Home Associates http://homeassociates.org/ Fri, 03 Dec 2021 04:47:15 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://homeassociates.org/wp-content/uploads/2021/05/home-associates-icon-150x150.png Home Associates http://homeassociates.org/ 32 32 CHL Mortgages adds new LTV tranches https://homeassociates.org/chl-mortgages-adds-new-ltv-tranches/ Fri, 03 Dec 2021 04:00:23 +0000 https://homeassociates.org/chl-mortgages-adds-new-ltv-tranches/

CHL Mortgages introduced a series of products in new loan-to-value (LTV) bands, reduced rates on existing agreements and 2-year fixed rate options for homeowners.

Rates now start from 2.69% on lenders’ 5-year fixed rate buy-to-let (BTL) product line (up to 50% LTV) and from 2.85% up to 75 % LTV.

Both are available on both Personal and Limited Liability Company offers with product fees ranging from 1.25% to 2%.

Stephen wrigley chl bdm

CHL Mortgages appoints BDM

A 2.93% 2-year fixed rate at 60% LTV and a 2.99% 2-year fixed rate at 70% LTV were introduced to replace the old BTL 2-year 65% and 75% LTV products.

Both are available for the Personal and Limited Liability Company lines, with a 2% product charge.

The lender’s line of multi-occupancy houses (HMOs) and freehold multi-unit (MUFB) blocks of the lender also saw the introduction of several new products as well as rate reductions on existing LTV bands.

5-year fixed rates start from 2.94% to 50% LTV and 3.15% to 75% LTV.

This range also includes a 0% to 65% product charge option and 75% LTV for 2 year fixed products.

Ross Turrell, Commercial Director of CHL Mortgages, said: “The specialty BTL market continues to experience sustained levels of interest and demand from investors, developers and homeowners looking to take advantage of the growing demand for tenants and a highly competitive lending environment.

“Which means lenders must constantly evaluate their product offerings to meet their ever-changing needs.

“We expect these positive changes to be welcomed by our growing distribution base and will attract even more companies to bolster what has been an extremely encouraging first half in the specialist lending arena. ‘purchase and rental. “

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IRS Criminal Investigation Report Highlights Work of Pandemic Year https://homeassociates.org/irs-criminal-investigation-report-highlights-work-of-pandemic-year/ Thu, 02 Dec 2021 09:50:21 +0000 https://homeassociates.org/irs-criminal-investigation-report-highlights-work-of-pandemic-year/

Over ten billion dollars. It is the amount of money identified by the IRS Criminal Investigations Department, sometimes referred to as CI, from tax evasion and financial crimes in the past fiscal year.

That’s a jaw-dropping figure, almost as much (around 90%) as the IRS ‘entire budget for the fiscal year ended September 30, 2021, according to CI’s recent annual report.

About CI

This is true despite the size of the department. CI has just under 3,000 employees worldwide; about 70% of these employees are special agents who tackle crimes with a focus on tax laws, money laundering and bank secrecy law.

CI “follows the money” in many financial crime cases. And, while other federal agencies, like the Federal Bureau of Investigation, can also prosecute financial criminals, the IRS is the only federal agency that can investigate potential violations of the Internal Revenue Code.

How effective are they? In the last fiscal year, the IRS-CI opened 2,581 investigations, recommending 1,982 potential defendants for trial. The cases, typically prosecuted by the tax department of the attorney general’s office of the US Department of Justice, resulted in 1,268 convictions, a jail rate of nearly 80 percent, CI said.

Money laundering

Over 40% of CI’s investigations focused on money laundering. Money laundering is, in its most basic form, the hiding or returning of money. Most often, it is used to cover up “dirty money” earned through criminal activity so that it can appear “clean” or legitimate. Today, CI claims that criminals are moving illicit earnings using various businesses, such as banks, money issuers, brokerage houses, casinos, and virtual money changers. The flow of illegal funds around the world is estimated at hundreds of billions of dollars.

CI’s special agents are trained to track money through traditional and virtual financial banking systems. CI chief Jim Lee noted that “the speed at which money is flowing today is almost instantaneous,” making it easier for criminals to exploit the latest technological advances. CI is committed, he says, to staying one step ahead of these developments.

Sometimes technological and tax crimes collide. This year, for example, CI saw the very first conviction of a Bitcoin case with a tax component. In this case, a former Microsoft employee, Volodymyr Kvashuk, was convicted in a scheme to embezzle more than $ 10 million from the company, using a bitcoin mixer to hide taxable income. Online mixers are companies that pool cryptocurrency funds and create a series of new transactions to disguise the source of the funds, like an ultra-sophisticated version of money laundering. Kvashuk used the money to buy a waterfront property and a Tesla before being found guilty of 18 counts – including wire fraud, money laundering and filing false claims. income – and sentenced to nine years in federal prison, CI said.

Tax evasion and tax evasion

IRS-CI agents spent most of their investigative hours in the past fiscal year (about 72%) investigating tax-related crimes like tax evasion and tax evasion.

General tax fraud investigations are at the heart of CI’s law enforcement efforts. This is because the integrity of our tax system depends heavily on the willingness of taxpayers to properly file their income tax returns and pay the resulting tax. And most taxpayers – just over 80% according to the IRS – pay voluntarily and on time.

But those who deliberately under-report or omit income from their tax returns represent a sizable balance. According to the Treasury, “the ‘tax gap’ – the difference between taxes due and collected – totals about $ 600 billion a year” and “is equal to 3% of GDP, or all income taxes paid by the lowest paid 90% of taxpayers. . ”

Pandemic fraud

The pandemic has also created opportunities for crooks and criminals. As part of its investigations, CI examined fraudulent claims involving economically impacted payments (i.e. stimulus checks), Paycheck Protection Program (or P3) loans, and credits. employer retention (ERC). In one case, David T. Hines of Miami, Florida pleaded guilty to fraudulently obtaining nearly $ 4 million in PPP loans, which he used to purchase, among other things, a Lamborghini Huracan sports car.

In another case, Dinesh Sah of Coppell, Texas, was sentenced to more than ten years in prison, in connection with efforts to secure approximately $ 24.8 million in PPP loans by submitting 15 fraudulent claims. He used the money to pay off mortgages in California, buy homes in Texas and buy several luxury cars, CI said.

Undercover operations

CI uses various techniques in its investigations, including undercover. In fiscal 2021, agents conducted approximately 292 covert operations in areas focused on unscrupulous tax preparers, offshore tax regimes, money launderers, dark web market operators and the ‘tax evasion.

The department has a certain reputation for infiltration: almost 100 years earlier, in 1929, Agent Michael Malone, a member of the new IRS intelligence unit, precursor to CI, had successfully infiltrated the gang of ‘Al Capone in Chicago, resulting in putting Capone behind bars. Malone was an undercover agent in other notable tax evasion cases, including those targeting Irving Wexler, better known as Waxey Gorden, and Leon Gleckman, the “Al Capone of St. Paul”.

If that sounds like the kind of thing that requires special training, you’re not wrong. CI begins training at the National Criminal Investigation Training Academy — NCITA — located at the Federal Law Enforcement Training Center in Brunswick, Georgia. New special constables receive training in areas such as basic criminal investigation skills, federal criminal law, court procedures, law enforcement operations, interview skills and training on the job. firearms. Despite the challenges of the pandemic, CI graduated 124 new special agents in the past fiscal year.

Annual Report

More information about CI can be found in the annual report, which includes case examples for each U.S. field office, an overview of CI’s international footprint, details of the specialist services provided by CI, and investigation statistics. , broken down by discipline, for the last fiscal year.

“The annual report provides an overview of the important work that our special constables and professional staff have accomplished over the past fiscal year,” said Lee. “They have identified more than $ 10 billion in tax evasion and other financial crimes, including the seizure of $ 3.5 billion worth of ill-gotten cryptocurrency gains.”

But that’s not what Lee focused on.

“Looking back to 2021, I am very proud of our employees,” he said. “They tenaciously overcame personal and professional challenges during the COVID pandemic and continued to serve the American people by protecting the tax system that funds our country’s services and benefits. These aren’t just good numbers for a pandemic year, these are good numbers, period. “

This is a weekly column by Kelly Phillips Erb, the Taxgirl. Erb provides commentary on the latest tax news, tax law and tax policy. Find Erb’s weekly column in Bloomberg Tax and follow her on Twitter at @taxgirl.

The smart way to lend money to family and friends https://homeassociates.org/the-smart-way-to-lend-money-to-family-and-friends/ Wed, 01 Dec 2021 21:15:00 +0000 https://homeassociates.org/the-smart-way-to-lend-money-to-family-and-friends/

FFinancial experts will tell you to avoid borrowing money from family and friends. And for good reason. Even the healthiest, strongest relationships can give way to the financial problems it can cause. At the same time, in times of financial hardship, there might not be a better place to turn to your loved ones.

For starters, if you’re in a serious rush, this is the fastest, easiest way to get a loan. It can be as simple as depositing a check into your account. Second, it’s a much more affordable option – interest rates can range from 35.99% to a staggering 199% for a personal loan.

But what happens when the shoe is on the other foot? In other words, a family member or friend asks you to borrow money from you. Well, here are 8 smart ways to lend them the money they need while keeping the relationship alive.

1. Sleep on it.

Before making an important decision, many of us are advised to “sleep on it”. But why?

“Conventional wisdom suggests that by ‘sleeping on it’ we clear our minds and relieve ourselves of the immediacy (and the stress that comes with it) of making a decision,” writes John M. Grohol in Live Science. “Sleep also helps organize our memories, process the information of the day, and solve problems. Such wisdom also suggests that conscious deliberation helps with decision-making in general.

Plus, research has shown that sometimes we make worse decisions the more we consciously consider them. In order to make better decisions, researchers have found that unconscious thinking – equivalent to sleeping on it – can be helpful.

How does this apply to money lending? Well, you may feel compelled to say “yes” when someone applies for a loan. What, between having the impression of having been embarrassed or having a real concern to help them. However, you should tell them that you need some time to think things over and calculate the numbers.

2. Only lend money to people you trust.

There are many valid reasons for not lending money to your family and friends. For example, reimbursement may not be a priority for them. Ultimately, this could damage the relationship. In fact, nearly a third of borrowers and lenders reported negative consequences, such as resentment or hurt feelings, in a Lending Tree survey.

The quick fix? Only lend money to those who are responsible. And above all, those you trust.

For example, you have a friend who has a bad history of non-paying people. Worse yet, they have an angry temper that makes them bounce from job to job. In this scenario, why would they think they would pay you back on a $ 500 loan?

Also, and this is extremely painful, if the borrower is struggling with an addiction, you have to decline the request. Although it may sound harsh, lending them money helps them. My parents learned this the hard way with my sister when she struggled with an addiction to Oxycontin.

3. Ask what it is for.

Another way to make the decision to lend money to friends or family? Ask them up front why they need the money. In fact, as a lender, you have every right to know where the money is going.

At the same time, if someone asks to borrow a tiny amount, like $ 20 or $ 50, it probably shouldn’t hurt you financially. For this reason, you probably don’t need to grill them. But, for a larger amount, certainly inquire.

For example, if you know they’re going through a financial crisis and can’t pay their bills, and they ask to borrow $ 1,000 for a vacation, that makes the answer easier. It is a categorical no. But if they need that money to replace a furnace as winter approaches, that’s another story.

4. Don’t lend more than you can afford.

When you practice “metta” meditation in Buddhism, you start with yourself. As Troy Erstling explains in an article on Medium, “You say ‘May I Be happy. May I be free from anger, hatred, animosity, resentment and ill will. May I experience real peace, real happiness, real love. ‘

“After you’ve done that, THEN you can move on to saying the same for friends, family and possibly strangers and all living creatures,” Erstling adds.

Starting with yourself may seem selfish, but it is a precious principle in life. And, this certainly applies to lending money to others.

Let’s say you recently lost a source of income or are in the process of paying for an emergency medical procedure. In these situations, you are probably not in the best financial position to help others. As such, you don’t want to put additional financial strain on yourself.

As a general rule, the following should be a priority; “If you can’t afford to lose it, don’t lend it.

5. Execute a loan agreement.

A written record can help avoid misunderstandings when granting loans to friends or family. If you decide to sue the borrower for your money, it will also be easier for you to do so. After all, you have agreed to a loan agreement and it can be legally binding.

A loan contract must at least include:

  • Your name and that of the borrower
  • The date the loan was issued
  • The amount borrowed
  • Repayment terms, such as minimum payment amount and due date
  • Interest rate, if you charge it
  • Recourse in the event of non-payment. These may include adding additional costs to the loan, taking possession of the collateral, or pursuing legal action.

With a large loan, you may want a lawyer to draft the contract on your behalf. And, if you plan to charge interest on the loan, consult a tax professional.

The interest rate charged must be based on the Federal Applicable Rates (AFR). FYI, loans over $ 10,000 are subject to interest tax. And whether or not you charge interest, if the money is not returned, you may still need to declare it as a gift.

6. Understand taxes and tax consequences.

Are there any legal hurdles to overcome when lending money to friends and family? Not exactly. In other words, it is perfectly legal to lend money to someone else. Still, there are some shortcomings to be aware of, especially if you’re a senior lending money to your adult child.

Patrick Simasko, senior lawyer and heritage preservation specialist at Simasko Law in Mount Clemens, Michigan, told US News that “if you lend your child money and have to go to a house nursing home and apply for Medicaid within the next five years, your child must return the money to you. If they are unable and can never return the money, serious Medicaid divestment penalties will apply. Medicaid will treat it like a gift.

According to Neel Shah, certified financial planner and owner of Beacon Wealth Solutions in Monroe, New Jersey, and estate planning attorney at Shah & Associates, you should also be thinking about the Internal Revenue Service.

Typically, the IRS believes that no one gets something for nothing. When money or anything of value is transferred to a friend or family member, it will either be a gift, loan, or sale. Each of these elements would have associated tax consequences, ”explains Shah.

7. Make it part of your budget.

Remember to budget for these types of loans if it is something that you do frequently. And this also applies when giving hard cash as a gift.

While it may seem unnecessary, there is a good reason to budget for loans. The gift or loan you give can be planned along with your other financial obligations and goals. In addition, it protects you from your overly thin sprawl, which could put your own financial well-being at risk.

8. Consider alternatives.

Make no mistake about it. Lending money to family or friends can be a bit uncomfortable, to say the least.

Since you care about this person, you want to help them in any way you can. But, on the other hand, it can strain the relationship.

According to a 2019 Bankrate survey, 60% of people have loaned money to a loved one to help them. Unfortunately, it is also more likely to produce a negative result (46%). Of those who have loaned money to friends and family, 37% say they have lost money and 21% say their relationship has been ruined.

Other than not lending them money, what other options do you have? Well, there are actually quite a few alternatives that you can choose from.

First, you can still lend them money, but not as much as they requested. For example, if your brother asked you to borrow $ 1,000 and you are not comfortable with it. Give him $ 500 instead if that’s the most amount you’re willing not to get back.

An other idea? Help them improve their financial literacy. Examples would be explaining to them how to budget, what tools to use and what financial educational resources are available to them.

Finally, you could take risks and co-sign a loan with a financial institution. Or, to reduce this risk, you can suggest that they turn to peer-to-peer lending sites like Lending Club and Prosper.

By John Rampton for Due.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Down payment vs student loans: how to decide where to put your money https://homeassociates.org/down-payment-vs-student-loans-how-to-decide-where-to-put-your-money/ Wed, 01 Dec 2021 16:37:39 +0000 https://homeassociates.org/down-payment-vs-student-loans-how-to-decide-where-to-put-your-money/

Yesou have student loan debt. You would like to buy a house. Is it better to pay off student loans before you start saving for a down payment on the home?

This is a common question for American buyers. On the one hand, paying off your student loans before saving for a down payment could qualify you for a larger mortgage because you will have less debt. It might also give you the psychological advantage of knowing that you are officially excluded from these college loans.

On the other hand, waiting to start saving for housing means being locked out longer as a tenant. Plus, home prices, already high in most of the United States, will have time to rise further before you’re ready to buy.

It’s no secret that student debt can be a barrier to achieving other financial goals. A recent National Association of Realtors study found that first-time homebuyers struggled to put down a down payment, nearly half said student debt held them back in saving for a home.

Saving for a down payment is already taking longer now than before the pandemic. It is already taking longer to save a down payment now than before the pandemic. According to an analysis by home-buying startup Tomo, in August, a first-time home buyer would need about seven years and 11 months to save a 20% down payment on a mid-priced home. In January 2020, the same buyer would have needed seven years and a month.

It is not just a pandemic trend. The time required to save for a down payment has also increased over the past 20 years. In June 2001, the average first-time home buyer needed about six years to save on a 20% down payment.

Pair this growing challenge with rising average student debt and longer loan repayment terms, and you’ve got a perfect storm of competing financial challenges: prioritize paying off student debt or saving for a down payment? To find out what’s right for you, answer these three questions:

What are your other financial priorities?

Can you buy a house before you pay off your student loans? The answer, according to many financial planners, is “it depends”. Everyone says that a bad student loan balance doesn’t have to kill your dreams of home ownership.

But the decision to focus on saving for a home before paying off your student loans is a decision you should make in the context of your total financial life. Two to three financial goals is the most everyone can work on at the same time, says Kristi Sullivan, a financial planner from Denver, so make sure you’ve built a solid financial foundation before you start saving for a home.

You will want to pay off any credit card debt. This debt almost certainly carries a higher interest rate than your student loans or a mortgage, so pay it off first.

Build an emergency fund, which should contain about six months of your basic expenses. This money could help you get through a period of unemployment, write off an unexpected expense, or even help you take advantage of a sudden opportunity. Put the money in a savings account or certificate of deposit where you know you can easily access it if needed.

Finally, start or continue saving for retirement. The more you can set aside while you’re young, the more years your investments will have to take advantage of the multiplier power of compound interest. You should at least save an amount that allows you to take full advantage of your employer’s matching funds, if offered. It’s free money and gives you a 100% rate of return, even if it never earns another dime.

How much debt do you have and how much is it costing you?

Once you’ve secured a solid financial foundation, you need to weigh the details of your student debt balance.

In the United States, the average borrower owes about $ 29,000 on bachelor’s student loan debt, that number jumps to $ 66,000 for master’s degrees in general, and it rises to $ 145,500 for law school. , $ 202,400 for degrees in health sciences like dentistry and pharmacy, and a whopping $ 246,000 for medical school, according to the National Center for Education Statistics. From bottom to top, it’s a difference of $ 217,000.

Interest rates on student debt also vary. The rates on federally guaranteed debt for undergraduate degrees are the lowest and range from 2.75% to 4.66%, depending on the year you took them out. Graduate debt bears interest between 5.3% and 6.6%, and PLUS loans can be as high as 7.6%. Interest rates on private loans are generally higher, ranging from 3.34% to 12.99%.

Where your debt falls within these ranges will help you determine the best option for you. A difference of a few percentage points in your interest rate is a lot of money over a period of years. For example, at 3%, a total loan of $ 29,000 would cost you $ 4,860 in interest over 10 years, while a loan balance of $ 246,000 would cost $ 39,050.

But at 5%, the amount you spend on interest drops to $ 7,900 on the smaller balance and $ 67,100 on the larger.

Simply put: if your interest rate is low, it’s easier to pay the minimum on your student debt while putting more money into your down payment. But the more you owe and the higher your interest rate, the better off you pay off the balance before the due date, even if that means it will take you longer to save a down payment.

Can you afford a house?

A faster repayment plan means you’ll pay less interest, but that might also be what you need to do to qualify for a mortgage.

If your student loan balance is high relative to your salary, your debt-to-income ratio may be too high to qualify for a mortgage, even if you’ve spent years saving for a down payment. In that case, a lender will make that decision for you: You can’t buy a house without paying off your student loans, Sullivan points out.

Mortgage lenders generally prefer borrowers with a debt-to-income ratio of 36% or less. You can be approved if your ratio is higher, but probably with a higher mortgage interest rate. (To calculate your ratio, use Money debt ratio calculator.)

Keep in mind that when you buy a house you will have more freedom than as a tenant, but you will also take a greater risk. When you own a home, you have to pay for insurance, taxes, utilities, and what can seem like endless maintenance expenses. This can include everything from cleaning gutters to installing a new roof. With your other time commitments and expenses, including your student loan payments, can you afford to buy a seat and take good care of it?

“A home is important and it shouldn’t be taken lightly,” says Logan Murray, financial planner in Tempe, Arizona. But, he adds, “You still don’t need to let student loans rule your life.”

More money :

7 tips for getting a mortgage when you have a student loan

A housing economist did the math on how long it takes to save for a down payment – and that’s not pretty

How to prepare for the next student loan repayment

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This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. The opinions expressed in this article are those of the author alone, not those of any third party, and have not been reviewed, endorsed or endorsed in any way. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Real Estate Insider: The troubled Corktown apartment building with no owner https://homeassociates.org/real-estate-insider-the-troubled-corktown-apartment-building-with-no-owner/ Tue, 30 Nov 2021 19:23:02 +0000 https://homeassociates.org/real-estate-insider-the-troubled-corktown-apartment-building-with-no-owner/

Uralli is a household name in Detroit real estate, having first come to town as an investor in Florida in 2008, drawn by the lower prices of solid historic buildings.

Today, he owns the Detroit Club, a private social club located at 712 Cass Ave. which he has owned since 2013 after buying it for $ 1 million. It reopened several years later after undergoing a multi-million dollar renovation after a flood destroyed much of the 1892 Neo-Romanesque building. But before that, it entered the ground floor of the rise of Detroit real estate.

Uralli had only paid $ 922,000 for the David Stott building at 1150 Griswold St. after a lender foreclosed on his mortgage in 2010, and $ 1.65 million for the old Detroit Free Press building, located at 321 W. Lafayette Blvd., in December 2008, according to land registers.

“These are buildings that were built in the 1920s, and I am buying them for less than it cost to build them at that time in history,” he told Crain’s in late 2011. .

“There is no better value anywhere in the world. And that is why I am here.”

In October 2013, he sold the David Stott building for $ 9.4 million and the old Detroit Free Press building for $ 4.2 million to a Shanghai-based investment firm called DDI Group in October 2013 for a total of $ 13.6 million, about $ 11 million more than what he paid for the buildings. DDI, which was effectively kicked out of the city due to poor management and maintenance of its buildings, was not too bad at pulling out.

Dan Gilbert paid $ 14.9 million for the David Stott and, later, $ 8.425 million for the Detroit Free Press building, almost $ 10 million more than what DDI paid for them. Both properties have since been converted to mixed-use apartment buildings at market rates called The Stott and The Press / 321, respectively.

Why a loan premium awaits multi-family borrowers https://homeassociates.org/why-a-loan-premium-awaits-multi-family-borrowers/ Tue, 30 Nov 2021 18:00:37 +0000 https://homeassociates.org/why-a-loan-premium-awaits-multi-family-borrowers/

After two years of extraordinary liquidity, multi-family loans are on track for a record year that will offer multi-family investors and sponsors a full menu of competitive options.


“Much of the uncertainty that reigned in 2020 around the multi-family market, much of that fog, has lifted,” said Woodwell. “So lenders and investors feel pretty confident in their ability to understand a property, understand its current operations and where it will be in the quarters and years to come. “

Even worries about interest rate hikes, tax changes, inflation and rising construction costs are not dampening expectations. Multi-family loans are expected to reach about $ 421 billion in 2022, up from the record high of $ 409 billion forecast for 2021 and a 13% increase from 2020, according to MBA.

“When you look at how you expect to see 2022 versus 2021, I think there is still a lot of room to operate in the market,” said Brian Hirsh, vice president of Mesa West Capital Partners. “There is a lot of equity that has not yet been deployed. “

Mesa West, which specializes in variable rate bridging loans for sponsors seeking capital and flexible structures, made more than $ 600 million in loans in the third quarter alone. Transactions varied from coast to coast and included acquisitions, refinances and recapitalizations. Among the transactions was a five-year, $ 77 million adjustable rate first mortgage for the acquisition of Alta Congress, a 369-unit multi-family property in Delray Beach, Florida.

Foreign investment is expected to increase with the lifting of restrictions on overseas travel. Capital will flow to conventional multi-family assets as well as affordable and labor-intensive segments, but lenders also expect deals for student and senior housing to resume in 2022. Single-family rentals, which increased significantly during the pandemic, often with institutional investors, is also expected to continue to grow.

In October, Black Bear Capital Partners arranged a $ 19.5 million financing for the construction of Overlook, a
49 unit condominium project planned by Monolith Capital in Port St. Joe, Florida Provided by national debt
fund, the loan involves interest payments only for the entire term. Image courtesy of Black Bear Capital Partners

Hats off

A big increase will come from government sponsored companies. The Federal Housing Finance Agency has increased the 2022 multi-family loan purchase limits for Fannie Mae and Freddie Mac by $ 8 billion each. This will raise the caps to $ 78 billion between the two agencies.

“It’s huge for us because it’s more capacity,” said Pamela van Os, senior vice president and head of West Coast branch loan production at Greystone. “More capacity means more availability to get us into debt. “

The FHFA has also changed several key definitions. Loans are considered mission-oriented if the units involved are affordable to cost-overburdened tenants with incomes of up to 100% of the median income of the area and, in some cases, up to 120% of the FRIEND. Units affordable to residents with incomes at 60% of the MAI will be eligible for loans with energy and water improvements. Changes to the FHFA for cost-overrun tenant markets could mean more competitive prices for borrowers in high-cost areas, but lenders are waiting for clarifications on the markets that will be included.

The FHFA has also changed several key definitions. Loans will be considered mission-oriented if the units involved are affordable to high-cost tenants with incomes of up to 100% of the median income in the area and, in some cases, up to 120% of the FRIEND. Units affordable to residents with incomes at 60% of the MAI will be eligible for loans with energy and water improvements. Changes to the FHFA for cost-overrun tenant markets could mean more competitive prices for borrowers in high-cost areas, but lenders are waiting for clarifications on the markets that will be included.

Yet the change is seen as positive. “It allows (GSEs) and us to compete for this truly affordable business in those markets and it puts these deals in the bucket of mission capital and out of the bucket of non-mission capital,” noted Don King, vice-president. executive chairman of multi-family finance at Walker & Dunlop.

The changes are expected to result in a more consistent transaction flow than in 2020 and 2021, when lower caps slowed GSE creations. It also indicates that Fannie Mae and Freddie Mac may be more aggressive on market rate deals in 2022.

Aggressive agencies

Source: Association of Mortgage Bankers

“Agencies always have very good options for long-term debt. We’ve seen really aggressive pricing from them this year, ”said Scott Modelski, Managing Director of Black Bear Capital Partners, which specializes in structured debt and equity advice. “Our company was able to close a handful of deals below 3%. I think the best deal we could get was a 2.88%, 10 year, 10 year interest only loan (loan).

For its part, Fannie Mae has expanded its variable rate products and has been more aggressive this year. This should create additional opportunities for homeowners to refinance three-year variable rate construction loans into permanent debt – likely with GSEs – and for new buyers to acquire stabilized assets, predicted Hilary Provinse, vice-president. Executive Chairman of Berkadia and Head of Mortgage Banking Services.

With Fannie Mae and Freddie Mac expected to generate around 40% of multi-family loans in 2022, borrowers will have a variety of additional options including banks, debt funds, REITs, private lenders, Wall Street conduits and life insurance companies. Life insurance companies, for example, increased the number of multi-family arrangements, adding $ 2.5 billion in mortgages in the second quarter alone, Woodwell said.

Banks often prefer to lend on smaller assets, and life insurance companies tend to like “higher quality assets, at market rates and low LTVs,” said King of Walker & Dunlop. “This is where they like to play, and they compete on price.”

The cap rate factor

Compression of the capitalization rate is also more common. Formerly present primarily in coastal entry markets, the trend now encompasses popular secondary and tertiary markets. Faced with ceiling rate constraints, Berkadia aims to structure agency agreements more competitively in markets where rents are rising and to use interest only as a tool to compensate for a lower LTV for the borrower, reports Provinse.

At Comerica Bank, which focuses on short-term multi-family construction and value-added loans, multi-family clients will find LTVs of between 50% and 60% on new development loans due to low cap rates, the vice said. -Executive Chairman Jeffrey Bloom. With a higher LTV, borrowers may want amortization while interest-only payments may make more sense for a low LTV.

Comerica doesn’t buy into today’s low interest rates, and even when rates rise, there would be a long way to go before an increase had a significant impact on their underwriting, Bloom noted. He cited Texas and California as examples of markets where the lender plans to remain active in 2022, as well as Arizona, Florida, Georgia, Colorado, Nevada and Washington.

Borrowers looking for a higher LTV and more years of interest-only interest may consider loan funds, noted Mitchell Kiffe, senior managing director of CBRE and co-head of domestic production. For CBRE sponsors looking for acquisition loans with a combination of product, price and structure, debt funds have been the most competitive option in recent times, he said.

With interest rates typically between 3 and 3.5 percent for fixed and variable rate loans, “the big advantage of debt funds is that they are not limited by the income guarantee in place.” Kiffe said. “They are prepared to look into underwriting some of the rental growth that we are seeing.”

Debt funds can generally offer a loan-to-cost ratio of 75% on most multi-family acquisition loans with term interest only. Other lenders, including GSEs, life insurance companies and banks, which tend to guarantee income in place, cap income in a 60% range.

Bonds and new products

Alta Congress, a unit of 369
multi-family property in Delray Beach, Florida.

Single-asset, single-borrower CMBS operations for large individual loans and loan portfolios were also very strong execution for multi-family and are expected to continue due to excellent multi-family market fundamentals and low rates for the business. bond.

“While bond buyers have demanded an increase in spreads on recent transactions due to the increase in bond supply, we expect CMBS-SASB execution to be competitive through 2022. “said Kiffe.

The student housing category is attracting increased lending activity, said Josh Zegen, founder and CEO of Madison Realty Capital. In July, the company provided a $ 62 million bridge and construction loan for the refinancing and development of University Pointe, an 877-bed student residence in Davie, Florida. Hybrid financing was provided at a rate of 4.5% with a mortgage of $ 58 million and a mezzanine loan of $ 4 million. Most of the proceeds will refinance a 2019 loan with $ 8 million allocated to develop a new 96-bed facility.

Madison Realty Capital closed some $ 1.8 billion in deals in 2020 and is expected to exceed that figure three or four times in 2021, Zegen reported. He attributes some of that growth to a new $ 1.5 billion debt investment vehicle that he describes as a “lighter bridging loan product.”

Other lenders are also creating additional products and van Os of Greystone expects this to be a trend next year as well. For affordable housing, this includes Greystone’s tax-exempt bond financing and the option to build 100% LTC through its subsidiary ATAX. “We are all looking for other products to have in our arsenal,” she said.

Read the December 2021 issue of MHN.

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Analysis of FEMA Flood Insurance Reviews https://homeassociates.org/analysis-of-fema-flood-insurance-reviews/ Tue, 30 Nov 2021 00:17:06 +0000 https://homeassociates.org/analysis-of-fema-flood-insurance-reviews/

Bad news for homeowners with a flood insurance policy – for the majority of homeowners in flood-prone areas, rates are more than likely to increase when policy renewal time arrives.

As of October 1, 2021, the Federal Emergency Management Agency (FEMA) has moved to a new risk assessment system colloquially known as “Risk Assessment 2.0,” which changes the way risk is assessed for homeowners. Previously, the risk depended on whether or not you lived in a flood-prone area; now it depends on a variety of factors including the distance to the source of the flood, the severity and frequency of the flooding, and the characteristics of the property, such as the cost of rebuilding the property in the event of damage.

Nationally, flood insurance rates will increase for around 77% of policyholders, meaning that for 23% of policyholders, rates will decrease. However, due to the expected increase for some owners, the premium increase will be spread over a few years so the impact of the new model will be easier on the portfolio.

Most homeowners (66%) will see an increase of about $ 120 per year while 11% will see their rates increase between $ 120 and $ 240.

According to research by Porche.com, a typical rise in flood insurance premiums would be about $ 7.35 per month or $ 88 per year, which would bring the average annual price to $ 822, a 12% increase from what ‘he is actually. Currently, the national flood insurance rate averages $ 734 per year.

The move to a new rating system comes from the need for the program to remain solvent; a litany of disasters has driven the program into massive debt of around $ 20 billion over the past decade. This was due to insufficient rates which did not accurately reflect the cost of repairs / reconstruction in the event of a flood.

The National flood insurance program was originally started in 1968 as a way for homeowners to obtain a federally insured flood insurance policy for those living in high risk areas. The program was created at the time because of decisions by insurance companies that flooding was an uninsurable risk, prompting Congress to protect these homeowners. This program also created maps of flood zones which were virtually non-existent at the time. It should be noted that homes and businesses located in high flood risk areas with mortgages from government backed lenders are required to have flood insurance.

While the majority of policyholders may see a rate hike, those in flood-prone areas, such as Hawaii and the Gulf Coast states, will experience the highest percentage of rate hikes.

For example, in hurricane-prone Texas, 86% of policyholders will see their premiums increase. In neighboring Mississippi, rates are expected to increase for 84% of homeowners, while those in Florida and Louisiana will see increases of 80%.

“On the other hand, Alaska, the Washington, DC area and several Midwestern states have the lowest proportion of homeowners facing rising flood insurance premiums,” the study said. “In Alaska (14%) and Washington, DC (28%), only a minority of households are about to pay more for flood insurance, while in Washington, DC, adjacent to Maryland, the share is well above 39%.

“Many states in the Midwest are among those with the lowest percentage of homeowners facing price increases in flood insurance. In Michigan, less than half (46%) will pay more, while in states like Nebraska, Indiana, Ohio, Wisconsin and Illinois, that share is between 54% and 57% of all the owners.

Click here to view the full report on Porch.com. The web page also includes a postcode tracker where one can search by postcode to see how rates may be affected by the new risk management calculator.

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Today in history – Le Journal https://homeassociates.org/today-in-history-le-journal/ Mon, 29 Nov 2021 16:02:21 +0000 https://homeassociates.org/today-in-history-le-journal/

Today in history

Today is Monday, December 6, the 340th day of 2021. There are 25 days left in the year.

Today’s highlight in history:

On December 6, 1865, the 13th Amendment to the U.S. Constitution, abolishing slavery, was ratified, with Georgia becoming the 27th state to approve it.

To this date :

In 1790, Congress moved to Philadelphia from New York.

In 1889, Mark Twain’s novel “A Connecticut Yankee in King Arthur’s Court” was first published in England under the title “A Yankee at the Court of King Arthur” (it was published in the United States under his more familiar name four days later).

In 1907, the worst mining disaster in U.S. history occurred with the deaths of 362 men and boys in a coal mine explosion in Monongah, West Virginia.

In 1917, some 2,000 people were killed when a French cargo ship loaded with explosives, the Mont Blanc, collided with the Norwegian ship Imo in the port of Halifax, Nova Scotia, triggering an explosion that affected devastated the Canadian city. Finland declared independence from Russia.

In 1922, the Anglo-Irish Treaty, which established the Irish Free State, entered into force one year to the day after it was signed in London.

In 1957, America’s first attempt to put a satellite into orbit failed when Vanguard TV3 rose about four feet from a Cape Canaveral launch pad before crashing and exploding.

In 1962, 37 coal miners were killed in an explosion at the Robena No. 3 mine operated by US Steel in Carmichaels, Pennsylvania.

In 1969, a free Rolling Stones concert at Altamont Speedway in Alameda County, California was marred by the deaths of four people, one of whom was stabbed by a Hell’s Angel.

In 1973, minority parliamentary leader Gerald R. Ford was sworn in as vice president, succeeding Spiro T. Agnew.

In 1989, 14 women were shot dead at the University of Montreal’s engineering school by a man who then committed suicide.

In 1998, in Venezuela, former Lieutenant-Colonel Hugo Chavez (OO’-goh CHAH’-vez), who had organized a bloody coup attempt against the government six years earlier, was elected president.

In 2007, President George W. Bush announced a plan to freeze interest rates on subprime mortgages held by hundreds of thousands of homeowners.

Ten Years Ago: Declaring America’s middle class in danger, President Barack Obama, speaking in Kansas, presented a populist economic vision that would lead to his candidacy for reelection, insisting that the United States must regain their status as a country in which everyone could prosper if given “a fair share”. A suicide bomber massacred 56 Shiite worshipers and injured more than 160 others outside a shrine in the Afghan capital.

Five years ago: President-elect Donald Trump officially announced he would nominate retired Naval General James Mattis to be his Secretary of Defense, bringing his choice on stage at a rally in Fayetteville, Carolina North.

A year ago: President Donald Trump said his personal lawyer Rudy Giuliani tested positive for the coronavirus, making him the latest member of Trump’s inner circle to contract the disease. In a debate with her Democratic opponent, Reverend Raphael Warnock, ahead of the two parliamentary elections in Georgia that would determine control of the Senate, Republican Senator Kelly Loeffler repeatedly refused to acknowledge that Trump had lost his re-election.

Today’s birthdays: Comedy actor David Ossman is 85 years old. Actor Patrick Bauchau is 83 years old. Country singer Helen Cornelius is 80 years old. Actor James Naughton is 76 years old. Former Transportation Secretary Ray LaHood is 76 years old. R&B singer Frankie Beverly (Maze) is 75 years old. Don Nickles, R-Okla., Is 73 years old. Actor JoBeth Williams is 73 years old. Actor Tom Hulce is 68 years old. Actor Wil Shriner is 68 years old. Actor Kin Shriner is 68 years old. Actor Miles Chapin is 67 years old. Rock musician Rick Buckler (The Jam) is 66. Comedian Steven Wright is 66 years old. Country singer Bill Lloyd is 66 years old. Singer Tish Hinojosa is 66 years old. Rock musician Peter Buck (REM) is 65 years old. Rock musician David Lovering (Pixies) is 60 years old. Actress Janine Turner is 59 years old. Rock musician Ben Watt (Everything But The Girl) is 59. Writer-director Judd Apatow is 54 years old. Rock musician Ulf “Buddha” Ekberg (Ace of Base) is 51 years old. Writer-director Craig Brewer is 50 years old. Actor Colleen Haskell is 45 years old. Actor Lindsay Price is 45 years old. Actor Ashley Madekwe is 40 years old. Actor Nora Kirkpatrick is 37 years old. Christian rock musician Jacob Chesnut (Rush of F ools) is 32 years old. Tennis player CoCo Vandeweghe is 30 years old. NBA star Giannis Antetokounmpo (YAH’-nihs an-teh-toh-KOON’-poh) is 27 years old.

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3 key decisions that could make you richer in retirement https://homeassociates.org/3-key-decisions-that-could-make-you-richer-in-retirement/ Sat, 27 Nov 2021 11:48:00 +0000 https://homeassociates.org/3-key-decisions-that-could-make-you-richer-in-retirement/

IAs you plan for retirement, you will be faced with a number of important decisions that can be difficult to make. But it is essential that you give them a lot of thought.

These three choices, in particular, have the potential to improve your retirement. But if you botch them, you could find yourself strapped for cash for life.

1. The age at which you apply for social security

The monthly Social Security benefit you are entitled to upon retirement will depend on how you have earned your income over your top 35 most profitable years in the workforce. But that’s not the only factor that goes into determining the benefits. Your filing age will also play a role.

Image source: Getty Images.

Once you reach full retirement age, or FRA, you are entitled to your full monthly allowance based on your salary history. But you don’t have to wait for FRA to register for social security. You are allowed to claim your benefits from the age of 62, but for each month you deposit before FRA, these benefits are reduced.

The reverse will happen if you delay your deposit after FRA. In this case, each month you stop will result in an increase in your benefits, up to the age of 70.

Choosing a Social Security filing age that best fits your plans and goals, as well as your circumstances, is crucial. If you’re worried that your nest egg is not enough, you might want to over-rank later. And if you have a good amount of savings, filing earlier might be perfect for you. But take a long time to land on the right age to start collecting these benefits.

2. The pension plan you choose

Taxes are a huge burden on some seniors. It could therefore be advantageous to choose a retirement savings plan that minimizes them.

If you house your retirement savings in a traditional IRA or 401 (k), you will get initial tax relief on your contributions. But your withdrawals will be subject to tax during retirement.

On the other hand, if you choose to keep your savings in a Roth IRA or 401 (k), you will forgo tax relief on your contributions but will benefit from tax-exempt withdrawals in retirement. And if you expect to have a lot of other sources of taxable income, a Roth might be the best bet.

Of course, you don’t have to choose one or the other. You can choose to keep some of your money in a traditional pension plan and host the rest in a Roth account. This could give you the best of both worlds from a tax standpoint.

3. The way you invest your retirement savings

Playing too conservatively with your retirement savings could cause you to run out once you get into old age. Even if you’re the risk averse type of person, you might want to step out of your comfort zone and stock up on stocks in your IRA or 401 (k) while retirement is still many years away.

Imagine that you contribute $ 500 per month to your savings over 40 years. If you bet a lot in stocks, you could manage to get an average annual return of 8%, which is a little lower than the stock market average. That would, in turn, leave you with a nest egg of 1.5 million to enjoy.

But if you bet heavily on bonds, you might only see an average 4% annual return in your pension plan. All other things being equal, this would reduce your nest egg to $ 570,000. It’s not pocket money, but it’s a far cry from $ 1.5 million.

Weigh your options carefully

The choices you make before retirement could have a big impact on your old age. Be aware of when you apply for Social Security, where you keep your retirement savings, and how diligently you invest the money you use. Hopefully, you’ll make a series of smart decisions that will help you get the most out of your retirement.

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The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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It might not be home building season, but builders are a fair game right now https://homeassociates.org/it-might-not-be-home-building-season-but-builders-are-a-fair-game-right-now/ Fri, 26 Nov 2021 18:09:00 +0000 https://homeassociates.org/it-might-not-be-home-building-season-but-builders-are-a-fair-game-right-now/

Homebuilders are looking to close out a very strong year (or two), as the pandemic-inflated 2020 boom has resulted in record inventories and sky-high prices, even as constraints on land, labor and raw materials made it much more difficult to build up stocks.

This is clear from the Housing and Urban Development (HUD) statistics for October. And so we see that while the housing units allowed by building permits were 3.4% (± 1.6%) above October 2020, housing starts were only 0.4%. (± 12.3%) above last year’s level and completions were 8.4% (± 9.2%) below. Thus, although permits are requested and received, production appears to be insufficient. And limited supplies of course drive up prices.

Prices became so high between the two that some buyers left the market, preparing to wait for sanity to return. The jury is still out on how long this wait will last, but different data points indicate that it is going to be relatively long.

Earlier this month, we learned that the NAHB / Wells Fargo Housing Market Index (for the single-family housing market) for November hit its highest level in six months, indicating that buyers are willing to pay. higher prices and even have to wait for the extra time. . The single-detached home sub-index also rose 3 points as the gauge of potential buyers rose from 65 to 68.

Meanwhile, the Mortgage Bankers Association (MBA) noted yesterday that the 30-year fixed rate rose 4 basis points to 3.24% over the past week as buying activity continued to rise. for the third consecutive week. Part of the reason for this is attempts by borrowers to lock in mortgages in anticipation of rising rates. In addition, requests for conventional and government loans have increased, with loan amounts “mostly over $ 400,000,” according to Joel Kan, assistant vice president of economic and industrial forecasting at the MBA.

Leading the supporting factors is the strong labor market (the unemployment rate fell to 4.6% in October, the lowest level since March 2020), which benefited from the rapid economic rebound from pandemic lows. This has resulted in increased demand for labor, record levels of job vacancies and the resulting wage inflation. With the government also withdrawing its support, the summer wave of COVID-19 infections behind us and high spending this holiday season, unemployment rates are set to drop further, as purchasing power remains strong.

However, we must not forget the logistical challenges and imbalances between the factors of production which lead to a drop in production. GDP growth slowed to 2.1% in the third quarter, entirely due to these challenges. Further price increases are undesirable, but the Fed seems reluctant to do anything just yet.

So here we have an industry that has a huge pent-up demand that will generate growth for the months to come and the kind of pricing that allows it to pass the rising costs on to buyers. It would have been better if the entry challenges hadn’t been there. But in this environment, what is not to like here?

Beazer Homes, Meritage Homes, Tri Pointe Homes, and Toll Brothers are four home building stocks worth buying right now.

Beazer Homes USA BZH

Beazer Homes holds a Zacks # 1 (strong buy) ranking and an A for value, growth and momentum.

It is expected to increase its revenue by 13.6% this year and 9.2% next year. Its profits are expected to increase 23.7% and 6.4%, respectively, over the two years.

Over the past 30 days, Beazer Homes’ estimates for 2021 and 2022 have jumped $ 1.53 (44.0%) and $ 1.34 (33.6%), respectively.

Despite all of these positives, Beazer Homes is trading at a significant discount to both the 22.0x of the S&P 500 and to all of the companies in our universe with a mere 4.1x profit. His own median level over the past year is 7.0X.

Meritage MTH Homes

Meritage Homes also holds a Zacks Rank # 1, but its B, F and D value, growth and momentum scores are not as attractive as Beazer’s.

Still, analysts expect Meritage Homes to generate very strong growth. For 2021, the company is expected to increase revenue and profits by 14.7% and 74.6% respectively. For 2022, these figures should be 20.0% and 21.2% respectively.

The history of revisions to Maisons Méritage’s estimates is also interesting. Its estimates for 2021 are up 56 cents (3.0%) on average, and those for 2022 are up $ 1.89 (8.8%) in the past 30 days. They have steadily increased over the past 90 days.

To top it off, shares in Meritage Homes are almost as inexpensive as Beazer. They are trading at just 5.1X, below their own median level of 6.5X over the past year and the S&P 500.

Tri Pointe Houses TPH

Tri Pointe ranked # 2 (Buy) has value, growth and momentum scores of A, C and F.

Despite the low scores, analysts’ expectations for the company are strong. For 2021, Tri Pointe is expected to generate revenue and profit growth of 21.2% and 80.2%, respectively. This will be followed by revenue growth of 7.7% and profit growth of 9.6% in 2022.

The revisions to Tri Pointe’s estimates are also positive. The 2021 estimate is up 29 cents (8.0%) and the 2022 estimate is up 34 cents (8.6%) in the past 60 days.

At 6.1 times 12-month earnings, Tri Pointe shares are obviously a steal.

Toll Brothers TOL

Toll Brothers shares the second rank of Tri Pointe, but its value, growth and momentum scores of A, B and D are more attractive.

Analysts are currently forecasting double-digit revenue and profit growth for Toll Brothers for 2021 and 2022 (end of October). The growth rates for 2021 are 22.4% for revenue and 80.6% for profits. Growth rates in 2022 are 19.1% for revenues and 43.9% for profits.

Estimates for 2021 and 2022 have both increased by a few cents in the past 30 days. But over the past 90 days, Toll Brothers’ estimates for 2021 and 2022 are up 6.4% and 6.6% respectively.

But without an attractive valuation, shares in Toll Brothers would still not be worth buying. Since they are trading at only 7.3 times earnings (median 9.3 times), there is no reason to complain.

6-month price movement

Image source: Zacks Investment Research

Bitcoin, like the internet itself, could change everything

Blockchain and cryptocurrency have sparked one of the most exciting talking points in a generation. Some call it the “Internet of Money” and predict that it could change the way money works forever. If this is true, it could do to banks what Netflix did to Blockbuster and Amazon to Sears. Experts agree that we are in the early stages of this technology and as it develops it will create several investment opportunities.

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Toll Brothers Inc. (TOL): Free Stock Analysis Report

Meritage Homes Corporation (MTH): Free Inventory Analysis Report

Beazer Homes USA, Inc. (BZH): Free Inventory Analysis Report

Tri Pointe Homes Inc. (TPH): Free Inventory Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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