Monday Morning Cup of Coffee: Risky home lending really on the comeback?

Mortgages also received plenty of attention this weekend, and not just during Super Bowl commercial breaks, with reports offering divided view of the markets, according to the various media platforms that published the copy.

New York real estate news service, The Real Deal, examined performance of the low downpayment mortgages on offer from Fannie Mae and Freddie Mac.

Kenneth Harney writes that federal regulators want to see more of these affordably mortgages being written, so why arent more closing?

Well, besides the charge that the loans cost too much, there is the strict underwriting that also serves as a problem:

The average score for conventional loans closed in December was 754, just one point lower than in December 2014. Conventional mortgages are those eligible for sale to the two giant mortgage investors, Fannie Mae and Freddie Mac. FICO scores run from 300 (abysmal) to 850 (pristine.) Average scores at the governments main mortgage source for young and minority first-time buyers the Federal Housing Administration (FHA) actually rose to 688 in December, seven points higher than they were the same month the year earlier. That looks like a tightening of the lid, not an opening.

To put this into context: The average FICO score for Americans is just 695. Young, prospective first-time buyers millennials in their 20s and early 30s tend to have lower scores on average than other age groups. According to a report from FICO last year, nearly 53% of millennials have scores below 670. Just 25% of them score between 670 and 739. No wonder first time buyers are missing in action, accounting for just 30% of all home purchases instead of the historical norm of around 40%.

At the Los Angeles Times, the story is different. Easy mortgages are flowing, from some way-to-familiar faces.

James Rufus Koren warns:

So-called nonbank lenders are again dominating a riskier corner of the housing market this time, loans insured by the Federal Housing Administration, aimed at first-time and bad-credit buyers.

Such lenders now control 64% of the market for FHA and similar Veterans Affairs loans, compared with 18% in 2010.

Koren then names a few of the nonbanks that are offering said mortgages.

He also adds some non-profit concerns, then adds this data as food-for-thought:

A Los Angeles Times analysis of federal-loan data shows that FHA mortgages from nonbank lenders are seeing more delinquencies than similar loans from banks. Just 0.9% of FHA-insured loans issued by banks from October 2013 to September 2015 were seriously delinquent compared 1.1% of nonbank loans. Put another way, nonbank FHA and VA loans are about 23% more likely to go bad than those issued by banks.

However, ultimately hes left to conclude that, in fact, these nonbanks are giving honest Americans a shot at homeownership, something big banks simply arent doing as much these days.

As for the mortgages being offered? For now, those options look relatively safe, Koren concludes.

Heres another, more alarming column on these easy mortgages that bear similarities to the same loans that took down the entire national column.

At the OC Register, Jeff Lazerson opens with this gem: Steroid mortgages to buy those big boy properties through a lot of leverage and a menu of other exotic mortgages for hard to finance borrowers are back.

Lazerson is referring to a front-page piece in the Wall Street Journal: Crisis-era mortgage makes a comeback.

In his column, Lazerson argues that the interest on these Alt-A loans ultimately make them unattractive for borrowers in Orange County.

Further, the Wall Street Journal coverage goes to lengths to express the limits of origination, hardly a comeback.

Some lenders remain reluctant to jump in. Quicken Loans Inc., the second-largestconsumer lender in the US by mortgage volume, considered getting into Alt-A mortgages but decided against itbecause of the regulatory environment,said Bob Walters, the companys chief economist.

Lazerson goes a step further to back this up by applauding the Consumer Financial Protection Bureau:

The CFPBs added hammer was and is that if your lender gives you a loan that doesnt fall into the safe-harbor category known as a qualified mortgage, you better document the heck out of why you gave the borrower that loan anyway.

And, if you cant justify the borrowers ability to afford this, the borrower will be able to rescind the loan up to three years later.

So what kind of mortgage should a borrower get?

Go with a nonbank? Subprime or Alt-A?

Dont panic, its not that bad yet. is running this primer on fixed-rate versus adjustable mortgages for some guidance.

And if theres one thing to find comfort in: the Federal Deposit Insurance Corp did not close any banks this week.

Moody’s ABCP rating activity ending February 5, 2016

New York, February 10, 2016 — Moodys ABCP rating activity for the period ending February 5, 2016

2016 THROUGH FEBRUARY 5, 2016:

Moodys has reviewed the following ABCP programs in conjunction
with the proposed additions and amendments, as applicable.
At this time the additions and amendments, in and of themselves,
will not result in any rating impact on the respective program.
Moodys does not believe they will have an adverse effect on the credit
quality of the securities such that the Moodys ratings are impacted.
Moodys does not express an opinion as to whether the additions and amendments
could have other, non-credit-related effects.


Matchpoint Finance plc (Matchpoint), a fully supported,
multiseller ABCP programme sponsored and administered by BNP Paribas has
removed Morgan Stanley as dealer and placement agent and replaced Citibank
NA with BNP Paribas New York as US Depositary and Issuing Paying Agent.
The amendments will not, in and of itself and at this time,
cause the rating of the current ABCP issued by Matchpoint to be reduced
or withdrawn.

Matchpoints purchase limit is approximately EUR 5.992 billion
and it had EUR 4.601 billion ABCP outstanding.


Starbird Funding Corporation (Starbird), a partially supported,
multiseller ABCP program sponsored and administered by BNP Paribas (BNP),
has amended an existing auto loan facility originated by an investment-grade
rated auto financing company. The facility was increased to $600
million from $300 million. Additionally, the expected
loss matrix, which is used to calculate the required overcollateralization
was amended. Transaction-specific credit enhancement is
comprised of overcollateralization and a cash reserve account.
This transaction is partially supported by a liquidity facility provided
by Prime-1(cr) BNP.

Starbird had approximately $7.6 billion of purchase commitments
and $4.7 billion in outstanding ABCP. Its program-wide
credit enhancement is approximately $473 million with a $150
million floor.


SAFE Trust (SAFE) and SURE Trust (SURE), two partially
supported, multiseller Candian ABCP programs administered by Canadian
Imperial Bank of Commerce (CIBC) have extended an existing
CAD500 million revolving credit card securitization facility for three
years to February 2019. The securitization is for an investment-grade
rated financial institution and includes a combination of revolving retail
consumer and business accounts. The transaction is structured as
an uncommitted multi-year revolving facility.

Transaction-specific credit enhancement is comprised of overcollateralization
sized at 8% of the invested amount and excess spread. This
transaction is partially supported by liquidity provided by Prime-1(cr)
CIBC. SAFE and SURE do not have any program-wide credit

SAFE currently has CAD1.9 billion of purchase commitments and CAD1.5
billion of ABCP outstanding.

SURE currently has CAD1.4 billion of purchase commitments and CAD1.2
billion of ABCP outstanding.


King Street Funding Trust (King Street) and Bay Street Funding Trust
(Bay Street), two partially supported, multiseller
Canadian ABCP programs administered by Scotia Capital Inc.,
a wholly owned subsidiary of Bank of Nova Scotia (Scotiabank)
have amended their commitment in an existing auto lease securitization
facility to allow the inclusion of 60 month leases in the securitized
lease pool. The auto leases are originated by an investment-grade
rated auto finance company.

Transaction-specific credit enhancement is comprised of non-declining
overcollateralization sized at 20% of the initial securitization
value, a 1.0% non-declining cash reserve account
and minimum excess spread. This transaction is partially supported
by liquidity provided by Prime-1(cr) Scotiabank. King Street
and Bay Street do not have any program-wide credit enhancement.

King Street currently has CAD1.9 billion of purchase commitments
and CAD1.3 billion of ABCP outstanding.

Bay Street currently has CAD2.3 billion of purchase commitments
and CAD1.4 billion of ABCP outstanding.

The principal methodology used in these ratings was Moodys Approach
to Rating Asset-Backed Commercial Paper published in July 2015.
Please see the Credit Policy page on for
a copy of this methodology.

Moodys monitors and analyzes ABCP programs on an ongoing basis.
A detailed description of each program is published in the ABCP Program
Review. Some ABCP programs have updated performance information,
which is published in the Performance Overviews. All publications
are available on

This publication does not announce a credit rating action. For
any credit ratings referenced in this publication, please see the
ratings tab on the issuer/entity page on
for the most updated credit rating action information and rating history.

Valerie Oliveri
Associate Analyst
Structured Finance Group
Moodys Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Lisa Singman
VP – Sr Credit Officer/Manager
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moodys Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moodys ABCP rating activity ending February 5, 2016

Lender Fees Going Up; Non-Agency/Jumbo Program Trends

How much does it cost to buy sixty female pigs and forty male deer?One hundred sows and bucks! Money? I continue to be amazed at this stat: last yearthe 3.5 billion people that made up the bottom 50 percent of the world held the same amount of wealth as the richest 62 people in the world,down from 2010s 388 people. The top 1 percent of the worlds population controls more wealth than the rest of the world, and the average wealth of each of the 72 million adults who are considered the wealthiest 1 percent was $1.7 million. The 6.48 billion that make up the bottom 90 percent have an average wealth of about $5,000. The gap between the haves and have-nots widens…lets ask Bernie Sanders if increased global inequality a stable system?

It appears that in mid-2016PennyMacis going to throw its hat into the ring and compete with Stearns, United, Caliber, Flagstar, Quicken, etc., catering to brokers. Regulators love non-banks increasing their market share, dont they! The publicly traded nonbank – the fastest growing originator among the top 10 – announced the move along with a $68.9 million profit for the fourth quarter. During the companys 4Q earnings call, company CEO and founder Stan Kurland said he expected PennyMac will increase market share further this year (isnt everyone?) and that wholesale will play a role. The correspondent channel accounted for 91% percent of PennyMacs $11.1 billion in fourth quarter originations, with consumer-direct activity accounting for the rest. Unfortunately the production of last quarter was down almost 29% from the previous quarter. David Spector, PennyMacs president and COO, said the lower volume was primarily driven by a seasonally smaller origination market, higher interest rates and delays caused by the Consumer Financial Protection Bureaus TRID disclosure rule.

Channels and loan types are created, butare programs ever discontinued? You bet. Just this week we learned that…

Mountain West Financialspread the word that The National Homebuyer Fund, Inc. (NHF) Sapphire Down Payment Assistance Grant Programs will be suspended in Nevada. All lock requests for the affected programs in Nevada must be submitted no later than 3PM PST on February 10. At this time, the suspension does not impact the NHF Sapphire FHA, VA amp; USDA loans in the state of California.

And the NHF Platinum is being suspended byUS Bank.This program offers a non-repayable grant of up to 5% (FHA/VA) or 3% (conventional) for eligible borrowers. The program is very popular as the down payment assistance was a grant rather than a loan like many DAP programs. TheNHF PlatinumDown Payment Assistance Program with US Bank as servicer will be suspended as of February 29. All reservations for NHF Platinummust be locked in on the portal by February 29…We are working diligently during this transition period to restructure, enhance and expand the NHF Platinum Program which, in the past few years, thanks to our mortgage lending partners, has already helped over 16,000 families purchase a home and has provided down payment assistance gifts of more than $134 million.

With lots of people paying lots of rent in lots of places, down payment assistance programs are garnering a lot of interest. And so is shopping for loans that dont cost much. Unfortunately it is becoming more expensive to originate and service loans. And lenders are reacting – why would anyone think theyre going to eat the increased costs?

US Bankposted a reminder that its new fee structure is effective for all loans that are registered and or locked on or after Monday, February 8, 2016.

Due to regulatory changes in our industry,Land Home Financial Services (LHFS)will be increasing the Admin fee by $50, for all states.The new Admin Fee will be effective with Forward Locks or the Loan Estimate (LE) dated on or after Tuesday February 16.

Effective March 1all Conventional and FHA appraisal fees will be increased by$25in California to ensure that Mortgage Works AMC continues to offer a more competitive turn time and service level. Please viewMountain West Financialrevised fee sheetposted on its website for details.Also,The Fannie Mae HomeReady Mortgage (HomeReady) is now available for loan reservation. Mountain West Financial (MWF) has implemented minimal overlays to the HomeReady program which are incorporated into the published Product Matrix found on the intranet.

Also, NYCB fees are changing. The NYCB Origination Fee (for Table Funding transactions) will be $905 effective for loans registered on or after 01.04.16. The increased NYCB Origination Fee expressed as an LLPA (fee buy-out) will be reflected on its rate sheet beginning 1/4/16.

Nationstar Mortgageupdated its price adjusters effective with locks on and after January 4thper its recent announcement.To download a print version of this announcement, please click here.

I received this note about fees. The new VA IRRL rule – issued last May 2014 – still not the final – requires a 36 month recoupment of all fees and charges to the evaluation so its not just about the lower rate. You MUST show that the client earns back the cost of the refinance within that 36 month period. What we are asking is how most lenders are addressing this? The MBA sent a letter last June asking the VA to provide guidance on what is included in the charges and fees as the Rule is ambiguous. To date according to Pete Mills the VA has yet to provide that guidance. Therefore we have been including ALL fees and charges collected. This includes prepaid escrows. Our sales guys claim everyone else is excluding these from the calculation and therefore my guys say they are losing deals to other lenders b/c we are including something that no one else is. My question was/is: What are other lenders doing?

How aboutjumbo amp; agency jumbo chatterand lender changes?

I received this note of frustration from a broker on the East Coast. I just priced out an Agency Jumbo as a fixed and a 5-1 ARM. The fixed had 1.25 in LLPA the ARM was 2.54! This seems like a disconnect at Famp;F: the LLPA varying between fixed and ARMs is disparate. This guy has a mid-700 credit score and less than 70% LTV. There is no YSP to speak of on the ARMs so at the end the ARM cost almost the same as the fixed! Why?

The last headline of note was in December. Recall thatAngel Oak Capital Advisors($6B+ in AUM) announced that they closed the biggest subprime securitization since the housing crisis: a $150.4 million in residential mortgages that fall outside of the governments QM safe harbor.

$17 Billion in non-agency securitizations in 2016? I receive many versions of the question Hey Rob, when is the Jumbo/Alt market going to find legs? The short answer is when legacy issues have been resolved, and demand outstrips supply. Helping this market is theStructured Finance Industry Group (SFIG),who late last year released thethird version of its proposed standardsfor private label RMBS transactions. The document is intended to help re-start the private label market by providing standardized best practices for deals. For the uninitiated, SFIG represents around 300 firms, in all sectors of the securitization markets, including issuers, investors, financial intermediaries, law firms, accounting firms, technology firms, rating agencies, servicers and trustees. Goldman Sachs writes,The report includes proposed representations and warranty frameworks, and a clarification of transaction parties roles and functions. Standardizing deal terms will be a positive for the industry, but the headwinds for a return to RMBS securitization remain significant. In 2015, there has been $12B of prime non-agency RMBS issued, vs. $8B in 2014 year-to-date. We anticipate only a modest pickup of deal flow in 2016, with an expected $17B of securitizations.

Wellsis expanding its policy for court-ordered debt on Non-Conforming Loans by limiting the late payment evaluation to 12 months, effective for loans purchased on or after February 15th. Any late payment in the last 12 months associated with the debt must be evaluated. Potential impacts to the capacity to repay (should the financial institution holding the note pursue repayment from the borrower) must be taken into account, as well as potential impacts to the borrowers credit profile if the account is significantly delinquent. In addition, Wells is updating its requirements for construction-to-permanent financing for Non-Conforming rate/term Loans to provide additional detail for acceptable use of loan proceeds and required documentation for loans purchased on or after February 15th.

Citadel Wholesalefeatures non-prime Jumbo loan amounts up to $3,000,000. Programs and details are available atsales@citadelservicing. com.

CMG Financialspread the word about changes to its 6200 Series Jumbo program after 2/1. Ineligible Borrowers: added Non-Occupant Co-Borrowers as an ineligible borrower. Non-occupant co-borrowers were not previously allowed; guidelines deferred to Fannie Mae which did not allow non-occupant co-borrowers with blended ratios. Fannie Mae recently updated the Fannie Mae Selling Guide to allow blended ratios with non-occupant co-borrowers therefore it is necessary to add as an ineligible borrower to the guidelines. There were other changes – read the bulletin for full details.

Aside from some intra-day chopping around in Thursdays bond markets, not much happened after the initial salvo of economic news. The 10-year note ended slightly higher and closed Thursday at 1.86% and most current coupon MBS prices were roughly unchanged.

As is standard for the first Friday of the month weve had the payroll numbers.January Non-Farm Payrolls were expected at +190k and came in weaker at +151k. The unemployment is expected to remain steady at 5% with average hourly earnings growing 0.2% m/m (2.1% y/y) but came in at 4.9% (lowest since early 2008) and +.5% respectively. Weve also had International Trade for December which came in at $43.4 billion.In the early going the 10-year is hovering around 1.86% and agency MBS prices are roughly unchanged.

Jobs and Announcements

In job newsNations Direct Mortgageis pleased to announce the promotion ofMartin Warrento SVP of Wholesale and Correspondent Lending.Mr. Warren will lead the sales and fulfillment teams for the wholesale and correspondent channels at the Irvine, CA based company. Martin has been instrumental in the companys success over the past eight plus years and we look forward to his leadership in this new role as we continue our nationwide expansion said Dan Upton, CEO of the company.With over $3 Billion in originations in 2015, Thompson Reuters recently named Nations Direct Mortgage in the top 25 Wholesale FNMA and FHA issuers.It is an approved Fannie Mae, Freddie Mac and Ginnie Mae direct seller/servicer and is poised for robustgrowth in 2016. They are aggressively expanding nationwide and are heading east to Dallas amp; Chicago to better support its sales efforts. Were looking for talented underwriters and account managers to join our family! And if youre an account executive whose production has plateaued due to market saturation, come talk to us!If unlimited upside appeals to you, please contact us atrecruiting@myndm.comto learn more.

In TexasCLM Mortgage, a Houston-based mortgage banker is seeking experienced loan processors and underwriters in its Houston office and established loan officers in the Austin and Dallas markets.CLM Mortgage is a small company with excellent financial backing that is on track to double production in 2016. We are looking for underwriters that have experience underwriting VA loans with their SAR, and loan processors who have experience working across all loan types. With a strong family culture and people that live our values, come see whyCLM Mortgageand our parent company have been ranked as one of the Top Workplaces in Houston for the last 4 years in a row! ContactVP Mike Kleinfor confidential inquiries.

Another foreign company has made inroads into the US mortgage market. In this instanceComputershare has purchased FloridasCapital Markets Cooperative. Last month this commentary noted that, AustraliasComputershare, which purchased Specialized Loan Servicing for $113.6 million about five years ago, announced that it signed an agreement to acquireAltavera Mortgage Services, a provider of independent, third-party mortgage origination services to residential mortgage lenders.

In other cooperative newsThe Mortgage Collaborativeannounced the addition of two new correspondent lenders to its preferred partner network: Plaza Home Loans and Wintrust Correspondent.

First-Time Home Buyer’s Guide To Making A Downpayment

First-Time Home Buyers Guide: Making A Downpayment

Buying Your First Home: The Down Payment

First-time home buyers face a few hurdles as compared to other types of buyers.

A first-time home buyer may less money saved for a downpayment; may have a collection of  student loans and other large debt; may be just starting a career; and may have less experience with the home-buying process.

A first-time home buyer may even be about to live on their own for the very first time.

According to the National Association of REALTORS®, first-time home buyers account for 1-in-3 homes sold nationwide. This is the lowest rate in close to 30 years.

Yet, with mortgage rates low and an abundance of low- and no-downpayment mortgages available from mortgage lenders, theres never been a simpler time to get approved for your very first home loan.

This post discusses down payments; and, is the first of a four-part series meant to help first-time home buyers buy their first home and get approved for their first mortgage.

Click to see todays rates (Feb 27th, 2016)
What Does It Mean To Make A Downpayment?

When you buy a home, you have the option of paying for it with cash from your bank account; or, with money youve borrowed from a bank.

Sometimes, a bank will lend you the entire amount you need to buy a home. This is known as 100% financing.

However, you may not want to borrow 100% of a homes purchase price, or the bank may not allow it. The monies you pay from your own bank account is known as your downpayment.

As an illustration, if you purchased a home for $100,000 and wanted to make a ten percent downpayment, at closing, the bank would have $90,000 for you while the remaining $10,000 would be sourced from your savings.

As a home buyer, the size of your downpayment is up to you.

You can make a downpayment of twenty percent or more, or you can skip the downpayment altogether. Each choice has its benefits.

For example, when you make a large downpayment, you borrow less money from your lender which reduces your monthly mortgage payment.

You may also get access to lower mortgage rates.

When you make a small downpayment, you get the benefit keeping cash in your savings account for lifes emergencies. It also means that you can buy a home today instead of waiting 8 years to save for a downpayment.

Click to see todays rates (Feb 27th, 2016)
How Much Downpayment Is Required To Buy A Home?

As a first-time home buyer, you have access to a wide range of mortgage loans and mortgage loans can be customized to meet a buyers needs.

The size of your downpayment is one such customization.

Your downpayment can be as large as you wish, or as small — so long as you make the minimum downpayment required by your lender.

The five most-common low- and no-downpayment mortgages used by first-time home buyers are the FHA loan, the VA loan, the USDA loan, the Conventional 97, and the HomeReady(TM) mortgage.

Each is described below.

The FHA Loan

FHA loans require a downpayment of 3.5% of a homes purchase price, at minimum.

FHA loans are common among first-time home buyers because the program allows for below-average credit scores and there are no special qualifications.

FHA mortgage approval standards are considered to be the most-friendly toward first-time buyers.

The VA Loan

VA loans are available to members of the US military and veterans of the Armed Services.

VA loans provide a 100% financing option, and VA mortgage rates are often the lowest as compared to other low- and no-downpayment mortgage loans.

The USDA Loan

USDA loans also allow for 100% financing. The program is available for homes in rural areas and less-dense suburban neighborhoods nationwide.

USDA mortgage rates are often as low as VA mortgage rates.

The Conventional 97

The Conventional 97 is a 3% downpayment program available to home buyers with above-average credit scores. The Conventional 97 loan allows buyers to receive cash gifts for their downpayment.

The program has a loan size limit of $417,000.

The HomeReady(TM) Mortgage

The HomeReady(TM) mortgage is another 3% downpayment program. The program is geared at multi-generational households, but all home buyers are welcome to apply.

Home buyers using HomeReady(TM) get access to discounted mortgage rates and can use the income of boarders and other household residents to help get mortgage-qualified.

Click to see todays rates (Feb 27th, 2016)
Downpayment Assistance Programs Can Help, Too

First-time home buyers often cite making a downpayment as a primary obstacle to homeownership.

However, in addition to an abundance of low- and no-downpayment mortgages, first-time buyers have access to downpayment assistance programs (DPAs) — many of which grant money instead of requiring repayment.

And the programs are widely-available, too.

According to a study from housing data company RealtyTrac, there are 78 million single-family homes in the United States, including condominiums. 68 million — or 87% — of these homes potentially qualify for downpayment assistance.

As a first-time buyer, therefore, you can use downpayment assistance programs to help reduce your cash required at closing; and, to reduce your monthly mortgage payment.

Strangely, less than ten percent of home buyers even apply for downpayment assistance.

Home buyers often dont apply for such programs because theyre unaware that the downpayment assistance programs exist, they dont believe theyll qualify, or they plain dont know where to get access.

To find out for which assistance programs you may be eligible, talk to your mortgage lender. Most banks have applications on-hand for downpayment assistance programs, or can point you to a website.

The average downpayment assistance amounts to $11,565.

What Are Todays Mortgage Rates?

With mortgage rates low and US rents rising, its an excellent time to consider homeownership. And, as a first-time buyer, you have lots of options.

Get todays live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.

Click to see todays rates (Feb 27th, 2016)

Estate planning seminar at NCHS

NEWARK – An estate planning seminar will be at 6:30 pm Thursday at Newark Catholic High School, sponsored by the Newark Catholic High School Foundation.

Adam Vernau, Jeff Cox and Crystal Kent will discuss estate planning and probate, investments and tax matters.

For more information, contact Nancy Bourne at 740-345-5671 or

Five Estate Planning Secrets of Successful Real Estate Investors

People often devote a massive chunk of their time for planning vacations and reading restaurant reviews, but rarely think of estate planning and investment. For most Americans, a substantial part of their wealth comes from real estate investments and this makes it important to utilize estate planning for tax advantages. If you are a real estate investor, estate planning allows you to optimize capital gains while reducing your tax liabilities. Here are fivekey points that every real estate investor should consider for advantageous ownership:

Real estate investments do not qualify for tax exemption on lifetime capital gains.

A spousal rollover remains tax-deferred until the property is sold or the surviving spouse dies.

Estate equalization, mortgage repayment, real estate fluctuations and capital gains create a need for liquidity.

Estate planning facilitates the strategic organization of assets to ensure that you attract a minimum of taxes on real estate holdings. It can be very complicated, but this solid plan will keep you organized and on track at all times. Follow these five estate planning strategies to ensure that all your assets are passed on to your designated beneficiaries without inviting any familial discord.

Six questions to ask for lower mortgage rates

ARMs look good to a lot of homebuyers because they usually offer lower introductory rates. But remember, your rate could go up after your introductory period, so be sure you’re comfortable with the chance your monthly mortgage payment could rise substantially in the future. Using the terms of the loan, you can calculate what your payment might look like in different rate scenarios. 

2. Should I pay for points?

A point is an upfront fee — 1% of the total mortgage amount — paid to lower the ongoing interest rate by a fixed amount, usually 0.125%. For example, if you take out a $200,000 loan at 4.25% interest, you might be able to pay a $2,000 fee to reduce the rate to 4.125%.

Paying for points makes sense if you plan to keep the loan for a long time, but since the average homeowner stays in his or her house for about nine years, the upfront costs often outweigh interest rate savings over time.

Alternatively, there are negative points. It’s the opposite of paying points: A lender reduces its fees in exchange for a higher ongoing interest rate. It’s tempting to reduce your upfront fees, but the additional interest you pay over the life of the loan can be significant. Carefully consider your short-term savings and your long-term costs before taking negative points.

3. How much should I expect to pay in closing costs?

Closing costs usually amount to about 3% of the purchase price of your home and are paid at the time you close, or finalize, the purchase of a house. Closing costs are made up of a variety of fees charged by lenders, including underwriting and processing charges, title insurance fees and appraisal costs, among others. You’re allowed to shop around for lower fees in some cases, and the Loan Estimate form will tell you which ones those are. Shopping for the right lender is a good way to save money on a mortgage and associated fees.

4. Do I qualify for any special programs?

Before you settle on a mortgage, find out if you’re eligible for any special programs that make home-buying less costly. For example:

  • VA loans: If you or your spouse are active military or veterans, you might qualify for a VA loan. Such loans allow low (or no) down payments and offer protections if you fall behind on your mortgage.
  • FHA loans: Like VA loans, FHA loans allow low down payments, but they’re open to most US residents. They’re popular with first-time homebuyers, because they require as little as 3.5% down and are more forgiving of low credit scores than traditional lenders.
  • USDA loans: If you live in a rural area, the USDA might give you a low- or no-down-payment mortgage and help cover closing costs. Like VA loans, USDA loans can also offer help if you fall behind on your payments.
  • First-time homebuyer programs: If this is your first go-round in the homeownership process, check out the HUD website for helpful information and a list of homebuyer assistance programs in your state.

5. How much can and should I put down?

Generally speaking, a lower down payment leads to a higher interest rate and paying more money overall. If you can, pay 20% of your home’s purchase price in your down payment. However, if you don’t have that kind of cash, don’t worry. Many lenders will accept down payments as low as 5% of your home’s purchase price. 

Be aware: Low-down-payment loans often require private mortgage insurance, which adds to your overall cost, and you’ll probably pay a higher interest rate. Put down as much as you can while maintaining enough of a financial cushion to weather potential emergencies.

6. What else should I be on the lookout for?

Remember these last tips as you’re buying a home:

  1. Use your Loan Estimate to compare costs. Every lender should provide a statement of your potential loan’s terms and costs before you commit. This will help you make an apples-to-apples comparison between loan offers.
  2. Comparison shop with as many banks, credit unions and online lenders as possible, and ask for referrals from your real estate agent and friends, to get a complete picture of your options. Prioritize credit unions in your search. Credit unions are not-for-profit lending institutions that often have lower rates and fees than for-profit banks. 
  3. Confine your search for a mortgage to a 14-day window. If you apply for mortgages beyond a two-week time period, the credit inquiries could temporarily lower your credit score.

Taking on a mortgage is an important decision that has huge implications for your financial future. Ask smart questions and explore all of your options to save on costs and find the right loan.

This article first appeared at NerdWallet.

TCF Financial Upgraded to Neutral at Compass Point, Price Target Cut to $12.50 (NYSE:TCB)

TCF Financial (NYSE:TCB) was upgraded to neutral from sell by Compass Point while the firm trimmed their price target to $12.50 from $13.00 a share.

The stock decreased 3.97% or $0.45 during the last trading session, hitting $10.89. TCF Financial Corporation (NYSE:TCB) has declined 33.07% since July 6, 2015 and is downtrending. It has underperformed by 22.66% the Samp;P500.

TCF Financial Corporation operates as the bank holding company for TCF National Bank that provides various retail and commercial banking products and services. The companyÂ’s Lending segment offers retail lending services, including consumer loans for personal, family, and household purposes, such as home purchases, debt consolidation, and financing of home improvements. This segment also provides loans secured by personal property, as well as unsecured personal loans; commercial real estate and business lending products; lease and equipment finance; inventory finance; and auto finance.

Its Funding segment provides deposit products, including free checking accounts, money market accounts, regular savings accounts, certificates of deposit, and retirement savings plan accounts. This segment also offers treasury services. As of December 31, 2014, the company had 381 branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona, South Dakota, and Indiana. TCF Financial Corporation was founded in 1923 and is headquartered in Wayzata, Minnesota.