housing
Rochester, New York (PRWEB) October 31, 2011
Dr. Robert D. Manning, distinguished consumer finance scholar (author of CREDIT CARD NATION and link to http://www.creditcardnation.com) and founder of the nonprofit Responsible Debt Relief (RDR) Institute, announced the release of his company?s pathbreaking, online mortgage underwriting, home refinancing, and housing counseling assessment system last week in Salt Lake City, Utah. During his luncheon address at the Utah Housing Coalition conference, Dr. Manning, one of the earliest forecasters of the Consumer-Led Recession and collapse of the US housing market, reported on the current state of the U.S. economy, the perilous condition of the housing market, and the failure of the banking industry to adjust to the realities of current risk-management standards.
According to Dr. Manning, ?public policy-makers made the fatal mistake of assuming that the 2007 recession was propelled by a traditional business-cycle that would last 3 or four years rather than a consumer debt bubble that would require drastic household debt relief through loan forgiveness and low-interest loans.? The problem is that financial institutions have not adjusted to the new reality of their faulty underwriting methods. Individually-based FICO scores and related retrospective financial measures are much less reliable assessments of consumer financial capability in the current environment of consumer credit scarcity. As a result, banks are reluctant to offer loans to creditworthy households that have encountered financial difficulty during this turbulent economic period.
During his presentation, Dr. Manning asserted that a new paradigm for assessing household credit capability must be explored if the nation is to avoid a deeper and more prolonged recession. Otherwise, fewer mortgage and loan applications will be approved which will reinforce falling housing prices and lead to more families abandoning their ?upside-down? mortgages. Dr. Manning then explained the key features of the RDR net cash-flow algorithm/software that calculates net, after-tax household income based on such factors as federal, state and local taxes, household structure, tax filing status, regional cost of living, home ownership status, federal approved deductions such as retirement and charitable contributions, and court-mandated payments such as child support and garnishments.
This proprietary algorithm is the basis of a webservices-based data management system whereby lenders, counselors, and individual consumers can conduct a preliminary, online assessment of the affordability of a mortgage modification, home loan, and even an auto loan.
Following the presentation, Dr. Manning demonstrated the ease and speed in using the RDR online financial assessment system?beginning with a budget assessment based on the net cash-flow software. The assessments can be calculated for individuals and for households. The unique ?Credit Capacity? score provides a quick assessment of the financial situation of a household. Similarly, the online mortgage underwriting, home loan modification, and auto loan assessments estimates the size of the loan that is affordable, whether the borrower should qualify for a prime or subprime loan, and the total cost of the loan. Additionally, RDR offers a unique tenant screening score that estimates whether a person that has experience financial distress such as foreclosure or bankruptcy can afford a particular rent without being rejected due to a low FICO score.
Dr. Manning concluded that, in the short-term, the pace of the US economic recovery will depend on the stabilization of the housing market. Without new risk management tools to a guide recently foreclosed and/or bankrupt families into the rental housing market and more precise underwriting tools that are not dependent on flawed FICO scores, the US will face a decade of declining economic prosperity and widening social inequality.
For more about RDR, its pathbreaking net cash-flow tools, and Dr. Manning, please contact us at 585-563-7675.
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Category : Mortgage
August 9, 2011
Featured Story
In Housing, S&P’s Influence Indirect
By Maria Aspan
Housing industry executives awoke on Monday to a world reshaped by the U.S. downgrade, but for their corner of the financial markets the pain is mostly psychological.
NMLS Update: Bank LOs Outnumber Nonbank LOs Almost 3 to 1
By Brian Collins
Federally insured banks, thrifts and credit unions have three times as many loan officers engaged in mortgage lending as state-licensed companies, according to new figures submitted to the Nationwide Mortgage Licensing System and Registry.
| A Growth Business for Fannie: Buyback Requests & Collections By Brian Collins Fannie Mae, in a new quarterly filing, says it is receiving “higher amounts” from lenders on loan repurchase requests while its pipeline of buyback claims on defaulted mortgages continues to grow. |
| New Green Tree Owner Posts Loss By Brad Finkelstein Walter Investment Management, the proud new owner of Green Tree Servicing, posted a $3.4 million loss in the second quarter, after booking $9 million of transaction costs related to the deal. NAIHP Meeting With FDIC on Broker Buybacks Set for Today The National Association of Independent Housing Professionals said it has a meeting scheduled for Tuesday with the Federal Deposit Insurance Corp. to discuss the issue of loan buyback claims being forced upon mortgage brokers. SpotlightSubservicing Samples So Far Up 12% Year-to-Year
A sample of residential subservicers reporting through June 30 suggests combined volumes in this category are up 12% over last year’s first half. One company in this category saw a four-digit percentage increase and four companies saw double-digit percentage gains in volume but four other companies saw double-digit percentage declines. H&R Block Unit Settles with Massachusetts Over OOMC Sand Canyon Corp., a subsidiary of H&R Block that holds the remnants of the Option One Mortgage business, will pay a $10 million settlement to Massachusetts and institute a loan modification program providing an estimated $115 million of additional relief to consumers.
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Category : Agents & Brokers
Featured Story
Holdings of Servicing Continuing Steady Fall
By Paul Muolo
In the “pre-crash” days of the mortgage industry two facts were unmovable: that the average nationwide home price would never fall and that servicing rights would never decline.
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Overcome Recent Market Changes and Achieve More with Radian MI The FHA’s April 18th pricing increase makes conventional financing with Radian the best option for qualifying low-downpayment borrowers and increasing volume. Drive volume by lowering monthly payments by 15% over the FHA, plus increase purchasing power by 18%. Learn more today. |
| Federal Judge Dismisses Ore. Foreclosure In Another Challenge to MERS By Austin Kilgore In yet another borrower dispute of the use of the Mortgage Electronic Registration Systems, a U.S. District court vacated the nonjudicial foreclosure of an Oregon borrower |
| Mixed Bag for Stocks After Big Selloff By Brad Finkelstein It has been a mixed bag for mortgage-related stocks on Thursday morning, as the Dow Jones Industrial Average slid another 85 points, on top of a decline of 280 points on Wednesday. |
| Former FHLB President Blames Regulatory ‘Overreaction’ for Slowdown By Brian Collins One chief reason mortgage application volume is slowing and home prices have yet to recover is regulatory “overreaction” in the wake of the housing bust, according to former Federal Home Loan Bank president Alex Pollock. |
| Ranieri JV Buys New Penn Financial By Brad Finkelstein Shellpoint Partners LLC, a joint venture between company management and Ranieri Partners, has purchased New Penn Financial, an originator of FHA/VA and conforming loans, based in Plymouth Meeting, Pa. |
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SpotlightMarking 30 Years
PCV Murcor is marking its 30th anniversary in the real estate valuations space. Chairman and CEO Keith Murray says the firm is a pioneer in the outsourcing of valuations. |
| New Chief for NeighborWorks By Brad Finkelstein NeighborWorks America has promoted Eileen M. Fitzgerald to the chief executive job, a post she has held on an interim basis since January. Prior to that, she has been the affordable housing organization’s chief operating officer since 2005. |
| Rate Drops for Seventh Week to Another Low for Year By Bonnie Sinnock The average 30-year mortgage rate’s seventh consecutive decline during the week ending June 2 brought it to new lows not seen in Freddie Mac’s survey since the week ending Dec. 2. |
| Weichert-Related Lender Fined for Using Unlicensed LOs By Brian Collins State regulators this week fined Mortgage Access Corp., an affiliate of realty giant Weichert, $3 million for using unlicensed mortgage originators. The settlement covers 10 states. |
| CoreLogic Offers a Glimmer of Good News on Housing By Brian Collins Home prices rose slightly in April for the first time since the federal home buyer tax credit expired last summer, according to the CoreLogic house price index, which includes distressed sales. |
| House GOP Demands Second Hearing with CFPB’s Warren By Kate Davidson The chairman of the House Oversight Committee is calling Elizabeth Warren back to the Hill for a second hearing following a dispute with a subcommittee chairman last week. |
| 163 Elected Officials Sign QRM/Risk Retention Letter By Brian Collins A letter signed by 163 congressmen urges federal regulators to loosen the definition of a “qualified residential mortgage,” allowing single-family loans with low downpayments and private mortgage insurance to be exempt from pending risk retention rules. |
HUD Charges MGIC Over Maternity Issue
By Brad Finkelstein
The Department of Housing and Urban Development is charging Mortgage Guaranty Insurance Corp. with violating the Fair Housing Act because its underwriter required a woman return to her job from maternity leave as a condition for approving the application for mortgage insurance.
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