Friday, July 03, 2015
Tuesday, August 12, 2014
Changes coming to FICO credit scores
Changes coming to FICO credit scores
NEW YORK (AP) – Aug. 11, 2014 – Changes are coming to FICO, a broadly used credit score, that may mean higher credit scores for many consumers. Banks, credit card issuers, auto lenders and other businesses use those scores to decide whether to lend to consumers and how much interest to charge them. A higher score could get you better terms on loans for cars and homes.
What are the changes?
Fair Isaac Corp., the company behind FICO, says there are three significant changes to its metric, which it says is used in 90 percent of U.S. consumer lending decisions.
- Debts that go to collections agencies and get repaid won't count against a consumer's FICO score.
- Medical debts will have a smaller effect on the score. If your only major bad mark comes from unpaid medical debts, FICO says it expects your credit score to go up by 25 points. (Scores range from 300 to 850.)
- A technique will analyze people's creditworthiness if they don't have much of a credit history.
Why are the changes happening?
Regulators have focused on health care debts. In May, the Consumer Financial Protection Bureau (CFPB), a government agency, said consumers may be penalized too harshly for medical debt. The CFPB said medical bills are different from some other types of debts because they can be more expensive, unpredictable and caused by disputes between medical providers and insurers instead of bills consumers simply didn't pay.
The CFPB said that consumers who owe medical debt may have their credit scores underestimated by about 10 points.
Who will be most affected?
Greg McBride, the chief financial analyst for financial services company Bankrate, says the change will help many consumers, but it won't make a big difference if you already have bad credit or very good credit. For consumers with medical debt, this could be the difference between a decent score of around 675 and a good one around 700, or a good score and a great one around 725.
According to a study by the Urban Institute, 35 percent of Americans have debts and unpaid bills reported to collection agencies. The Association of Credit and Collection Professionals says health care-related bills account for about 38 percent of the debt that gets collected.
As for the new technique focused on those with little or no credit history, McBride says its effect remains to be seen. He says lenders want to get a better read on such consumers because they see them as potential customers and want to know which are likeliest to repay loans. The technique will help lenders evaluate people who don't have a bank account, mortgage or credit card – often those with lower incomes, including young people and retirees.
When do these changes go into effect?
Fair Isaac hopes lenders will use the newest version of FICO, which will be available in the fall. But lenders don't have to buy the updated version.
Copyright © 2014 The Associated Press, Marley Jay. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Sunday, May 25, 2014
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Saturday, May 24, 2014
Home Sales, Inventories Reach a Turning Point? | Realtor Magazine
Home Sales, Inventories Reach a Turning Point?
Existing-home sales posted the first rise of the year in April as inventory levels of for-sale homes also showed improvement, the National Association of REALTORS® reports.
Existing-home sales rose 1.3 percent in April compared to March, reaching a seasonally adjusted annual rate of 4.65 million last month. Still, home sales are 6.8 percent below the 4.99 million-unit pace set in April 2013, NAR reports.
“Some growth was inevitable after subpar housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from this point,” says Lawrence Yun, NAR’s chief economist. “Annual home sales, however, due to a sluggish first quarter will likely be lower than last year.”
An Overview of Key Indicators
Inventory levels: Housing inventories soared 16.8 percent in April, reaching a 5.9-month supply at the current sales pace. That is up from a 5.1-month supply in March. Unsold inventory is 6.5 percent higher than a year ago. “We’ll continue to see a balancing act between housing inventory and price growth, which remains stronger than normal simply because there have not been enough sellers in many areas,” Yun says. “More inventory and increased new-home construction will help to foster healthy market conditions.”
Home prices: The median existing-home price was $201,700 in April – 5.2 percent higher than year ago levels. “Current price data suggests a trend of slower growth, which bodes well for preserving favorable affordability conditions in much of the country,” Yun says.
Distressed sales: The decrease continues in distressed homes, which includes foreclosures and short sales. Distressed homes accounted for 15 percent of April sales, down from 18 percent a year ago, NAR reports. Broken out, in April, 10 percent of sales were foreclosures and 5 percent were short sales.
Time on the market: For the fourth consecutive month, homes sold faster. Four out of 10 homes nationwide sold in less than a month in April. The median time on the market for all homes was 48 days in April, down from 55 days in March.
By Region
Across the U.S., here’s how existing-home sales and prices fared in April:
- Northeast: unchanged in April compared to March, holding at an annual rate of 600,000, but down 6.3 percent compared to year ago levels. Median price: $244,000, down 0.4 percent from a year ago.
- Midwest: dropped 1 percent in April to a 1.03 million pace, and are 9.6 percent below year ago levels. Median price: $157,200, which is 5.8 percent higher than April 2013 levels.
- South: rose 1 percent to an annual level of 1.94 million in April, but remain 3.5 percent below year ago levels. Median price: $173,200, up 3.2 percent from April 2013 levels.
- West: rose 4.9 percent to a 1.08 million pace in April, but are 10 percent below year ago levels. Median price: $291,200, up 9.7 percent from April 2013.
Thursday, May 22, 2014
Miami EB-5 | EB-5 South Florida
Miami receives EB-5 designation
The program will facilitate foreign investment in South Florida
May 21, 2014 03:45PM
Wednesday, May 21, 2014
Housing Affordability Slips, But Not Everywhere | Realtor Magazine
Housing Affordability Slips, But Not Everywhere
Housing affordability continued to fall across the country as the median price of single-family homes rose due to a continued lack of housing inventory, according to the latest National Association of REALTORS® Housing Affordability Index. The median single-family home price was $198,200 in March, up 7.4 percent from year-ago levels.
What’s more, mortgage rates are higher than last year. Income levels rose 2.1 percent from last year.
“An increase in inventory along with price stabilization will improve affordability,” according to NAR’s Economists’ Outlook blog.
Affordability is down in all regions across the country, but the West saw the biggest drops in affordability due to a 12.5 percent price gain.
Still, more than 63 percent of homes sold in the first three months of the year were affordable to buyers earning the U.S. median income of $63,900, according to a new analysis by the National Association of Home Builders. In some markets, the income needed to qualify is a fraction of that.
The following housing markets are known as the most affordable markets in the nation for a median-priced home, where buyers need less than $21,000 in income to qualify for a mortgage when putting 5 percent down.
- Youngstown-Warren-Boardman, Ohio-Pa.; $14,894 (income needed to qualify when putting 5% down)
- Decatur, Ill.: $16,046
- Toledo, Ohio: $16,623
- Rockford, Ill.: $16,853
- Cumberland, Md.-W.Va.: $18,767
- South Bend-Mishawaka, Ind.: $19,758
- Dayton, Ohio: $21,649
- Canton-Massillon, Ohio: $21,741
- Fort Wayne, Ind.: $21,787
- Fond du Lac, Wis.: $21,810
Meanwhile, the least affordable markets were San Jose-Sunnyvale-Santa Clara, Calif. (where a buyer would need an income of $186,285 to qualify), followed by San Francisco-Oakland-Fremont, Calif. ($156,728); Honolulu ($154,999); and Anaheim-Santa Ana-Irvine, Calif. ($154,423).
Source: “Latest Housing Affordability Index Data,” National Association of REALTORS® Economists’ Outlook Blog (May 20, 2014) and “Where it Takes $185k to Get a Loan,” Bankrate.com (May 14, 2014)
Mortgage Giant Tweaks 5 Projections for Housing in 2014 | Realtor Magazine
Mortgage Giant Tweaks 5 Projections for Housing in 2014
Regular supply and demand forces continue to produce unexpected results in the housing recovery, according to Freddie Mac’s U.S. Economic and Housing Market Outlook for May.
“The housing recovery is struggling to shift into a higher gear, and obviously there are various imbalances holding this back from happening, but at the heart of the matter it comes down to jobs,” says Frank Nothaft, Freddie Mac’s chief economist. “Housing needs stronger, and just as important, sustained levels of job creation to get the housing engine firing on all cylinders. April’s jobs numbers were encouraging, and nothing will solve the supply and demand factors faster than keeping employment growth going.”
As such, Freddie Mac revised its housing forecast and lowered several indicators.
“While we still see an improving trajectory for the housing market, we're pushing it out a few months from our earlier forecast because we expect GDP growth to pick up in the final three quarters of the year from what was clearly a dismal first quarter reading,” Nothaft notes.
The mortgage giant’s latest report showed the following projections for the market for 2014:
1. New-home construction: Starts on new homes are expected to rise by 18 percent this year.
2. Home prices: Appreciation is expected to moderate to an annual growth of 5 percent this year.
3. Sales: New and existing home sales are expected to hold at 5.5 million, the same as 2013. The inventory of homes for sale remains low in many housing markets across the country.
4. Household formation: Net household formation continues to rise, but the overall levels remain lower than what is expected, Freddie Mac notes. “Stronger job and income growth are necessary to support additional household formation,” Freddie notes.
5. Mortgage rates: The 30-year fixed-rate mortgage is expected to gradually inch higher and end the year around 4.6 percent. “We expect fixed rates to rise gradually during the second half of the year in part as a result of the Federal Reserve’s ‘tapering’ of net MBS acquisitions,” according to Freddie Mac’s report.
Source: Freddie Mac
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