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Tag: mortgages

  • Fed governor Cook to seek court order blocking her firing by Trump

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    A case that could provide the Trump administration with new and expansive power over the traditionally independent Federal Reserve will get its first court hearing Friday.

    Federal Reserve Governor Lisa Cook has requested an emergency injunction to block President Donald Trump’s attempt to fire her over allegations that she committed mortgage fraud when she purchased a home and condo in 2021. She was appointed to the Fed’s board by former president Joe Biden in 2022.

    If her firing is allowed to stand, it would likely erode the Fed’s longstanding independence from day-to-day politics. No president has ever fired a Fed governor in the agency’s 112-year history. Economists broadly support Fed independence because it makes it easier for the central bank to take unpopular steps such as raising interest rates to combat inflation.

    Cook has asked the court to issue an emergency order that would block Trump’s firing of her and enable her to remain on the seven-member board of governors while her lawsuit seeking to overturn the firing makes its way through the courts. Many observers expect her case will end up at the U.S. Supreme Court.

    The law governing the Fed says the president can’t fire a governor just because they disagree over interest rate policy. Trump has repeatedly demanded that the Fed, led by Chair Jerome Powell, reduce its key interest rate, which is currently 4.3%. Yet the Fed has kept it unchanged for the last five meetings.

    But the president may be able to fire a Fed governor “for cause,” which has traditionally been interpreted to mean inefficiency, neglect of duty, or malfeasance. Cook’s lawyers argue that it also refers only to conduct while in office. They also say that she was entitled to a hearing and an opportunity to rebut the charges.

    “The unsubstantiated and unproven allegation that Governor Cook ‘potentially’ erred in filling out a mortgage form prior to her Senate confirmation — does not amount to ‘cause,’” the lawsuit says.

    Trump has moved to fire a number of leaders from a host of independent federal regulatory agencies, including at the National Transportation Safety Board, Surface Transportation Board, Equal Employment Opportunity Commission, and Nuclear Regulatory Commission, as well as the Fed.

    The Supreme Court declined to temporarily block the president from firing directors of some independent agencies earlier this year while those cases move through the courts. Legal experts say the high court this year has shown more deference to the president’s removal powers than it has in the past.

    Still, in a case in May, the Supreme Court appeared to single out the Fed as deserving of greater independence than other agencies, describing it as “a uniquely structured, quasi-private entity.” As a result, it’s harder to gauge how the Supreme Court could rule if this case lands in its lap.

    As a governor, Cook votes on all the Fed’s interest rate decisions and helps oversee bank regulation. The Fed has substantial power over the economy by raising or cutting its key interest rate, which can then influence a broad range of other borrowing costs, including mortgages, car loans, and business loans.

    Bill Pulte, Trump’s appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, first leveled the accusation against Cook that she has committed mortgage fraud.

    It’s a charge he has also made against two of Trump’s biggest political enemies, California Democratic Sen. Adam Schiff and New York Attorney General Letitia James, who has prosecuted Trump. Pulte has ignored a similar case involving Ken Paxton, the Texas attorney general who is friendly with Trump and is running for Senate in his state’s Republican primary.

    Cook’s lawsuit responds by arguing that the claims are just a pretext “in order to effectuate her prompt removal and vacate a seat for President Trump to fill and forward his agenda to undermine the independence of the Federal Reserve.”

    If Trump can replace Cook, he may be able to gain a 4-3 majority on the Fed’s governing board. Trump appointed two board members during his first term and has nominated a key White House economic adviser, Stephen Miran, to replace Adriana Kugler, another Fed governor who stepped down unexpectedly Aug. 1. Trump has said he will only appoint people to the Fed who will support lower rates.

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  • Average rate on a 30-year mortgage slips to 10-month low

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    MCLEAN, Va. — The average rate on a 30-year U.S. mortgage slipped this week to its lowest level in 10 months, but remains close to where it’s been in recent weeks.

    The long-term rate eased to 6.56% from 6.58% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.35%.

    Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, were unchanged from last week. The average rate held steady at 5.69%. A year ago, it was 5.51%, Freddie Mac said.

    Elevated mortgage rates have added to a slump in the U.S. housing market that began in early 2022, when rates began climbing from pandemic lows.

    For much of the year, the average rate on a 30-year mortgage has hovered relatively close to its 2025 high of just above 7%, set in mid-January. It’s has mostly trended lower six weeks in a row and is now at the lowest level since Oct. 24, when it averaged 6.54%.

    The recent downward trend in mortgage rates bodes well for prospective homebuyers who have been held back by stubbornly high home financing costs. But it has yet to translate into a turnaround for home sales, which have remained sluggish this year after sinking in 2024 to their lowest level in nearly 30 years.

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  • Trump’s secret weapon: Housing chief Bill Pulte morphs into attack dog, wielding America’s property records like a club

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    When Bill Pulte was nominated as the country’s top housing regulator, he told senators that his “number one mission will be to strengthen and safeguard the housing finance system.”

    But since he started the job, he’s distinguished himself by targeting President Donald Trump‘s political enemies. He’s using property records to make accusations of mortgage fraud and encourage criminal investigations, wielding an obscure position to serve as a presidential enforcer.

    This week, Trump used allegations publicized by Pulte in an attempt to fire Lisa Cook, a member of the Federal Reserve board, as he tries to exert more control over the traditionally independent central bank.

    Pulte claims that Cook designated two homes as her primary residence to get more favorable mortgage rates. Cook plans to fight her removal, laying the groundwork for a legal battle that could reshape a cornerstone institution in the American economy.

    Trump said Tuesday that Cook “seems to have had an infraction, and you can’t have an infraction,” adding that he has “some very good people” in mind to replace her.

    Pulte has cheered on the president’s campaign with a Trumpian flourish.

    “Fraud will not be tolerated in President Trump’s housing market,” he wrote on social media. “Thank you for your attention to this matter.”

    Pulte targets Democrats but not Republicans

    Pulte, 37, is a housing industry scion whose official job is director of the Federal Housing Finance Agency. He oversees mortgage buyers Fannie Mae and Freddie Mac, which were placed in conservatorship during the Great Recession almost two decades ago.

    Like other political appointees, he routinely lavishes praise on his boss.

    “President Trump is the greatest,” he posted over the weekend.

    Pulte has made additional allegations of mortgage fraud against Sen. Adam Schiff, one of Trump’s top antagonists on Capitol Hill, and New York Attorney General Letitia James, who filed lawsuits against Trump. Those cases are being pursued by Ed Martin, a Justice Department official.

    “In a world where housing is too expensive, we do not need to subsidize housing for fraudsters by letting them get better rates than they deserve,” Pulte wrote on social media.

    Pulte has ignored a similar case involving Ken Paxton, the Texas attorney general who is friendly with Trump and is running for Senate in his state’s Republican primary. Paxton took out mortgages on three properties that were all identified as his primary residence.

    He also has mortgages on two other properties that explicitly prohibit him from renting the properties out, but both have been repeatedly listed for rent, according to real estate listings and posts on short-term rental sites.

    Asked about Pulte’s investigations and Trump’s role in them, the White House said that anyone who violates the law should be held accountable.

    “President Trump’s only retribution is success and historic achievements for the American people,” said Davis Ingle, White House spokesman.

    It’s unclear whether Pulte is using government resources to develop the allegations he has made. Mortgage documents are generally public records, but they are typically maintained at the county level across most of the U.S., making them difficult to comprehensively review. However, Fannie Mae and Freddie Mac, which are both government-sponsored entities, purchase large tranches of mortgages from lenders, which could centralize much of that information, real estate and legal experts say.

    FHFA did not respond to a detailed list of questions from the AP, including whether Pulte or his aides used government resources to conduct his research.

    It’s not just mortgages

    Pulte’s broadsides go beyond mortgages. He’s been backing Trump’s criticism of Jerome Powell, chair of the Federal Reserve, over expensive renovations at the central bank’s headquarters. Trump is pressuring Powell to cut interest rates in hopes of lowering borrowing costs, and his allies have highlighted cost overruns to suggest that Powell is untrustworthy or should be removed from his position.

    “This guy is supposed to be the money manager for the world’s biggest economy, and it doesn’t even look like he can run a construction site,” Pulte said while wearing a neon safety vest outside the building. “So something doesn’t smell right here.”

    Since returning to the White House, Trump has reached deep into the government to advance his agenda. He’s overhauled the federal workforce with the Office of Personnel Management, pushed ideological changes at the Smithsonian network of museums and fired the commissioner of the Bureau of Labor Statistics when he didn’t like a recent report on job numbers.

    With Pulte in charge, the Federal Housing Finance Agency is becoming another instrument of Trump’s mission to exert control and retaliate against enemies.

    It’s a contrast to the Internal Revenue Service, where Trump has unsuccessfully discussed ways to use tax policies as a pressure point. For example, during battles over higher education, Trump threatened to take away Harvard’s long-standing tax-exempt status by saying, “It’s what they deserve.”

    However, there are more restrictions there, dating back to the Watergate scandal under President Richard Nixon.

    “It’s been hard for the administration to use the inroads it wants to use to pursue its enemies,” said Vanessa Williamson, a senior fellow at the Urban-Brookings Tax Policy Center.

    She said, “The law is very clear about taxpayer privacy and the criminal penalties at play are not small.”

    Before going on the attack, Pulte played nice online

    Pulte is heir to a home-building fortune amassed by his grandfather, also named William Pulte, who founded a construction company in Detroit in the 1950s that grew into the publicly traded national housing giant now known as the Pulte Group.

    He spent four years on the company’s board, and he’s the owner of heating and air conditioning businesses across the U.S. He had never served in government before being nominated by Trump to lead the Federal Housing Finance Agency.

    “While many children spent their weekends at sporting events, I spent mine on homebuilding jobsites with my father and grandfather,” Pulte said in written testimony for his nomination hearing. “From the ground up, I learned every aspect of housing — whether it was cleaning job sites, assisting in construction, or helping sell homes.”

    He once tried to make a name for himself with good deeds, describing himself as the “Inventor of Twitter Philanthropy” and offering money to needy people online. He was working in private equity at the time, and he told the Detroit Free Press that he funded his donations with some “very good liquidity events” to power his donations.

    Even six years ago, he appeared focused on getting attention from Trump.

    “If @realDonaldTrump retweets this, my team and I will give Two Beautiful Cars to Two Beautiful Veterans on Twitter.”

    Trump replied, “Thank you, Bill, say hello to our GREAT VETERANS!”

    Pulte, whose most recent financial disclosure shows a net worth of at least $180 million, was also ramping up his political donations.

    Over the past six years, he and his wife have donated over $1 million to the political efforts of Trump and his allies, including a $500,000 contribution to a super PAC affiliated with Trump that was the subject of a campaign finance complaint made with the Federal Election Commission.

    The Pultes’ $500,000 contribution was made through a company they control named ML Organization LLC, records show. While such contributions are typically allowed from corporations, the same is not always true for some limited liability companies that have a limited business footprint and could be set up to obscure the donor.

    The FEC ultimately exonerated the Pultes, but found in April that the Trump super PAC, Make America Great Again, Again! Inc., did not properly disclose that the Pultes were the source of the donation, said Saurav Ghosh, the Campaign Legal Center’s director of federal campaign finance reform.

    Ghosh said the donation raises serious questions about Pulte’s appointment to lead FHFA.

    “Why is Bill Pulte even in a government position?” he said. “Maybe he’s qualified, maybe he isn’t. But he did pour hundreds of thousands of dollars into a pro-Trump super PAC. And I think it’s clear there are these types of rewards for big donors across the Trump administration.”

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    Chris Megerian, Brian Slodysko, Fatima Hussein, The Associated Press

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  • Embattled Fed Gov. Lisa Cook says she’ll sue Trump to keep her job

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    WASHINGTON — Federal Reserve Gov. Lisa Cook will sue President Donald Trump’s administration to try to prevent him from firing her, her lawyer said Tuesday.

    “President Trump has no authority to remove Federal Reserve Governor Lisa Cook,” said Abbe Lowell, a longtime Washington lawyer who has represented figures from both major political parties. “His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action.”

    The case is likely to end up at the Supreme Court and could more clearly define the limits of the president’s legal authority over the traditionally independent institution. The Fed exercises expansive power over the U.S. economy by adjusting a short-term interest rate that can influence broader borrowing costs for things like mortgages, auto loans, and business loans. Trump, a Republican, has repeatedly demanded that Chair Jerome Powell and the Fed’s rate-setting committee cut its rate to boost the economy and reduce interest payments on the government’s $37 trillion debt pile.

    If Trump succeeds in removing Cook from the Fed’s board of governors, it could erode the Fed’s political independence, which is considered critical to its ability to fight inflation because it enables the Fed to take unpopular steps like raising interest rates. A less-independent Fed could leave Americans paying higher interest rates, because investors would demand a higher yield to own bonds to offset potentially greater inflation in the future, pushing up borrowing costs throughout the economy.

    Trump appointed two members of the board, Christopher Waller and Michelle Bowman, in his first term and has named Steven Miran, a top White House economist, to replace Gov. Adriana Kugler, who stepped down unexpectedly Aug. 1. If Miran’s nomination is approved by the Senate and Trump is able to replace Cook, he would have a 4-3 majority on the Fed’s board, which votes on all interest rate decisions, along with five of the Fed’s 12 regional bank presidents.

    Legal experts say the Republican president’s claim that he can fire Cook, who was appointed by Democratic President Joe Biden in 2022, is on shaky ground. But it’s an unprecedented move that hasn’t played out in the courts before, and the Supreme Court this year has been much more willing to let the president remove agency officials than in the past.

    “It’s an illegal firing, but the president’s going to argue, ‘The Constitution lets me do it,’” said Lev Menand, a law professor at Columbia University and author of a book about the Fed. “And that argument’s worked in a few other cases so far this year.”

    Menand said the Supreme Court construes the Constitution’s meaning, and “it can make new constitutional law in this case.”

    Bill Pulte, a Trump appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, made the accusations last week. Pulte alleged that Cook had claimed two primary residences — in Ann Arbor, Michigan, and in Atlanta — in 2021 to get better mortgage terms. Mortgage rates are often higher on second homes or those bought to rent.

    The most likely next step for Cook is to seek an injunction against Trump’s order that would allow her to continue her work as a governor. But the situation puts the Fed in a difficult position.

    “They have their own legal obligation to follow the law,” Menand said. “And that does not mean do whatever the president says. … The Fed is under an independent duty to reach its own conclusions about the legality of Lisa Cook’s removal.”

    The Fed has declined to comment on Trump’s effort to fire Cook.

    Trump said in a letter posted on his Truth Social platform late Monday that he was removing Cook effective immediately because of allegations she committed mortgage fraud.

    Cook said Monday night that she would not step down. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in an emailed statement. “I will not resign.”

    The courts have allowed the Trump administration to remove commissioners at the National Labor Relations Board, the Merit System Protection Board and other independent agencies. Yet Cook’s case is different.

    Those dismissals were based on the idea that the president needs no reason to remove agency heads because they exercise executive power on his behalf, the Supreme Court wrote in an unsigned order in May.

    In that same order, the court suggested that Trump did not have the same freedom at the Fed, which the court called a “uniquely structured, quasi-private entity.”

    The law that governs the central bank, the Federal Reserve Act, includes a provision allowing for the removal of Fed governors “for cause.”

    “For cause” is typically interpreted to mean malfeasance or dereliction of duty by an official while in office, not something done before that person is appointed, Menand said.

    To establish a “for cause” firing also requires a finding of fact, said Scott Alvarez, the Fed’s former general counsel and now adjunct professor at Georgetown Law.

    “We know there’s allegations by Bill Pulte, but Lisa has not been able to respond yet,” Alvarez said. “So we don’t know if they’re true. Allegations are not cause.’’

    Lowell said Monday night that Trump’s “reflex to bully is flawed and his demands lack any proper process, basis or legal authority,” adding, “We will take whatever actions are needed to prevent his attempted illegal action.”

    Cook is the first Black woman to serve as a governor. She was a Marshall Scholar and received degrees from Oxford University and Spelman College, and she has taught at Michigan State University and Harvard University’s Kennedy School of Government.

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    Associated Press Writers Mark Sherman and Paul Wiseman contributed to this report.

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  • Wall Street steadies, global markets sink after Trump escalates feud with the Federal Reserve

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    Wall Street has recovered some overnight losses that took place after President Donald Trump said he was firing Federal Reserve Governor Lisa Cook.

    Futures for the Nasdaq, Dow Jones Industrial Average and S&P 500 all inched down about 0.1% before the bell Tuesday. All three swung notably lower after Trump said in a post Monday that he was removing Cook because of allegations of mortgage fraud by his appointee that heads the agency regulating mortgage giants Fannie Mae and Freddie Mac.

    It’s an unprecedented action that suggests a sharp escalation in Trump’s battle to exert greater control over what has long been considered an institution independent from day-to-day politics. Apart from potentially rattling financial markets, it is likely to touch off an extensive legal battle that will probably go to the Supreme Court. Cook said that she does not intend to step down.

    “Trump’s decision to remove a sitting Fed governor has shaken confidence in the institution that underpins the world’s financial system,” Nigel Green of the financial advisory deVere Group, said in a commentary.

    Most markets overseas declined significantly after Trump’s announcement.

    Germany’s DAX lost 0.3%, while the CAC 40 in Paris slumped 1.4%. Britain’s FTSE 100 gave up 0.5%.

    Trump has repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting its short-term interest rate, and even threatened to fire him.

    Wall Street is still overwhelmingly betting that the Fed will cut interest rates at its next meeting in September. Traders see an 84% chance that the central bank will trim its benchmark rate by a quarter of a percentage point, according to data from CME Group.

    In Asian trading, most benchmarks declined.

    Japan’s benchmark Nikkei 225 dove nearly 1.0% to finish at 42,394.40. Australia’s S&P/ASX 200 declined 0.4% to 8,935.60.

    South Korea’s Kospi lost 1.0% to 3,179.36 after data showed improved consumer sentiment, strengthening expectations that the central bank won’t lower interest rates.

    Hong Kong’s Hang Seng shed 1.2% to 25,524.92, while the Shanghai Composite slipped 0.4% to 3,868.38.

    In corporate news, Boeing shares were little changed after Korean Air has announced a $50 billion deal to buy more than 100 aircraft from the troubled aerospace manufacturer. The deal includes 19 spare engines and a 20-year maintenance contract.

    Benchmark U.S. crude lost $1.09 to $63.71 a barrel. Oil prices are down 8% this month and nearly 14% since the beginning of the summer. That’s due to a combination of production increases by OPEC and the summer travel season winding down.

    Brent crude, the international standard, declined $1.02 to $67.20 a barrel.

    The U.S. dollar edged down to 147.55 Japanese yen from 147.77 yen. The euro rose to $1.1647 from $1.1620.

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  • China’s monetary policy settings have been optimal so far: Fullerton Fund Management

    China’s monetary policy settings have been optimal so far: Fullerton Fund Management

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    Robert St Clair of Fullerton Fund Management says that the PBOC is using “all the tools it has at its disposal” and the monetary stimulus could make a difference as it is targeting the heart of the problem facing China.

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  • Rescued New York Community Bank to lay off 700 at its Flagstar subsidiary

    Rescued New York Community Bank to lay off 700 at its Flagstar subsidiary

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    Struggling New York Community Bancorp said Friday that it is cutting 700 jobs at its Flagstar subsidiary as it tries to return to profitability after being rescued by investors earlier this year.

    The bank said the cuts amount to 8% of its head count. It’s also selling its mortgage-servicing business to mortgage company Mr. Cooper, which will mean trimming another 1,200 employees from its payroll. Most of those employees will be offered the chance to transfer to Mr. Cooper, NYCB said.

    Shares of Hicksville, New York-based NYCB fell 1.6% to close Friday at $12.18.

    NYCB got a lifeline of more than $1 billion from a group of investors in March of this year its stock plunge by more than 80%.

    The bank has been hammered by weakness in commercial real estate and growing pains resulting from its buyout of a distressed bank.

    That cash infusion brought four new directors to NYCB’s board, including Steven Mnuchin, who served as U.S. Treasury secretary under President Donald Trump. Joseph Otting, a former comptroller of the currency, became the bank’s CEO.

    Under the deal, NYCB was to get investments of $450 million from Mnuchin’s Liberty Strategic Capital, $250 million from Hudson Bay Capital and $200 million from Reverence Capital Partners. Cash from other institutional investors and some of the bank’s management took the total over $1 billion, the bank said in March.

    NYCB was a relatively unknown bank until last year, when it bought the assets of Signature Bank at auction on March 19 for $2.7 billion. Signature was one of the banks that crumbled in last year’s mini-crisis for the industry, where a bank run also sped the collapse of Silicon Valley Bank.

    The sudden increase in size for NYCB meant it had to face increased regulatory scrutiny. That’s been one of the challenges for the bank, which is trying to reassure depositors and investors that it can digest the purchase of Signature Bank while dealing with a struggling real-estate portfolio. Losses in loans tied to commercial real estate forced it to report a surprise loss for its latest quarter, which raised investors’ concern about the bank.

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  • Housing market is very confusing for the consumer, says HousingWire’s Logan Mohtashami

    Housing market is very confusing for the consumer, says HousingWire’s Logan Mohtashami

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    Logan Mohtashami, HousingWire analyst, joins ‘Squawk on the Street’ to discuss what the rise in mortgage rates mean for the consumer, what recent rate moves mean for housing activity, and much more.

    03:22

    Fri, Oct 18 202411:18 AM EDT

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  • Weekly mortgage demand tanks 17%, after interest rates hit the highest level since August

    Weekly mortgage demand tanks 17%, after interest rates hit the highest level since August

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    A sign is posted in front of a home for sale on August 07, 2024 in San Rafael, California.

    Justin Sullivan | Getty Images

    Mortgage interest rates rose last week for the third straight week, hitting the highest level since August. That caused demand from both current homeowners and potential homebuyers to take a big step back. Total mortgage application volume fell 17% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

    The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.52% from 6.36%, with points rising to 0.65 from 0.62 (including the origination fee) for loans with a 20% down payment.

    Refinance demand, which is most sensitive to weekly rate moves, fell the hardest, down 26% week to week. It was still 111% higher, however, than the same week one year ago; rates at this time a year ago were 118 basis points higher, so anyone who bought a home last year could likely benefit from a refinance now. The refinance share of applications fell below 50% for the first time in over a month.

    Applications for a mortgage to purchase a home fell 7% for the week but were 7% higher than the same week one year ago. More supply on the market now is opening up opportunities for some buyers.

    “Demand is holding up to an extent for prospective first-time buyers. FHA purchase applications were little changed despite the increase in rates, as some first-time homebuyers remain in the market because of improving housing inventory conditions,” said Joel Kan, an MBA economist, in a release.

    Rates haven’t done much to start this week, especially given the federal holiday Monday. The recent rise in mortgage rates may have slowed the resurgence in refinancing, but homebuyers may be less concerned about interest rates today and more concerned about the shape of the economy in the coming months. Some say they are holding off on making such a major purchase until after the November election.

    Don’t miss these insights from CNBC PRO

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  • How a rare type of mortgage is landing homebuyers a 3% rate

    How a rare type of mortgage is landing homebuyers a 3% rate

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    As mortgage rates stagnate around 6%, prospective homebuyers are feeling nostalgic for the 3% interest rates of 2020 and 2021. Google search results for the term “assumable mortgage” spiked in May, following a steady upward trend starting in 2022.

    Mortgage assumptions allow buyers to take over an existing mortgage at its current rate, possibly securing mortgage rates as low as 2% or 3% depending on when the original mortgage was taken out.

    Mortgage assumptions were a popular way to buy a house in the 1970s and 1980s but have largely fallen out of public consciousness. The Garn St.-Germain Act of 1982 allowed private lenders to enforce a due-on-sale clause, requiring payment in full if a property changes hands, making assumable mortgages near obsolete outside of divorce and property inheritance.

    Now a rarer find in the U.S. housing market, a specific subsect of mortgages can still be assumed by outside buyers: Veterans Affairs, Federal Housing Administration, and United States Department of Agriculture mortgages.

    “Twenty percent to 25% of the homes on the market will be fully assumable at one time,” says Raunaq Singh, Roam founder and CEO. But, “the number of assumption transactions that are happening is far fewer than the number of mortgages which can be assumed.”

    Only 4,052 FHA-backed mortgage assumptions were completed in 2023. Still, that’s a 59% increase compared to 2021, according to numbers provided by the FHA. The VA has seen an even larger jump with 713% more mortgage assumptions in 2023 compared to 2021. Both the VA and FHA are already outpacing last year’s assumption totals at more than 5,000 assumption per department so far in 2024.

    Watch the video above to learn more about assumable mortgages, how they work, and why they can come with their own set of hurdles.

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  • 33% of homeowners would hire a ‘questionable’ contractor to save money, report finds

    33% of homeowners would hire a ‘questionable’ contractor to save money, report finds

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    Visoot Uthairam | Moment | Getty Images

    Home repairs and renovations are expensive. To lower costs, 1 in 3 homeowners are willing to hire a contractor with holes in their resume. 

    About 33% of surveyed homeowners say they’d consider hiring a contractor with a questionable reputation to save money, according to a new report by Clever Real Estate, a housing data site. 

    Generally, homeowners say reputation is the most important factor when hiring a contractor (25%), followed by experience (23%), cost (19%), personal recommendations (13%), availability (11%) and estimated project timeline (10%). Clever polled 1,000 U.S. homeowners mid-August regarding their choices when it comes to renovations. 

    That contractor trade-off might end up being more expensive in the long run, experts say. A questionable contractor is “someone who isn’t exactly honest with the price, may be overestimating their skills, doesn’t do high quality work, or simply doesn’t show up for the project,” said Jamie Dunaway-Seale, author of the Clever report.

    “That’s someone that you want to potentially avoid,” said Angie Hicks, co-founder of Angi, an online contractor marketplace. “I would rather take someone newer to the industry than someone that has a questionable reputation.”

    More from Personal Finance:
    Key steps to file a homeowners insurance claim after a natural disaster
    Here’s what’s not covered by flood insurance
    How to prevent hurricane damage on your home

    The risk of contractor fraud also increases in the aftermath of a natural disaster, said Loretta Worters, a spokeswoman of the Insurance Information Institute.

    “A lot of times, these people swoop in, claim they’re going to do something for you, and they take your money and leave,” Worters said. 

    The Justice Department and the Consumer Financial Protection Bureau issued a warning to consumers on Wednesday about potential fraud, price gouging and collusive schemes after natural disasters.

    “You don’t want to turn a bad situation worse,” Hicks said.

    Here’s what to consider when hiring a contractor.

    Contractor fraud can fester after natural disasters 

    Analysts anticipate that Hurricane Milton could be a “once-in-a-century” storm with the potential to generate record-breaking damage as it makes landfall along Florida’s west coast on Wednesday or early Thursday. 

    As homeowners juggle insurance claims and recovery efforts from back-to-back storm aftermaths, one thing to keep in mind is who to hire as a contractor.

    You “really need to be careful” about contractor fraud, as you could be “victimized twice by the storm and by the fraudulent person,” Worters said. 

    Roofing is one of the more common trades that you would have to hire for after a hurricane, Hicks said. 

    “A roof is something that’s going to last for 20 plus years,” Hicks said. “You want to make sure that you are working with a reputable local company who’s going to stand behind a warranty on that work as well.”

    While it’s a really difficult time, it’s important to do the due diligence and make sure the person you’re hiring is certified, experts say.

    3 ways to vet a contractor before hiring them

    Although most professional contractors are reliable, negative experiences contribute to bad reputations in consumers’ minds, noted Clever in the report.

    “A lot of people do have bad experiences, and it makes it harder for the honest ones” in the field, said Dunaway-Seale.

    While it can be hard to evaluate contractors, there are a few steps you can take to make sure you’re working with a reputable person, according to experts.

    Here are three ways to get started: 

    1. Ask for reviews and references

    “The first thing you want to do is check [the contractor’s] reputation,” said Hicks. 

    If possible, start with professionals who have good reviews: Ask for recommendations from friends and family who had good experiences with a contractor in the past, Dunaway-Seale said. 

    From there, look for online reviews and ask for references, experts say. As you start to get estimates, check with references to see how that firm or professional has handled jobs in the past, Hicks said.

    Asking a contractor if they’d put you in touch with a prior client can be a litmus test, said Dunaway-Seale. 

    “If they’re unwilling to do that, that might be a red flag,” she said. “Maybe they don’t think anyone would recommend them positively.”

    2. Check their credentials

    Check a contractor’s credentials and licensing to understand if they have the necessary experience to tackle the job, said Hicks.

    All professional contractors should be insured and able to show their certificate proving so, according to the National Association of Home Builders. While not all states require licensing, contractors located in states that do require a license should provide a copy, NAHB noted.

    The FTC and CFPB offer resources for consumers on how to avoid scams, prepare and respond to natural disasters, and how to handle your finances in such events.

    “Sometimes the state insurance department will have a list of different contractors on their website as well,” Worters said. 

    3. Watch for warning signs

    Early interactions can give you a sense of how the contractor operates, and help you decide if you feel confident giving them your business.

    “Are they giving you estimates in writing? Are they detailed? Are payments outlined?” Hicks said. 

    It’s really important payments on larger projects are outlined in your estimates and how they will be handled, she said. Typically, upfront payments should not be more than 10 or 20%; you should not be paying a large deposit up front, said Hicks. 

    It’s also a good idea to get two or three estimates because it can tell you if you’re having outliers in your pricing, Hicks said. 

    “If a deal seems too good to be true, it probably is,” she added.

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  • Here are key steps to file a homeowners insurance claim after a natural disaster, experts say

    Here are key steps to file a homeowners insurance claim after a natural disaster, experts say

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    David Hester inspects damages of his house after Hurricane Helene made landfall in Horseshoe Beach, Florida, on September 28, 2024. 

    Chandan Khanna | Afp | Getty Images

    It’s crucial to understand how to file a homeowners insurance claim after a natural disaster. 

    Insured losses alone for Hurricane Helene are now estimated at more than $6 billion.

    Meanwhile, analysts anticipate that Hurricane Milton could be a “once-in-a-century” storm with the potential to generate record-breaking damage when it makes landfall along Florida’s west coast on Wednesday.

    Once you’re safely out of harm’s way, starting the insurance claim process is an important consideration. The sooner you report a claim, the sooner your insurance company can start the process and you can begin rebuilding, experts say. 

    “Your adjuster is assigned on a first-come, first-serve basis,” said Shannon Martin, a licensed insurance agent and analyst for Bankrate.com. 

    More from Personal Finance:
    A ‘man-made disaster’ could make it trickier to buy or sell a home
    Here’s what’s not covered by flood insurance
    How to prevent hurricane damage on your home

    The processing arm of your insurance company is going to have a “tremendous amount of paperwork and claims coming through,” said Jeremy Porter, head of climate implications research at First Street Foundation, an organization focused on climate risk financial modeling in New York City. 

    “The longer you wait, you’re not only delaying the ability to have your claim approved and make its way to you, but you’re lengthening the time in which that claim will sit in the processing pipeline,” Porter said.

    Here are three important steps to quickly file an insurance claim after a disaster, according to experts.

    1. Call your insurer as soon as you can

    Experts recommend including copies of your insurance policies and contact numbers in a disaster preparedness kit, that goes with you if you evacuate and is securely stored, otherwise.

    Once a disaster has passed, immediately contact your insurance company to let them know that your home has damage from a recent disaster and you’d like to start the claims process, said Porter. 

    If you evacuated, “you can start the claim from anywhere,” Porter said. “You’ll eventually have to schedule with the insurance company to actually review and inspect the damage.” 

    But if you decide to wait out the storm in your house, you need to first prevent further damage to the home before calling, said Bankrate.com’s Martin.

    A typical home insurance policy has language requiring homeowners to lessen the impact and prevent further damage, she said. 

    “Then you can call the insurance company, take pictures of the damage and [move] items into safer locations,” Martin said.

    2. Make a log of damages

    During your call, provide your insurance company with some initial details, like if your roof blew off or several windows broke, said Porter. 

    “But they really won’t make their assessment until they come in and inspect the damage,” he said. 

    While the insurer will make its own inspection, it’s always important to document your damages, including taking pictures, so that you can align that with the formal inspection record that comes out from the insurance company, Porter said. 

    This way, you can dispute any claims if you have to later, he said. 

    3. Keep a record of receipts

    In the event of a loss, you have to give prompt notice to your insurer and you have a duty to protect the property, said Daniel Schwarcz, an insurance law professor at the University of Minnesota Law School. 

    You have to protect the property from further damage after the storm, make reasonable repairs and have an accurate record of repair expenses, Schwarcz said. 

    The receipts that you need to keep on file are for purchased materials used to prevent further damage on the property that’s already been damaged by a covered peril, said Schwarcz — meaning wind and trees, but not generally flooding unless you have a flood insurance policy. The insurer will generally reimburse you for reasonable expenses you incur. 

    If you don’t take such measures after the storm, and that inaction results in further damage, the insurer is not obligated to cover the loss, he said.

    Materials purchased to protect the home before the natural disaster — for example, plywood to cover windows — are oftentimes not covered. 

    You also want to keep a record of receipts when you start working with contractors to rebuild from the damage, experts say. 

    Differentiating damage from back-to-back disasters 

    One of the reasons why you want to document the damage immediately with your insurer is so that you can attach it to the event itself, increasing the likelihood of the event being covered by your home insurance, said Porter. 

    “Filing the claim immediately is the number one most important thing to do,” Porter said.

    It’s important to keep track of where the damage came from, and having evidence can help avoid problems down the road, he said.

    Port offers the hypothetical of of someone whose home sustained wind damage from Hurricane Debbie or Helene, but hasn’t filed a claim before the Milton makes landfall and causes flood damage. 

    “All of a sudden, you have a problem where the National Flood Insurance Program, which covers flood, and your home insurance company, which covers wind, can potentially start to argue over what actually caused the damage to the property,” Porter said.

    You want to make sure you file any claim within three to five days of when the incident occurred, said Martin. As long as you had submitted all of your information in a timely manner for the first incident, if something else arises, you’re able to show the adjuster that it happened from a second event, she said.

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  • Fed cuts could turn the tide for commercial real estate. Where to find opportunity

    Fed cuts could turn the tide for commercial real estate. Where to find opportunity

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  • Zillow adds climate risk data to home listings as threats rise

    Zillow adds climate risk data to home listings as threats rise

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    Insured losses for Hurricane Helene are now estimated at over $6 billion, but the uninsured losses are far higher. That’s because the vast majority of homes impacted by the storm, especially in hard-hit North Carolina, did not have flood insurance.

    New risk-assessment technology is designed to help change that for the future.

    Most homeowners in North Carolina do not have flood insurance, because they are not in flood zones designated by the Federal Emergency Management Agency. Government-backed mortgages require flood insurance in those designated areas.

    Just 4% of North Carolina homes are in a FEMA flood zone. But climate risk firm First Street, which incorporates the effects of climate change into its property risk scores, shows nearly 12% of homes in the state at flood risk.

    First Street just launched a suite of climate risk data for every for-sale property listed on Zillow.

    “Climate risks are now a critical factor in home buying decisions,” said Skylar Olsen, chief economist at Zillow, in a release. “We’re providing buyers and sellers with clear, property-specific climate data so they can make informed decisions. As concerns about flooding, extreme temperatures, and wildfires grow, this tool also helps agents inform their clients in discussing climate risk, insurance, and long-term affordability.”

    A house along the Broad River in the aftermath of Hurricane Helene on October 1, 2024 in Bat Cave, North Carolina. 

    Sean Rayford | Getty Images

    Each for-sale listing on Zillow now displays First Street risk scores for flood, fire, wind, air and heat. They also show those same risk percentages estimated 15 years and 30 years into the future — the standard lengths for fixed-rate mortgages.

    On properties with some risk now, it often shows that risk rise over time, as First Street incorporates the effects of climate change. This is especially true for the flood risk, because climate change is already intensifying the severity of rainfall, even in minor storms.

    The data also includes a recommendation as to whether the homeowner should have flood insurance and a link to the First Street site, which will help estimate insurance costs.

    “A lot of people think that they are safe from flood if they’re not in a FEMA flood zone, and that’s decidedly not true. Heavy rainfall can affect many, many people across the country, and there’s no indication from the FEMA flood zone designation that that is a risk for you,” said Ed Kearns, chief science officer at First Street. “We’ve created these new flood maps that do bring that into account, that will allow consumers to make that informed choice about whether they need flood insurance.”

    More than 80% of buyers now consider climate risk when purchasing a home, according to a survey by Zillow. Respondents ranked flood risk as their highest concern, followed by fire.

    A Zillow analysis of August listings found that more homes nationwide had a major climate risk than did those listed for sale five years ago. That was true across all five climate risk categories, the analysis found. For new listings in August, 16.7% are at major wildfire risk and 12.8% show a major risk of flooding, according to Zillow and First Street data.

    As more and more consumers consult these climate scores in their purchase decisions, the effect on home values will surely increase. The cost of insurance is already factored into home prices, and as both the cost and necessity of insurance rise, home values in the most affected areas will fall.

    “I think that’s going to be the most direct impact of having scores on homes that quantify risk is that there may be some direct impact on real estate values, but a lot of that is going to go through the amount of insurance necessary to cover that home,” Kearns added.

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  • Mortgage rates spike after stronger-than-expected jobs report

    Mortgage rates spike after stronger-than-expected jobs report

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    CNBC's Diana Olick joins 'Halftime Report' with the latest news on mortgages.

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  • Mortgage rates spike after stronger-than-expected jobs report

    Mortgage rates spike after stronger-than-expected jobs report

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    The average rate on the 30-year-fixed mortgage jumped 27 basis points Friday morning following the release of the government’s monthly employment report. The rate is now 6.53%, according to Mortgage News Daily.

    That is 42 basis points higher than Sept. 17, the day before the Federal Reserve cut its benchmark rate by half a percentage point. Mortgage rates do not follow the Fed, but they loosely follow the yield on the 10-year U.S. Treasury.

    For mortgage rates, it is all about what the expectation is next for the Fed. As such, there was a lot of anticipation leading up to this particular monthly report, since the last two pointed to weaker labor market conditions.

    “Indeed, the Fed’s decision to cut by 0.50 vs 0.25 last month had much to do with the fear/expectation that reports like today’s would be in shorter supply going forward,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “The only salvation here would be the notion that this is just one jobs report in a recent run that’s been mostly weaker and that perhaps the next one won’t be so damning for bonds.”

    However, the report does shift the outlook slightly for rates going forward, since most had assumed the trajectory would be lower.

    “MBA’s forecast is for longer-term rates, including mortgage rates, to remain within a relatively narrow range over the next year,” the Mortgage Bankers Association’s chief economist, Michael Fratantoni, wrote after the jobs report was released. “This news will push mortgage rates to the top of that range, but we do expect that mortgage rates will stay close to 6% over the next 12 months.”

    Today’s homebuyers are highly sensitive to rate moves, as house prices continue to rise from year-ago levels. There is also still very low inventory on the market, which has only served to keep prices higher. Rates are a full percentage point lower than they were a year ago, but the housing market has not seen much of a boost yet.

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  • Red-hot refinance demand retreats after tiny bump higher in mortgage rates

    Red-hot refinance demand retreats after tiny bump higher in mortgage rates

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    Skynesher | E+ | Getty Images

    Mortgage rates moved ever so slightly higher last week, but it was enough to take a little heat out of what had been a briefly red-hot refinance market. That caused total mortgage application volume to fall 1.3% for the week, according to the Mortgage Bankers Association’s seasonally adjusted index.  

    The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.14% from 6.13%, with points rising to 0.61 from 0.57 (including the origination fee) for loans with a 20% down payment. The rate was 139 basis points higher the same week one year ago.

    “Last week’s incoming data showed an economy that is still growing at a solid pace, even as inflation continues to decline. As a result, mortgage rates were up modestly,” said Mike Fratantoni, senior vice president and chief economist at the MBA, in a release.

    Applications to refinance a home loan fell 3% for the week but were still a striking 186% higher than the same week one year ago. The vast majority of borrowers today have mortgages with rates well below 5%, but those who may have purchased a home in the past year or two might be able to benefit from a refinance to today’s lower rates.

    Applications for a mortgage to purchase a home rose 1% for the week and were 9% higher than the same week one year ago. The fall market does appear to be warming up a little bit, with real estate brokerages like Redfin reporting more home tours in the last few weeks. Some buyers, however, may be sitting on the sidelines, expecting rates to move even lower in the coming months.

    “Inventories of both new and existing homes have been increasing over the course of 2024, meaning that potential buyers have properties to look at and now have somewhat lower mortgage rates leading to better affordability,” Fratantoni added.  

    Mortgage rates moved very slightly lower again to start this week, as bond yields dipped following escalation in the Middle East conflict. The next big move in interest rates could come Friday, with the release of the all-important monthly employment report.

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  • Homebuyers are much more active than they were before, says Compass CEO Robert Reffkin

    Homebuyers are much more active than they were before, says Compass CEO Robert Reffkin

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    Robert Reffkin, Compass founder and CEO, joins ‘Squawk Box’ to discuss the state of the real estate market, impact of the Fed’s interest rate decision and lower mortgage rates, housing demand outlook, and more.

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  • Average rate on a 30-year mortgage slips to 6.08%, lowest level in 2 years

    Average rate on a 30-year mortgage slips to 6.08%, lowest level in 2 years

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    The average rate on a 30-year mortgage in the U.S. slipped to its lowest level in two years this week, boosting home shoppers’ purchasing power as they navigate a housing market with prices near all-time highs.

    The rate dipped to 6.08% from to 6.09% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.31%.

    The last time the average rate was lower was on Sept. 15, 2022, when it was 6.02%.

    Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, increased slightly this week. The average rate rose to 5.16% from 5.15% last week. A year ago, it averaged 6.72%, Freddie Mac said.

    Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions. That can move the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

    The average rate on a 30-year mortgage is down from 7.22% in May, its peak so far this year. Rates have been mostly declining since July in anticipation of last week’s move by the Fed to cut its main interest rate for the first time in more than four years.

    Fed officials also signaled they expect further cuts this year and in 2025 and 2026. The rate cuts should, over time, lead to lower borrowing costs on mortgages.

    The average rate on a 30-year mortgage rose from below 3% in September 2021 to a 23-year high of 7.8% last October. That coincided with the Fed increasing its benchmark interest rate to fight inflation.

    When mortgage rates rise they can can add hundreds of dollars a month in costs for borrowers. The housing market has been in a sales slump going back to 2022 as elevated mortgage rates put off many would-be homebuyers. Sales of previously occupied U.S. homes fell in August even as mortgage rates began easing.

    Still, as rates have looked more attractive in recent weeks, more homeowners have applied for home loans.

    Mortgage applications jumped 11% last week, according to the Mortgage Bankers Association. The strong gain was due partly to a 20% increase in applications by homeowners seeking to refinance their existing loan to a lower rate.

    “Given the downward trajectory of rates, refinance activity continues to pick up, creating opportunities for many homeowners to trim their monthly mortgage payment.,” said Sam Khater, Freddie Mac’s chief economist. “Meanwhile, many looking to purchase a home are playing the waiting game to see if rates decrease further as additional economic data is released over the next several weeks.”

    While lower rates give home shoppers more purchasing power, a mortgage around 6% is still not low enough for many Americans struggling to afford a home. That’s mostly because home prices have soared 49% over the past five years, roughly double the growth in wages. They remain near record highs, propped up by a shortage of homes in many markets.

    Mortgage rates would have to drop back to near rock-bottom lows from three years ago, or home prices would have to fall sharply for many buyers to afford a home. Neither scenario is likely to happen any time soon.

    Economists generally expect mortgage rates to remain near their current levels, at least this year. Fannie Mae projects the rate on a 30-year mortgage will average 6.2% in the October-December quarter and decline to an average of 5.7% in the same quarter next year. It averaged 7.3% in the same period in 2023.

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