It wasn’t that long ago consumers realistically had only one option when obtaining flood insurance. The National Flood Insurance Program (NFIP), which was initially authorized by the National Flood Insurance Act of 1968 and reauthorized by the Biggert-Waters Flood Insurance Reform Act of 2012, provided that lone option. Earlier this year, five federal regulatory agencies issued a Final Rule that becomes effective July 1, 2019, implementing the BW-12 “requirement that regulated lending institutions accept private flood insurance policies.” Privatization of any product or program creates pricing competition and more options, and flood insurance is no exception. Consumers are able to comparatively shop and lenders will have more opportunities to qualify borrowers.
Are FICO scores overrated when assessing one’s creditworthiness? Probably not, but what about the 67 million people who don’t qualify for mortgage loans or even credit cards because of a lack of traditional credit?
While using alternative credit scoring is not a substitute for bad credit, it can be a vehicle to offer more affordable loans than sub-prime or Alt A programs offer.
It’s no secret that interest rates are on the rise. If your customers haven’t taken advantage of refinancing their first mortgage loans by now, it may be too late for them to make it a cost-effective option.The market for refinancing a first mortgage to pay off debt, finance home improvements, or simply do a cash-out refi is just not as attractive as it was when rates were historically low. This creates an opportunity for junior lien mortgages, typically called HELOCs or HELOANs, to be in higher demand.
Commercial Real Estate (CRE) Appraisal Requirements Raised to $500,000—A Welcomed Relief for Community Banks
Since 1994, commercial real estate loans over $250,000 needed a full appraisal that conformed with laborious Title XI requirements. As of April 2, 2018, The Federal Reserve, FDIC and OCC released a new rule raising the full appraisal exemption for Banks on loans at or below $500,000.