The Power Is Now Real Estate Magazine | October 31, 2022

Why many people are demanding for riskier home loans

evidence that suggest that many small mortgages, typically those falling below $150,000 are driving borrowers who actually have better credit scores and meet other qualifying criteria to this alternative borrowing arrangements. And the question I get bothered by is why?

There are certainly some factors which include but not limited to the home’s habitability and the ownership if the land beneath todays mobile homes, else known as ‘manufactured homes’ all of which are factors that make it impossible to qualify for the mortgages using the traditional route.

CASE SCENARIO ONE ALTERNATIVE SOURCING OPTIONS

Many people in the United States purchase their homes using mortgages , but in recent times, many more are running towards alternative financing arrangements for instance rent-to-own which obviously are much more riskier. But it makes sense why people are preferring the riskier options, after all, it better than none.

The problem that I seee with renting-to-own option for homeownership is that its a costly option and also, when compared to traditional methods of homeownership, it is subject to far weaker consumer protections and regulatory oversight.

There is insurmountable

Although the evidence against these financing arrangements is overwhelming, and has been proven to cause harm to the unwitting consumers, very little is known about the prevalence and or scope of these alternate financing options, largely because this is a field where data is not the primary concern meaning that insufficient data that would lead to conclusive results. For instance, the Census Bureau collected data on the number of Americans

even as interest rates soar

using alternate financing options until 2009 and in 2019, the Harvard Joint Center for Housing analysis of alternate financing option revealed that a ‘persistent lack of data has prevented regulators and policy makers from understanding the full scope and scale of the market.’ this study by Harvard center was only done for selected states that require financiers to keep public records.

PEW CHARITABLE TRUST RESEARCH INTO ALTERNATIVE FINANCING

Due to the overwhelming lack of data in this seemingly lucrative industry, Pew Charitable Trusts conducted a national survey of the U.S. adults that aimed to uncover the prevalence of alternative financing and borrower demographics.

The following are the results of the study;

• 1 in 5 home loan borrowers which translates to about 36 million americans have used Alternative Financing at least once in their adult lives.

• Of these 36 million people, about 22 percent have used more than one type of alternative financing options across multiple home purchases. This means that multiple borrowers over the course of their adult life face multiple barriers to homeownership when it comes to mortgage financing.

• Also, this data shows that alternative financing varied by race and ethnicity and seemed to be a popular choice for the hispanics.

• About 1 in 15 current home borrowers -translating to 7 million U.S. adults have a current arrangement with these alternative financing optiopns.

• Among the homeowners currently in arrangement with alternative financing, the people with HOUSEHOLD incomes below $50,000 were more likely to use these options.

If anything, the data by Pew Researchers underscore the need for a better national data and state data collection that will enable regulators to fully understand the prevalence of alternative financing arrangement and to also ensure that millions of Americans , especially those from low-to-moderate income earners and the minorities are well protected and in policy decisions affecting home borrowers.

WHAT’S ALTERNATIVE FINANCING?

Alternative financing describes a set of financing arrangement that involves land contracts, seller-financed mortgages, lease-purchase agreements and personal property loans that differ significantly from the traditional financing options through the bank.

To better understand what alternative financing is, consider the following;

Typically to buy a home, there is a purchase agreement which must involve a third party lender who has no ‘prior’ interest in the property separate from the loan. And the lender has to strictly follow a specified conde of conduct and comply with the federal and state regulations.

Additionally, mortgage transactions must involve a title that stipulates full legal ownership of the property as detailed in the deed.

In contrast, alterative financing at least in some arrangements for instance land contracts, there arent significant regulations to govern the transactions. In addition to that, purchasing a home using alternative financing, sellers arent required to hand over the deed to the property for the duration of the transaction. Since a buyer isnt fully recognized as an owner of the property until they are in fully custody of the property deed, this structure creates somewhat legal ambiguity making it extremely difficult for buyers to establish clear ownership and to fully establish the responsible party for the property taxes and maintenance.

CASE SCENARIO TWO THE RISE IN ARMS

A recent trend is the use of Adjustable-Rate Mortgages or ARMs which typically offers lower rates. Many people are using this type of rate to finance their purchase after seeing that it hasn’t really fluctuated as much as the others over the last decade.

In fact, the Mortgage Banker Association show that the total mortgage application volume for the first week of October, 2022 dropped 2% compared to the previous week.

LET’S GET TECHNICAL.

Ideally going by the current rates the average contract interest rate for the 30 year fixed mortgage rate with conforming loan balances increased to 6.81% from 6.75% and this percentage rise includes the origination fees for the homes with a 20 percent downpayment. This is the highest its ever been since 2006.

“The news that job growth and wage growth continued in September is positive for the housing market, as higher incomes support housing demand. However, it also pushed off the possibility of any near-term pivot from the Federal Reserve on its plans for additional rate hikes,” wrote Michael Fratantoni, MBA’s chief economist in a release.

a period of 10 years, once that period lapses, they adjust to the market rates. However, it makes total sense why people would prefer these loans. Remember, rates have been so low for so long that people never saw the need to take out riskier loans.

The average rate for the 5/1 ARMs which typically has a fixed rate for the first five years increased just slightly but somewhat considerably lower at only 5.56%. The share of people preferring this mortgage optionwas just a little under 12%. when rates were significantly lower at the start of the year the share of people preferring ARMs was just 3% as it has been for several years.

ARMs, no matter how rosy they are, arent a good financing option. And while they can be fixed for

Mortgage applications meant for home purchases fell 2 percent for the first week of october were actually 39 percent lower than a year ago. Many buyers feel the pinch of the rising rates which have made affordability worse. While home prices have started to cool down potential buyers are concerned that if they buy now, their new homes might drop in value in the coming years due to concerns of coming recession.

PROPERTY

Expect the luxury at Grayhawk with golf courses, more high-end eateries and resorts nearby. The Scottsdale 85255 area is next to the majestic McDowell Mountain range and offers both desert and city views. Scottsdale consistently ranks as one of the best-run cities in America. Scottsdale’s high-end amenities frequently draw many to the area.This 4 Bedroom Split Floor plan Home offers much to be desired. Exquisite Backyard.

PROPERTY INFORMATION:

This wonderful mountain home in the beautiful subdivision of Alpine Village is a Must See! Large bedrooms, 2 bathrooms, spacious living room, great kitchen/dining combo. (New flooring and kitchen counters/cabinets in 2021.) Covered back deck, fully fenced back yard, unfinished basement acts as a workshop/hobby area. Two car garage and additio nal parking for RV or additional vehicles. Attic space the length of the home for tons of storage. Primary, second home or long/short term rental opportunity. Schedule your showing today before it’s gone!

PROPERTY INFORMATION:

Great price for this 2 bedroom one full bathroom, single level home in Gisela. Just 20 minutes South of Payson. The home has mountain views and is just a few blocks from the creek. Hiking, fishing, UTV, off roading, and more just outside your front door. All electric home with a metal roof. The home is currently rented for $1100/mo and the lease is good through 3/2023. Great rental property or after the lease it can be a primary or second home! 48hrs required to show. Please do not disturb tenants.

Beautiful Tall Pine Trees surround this

and Beautiful Country Cabin located just outside of Alpine AZ. Many consider Alpine and Nutrioso the Yellowstone of Arizona. This spacious cabin sits on one acre and is within a short distance of Luna Lake! Fishing, Hunting, Hiking, and Exploring are all within the area. The homehas many nice appointments throughout including an open kitchen with lots of cabinet space, a brick surround wood stove in the living room, and spacious bedrooms.

PROPERTY INFORMATION:

A rocky bluff on the northside of this 47.5 acre par cel provides an exquisite backdrop creating the per fect property for privacy and seclusion. The rocky bluff extends as a natural wall along the north side of a large, open meadow area that is bound by the local road and a wash which travels along the south side and through a section of the property, leaving approximately 13 open acres on the southeast side of the wash. The Arizona artist who owns this land has used the wash sand many times in her sand impressions. Amazing pieces of petrified wood are continually being found and the diversity of plant life gives credit that the soil is potentially suitable for growing a variety of plants. Owned by one family since 1983, Well can be drilled.

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Stunning 3 acre lot in the beautiful Santa Cruz Mountains. Lots of previous work and efforts have been put into this property and now it’s just waiting for the next owner to build it into their dream home. A well engineered driveway leads past a forgotten gem of a zinfandel vineyard, up to the existing garage and building pad with gorgeous mountain views. Septic tank was installed but not put into operation. Public water already on site. Power pole is already on the property. Just a short drive to Scotts Valley, Santa Cruz and the Silicon Valley, this lovely property provides peace and tranquility.

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Garage has cabinets and hanging storage racks. Backyard has a Fenced dog run, Built in BBQ Island, Fire pit and a wonderful view off both the backyard and off the balcony upstairs. Paint has recently been done outside this home will not disappoint! Buyer has the option to buy furnished negotiations will direct with Sellers. Floor plans are attached as supplements and virtual tour is attached.

Property Information

Owner may carry with a respectable down payment. Wonderful Remodeled Mid Century Modern on nearly a .5 acres private lot with a permitted guest house which is tenant occupied. The main home has a large bright and inviting open floor plan which is perfect for entertaining and opens to a spacious backyard. Some of the upgrades include a wide open kitchen with top of the line granite countertops, pull out pantry draws, a spice cabinet and a farm style sink which opens up to a combination living family room area which will let your imagination run wild as you set it up to fit your lifestyle. The main living area has vinyl wood plank flooring with plush carpets in the bedrooms. The hall bath shower has been creatively designed for easy access.

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C o s t a M e s a

DECIRA PIMENTAL

Come see this beautiful, elegant and modern Mount Carmel gem, recently renovated with beautiful finishes, perfect for a growing life. The 1800+ square foot floor plan includes 3 bedrooms, two and one half baths that includes a private primary bedroom suite. Included is a living room with fireplace, a large and airy living room with cathedral ceiling, brick fireplace, recessed lighting and open floor plan. The newly appointed kitchen spares nothing with granite counters, stainless appliances, and lots of storage. Kitchen opens back to dining room and attaches to extended rear slider and deck for an expanded living area. Lovely view from rear deck to yard to private area. Your home is close to Quinnipiac University and Sleeping Giant State Park as well as the Farmington Canal Trail for hiking and biking. STEVEN RIVKIN Planet Realty, Llc 26 BROOKLAWN CIR, NEW HAVEN, CT, 06515

Quiet and private contemporary home located North of RT 67 near to Transylvania Pond and Radey Pond. Perfect get-away or condoalternative. Large natural stone fireplace is a central feature in the great living room. Home office/den setup, cathedral ceiling in living and dining room, open floor plan. Great yard for gardening and entertaining. Stately stone walls appear in yard and offer sitting areas and natural barriers. Some TLC will make this shine! Bring your ideas and offer today :-)

Great opportunity to own this four bedroom colonial with over 1600 square feet in the desirable Hamden area! Traditional and comfortable floorplan with living/great room with brick fireplace for Winter retreat. Attached sunroom for reading and games. Formal dining room and hardwood flooring throughout. Upstairs are four bedrooms and full bathroom. There is a separate walkup attic for storage and potential space. Located in walking distance to local restaurants, library and shops. Short commute to university. Great home needs only your touches to make better. Put this on your list come see today

Mississippi

e a r n A b o u t

T h e l a t e s t m a r k e t i n g t r e n d s a n d b u d g e t s t h a t c o m p a n i e s a r e i n v e s t i n g i n O n l i n e M a r k e t i n g T h e p r i m a r y r e a s o n y o u m u s t r u n o n l i n e c a m p a i g n s n o w c o m p e t e W h a t p l a t f o r m s a r e p r o v i d i n g t h e b e s t o p p o r t u n i t i e s t o o b t a i n c u s t o m e r s t o d a y ?

T h e l a t e s t s t a t s o n v i d e o s a n d w h y y o u m u s t c r e a t e v i d e o c o n t e n t t o b e r e l e v a n t G o o g l e s e a r c h s t a t i s t i c s a n d w h y y o u m u s t b e s e a r c h a b l e E c o m m e r c e s t a t i s t i c a n d t h e f u t u r e o f s e l l i n g r e a l e s t a t e o n l i n e F a c e b o o k i s k i n g , l i k e i t o r n o t , f o r t a r g e t i n g a n d a d v e r t i s i n g H o w t o h a v e p r o f e s s i o n a l l y w r i t t e n a r t i c l e s / b l o g s f o r o u r m a g a z i n e s

H O S T Y O U R O W N T V S H O W !

O N L I N E M A R K E T I N G M E M B E R S H I P P R O G R A M W E B I N A R

B a s i c M e m b e r s h i p P r o g r a m F r e e f o r 3 0 d a y s t o a l l a t t e n d e e s .

C o n t a c t u s f o r m o r e i n f o r m a t i o n :

t h e T P I N N e t w o r k

North Carolina

North Carolina

Where Starting Over happens every day!

We’re Starting Over, Inc. a 501(c)(3) organization dedicated to supporting and uplifting people experiencing the effects of mass incarceration, systemic racism, housing insecurity, substance addiction, and mental health issues. We believe that people impacted by these issues are the ones closest to the solutions, which is why we are a Black led and criminal justice impacted organization engaged in this work. From experience, we’ve learned that housing is critical, but alone, it is not enough to support those exiting prisons or the streets We not only provide transitional housing, but also include holistic services such as peer support, case management, employment, wellness, and re entry services We also work to address the root causes of our houseguests’ difficult situations, leading grassroots organizing and policy initiatives in the Inland Empire region and statewide. Established in 2009, we’ve served over 1,400 men, women, and families in Riverside and Los Angeles Counties through the re entry and transition process.

We believe that the past does not define our future. We’re invested in creating safe and equitable opportunities for all members of our community, and especially those with past convictions Housing opportunities are crucial for our community members and directly affect their ability to thrive.

Starting Over, Inc. is committed to reducing and eliminating the many barriers to life after incarceration. We have a deep commitment to identifying and implementing evidence based approaches to strong communities and families. We seek to creating program/project solutions where the need exists in our community We do lots of things at Starting Over, Inc but our primary goal is to address the immediate effects and root causes of incarceration, be it through housing, employment, legislation, or community organizing

T t i l d ith i itiatives, access our services, or support our work through donations, you can or office@startingoverinc.org.

We currently operate eight homes in LA and Riverside Counties open to men, women, and children, with options for sober living or harm reduction housing All of our services are available to our houseguests, many of whom have been unable to obtain housing after being released due to their conviction histories

Our Case Management specialists provide support to our guests with obtaining necessary documents/identification and accessing insurance, education, healthcare, clothing, food, & more.

Transitional Housing Case Management Peer Support

Our houseguests are not alone our support specialists, having experienced incarceration, addiction, and homelessness themselves understand our guests' needs and the barriers they face. We’re here to meet our guests wherever they are in their journeys and to support them moving forward through empowerment, support with recovery, referrals, and mentorship

Family Reunification, Equity, & Empowerment (FREE) Project

Mass incarceration affects not just individuals, but families many of our community members and guests experience family separation at the hands of the child welfare system. The FREE Project is system impacted led and organizes parents and family members in a non judgemental space, advising on best practices and dependency court procedures We recently sponsored and passed statewide bill that eliminates major barriers to child placement and allows family members with criminal convictions unrelated to caring for children to be considered as placement options allowing for suitable family members with criminal convictions to step up in times of crisis

Employment

Through our Path to SEED program, we connect guests and community members with employment opportunities and provide training & support regarding obtaining and retaining employment, often a major hurdle for formerly incarcerated individuals.

Marshall Legal Clinic

Our free clinics provide relief for expungements, wills/trusts, immigration, and more with the support of local legal organizations

Policy Advocacy

In the past year, we’ve co sponsored and/or supported nearly a dozen statewide bills to reduce the scale of mass incarceration and its collateral consequences We’ve also worked locally to influence Riverside County to reduce criminal history look back periods from 7 years to 3 years in 2017 and to enable youth coming out of probation to be able to stay with their family members in subsidized housing

Grassroots Organizing & Civic Engagement

Our Participatory Defense organizing model (based on Silicon Valley De Bug) empowers family and community members in the courtroom to positively impact their loved one’s outcome and to bring them home. As fiscal sponsor and start up organization of Riverside All of Us or None (a chapter of a national initiative of formerly incarcerated people, family members, and allies advocating for the rights of the currently and formerly incarcerated people) we ensure that system impacted leadership remains at the center of the fight to keep our community together and address the social problems that incarceration purports to solve Our community outreach team also disseminates voter registration and public health information regarding COVID 19, and we organize food and clothing relief for community members in need.

PROPERTY INFORMATION:

Multiple Offers Received. Highest and Best due by 8:00 PM on Friday, April 22nd. Walk to Lake Lavon in minutes. This home is located in a small & quiet lake area. The home features 3 bedrooms and 2 full bathrooms, living room and eat-in kitchen. Lots of updates and special features inside. The backyard is a gardeners dream and features a large wooden deck, greenhouse, storage building, raised garden beds, and water collection system. Last but not least, cool off on hot summer days in the stock tank pool. At the end of the street is Avalon Park and the shores of Lake Lavon.