Another great article by the National Mortgage News.

The mortgage industry is calling on the Consumer Financial Protection Bureau to revise its Loan Originator Compensation rule in favor of better protection for consumers and lesser regulatory burdens for lenders.

The Mortgage Bankers Association and nearly a dozen trade groups said that after more than five years under the LO Comp rule, changes to the order should be among the CFPB’s top priorities in its review of the mortgage rules, according to a letter sent to acting CFPB Director Mick Mulvaney.

“The LO Comp rule, while well-intentioned, is causing serious problems for industry and consumers due to its overly strict prohibitions on adjusting compensation and the amorphous definition of what constitutes a ‘proxy’ for a loan’s terms or conditions,” the letter said.

“These harms are felt when borrowers are unable to obtain lower interest rates from their lender of choice when shopping for a mortgage, or when lenders are unable to hold loan officers accountable for errors in the origination process. Consumers are also harmed when lenders limit their participation in special programs designed to serve first-time and low-to-moderate income borrowers,” the groups wrote.

Under the current law, a lender must choose between lowering the interest rate, discount points to match competition and declining to compete with other mortgage offers.

“The requirement to pay the loan originator full compensation for a discounted loan creates a strong economic disincentive for lenders to match interest rates,” the letter said. “For the consumer, the result is a more expensive loan or the inconvenience and expense of switching lenders in the midst of the process.”

Revisions would significantly increase competition in the marketplace, the letter said.

The CFPB should allow lenders to reduce a loan originator’s compensation when the originator makes a mistake, the letter states. Currently, the LO Comp rule does not allow companies to hold employees financially accountable for losses incurring from errors made on a loan.

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September 30, 2018

The rule also prohibits varying compensation for different loan types, including Housing Finance Agency loans. But, lenders should be allowed to adjust loan compensation to offer loans made under state and local HFA programs, the letter argues.

“HFA programs are particularly important for first-time homebuyers and low-to-moderate income families who are often underserved and face affordability constraints under market interest rates and terms,” the trade groups wrote.

Originally, the LO Comp rule was created to protect consumers from steering, which is pretty much a non-issue following newer regulatory actions adopted from the passage of the Dodd-Frank Act, according to the letter. The CFPB’s TILA-RESPA integrated disclosure rule also aimed to provide clarity on mortgage terms and costs by elevating disclosure requirements.

    Good morning, Jodie Tanga here with your Mortgage Minute. Today’s topic, Going Deeper with Your Credit Score Part 2.

    Here are some things you can do now, to start increasing your credit score:
    • Don’t ever make a late payment on your credit cards.
    • Make more than the min payment each month.
    • Try to stay under 30 percent of your credit limit.
    • Be aware of cards that promote low interest rates, keep track of when they are going to increase and any annual fees they may have .
    • Don’t open up too many lines of credit- you don’t want it to appear that you are in need of excess credit.

    Make sure you have at least two lines of credit, you don’t want it to appear you don’t have access to credit.

    For more information on your credit score, call us at the Tanga Mortgage Team powered by Pacific Rim Mortgage at (808) 223-2761 or visit us on the web at

    Maui had a small decline in the number of homes sold last month while median prices moved in different directions for single-family homes and condominiums.

    A new report from the Realtors Association of Maui said the median price for single-family homes sold on the Valley Isle in March declined 10% to $680,000 from $756,000 in the same month last year.

    Some of the drag on the median price was due to more sales in the Wailuku area where residences tend to be more midpriced. There were 25 homes sold in the area last month for a median $641,114 compared with 15 sales for a median $685,000 a year earlier.


    Adobe Stock

    Overall, there were 100 single-family homes sold on Maui last month, down 5 percent from 105 a year earlier.

    In Maui’s condo market the median price jumped 15% to $450,000 last month from $390,000 a year earlier. Much of the increase was fueled by sales in Kihei where there were 56 sales last month for a median $416,000 compared with 45 sales a year earlier for a median $359,000.

    The number of condo sales slipped 5% to 127 last month from 133 a year earlier.

    The median price is a point at which half the sales were at a higher price and half at a lower price.

    Maui’s trade association for real estate agents counts sales of new homes and previously owned homes in its report.

    Great Article By Andrew Gomes from The Honolulu Star-Advertiser.


    Real estate foreclosures declined in Hawaii for a fourth consecutive year in 2017, according to statistics from the state Judiciary.

    The number of new foreclosure cases filed statewide last year fell 16% percent to 1,461 from 1,734 the year before.

    Foreclosure lawsuits initiated mainly by lenders against homeowners in Hawaii peaked in 2013 at 3,430 cases. The decline began in 2014 when 2,084 cases were filed, and the next year new case volume decreased to 1,826.

    The four-year trend has been influenced by a prospering state economy where personal income has risen, unemployment has dropped about as low as it can go, and home values have appreciated moderately. Still, unfortunate life events including divorce, bad financial decisions and debilitating illness or injury can lead to foreclosure.

    Judiciary statistics on foreclosures go back only to 2010, though for that year many foreclosures by lenders against homeowners were conducted out of court in a nonjudicial process that homeowner advocates contended was unfair to borrowers. Since mid-2011, all foreclosure cases by lenders against homeowners have been filed in state court after the Legislature overhauled rules governing foreclosure in Hawaii.

    Cases filed in court can include actions against owners of commercial real estate and actions initiated by condominium associations against homeowners who fail to pay maintenance fees or other assessments. Condo association cases, however, also can be done through the nonjudicial process. Other foreclosure cases, including actions involving timeshare properties, are typically done through the nonjudicial process that isn’t counted in Judiciary data.


    By   – Real Estate Editor, Pacific Business News

    Homebuyers in Honolulu have the highest mortgage debt-to-income ratio in the nation, while homebuyers on Maui have a ratio that’s third-highest in the U.S., topped only by San Jose in California’s Silicon Valley, according to a report by the personal finance company SmartAsset.

    Homebuyers in the Honolulu metropolitan area have mortgages worth 3.959 times their annual income, on average, according to an analysis of data from the Consumer Financial Protection Bureau.

    The data showed that Honolulu homebuyers have an average income of $131,639 and that the average mortgage is for $521,201.

    Maui homebuyers in the Kahului-Wailuku-Lahaina metro area have an average income of $131,681, and the average mortgage there is $468,597, putting their mortgage-to-income ratio at 3.559.

    By contrast, homebuyers in San Jose have an average income of $207,062 and an average mortgage of $740,693, giving them a ratio of 3.577.

    California had 17 of the top 25 cities with the largest mortgage-to-income ratios on the list, while Hawaii had two of the top three.

    Nationally, the average mortgage-to-income ratio was 2.119.

    “The goal of all our studies is to get people thinking about personal finance issues,” AJ Smith, SmartAsset’s vice president of financial education and author of the report, told Pacific Business News. “To look at what the mortages are compared to the income that they’re making.”