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What mortgage company changes mean for your home loan

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What mortgage company changes mean for your home loan

It’s been a bumpy ride for mortgage companies lately. Some lenders have gone out of business, merged with other companies or narrowed their focus. And more changes are likely in 2023.

What does all this mean for borrowers?

Here are answers to common questions, whether you’re shopping for a mortgage or paying off a home loan.

WHAT’S BEHIND THE SHAKEOUT?

A key factor: higher mortgage rates. Demand for home loans plummeted last year as the Federal Reserve raised a key interest rate to control inflation and mortgage rates spiked in turn. The average for a 30-year fixed-rate mortgage doubled from near-historic lows in early January 2022 to almost 6.4% at year’s end, according to Freddie Mac, an enterprise created by Congress in 1970 to support the U.S. housing finance system.

Higher mortgage rates shrink buying power, so elevated rates shut out some prospective homebuyers, already squeezed by eye-popping home prices.

And for homeowners who had locked in historically low rates in prior years, the spike removed money-saving incentives to refinance their mortgages. Unless your primary aim is to cash out some home equity, it doesn’t make sense to refinance to a higher rate.

As a result, fewer people applied for mortgages. Mortgage applications to buy homes dropped almost 40% year over year in the last few months of 2022, and refinance applications were down almost 90%, according to a December Mortgage Bankers Association forecast report.

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Higher rates also increased risk for banks and mortgage companies that buy mortgage loans from lenders.

WHAT IF MY LENDER GOES BUST?

Here’s what would happen:

— If the lender that issued your loan goes out of business or goes bankrupt after the mortgage has closed, you’ll be unaffected. The loan terms will stay the same. If the mortgage company that services your loan changes, you’ll be informed of where to send your monthly payments.

— If your lender runs into trouble and can’t fund the loan when you’re a week or two away from closing, the company will likely work with you to find another lender, says Mark Indelicato, a bankruptcy attorney and partner with Thompson Coburn Hahn & Hessen in New York. “What I’ve seen so far in the industry is the players work together to make sure that the borrowers themselves are not hurt,” he adds.

Some mortgage companies have filed for bankruptcy or gone out of business in the past year. First Guaranty Mortgage Corp. announced June 30 that it filed for Chapter 11 bankruptcy, for example. And some smaller lenders have simply gone out of business recently. Reali, a real estate company with an online lending arm, said in August that it was shutting down, and LenderFi said in an email in the fall that it was leaving the mortgage business.

Indelicato, whose firm is the lead counsel for unsecured creditors in the First Guaranty Mortgage Corp. case, does not expect to see a big wave of mortgage company bankruptcies. “It’s not so bad that you’re going to see the wholesale bankruptcies like you saw of mortgage originators in 2007 and 2008,” he says.

WHAT IF MY LENDER MERGES WITH ANOTHER COMPANY?

A merge will have little direct impact on you. Your loan terms will stay the same if your lender merges with or is acquired by another company.

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Meanwhile, don’t be surprised to hear more about mortgage company mergers. Stratmor Group, a mortgage advisory company based in Greenwood Village, Colorado, projected in an October report that almost 50 mergers and acquisitions would be announced or closed by the end of 2022, a 50% jump from 2018, the year with the next-highest number in the past 30 years. And the consolidation trend will likely continue this year.

WHAT HAPPENS IF MY MORTGAGE SERVICER CHANGES?

You’ll be notified of where to send your mortgage payments. Your mortgage servicer is the company that processes payments and manages the loan. If the servicing rights are transferred to a different company, generally the old and new servicers should notify you, according to the Consumer Financial Protection Bureau. The notices will tell you when the old servicer will stop accepting payments, when the new servicer will start accepting payments and the new servicer’s contact information. Read the notices and send payments to the new servicer after the transfer.

WILL OTHER MORTGAGE BUSINESS CHANGES AFFECT ME?

You’ll still have options if you’re seeking a mortgage. Some lenders may change the types of loans they offer or focus on different segments of consumers. Wells Fargo, for instance, said in January that it would create a “smaller, less complex” home lending business focused on bank customers, as well as people in underserved minority communities.

The advice for shopping to get a mortgage remains the same. Look for lenders that offer the types of mortgages you’re interested in and apply with multiple lenders to compare rates and fees.

WILL MORTGAGE COMPANY LAYOFFS COMPROMISE CUSTOMER SERVICE?

Not necessarily. Layoffs generally correspond to lower loan volume; there’s less work to go around, so fewer employees are needed.

Regardless of what’s happening in the industry, customer service is a key feature to consider when shopping for lenders. Many lenders offer a streamlined online application process. But even with robust digital tools available, you should be able to reach a human to help you through the process.

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Check customer service ratings online and from companies such as J.D. Power, a global data and analytics company. And when shopping for lenders, compare how quickly and helpfully they respond the first time you contact them with questions.

ARE THESE CHANGES A SIGN OF A HOUSING CRASH OR MORTGAGE CRISIS?

No.

“Consumers should not be concerned about a potential crash as the one we saw during the Great Recession for a number of reasons,” Selma Hepp, chief economist at property analytics company CoreLogic, said by email in reference to the 2007-09 financial crisis.

Lending standards have been strict in recent years, and a lot of buyers made sizable down payments, Hepp noted. In addition, most homeowners now have a lot of home equity, thanks to rising home prices.

“That means that even if they lose a job, they are not forced into a foreclosure but can instead sell their home at a profit,” she said.

Hepp doesn’t expect a huge wave of homes coming on the market. Many people bought their properties or refinanced when rates were low, so they have an incentive to stay put.

Given the limited supply of homes for sale, experts generally don’t expect average home prices to fall steeply as they did in 2008 and 2009.

_________________________

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This article was provided to The Associated Press by the personal finance website NerdWallet. Barbara Marquand is a writer at NerdWallet. Email: [email protected]. Twitter: @barbaramarquand.

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Israel hails ‘success’ after blocking unprecedented attack from Iran

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Israel hails ‘success’ after blocking unprecedented attack from Iran

TEL AVIV, Israel (AP) — Israeli leaders on Sunday credited an international military coalition with helping thwart a direct Iranian attack involving hundreds of drones and missiles, calling the coordinated response a starting point for a “strategic alliance” of regional opposition to Tehran.

But Israel’s War Cabinet met without making a decision on next steps, an official said, as a nervous world waited for any sign of further escalation of the former shadow war.

The military coalition, led by the United States, Britain and France and appearing to include a number of Middle Eastern countries, gave Israel support at a time when it finds itself isolated over its war against Hamas in Gaza. The coalition also could serve as a model for regional relations when that war ends.

“This was the first time that such a coalition worked together against the threat of Iran and its proxies in the Middle East,” said the Israeli military spokesman, Rear Adm. Daniel Hagari.

One unknown is which of Israel’s neighbors participated in the shooting down of the vast majority of about 350 drones and missiles Iran launched. Israeli military officials and a key War Cabinet member noted additional “partners” without naming them. When pressed, White House national security spokesman John Kirby would not name them either.

But one appeared to be Jordan, which described its action as self-defense.

“There was an assessment that there was a real danger of Iranian marches and missiles falling on Jordan, and the armed forces dealt with this danger. And if this danger came from Israel, Jordan would take the same action,” Jordanian Foreign Minister Ayman al-Safadi said in an interview on Al-Mamlaka state television. U.S. President Joe Biden spoke with Jordan’s King Abdullah on Sunday.

The U.S. has long tried to forge a regionwide alliance against Iran as a way of integrating Israel and boosting ties with the Arab world. The effort has included the 2020 Abraham Accords, which established diplomatic relations between Israel and four Arab countries, and having Israel in the U.S. military’s Central Command, which oversees operations in the Middle East and works closely with the armies of moderate Arab states.

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The U.S. had been working to establish full relations between Israel and regional heavyweight Saudi Arabia before the Oct. 7 Hamas attack sparked Israel’s war in Gaza. The war, which has claimed over 33,700 Palestinian lives, has frozen those efforts due to widespread outrage across the Arab world. But it appears that some behind-the-scenes cooperation has continued, and the White House has held out hopes of forging Israel-Saudi ties as part of a postwar plan.

Just ahead of Iran’s attack, the commander of CENTCOM, Gen. Erik Kurilla, visited Israel to map out a strategy.

Israel’s military chief, Lt. Gen. Herzi Halevi, on Sunday thanked CENTCOM for the joint defensive effort. Both Jordan and Saudi Arabia are under the CENTCOM umbrella. While neither acknowledged involvement in intercepting Iran’s launches, the Israeli military released a map showing missiles traveling through the airspace of both nations.

“Arab countries came to the aid of Israel in stopping the attack because they understand that regional organizing is required against Iran, otherwise they will be next in line,” Amos Yadlin, a former head of Israel’s military intelligence, wrote on X, formerly Twitter.

Israel’s defense minister, Yoav Gallant, said he had spoken with U.S. Defense Secretary Lloyd Austin and that the cooperation “highlighted the opportunity to establish an international coalition and strategic alliance to counter the threat posed by Iran.”

The White House signaled that it hopes to build on the partnerships and urged Israel to think twice before striking Iran. U.S. officials said Biden told Israeli Prime Minister Benjamin Netanyahu that Washington would not participate in any offensive action against Iran.

Israel’s War Cabinet met late Sunday to discuss a possible response, but an Israeli official familiar with the talks said no decisions had been made. He spoke on condition of anonymity because he was discussing confidential deliberations.

Asked about plans for retaliation, Hagari declined to comment directly. “We are at high readiness in all fronts,” he said.

“We will build a regional coalition and collect the price from Iran, in the way and at the time that suits us,” said a key War Cabinet member, Benny Gantz.

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Iran launched the attack in response to a strike widely blamed on Israel that hit an Iranian consular building in Syria this month and killed two Iranian generals.

By Sunday morning, Iran said the attack was over, and Israel reopened its airspace. Iran’s president, Ebrahim Raisi, claimed Iran had taught Israel a lesson and warned that “any new adventures against the interests of the Iranian nation would be met with a heavier and regretful response from the Islamic Republic of Iran.”

The foes have been engaged in a shadow war for years, but Sunday’s assault was the first time Iran launched a direct military assault on Israel, despite decades of enmity dating back to the country’s 1979 Islamic Revolution.

Iran said it targeted Israeli facilities involved in the Damascus strike, and that it told the White House early Sunday that the operation would be “minimalistic.”

But U.S. officials said Iran’s intent was to “destroy and cause casualties” and that if successful, the strikes would have caused an “uncontrollable” escalation. At one point, at least 100 ballistic missiles were in the air with just minutes of flight time to Israel, the officials said.

Israel said more than 99% of what Iran fired was intercepted, with just a few missiles getting through. An Israeli airbase sustained minor damage.

Israel has over the years established — often with the help of the U.S. — a multilayered air-defense network that includes systems capable of intercepting a variety of threats, including long-range missiles, cruise missiles, drones and short-range rockets.

That system, along with collaboration with the U.S. and others, helped thwart what could have been a far more devastating assault at a time when Israel is already deeply engaged in Gaza as well as low-level fighting on its northern border with Lebanon’s Hezbollah militia. Both Hamas and Hezbollah are backed by Iran.

While thwarting the Iranian onslaught could help restore Israel’s image after the Hamas attack in October, what the Middle East’s best-equipped army does next will be closely watched in the region and in Western capitals — especially as Israel seeks to develop the coalition it praised Sunday.

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In Washington, Biden pledged to convene allies to develop a unified response. Secretary of State Antony Blinken said the U.S. would hold talks with allies. After an urgent meeting, the Group of Seven countries unanimously condemned Iran’s attack and said they stood ready to take “further measures.”

Israel and Iran have been on a collision course throughout Israel’s war in Gaza. In the Oct. 7 attack, militants from Hamas and Islamic Jihad, also backed by Iran, killed 1,200 people in Israel and kidnapped 250 others. Israel’s offensive in Gaza has killed over 33,000 people, according to local health officials.

Hamas welcomed Iran’s attack, saying it was “a natural right and a deserved response” to the strike in Syria. It urged the Iran-backed groups in the region to continue to support Hamas in the war.

Hezbollah also welcomed the attack. Almost immediately after the war in Gaza erupted, Hezbollah began attacking Israel’s northern border. The two sides have been involved in daily exchanges of fire, while Iranian-backed groups in Iraq, Syria and Yemen have launched rockets and missiles toward Israel.

___

Federman reported from Jerusalem. Associated Press writers Zeke Miller and Michelle L. Price in Washington; Amir Vahdat in Tehran, Iran; Samy Magdy in Cairo; Omar Akour in Amman, Jordan; and Giada Zampano in Rome contributed to this report.

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How to get rid of NYC rats without brutality? Birth control is one idea

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How to get rid of NYC rats without brutality? Birth control is one idea

New York lawmakers are proposing rules to humanely drive down the population of rats and other rodents, eyeing contraception and a ban on glue traps as alternatives to poison or a slow, brutal death.

Politicians have long come up with creative ways to battle the rodents, but some lawmakers are now proposing city and statewide measures to do more.

In New York City, the idea to distribute rat contraceptives got fresh attention in city government Thursday following the death of an escaped zoo owl, known as Flaco, who was found dead with rat poison in his system.

City Council Member Shaun Abreu proposed a city ordinance Thursday that would establish a pilot program for controlling the millions of rats lurking in subway stations and empty lots by using birth control instead of lethal chemicals. Abreu, chair of the Committee on Sanitation and Solid Waste Management, said the contraceptives also are more ethical and humane than other methods.

The contraceptive, called ContraPest, is contained in salty, fatty pellets that are scattered in rat-infested areas as bait. It works by targeting ovarian function in female rats and disrupting sperm cell production in males, The New York Times reported.

New York exterminators currently kill rats using snap and glue traps, poisons that make them bleed internally, and carbon monoxide gas that can suffocate them in burrows. Some hobbyists have even trained their dogs to hunt them.

Rashad Edwards, a film and television actor who runs pest management company Scurry Inc. in New York City with his wife, said the best method he has found when dealing with rodents is carbon monoxide.

He tries to use the most humane method possible, and carbon monoxide euthanizes the rats slowly, putting them to sleep and killing them. Edwards avoids using rat poison whenever possible because it is dangerous and torturous to the rodents, he said.

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Some lawmakers in Albany are considering a statewide ban on glue boards under a bill moving through the Legislature. The traps, usually made from a slab of cardboard or plastic coated in a sticky material, can also ensnare small animals that land on its surface.

Edwards opposes a ban on sticky traps, because he uses them on other pests, such as ants, to reduce overall pesticide use. When ants get into a house, he uses sticky traps to figure out where they’re most often passing by. It helps him narrow zones of pesticide use “so that you don’t go spray the entire place.”

“This is not a problem we can kill our way out of,” said Jakob Shaw, a special project manager for People for the Ethical Treatment of Animals. “It’s time to embrace these more common sense and humane methods.”

Two cities in California have passed bans on glue traps in recent years. On the federal level, a bill currently in committee would ban the traps nationwide.

“It ends a really inhumane practice of managing rat populations,” said Jabari Brisport, the New York state senator who represents part of Brooklyn and sponsored the bill proposing the new guidelines. “There are more effective and more humane ways to deal with rats.”

Every generation of New Yorkers has struggled to control rat populations. Mayor Eric Adams hired a “rat czar” last year tasked with battling the detested rodents. Last month, New York City reduced the amount of food served up to rats by mandating all businesses to put trash out in boxes.

While the war on rats has no end in sight, the exterminator Edwards said we can learn a lot from their resilience. The rodents, he said, can never be eradicated, only managed.

“They’re very smart, and they’re very wise,” he said. “It’s very inspiring but just — not in my house.”

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Coachella: Earthquake shakes SoCal desert during music fest

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Coachella: Earthquake shakes SoCal desert during music fest

RIVERSIDE, Calif. (AP) — A small earthquake shook the Southern California desert Saturday near Coachella, where the famous music festival is being held this weekend. No damage or injuries were reported.

The quake, with a preliminary magnitude of 3.8, hit at 9:08 a.m. about 8 miles (13 kilometers) northeast of Borrego Springs in Riverside County, according to the U.S. Geological Survey.

The epicenter was about 20 miles (32 kilometers) southeast of Coachella. It struck at a depth of about 7 miles (11 kilometers), the USGS said.

A dispatcher with the Riverside County Sheriff’s Department said there were no calls reporting any problems from the quake.

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