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  What Is Second Lien Debt? After a first lien is already in place when any borrowing happens it is termed as  Second lien debt . It subsequently refers to the ranking of the debt in the event of a bankruptcy and liquidation the second-lien comes as a subsequent debt and comes only after the first-lien debt is fully repaid. Another name for the second-lien debt security is junior or subordinated debt. They have a lower priority of repayment than other seniors or higher-ranked debt. Meaning, in the case of the borrower’s insolvency the second lien is second in line to be fully repaid. The   second-lien debt can be paid only after all senior debt, like the loans and bonds, has been satisfied. Explanation of second lien debt While pledging collateral to secure a loan a second-lien debt has a subordinated claim. During a forced liquidation, the proceeds from the sale of the assets pledged to go to junior debt only after the senior debt holders have received their payments. Co...

  Fannie Mae suffered a serious income decline for the third quarter of 2021, it slid down to $4.8 billion from $7.2 billion from Q2 to Q3. The mortgage giant said the decline was majorly driven by a drop in credit-related income and lower net interest income. In the third quarter, Fannie Mae’s overall net worth grew to $42.2 billion. Hugh Frater CEO at Fannie Mae claims that in spite of the fall it was a strong quarter for them as they continue to build capital. But they remain   “significantly undercapitalized” in the third quarter admitted Fannie Mae in its release. Frater added, though rising home prices are good for homeowners and sellers it has negatively impacted the affordability for many first-time homebuyers along with lower- and middle-income families, making it unaffordable for them leading to inequity in the housing economy. They aim to continue working with FHFA and provide affordable homeownership and quality rental housing for Americans. In Q3 their single-fami...

  During September in spite of a decline in personal income, the annual inflation rose very high said the Commerce Department. For the month including food and energy, the personal consumption expenditures price index increased 0.3%, pushing the year-over-year gain to 4.4%. That’s the fastest pace since January 1991. If food and energy costs are not included then the inflation rose 0.2% for the month, and 3.6% for the 12-month period. This inflation jump came as personal income dropped 1% in September, which was expected to drop 0.4%. According to Wall Street estimates consumer spending increased 0.6%. The  g ross domestic product rose by 2% annualized pace in the third quarter. In the third quarter, the compensation costs also rose 1.3% when it was estimated 0.9%, reported the Labor Department. Bringing the year-over-year increase to 3.6%, a bit higher than Q1 and the fastest momentum since the second quarter of 2002. Compared to 2.7% wages and salaries rose to 4.6%, from Sep...

  Home Appraisal For Refinance Are you are in the process of  refinancing , or planning for one soon? The following home appraisal tips may help you to get through the process smoothly. It is essential to be updated about home appraisal in Texas before you refinance your mortgage in Texas so that it could enhance the property of your house and make sure that you don’t have any surprises at closing. It depends a lot on location and the type of property. Let us see a few tips about home appraisals. Property Inspection Waiver (PIW) While Refinancing Mortgage In Texas This is a new  t erm available for borrowers through the lender for the last couple of years.  PIW  is only available for conventional mortgages through  Fannie Mae  or  Freddie Mac . PIW means you get a complete waiver for a property inspection, which usually is a part of the refinancing process. The benefit of getting a PIW are; A) It speeds up the process of refinancing, and you would...

  If you’re planning a  home purchase  or  refinancing  it soon then now is the right time to lock a mortgage rate, because the next Federal Reserve meeting is set for Nov. 2–3. There is a strong possibility of the mortgage rates getting higher after the November meeting, so it is a good idea to lock in the mortgage while rates are still low today and save money in the long run. How do the mortgage rates get affected by the Federal Reserve? Even though the Fe d  does not directly set mortgage rates, their policy affects the borrowing costs for banks. If the interest rates for banks are raised by the Fed, then usually the expenses get passed onto consumers, so a revised Fed policy would lead to an increase in the interest rates on other products and to higher mortgage rates for borrowers. What action of the Fed would push mortgage rates up? Due to the pandemic, the Fed’s massive bond-buying action was an effort to help revive the national economy and keep ra...

  The mortgage rates are low today. There are two types of mortgage rates — fixed or adjustable. In a fixed-rate mortgage, the borrower’s rate remains the same for the entire length of their loan. In an adjustable-rate mortgage, the rates are locked for the first few years, and then it changes periodically. Over the past one month and more, the adjustable rates have started to go down hence compared to fixed rates they’re more competitive than they were in over a year. When  applying for  a  mortgage , borrowers may want to look at the fixed-rate as well as the adjustable-rate options. Earlier in 2021, the adjustable rates were higher than the 30-year fixed rates but now they are gradually going down. The average rate of 30 years fixed mortgage today is 3.59% Today’s 15 years fixed average rate is 2.62% The 7/1 ARM average rate today is 2.71% The 10/1 Average ARM rate is 3.94% The average rate for 30 years FHA is 2.72% The 30 years fixed mortgage refinance rate today...