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Real Estate News 1.17.2014

Roubini: U.S. economy will disappoint in 2014
“FORTUNE — Dr. Doom is back, sort of.”

Realtors® Rate Exterior Replacement Projects Among Most Valuable Home Improvements
“WASHINGTON (January 16, 2014) – A home’s curb appeal is crucial because it can be the first thing buyers notice about a home. That’s why Realtors® rated exterior projects among the most valuable home improvement projects in the 2014 Remodeling Cost vs. Value Report.”

Lower Mortgage Refinancing Activity Hits Citi Profit And Revenue
“If there was ever any question about the nation’s appetite for new and refinanced mortgages, Citigroup’s disappointing fourth quarter earnings results leave very little room for doubt: it’s weak.”

Shawnee County implores Legislature to keep mortgage fees
“As taxes go, the mortgage registration fee historically has fallen below the three budgets it is supposed to support.”

FBI Suspects Front-Running of Fannie, Freddie Swap Orders
“Bank employees may have profited by trading ahead of Fannie Mae and Freddie Mac swap orders, Reuters reported, citing a description of the practice in a U.S. Federal Bureau of Investigation intelligence bulletin.”

CFPB Provides New Guidance on Appraisal Disclosures
“The Consumer Financial Protection Bureau has provided an update to National Mortgage News on a story with inaccurate information about appraisal disclosures. Under the qualified mortgage rule, lenders are required to provide borrowers with all appraisal reports ordered or requested in conjunction with a loan application.”

Mortgage exec says don’t fear new rule on loans
“Wells Fargo Home Mortgage President Mike Heid spoke in favor of the federal government’s new qualified mortgage rule Thursday at a gathering of Des Moines-area business leaders.”

Banks Keep Their Mortgage Litigation Reserves a Secret
“From JPMorgan Chase’s $13 billion settlement over mortgage securities to lawsuits brought by bondholders, a barrage of litigation has been raining down on Wall Street banks. Yet the banks are not disclosing a number that is crucial for assessing their ability to deal those legal costs. And, curiously, the regulator that has sway over companies’ disclosure practices has not called on the industry to reveal this important figure so that investors can weigh the institutions’ health.”

Alabama court thinks landlords need more foreclosure protection
“Lawfirm Ballard Spahr is reporting that an Alabama federal court is suggesting that borrowers can allege invalid mortgage assignments — if a portion of the property has tenants.”

GSE reform idea puts private capital back in driver’s seat
“Representatives John K. Delaney, D-Md., John Carney, D-Del., and Jim Himes, D-Conn., are putting together a housing finance reform proposal that uses private sector market forces to price risk while providing the security of a government guarantee behind the program.”

Housing starts drop 9.8%
“While housing starts dropped 9.8% from November to December, they did manage to grow 1.6% from December 2012, the U.S. Census Bureau said Friday.”

Real estate prices appreciate at a slower pace
“While residential real estate appreciation continues to trend higher, the rapid pace experienced early last year is easing, Veros Real Estate Solutions said in its latest VeroFORECAST report.”

$669 million Fannie, Ginnie portfolio sale hits market
“Mortgage Industry Advisory Corp. is overseeing the sale of a $669.22 million Fannie Mae and Ginnie Mae mortgage-servicing portfolio, the company announced Friday.”

4 key housing trends
“Key indicators show housing moving in a positive direction, paving the way for an ongoing recovery, the latest Freddie Mac Economic and Housing Market Outlook shows.”

New Lenders for Real-Estate Investors
“A new lender is knocking on wealthy real-estate investors’ doors.”

HUD AND CENSUS BUREAU ANNOUNCE
NEW RESIDENTIAL CONSTRUCTION ACTIVITY IN DECEMBER
“WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau today announced the following new residential construction statistics for December 2013…”

Freddie Mac Prices New $4.5 Billion Three-Year Reference Notes® Security
“MCLEAN, VA–(Marketwired – Jan 17, 2014) – Freddie Mac (OTCQB: FMCC) announced today that it priced its new .875% three-year USD Reference Notes® security due on February 22, 2017. The issue, CUSIP number 3137EADT3, was priced at 99.839 to yield .928%. The issue will settle on Tuesday, January 21, 2014.”

San Fernando Valley home, condo prices soared in 2013
“The San Fernando Valley’s housing market shook off the shackles of the Great Recession during 2013, according to a report released Thursday.”

Rich Chinese continue to flee China
“Do the wealthy Chinese know something we don’t?”

Construction up, but are we building too many houses?
“The year-end numbers are in, and home construction improved dramatically in 2013. Both single- and multi-family housing starts were up, by 15 and 25 percent, respectively, according to the U.S. Census. Add it all up and total housing construction rose 18 percent from 2012 to the highest level since 2007.”

The Mortgage Professor: Breaking the logjam on reverse mortgages
“People reaching retirement age are living longer than ever, and retiring with less capacity to maintain their living standards. With good reason, this situation has been termed a ‘retirement funds crisis.'”

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Real Estate News 1.16.2014

Trulia set to serve up sellers as ‘leads’ to real estate agents
Selling the contact information of prospective homebuyers to real estate agents as buyer “leads” has long been the bread and butter of listing portals like Zillow, Trulia and realtor.com.”

Trulia’s housing indicator shows mixed market (VIDEO)
“It’s going to be an uneven recovery, says Sean Aggarwal, Chief Financial Officer at Trulia, sharing his thoughts on the outlook on housing. We¿ve seen a very sustained recovery in 2014, says Aggarwal.”

Foreclosures hit six-year low in 2013
“Last year was a banner year in the fight against foreclosures, with filings hitting their lowest level since 2007.”

World economy on recovery road, but weak inflation threatens: Reuters poll
“(Reuters) – A much better year lies in store for most of the world’s major developed economies, although weak inflation will persist, complicating central banks’ ability to get interest rates back to normal, Reuters polls forecast on Thursday.”

Why banks aren’t lending to homebuyers
“‘Despite the confluence of promising signs,” write Peter Eavis and Jessica Silver-Greenberg today, “little in the vast system that provides Americans with mortgages has returned to normal since the 2008 financial crisis, leaving a large swath of people virtually shut out of the market.'”

Some banks made to pay cities for foreclosing on properties
“Canton officials say they have found a way to hold banks accountable for foreclosed and vacant properties in the northeastern Ohio city.”

FHA: The incredible, shrinking mortgage resource
“Is FHA sending its most profitable, lowest-risk customers — homebuyers who have very good to excellent credit — to Fannie and Freddie for their mortgages, thereby losing significant market share?”

‘Worst of all worlds’ for mortgage lending in fourth quarter
“The country’s top three mortgage lenders confirmed this week that new home loans dropped last year as mortgage rates rose, with earnings results Wednesday from Bank of America showing a 46% year-over-year drop in the fourth quarter.”

The bear and bull cases for mortgage REITs in 2014
“WASHINGTON (MarketWatch) — Shareholders of real estate investment trusts that invest in mortgage-backed securities had a rough 2013, and while rising rates continue to pose a risk, there could also be buying opportunities, analysts say.”

Did Fannie Mae run afoul of California’s short sale laws?
“Fannie Mae and its servicers maybe broke the law in California when collecting contributions from borrowers on short sales, the office of the inspector general for the Federal Housing Finance Agency claims in a new report. The government-sponsored entity, while not admitting culpability, said a data error may be to blame.”

BofA Says Profit Quadruples as Mortgage Costs Ebb
“Bank of America Corp., the second-biggest U.S. lender, quadrupled its quarterly profit and beat Wall Street estimates as the company quelled claims tied to defective mortgages. The stock reached its highest level in more than three years.”

Freddie Mac: Mortgage rates hit monthly low
“Mortgage rates took a step back due to signs of a weakening economic recovery, according to the latest Freddie Mac Primary Mortgage Market Survey.”

Collapse in refis drive Citi earnings miss
“Citigroup (C) drove a 21% increase in fourth quarter earnings, but that wasn’t enough to reach analyst expectations as a weakening mortgage business proved too tough a headwind to overcome.”

Goldman Sachs sets aside plenty of cash for mortgage lawsuits
“Goldman Sachs (GS) reported fourth-quarter revenues and profit topping Wall Street estimates, bouyed by a resurgent IPO market that boosted investment banking revenue.”

Citi sells Fannie Mae MSRs … to Fannie Mae
“Fannie Mae has purchased mortgage servicing rights on about 64,000 of its own loans from Citigroup (C), as the nation’s 3rd largest lender looks to shed future liabilities tied to its servicing practices.”

Jobless claims fall by 2,000 filings
“Jobless claims pulled back slightly for the week ending Jan. 11, and fell by 2,000 filings to 328,0000, the U.S. Department of Labor said.”

Why Mortgage REITs Deserve Some Love in 2014
“There’s nothing sexy about mortgage real estate investment trusts. They can’t talk to you like Siri or deliver packages with drones like Amazon envisions. But they currently yield 13 percent while Treasury bonds yield only 3.8 percent.”

REAL ESTATE: Bailing out of PMI
“Home prices rose so significantly across Inland Southern California in 2013 that consumers who have been paying private mortgage insurance on their home loans for years not only may be emerging from underwater home equity positions.”

REAL ESTATE: Earthquake coverage rumblings follow 4.4-magnitude temblor
“Twenty years after the Northridge quake of January 1994, the earth that rumbled and roared in Fontana on Wednesday, Jan. 15, gave many in the Inland region more than a 4.4-magnitude wake-up call.”

OBAMA ADMINISTRATION ANNOUNCES SEVEN ADDITIONAL CITIES
PARTICIPATING IN THE STRONG CITIES, STRONG COMMUNITIES INITIATIVE
“WASHINGTON – Today the Obama Administration announced it is expanding the Strong Cities, Strong Communities (SC2) Initiative to include Brownsville, TX; Flint, MI; Gary, IN; Macon, GA; Rockford, IL; St. Louis, MO; and Rocky Mount, NC. President Obama established SC2 in 2011 as an innovative and flexible program designed to strengthen local capacity, coordinate federal investments, and spark growth in economically distressed communities.”

Squeezing out the working class through higher rents: 11.3 million Americans spend more than half their income on rent in 2011, a jump of 28 percent from 2007.
“Welcome to landlord nation.  People need a place to live and a recent Harvard analysis found that more Americans are spending a larger portion of their income on housing.  More to the point, there are now 11.3 million Americans that spend half of their income on rent.  This is a significant jump of 28 percent from 2007.  Rents also went up throughout 2012 and the first half of 2013 so this figure has definitely increased.  Is this a good thing for households?  Probably not but that is simply the current trend.  This is also a reason why only 1 out of 3 households can actually afford a home in California and is a direct consequence of the massive flood of investors into the real estate market.  When properties go back into the market with artificially low supply, these owners have the ability to command higher prices.  The end result?  More money to landlords and less money in the pockets of renting households.  And with America becoming more of a renter nation, this is putting a strain on the budgets of many households.”

California AG Busts Statewide, Multi-Million Dollar Housing Scheme
“California officials on Wednesday arrested five individuals who allegedly ran a statewide housing scheme involving the fraudulent seizure of at least 23 homes in nine counties.”

Fed’s Beige Book Details Improvements in Regional Real Estate Markets
“Representatives from the Federal Reserve’s 12 districts reported moderate economic expansion across most of the country through the end of last year, with indicators pointing to more steady growth ahead.”

Taking the Temperature of the Market
“MCLEAN, VA–(Marketwired – Jan 16, 2014) – Freddie Mac (OTCQB: FMCC) released today its U.S. Economic and Housing Market Outlook for January showing that four of the key housing indicators are all moving in the right direction, which bodes well for an ongoing recovery. A short preview video, and the complete January 2014 U.S. Economic and Housing Market Outlook are available here.”

Fixed Mortgage Rates Move Lower on Economic Data
“MCLEAN, VA–(Marketwired – Jan 16, 2014) – Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates fall amid signs of a weakening economic recovery.”

Freddie Mac Multifamily Research Highlights Borrower Default Behavior
“MCLEAN, VA–(Marketwired – Jan 16, 2014) – New Freddie Mac (OTCQB: FMCC) research shows that a commercial real estate borrower’s loan default decision for an underperforming property is based on several factors, including property and loan characteristics, and economic and market conditions. The research [PDF], “Default Ruthlessness: Examining Borrower Default Behavior,” analyzed and compared borrower default behavior for CMBS loans and Freddie Mac multifamily loans. The research can help debt investors better manage their investment expectations.”

Freddie Mac Prices $1 Billion Reopening of 1.75% Seven-Year Reference Notes® Security
“MCLEAN, VA–(Marketwired – Jan 16, 2014) –  Freddie Mac (OTCQB: FMCC) announced today that it auctioned a $1 billion reopening of its 1.75% seven-year USD Reference Notes® security that matures on May 30, 2019. The stop yield for the issue, CUSIP 3137EADG1, was 1.947%, priced at 98.999425. The bid-to-cover ratio was 3.4 to 1.”

Freddie Mac to Issue a New Three-Year Reference Notes® Security and $1 Billion Reopening of 1.75% Reference Notes Security
“MCLEAN, VA–(Marketwired – Jan 16, 2014) – Freddie Mac (OTCQB: FMCC) announced today that it plans to issue a new three-year USD Reference Notes® security, CUSIP number 3137EADT3, due on February 22, 2017. The issue will be priced on Friday, January 17, 2014, and will settle on Tuesday, January 21, 2014, at benchmark size.”

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Real Estate News 1.10.2014

Far fewer mortgage borrowers ‘deeply underwater’

“A growing number of mortgage borrowers are keeping their heads above water, according to a report from RealtyTrac.”

 

Mortgage Rates React to Light News Week

“This week saw conflicting reports of interest rate movements, despite markets having little news with which to react.”

 

Labor market data suggest economy strengthening

“(Reuters) – The number of Americans filing new claims for unemployment benefits last week fell and planned layoffs hit a 13-1/2 year low in December, adding to a range of data that have suggested the economy is gaining steam.”

 

Bill would boost disclosures in corporate settlements with U.S.

“WASHINGTON — Concerned that targets of federal investigations are getting off lightly, two senators proposed legislation requiring the government to disclose all the details about settlements that allow companies to duck trials on allegations of wrongdoing.”

 

JPMorgan, UBS Said to Be Among Banks in Mortgage Probe

“JPMorgan Chase & Co. (JPM) and UBS AG (UBSN) are among banks that received federal requests for information about trades in mortgage-backed securities after the financial crisis, two people briefed on the matter said.”

 

Brown Proposes Record $106.8 Billion California Budget

“California Governor Jerry Brown proposed a record $106.8 billion budget as state coffers brim with the biggest surplus in more than a decade, setting up a fight with fellow Democrats who want more spending.”

 

Home Equity Gains Spur the Economy as Owners Buy Cars: Mortgages

“Americans flush with cash as they regain equity in their homes are spending more after years of pinching pennies.”

 

New ECOA rule means collateral valuation pipelines may be leaking

“The Consumer Financial Protection Bureau’s Equal Credit Opportunities Act valuations rule, which goes into effect Jan. 18, mandates that all borrowers confirm statements prior to receiving an electronic copy of any appraisal report.”

 

The wrong vote on this Senate bill will cost billions

“A key vote on a bill that would put on hold key flood insurance rate hikes was delayed Wednesday, but the bill should be back up for a vote next week.”

 

UNDERWATER MORTGAGES: Equity on the rise in Inland homes

“Fewer foreclosures were deeply underwater on home equity in December, and the percentage of mortgaged homes in the Inland region with negative equity fell to 23 percent, a new report from real estate information service RealtyTrac revealed.”

 

REAL ESTATE: Lending basics restored in 2014

“The new consumer protections for homeowners take effect on Friday, Jan. 10.”

 

Shadow Inventory Lowest Since August 2008

“The industry’s shadow inventory of homes with mortgages 90 or more days delinquent, in foreclosure, or held as REO by mortgage servicers but not currently listed on multiple listing services (MLSs)—also known as pending supply—stood at 1.7 million as of October 2013, according to CoreLogic.”

 

Nation’s No. 3 Credit Union Adopts Mortgage Harmony’s ‘Rate Reset’

“Mortgage Harmony Corp., the provider of Loan Retention Software (LRS) and the HarmonyLoan product, announced that its Rate Reset Protection software has been added to online applications on select mortgage products from Pentagon Federal Credit Union (PenFed), the country’s third largest credit union.”

 

Freddie Mac Multifamily Prices First Securities Offering This Year, K-714

“MCLEAN, VA–(Marketwired – Jan 10, 2014) – Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (“K Certificates”), which are multifamily mortgage-backed securities. The approximately $1 billion issuance of K Certificates (“K-714 Certificates”) is expected to settle on or about January 28, 2014.”

 

What Does Your Mortgage Really Cost?

“The government has just come out with a new form designed to explain how much a mortgage really costs. It took two years of study, revision and editing to perfect the Consumer Financial Protection Bureau’s new “loan estimate” form, paperwork designed to help consumers make better mortgage choices and hopefully avoid higher loan costs and needless foreclosures.”

 

Jobs report blues: Did the Fed screw up?

“FORTUNE — The Fed has been too cheery about the economy before, and Friday’s jobs report may prompt many to wonder if the central bank screwed up again.”

 

What the new mortgage rules mean for you

“New mortgage lending rules are going into effect Friday that aim to put an end to the worst mortgage lending abuses of the past.”

 

Wall Street Predicts $50 Billion Bill to Settle U.S. Mortgage Suits

“Wall Street could pay nearly $50 billion to buy peace from federal authorities who are taking aim at the banks over their role in the mortgage crisis, according to interviews and a confidential analysis of the industry’s potential legal exposure.”

 

FHFA delays inevitable g-fee hike

“Just before Rep. Mel Watt, D-N.C., was officially sworn in as director of the Federal Housing Finance Agency, the agency said it would increase guarantee fees.”

 

Phoenix housing recovery stalls

“The Phoenix housing market continues to see home price gains, but those jumps are not as steep as before since the state is now dealing with an exodus of investors.”

 

5 big promises the White House is making now about housing

“The Secretary of Housing and Urban Development joined the education and agriculture secretaries Thursday in a press conference to elaborate on what will be involved in President Obama’s new “promise zone” initiative.”

 

HUD AWARDS $16.3 MILLION TO HUNDREDS OF PUBLIC HOUSING AUTHORITIES TO PROMOTE FAMILY SELF-SUFFICIENCY

“WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today awarded nearly $16.3 million in grants to help public housing residents to gain access to education, job training and employment. HUD’s Public Housing Family Self-Sufficiency Program (PH-FSS)helpspublic housing authorities across the country to hire or retain more than 300 program coordinators who will work directly with families to connect them to the supportive services that meet their individual needs and to become gainfully employed.”

 

California baby boomers and the golden real estate handcuffs: Examining the real numbers behind generational real estate wealth.

“Americans tend to shun generational transfers in wealth especially when they are unwarranted and not based on individual merit. Heck, revolutions were fought with much bloodletting to rid the heavy chains of an aristocratic class that handed down the baton of wealth to future heirs. The question of baby boomers and real estate is an important one because you have one generation with much of their wealth tied up in one asset class while younger generations struggle to get by. In California, Prop 13 has been the subject of much debate and was at the hub of a rallying cry back in 1978 for tax reform, a rally many baby boomers remember (the older baby boomers were already in their early 30s at this point). One issue that constantly comes up with Prop 13 is that you don’t want grandma thrown out to roam around the streets of L.A. Of course, this assumption is that most people stay put in one home for 30-years (this is factually not the case). People move. A lot. The figures for California highlight a mobile class which flies in the face of Prop 13 justifications since properties are typically reassessed when they transfer hands.”

 

Home buyers and sellers buckle up

“This will be a year of adjustment for the San Fernando Valley’s housing market.”

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Real Estate News 12.30.2013

Minimum wage to rise in 13 states on Jan. 1
“Starting January 1, minimum wage workers in 13 states and four cities will see higher paychecks.”

U.S. housing markets to watch in 2014
“Texas and California led recovery of the market in 2013. What are the next hot spots to watch for? Here are five cities to keep an eye on.”

5 biggest housing comebacks of 2013
“Six years later, the U.S. housing crash has grown more distant as the market continues to recover from record foreclosures and spiraling home prices. Here are five regions that experienced the most pronounced recoveries in 2013.”

Many Americans feel economy isn’t improving
“Despite a recent string of positive economic news, Americans say they aren’t feeling the improvements.”

Unemployment benefits for 1.3 million expire
“Michelle Marshall is one of the 1.3 million long-term unemployed Americans who is losing her jobless benefits.”

Pending Home Sales Edge Up in November
“WASHINGTON (December 30, 2013) – Pending home sales stabilized in November with a slight gain, according to the National Association of Realtors®. Monthly increases in the South and West offset declines in the Northeast and Midwest.”

Is Mortgage Market Deconsolidation Temporary or Here to Stay?
“In 1998, the top 10 mortgage lenders held around 40 percent of the market. By 2010, their share increased to nearly 80 percent; since then, it’s dropped down to around 60 percent.”

Even in Buyer’s Market, Homeownership Expected to Decline
“Zillow expects conditions next year to be a bit friendlier to homebuyers—but that doesn’t mean we’ll necessarily see more owner-occupied housing, experts at the real estate marketplace say.”

2013 in Review: The Consumer Financial Protection Bureau
“Mortgage industry commentators may argue (and they certainly have) about the Consumer Financial Protection Bureau’s (CFPB) performance over the last year, but one thing is certain: The bureau knows how to command headlines.”

Trulia Economist Sees 2014 as ‘Year of the Repeat Homebuyer’
“As prices continue rising in the new year—albeit at a slower pace—investors will begin to ease back from the purchase market, but repeat homebuyers will be there to pick up the slack, according to Trulia’s predictions for the housing market in 2014.”

Feature: New World Order
“The veterans of this business can remember when market conditions were “normal”—when REOs ran in the neighborhood of 150,000 a year, delinquency rates were just around 4 percent, and you only needed a credit score of 620 to qualify for a prime mortgage loan.”

Commentary: What’s in Store for Housing in 2014, Part 1
“Many economists and market observers have suggested the market is poised for continued growth as the recovery enters its third year, and there are positive elements in play that provide some reasons for optimism.”

Jobs, Population Growth, Low Prices Create Investment Opportunities
“Analysts at HomeVestors and Local Market Monitor say the formula for a nearly risk-free single-family investment opportunity is one part job growth, particularly in lower paying jobs, and one part population growth, mixed with relatively low home prices.”
The next article is from Christmas eve but I thought you may want to see it.

20 Cities with Biggest Foreclosure Discounts
“As the housing market continues to recover in 2014, finding a foreclosure deal is more important than ever to ensure you get the most bang for your buck and land a home with built-in equity. RealtyTrac has identified the top 20 U.S. cities with the deepest discounts still available on foreclosure homes, including several markets on both coasts, from the high end to the low end, and plenty in-between.”

Fannie Mae Reaches $591 Million Repurchase Agreement with Wells Fargo
“WASHINGTON, DC – Fannie Mae (FNMA/OTC) has reached a $591 million agreement with Wells Fargo to resolve repurchase requests on certain loans originated prior to 2009.  After adjustments for prior repurchases, Wells Fargo will pay Fannie Mae $541 million in the fourth quarter of 2013 and be released from repurchase liability for these loans, with certain exceptions. “

Fannie, Freddie give non-investor home buyers ‘first look’ period
“WASHINGTON — An important resource for first-time home buyers and others who find themselves in unfair competition with deep-pocket investors bearing cash just got better: The two biggest players in the mortgage market, Fannie Mae and Freddie Mac, are now giving non-investor shoppers 20-day exclusive rights to bid on and buy new listings they are selling.”

Nov. home sales fall to a 5-year low in Vegas
“The Las Vegas market turned into the comeback kid after investors flooded the city in the wake of the real estate bust.”

LPS: Home price increases slowed in October
“October proved to be a tepid month for home prices, with no state increasing more than a full percentage point, according to Lender Processing Services’ most recent U.S. Home Price Index report.”

Flagstar Bancorp reaches $10.8 million repurchase settlement
“Flagstar Bancorp (FBC), the holding company for Flagstar Bank, has entered into an agreement with Freddie Mac to resolve substantially all of the repurchase requests and obligations associated with loans originated between Jan. 1, 2000, and Dec. 31, 2008, reaching a total amount of $10.8 million, the company announced in a press release.”

New home sales and mortgage apps see growing divergence
“The November new home sales data from the U.S. Census Bureau includes “some surprisingly positive data points, and a continued divergence from the weekly purchasing applications trend as released by the MBA,” according to research from Compass Point Research & Trading.”

U.S. Stocks Little Changed as Home Sales Miss Estimates
“U.S. stocks were little changed, as the Standard & Poor’s 500 Index headed toward its biggest annual gain since 1997, after data showed contracts to purchase previously owned U.S. homes rose less than forecast in November.”

YEAR IN REVIEW: Stabilizer sums business scene in 2013
“One word: Stabilizer.
With its twists and turns, moments of trepidation, transition and glory, 2013 was a year Inland Southern California’s retail giants, small business, manufacturing companies, banks and real estate industry gained surer footing.”

Where did all the single family homes go? Half of foreclosed homes still occupied and big investors not reselling properties. Investors purchase $1 trillion in real estate since 2011.
“The real estate market has slim pickings for traditional buyers.  Funny thing that we have to use the “traditional” preface since the market is overrun with a hoard of investors.  I am seeing this with my own two eyes.  You are seeing it as well.  In most ordinary cases a rise in prices would be accompanied with some sort of rise in supply.  Yet this is no ordinary situation.  Scouring over a few reports I found that nearly half of foreclosed homes are still occupied.  In places like California and Miami this number is closer to 60 percent.  When these homes finally get fully repossessed, they are likely going to big money investors that end up holding on to the property, removing it completely from the market.  There is little doubt that investors are a big part of the market.  Since 2011 they have purchased over $1 trillion in real estate.  With razor thin inventory, this is a big deal.”

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Today’s Real Estate News 11.26.2013

GSEs Update Short Sale Policies

“Fannie Mae and Freddie Mac announced changes to their Servicing Guides Monday aimed at helping more borrowers avoid foreclosure through short sales and deeds-in-lieu of foreclosure (DILs).”

Report: October Cool Down in Temperature Only

“Cooler temperatures didn’t necessarily mean a cool down in October activity, according to recent data. Despite a seasonal slowdown in activity, the housing market continued to post some positive metrics in October, reports the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, which aggregates approximately 2,000 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.”

Negative Equity: A New Way of Life in the Recovery

“Fast-paced price increases have helped bring many underwater homeowners afloat. In the third quarter, 1.4 million homeowners rose to the surface as their home values once again outranked their equity, according to the Zillow Negative Equity Report released Thursday.”

Pending Sales Slip to Lowest Reading in Nearly a Year

“Pending home sales slipped a bit further in October, reflecting an overall declining trend amid mixed regional numbers.”

Top 25 Hipster Zips for Returns on Rental Properties

“While the precise definition of hipsters is elusive — which is likely just how they want it — there’s no doubt the culture surrounding the hipster lifestyle has a major impact on local real estate markets, and mostly in a positive way.”

Signs Point to Economic Volatility in the Near Term

“WASHINGTON, DC – The temporary government shutdown and debt ceiling negotiations dealt a blow to consumers in October, and foreshadows likely continued market volatility during the next few months, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research Group. In line with previous forecasts, the Group expects modest economic growth of approximately 2.0 percent for 2013 as a number of unresolved fiscal and monetary policy decisions weigh on consumer confidence. Factors including the appointment of a new Federal Reserve chair in January and the budget and debt ceiling issues that will remain until the first few months of next year are expected to suppress consumer spending – a key driver of economic growth. However, growth still is expected to pick up to 2.5 percent for 2014 once the fiscal drags wane and as labor market conditions improve further.”

Freddie Mac Multifamily Prices 19th Securities Offering This Year, K-035

“MCLEAN, VA–(Marketwired – Nov 25, 2013) – Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (“K Certificates”), which are multifamily mortgage-backed securities. The approximately $1.3 billion issuance of K Certificates (“K-035 Certificates”) is expected to settle on or about December 5, 2013.”

Home prices rise 11%

“Home prices continued to climb in third quarter, rising 11% from a year earlier.”

Realtors® Applaud DeMarco for Heeding Warnings, Leaving GSE Loan Limits As Is

“WASHINGTON (November 26, 2013) – The following is a statement by National Association of Realtors® President Steve Brown: “Realtors® welcome today’s announcement from the Federal Housing Finance Agency that the current limits on conforming loans will remain in effect until further notice. As the leading voice for homeownership, NAR opposes lowering the ceiling on loans eligible for backing by the government-sponsored enterprises. Lower loan limits would increase costs for consumers and reduce their access to conventional mortgages.”

Insight: A new wave of U.S. mortgage trouble threatens

“(Reuters) – U.S. borrowers are increasingly missing payments on home equity lines of credit they took out during the housing bubble, a trend that could deal another blow to the country’s biggest banks.”

U.S. residential building permits reach 1 million, a 5-year high

“The number of U.S. residential building permits issued in October surpassed 1 million, the highest level in five years, the Commerce Department reported Tuesday.”

FDIC reports positive trend in loan balances, failed banks

“The bad news about banks in the third quarter is that their net income declined 3.9% from the same quarter last year, according to the latest Quarterly Banking Profile released today from the Federal Deposit Insurance Corporation (FDIC).”

Colony American Homes to launch rental securitization

“Securitization deals backed by rental income continue to attract market interest as more families turn to rentals over homeownership amid tighter lending standards.”

FHA mortgage loans no longer best option after rule change

“The most popular type of mortgage for buyers with low down payments keeps getting pricier and less appealing as more buyers question whether it’s still worth getting an FHA loan.”

Wells Fargo’s Lofrano Was ‘Critical’ to Fraud, U.S. Says

“Wells Fargo & Co. (WFC) Vice President Kurt Lofrano played a “critical role” in helping the bank hide fraudulent home loans that cost the U.S. $189 million, the U.S. government claimed in a filing in Manhattan federal court.”

Some call on city to explore eminent domain to combat blight

“A California city’s controversial plan to use eminent domain to help its residents burdened with mortgages worth more than their homes has caught the eye of some Baltimore leaders, who say the city might benefit from the program.”

What Have Mortgage Settlements Done For Homeowners Lately?

“This week, JPMorgan Chase agreed to a $13 billion settlement with the Justice Department over the sale of faulty mortgage securities that led to the financial crisis. It’s the largest settlement with a single company in U.S. history.”

Chinese buying up California housing

“At a brand new housing development in Irvine, Calif., some of America’s largest home builders are back at work after a crippling housing crash. Lennar, Pulte, K Hovnanian, Ryland to name a few. It’s a rebirth for U.S. construction, while the customers are largely Chinese.”

3 Mortgage Stocks to Buy Now

“This week, three mortgage stocks are improving their overall rating on Portfolio Grader. Each of these rates an “A” (“strong buy”) or “B” overall (“buy”).”

Housing inventory disappears in California for the fall: Number of homes for sale reverses steady increase from February lows. Where did the housing inventory go?

“For most of the year, housing inventory was steadily increasing across the nation. In California, it appeared that inventory hit a bottom in February of this year. At that point, there were 109,000 homes available for sale. The latest figures going out to October showed 127,000 homes available for sale and this was down from 134,000 reached in August. There has also been a steady decline of homes available for rent. The cash investor crowd is still out buying in large numbers. The drop in inventory is typical for the fall and winter selling seasons in normal markets. However this drop in inventory is likely being brought on by other factors including the jump in interest rates and also, the perception that the market may be softening. The number of listings with price cuts was 17 percent earlier this year. Today it is up to 28 percent. Where did the inventory go?”

Troubled hedge fund sitting on real estate gold

“Hedge fund manager Steve Cohen has at least one easy way to make up some of the $1.2 billion he recently agreed to pay the government: Cash in on SAC Capital Advisors’ sprawling real estate holdings that stretch across three continents.”

Chinese real estate influence extends to the Big Apple

“Chinese buyers are fast becoming players in the cutthroat world of Manhattan real estate, and that keeps high-end real estate broker Dolly Lenz busy.”

What Homebuyers Can Be Thankful for in 2013

“Homebuyers have had it tough lately, suddenly finding themselves in a sellers market as summer came along. And mortgages suddenly cost more too — when you could even get one. But of course Thanksgiving isn’t about looking at negatives. So, if you can, look past that elephant-in-the-room that is the credit crunch and take stock of what’s now on the table for those homebuyers with the capital.”

Why Is High-End Real Estate So Hot Right Now? (VIDEO)

“Nov. 25 (Bloomberg) — Ziel Feldman, founder of HFZ Capital Group, and Kevin Maloney, co-founder of Property Markets Group, discuss luxury property market trends with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)”

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Flipping Short Sale Properties

Question:

Tony,
What is the best way for me to learn shorts? There are many in my area—some on mkt for LOTS of days. 😮

I would like to flip them to an investor but am clueless how that all would work—margins, time of assignment—bird dog it. Totally clueless.

Thanks!
ML

Answer:

The short answer is… by doing them.

The long answer is for the most part, Short Sales, are simple if you plan on holding them as long-term rentals and complicated if you want to do anything else (i.e. wholesaling them to other investors.) This is actually a very loaded question because there are too many directions you could go with Short Sales. (Too many moving parts!) Some may end up being profitable in the short run, but problematic in the long run. The problematic part is that if you are hoping to tie up Short Sales without initially closing the purchase escrow and then wholesaling them to other investors (again without closing the initial purchase escrow) you may find yourself being interviewed by an FBI agent about the fact they may consider your actions to be a fraudulent transaction where you are intending to defraud a federally insured lender. Some investors ignore this issue and deal with Short Sales as if they were an REO, and wholesale them without question. Some believe that if they disclose that they are purchasing the property with the intent of re-selling it with a profit that this is sufficient and absolves them from future legal consequences. Keep in mind that we are not talking about what’s fair or about your actual intent, we are simply discussing the possibility of your actions being interpreted by the Feds as fraud. Now, I’m sure there are many investors involved in flipping (wholesaling) as well as retailing Short Sales that have not (to date) experienced any problems whatsoever, however, I took the time to call the FBI and personally interview two agents. After spending two hours with them, the bottom line was when I posed the question, “if I purchase a Short Sale and re-sell it immediately to another investor for a profit, could that be construed as fraud?” Their response, was “absolutely, yes.” So therefore, as I previously mentioned, I only buy Short Sales to hold as rentals for at least 12 months before re-selling them to anyone. Although you may find on the internet plenty of information/advice/suggestions from “investors” on how to flip or wholesale Short Sales, I strongly caution you to do your own due diligence so that you are aware of the potential risk you might be taking which could come back to you bite you years after you’ve spent your Short Sale profit. Keep in mind we pursue Short Sales on a daily basis and buy them often. Many can be negotiated profitably without much trouble. The easiest way to learn and understand what’s involved in the complete process of a Short Sale (from beginning to end) is easily and accurately learned by taking a class offered by a local title company which are typically offered almost every month to Real Estate Agents and anyone else who wants to attend, typically for free or for a nominal fee.

We hope we have been of good service.

Thank you for your question.

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Today’s Real Estate News 11.4.2013

Free FICO credit scores coming to millions

“FICO scores are used by nearly every major lender to assess the creditworthiness of credit card and loan applicants. But these scores are mostly invisible to consumers, unless you go to FICO’s website and sign up for a subscription of $14.95 per month — a service you need to cancel within 10 days if you don’t want to be charged anything.”

Home Buyers and Sellers Survey Shows Lingering Impact of Tight Credit

“Although the housing market has shown a healthy recovery over the past two years, unnecessarily restrictive mortgage lending standards are preventing some financially qualified buyers from reaching their dreams, especially singles and first-time buyers, according to an annual study released today.”

Realtors® Report Americans Prefer to Live in Mixed-Use, Walkable Communities

“WASHINGTON (November 1, 2013) – Choosing a community is one of the most important factors for consumers as they consider a buying home, and research by the National Association of Realtors® has consistently revealed that Americans prefer walkable, mixed-use neighborhoods and shorter commutes. According to NAR’s 2013 Community Preference Survey, 60 percent of respondents favor a neighborhood with a mix of houses and stores and other businesses that are easy to walk to, rather than neighborhoods that require more driving between home, work and recreation.”

U.S. to put SAC hedge fund out of business over insider trading

“(Reuters) – Billionaire investor Steven A. Cohen’s days as a hedge fund manager may be finished with an agreement by his SAC Capital Advisors to plead guilty to criminal charges of insider trading and pay a record $1.8 billion in fines and forfeitures.”

Is the ‘End of the Suburbs’ Near?

“In her new book, “The End of the Suburbs: Where the American Dream is Moving,” Leigh Gallagher, an editor at Fortune magazine, argues that powerful economic, social and demographic forces are converging to render suburban living unsustainable.”

International Architects and Designers in New York

“New York City has long been a promised land for architects and designers from all over the world. What better stage on which to showcase a groundbreaking design than NYC’s hallowed skyline? The trend of international creatives contributing to New York’s unique aesthetic has been booming of late.”

Report: New Wave of Delinquencies from ARM Resets Unlikely

“Concerns of a new wave of problem loans caused by unsustainable rate resets on adjustable-rate mortgages (ARMs) are largely unfounded, according to Lender Processing Services (LPS).”

What Does Fannie Mae’s New LTV Threshold Accomplish?

“As of November 1, Fannie Mae is no longer purchasing loans without minimum down payments of at least 5 percent. Industry experts with the Urban Institute’s Housing Finance Policy Center argue this move is arbitrary and likely to provide little benefit to the GSE or to taxpayers.”

Georgia Real Estate Investor Nabbed for Fraud

“A Georgia real estate investor and his company pled guilty last week for conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.”

Half of Consumers Fear Another Housing Bubble Is Forming

“While many indicators suggest the housing market is on the road to recovery, some fear another bubble is already forming. Country Financial, a financial services company based in Bloomington, Illinois, found in a recent survey that 48 percent of Americans say the market could reach “bubble” status within the next two years.”

Maxine Waters places housing reform on chopping block

“After several critical years in the wake of the housing meltdown, the market recovery is continue to take shape.”

Two Harbors enters flow sales agreement for MSR portfolio

“Real estate investment trust Two Harbors Investment Corp.’s (TWO) wholly owned subsidiary, Matrix Financial Services Corporation, announced it entered into an agreement with PHH Mortgage Corporation for the purchase and sale of mortgage servicing rights.”

FHA policy transparency fuels Ginnie Mae modernization

“The ongoing push by the Federal Housing Administration toward additional transparency and data disclosure took another positive step toward the modernization of Ginnie Mae.”

Monday Morning Cup of Coffee: ING Alt-A liquidation will relieve lack of supply

“Monday Morning Cup of Coffee is a look at news across the HousingWire news desk with larger coverage to come on bigger issues.”

Single-family rental securitization market boasts near trillion-dollar potential

“The REO-to-rental securitization deal that Blackstone (BX) subsidiary Invitation Homes brought to market is just the tip of the iceberg, with KBW analysts forecasting a nearly trillion dollar market when calculating the lingering possibilities that exist for single-family rental securitization deals.”

Las Vegas September home sales buoyed by move-up buyers

“Despite the Las Vegas area posting a slowdown in sales last month when compared to August, overall activity was still slightly higher when compared to year ago levels, as relatively strong move-up buyers buoyed sales, the most recent DataQuick report reveals.”

Future secondary market remains a challenge

“Government authorities are examining the secondary mortgage market to determine all the elements needed to make it run successfully.”

Bank of America wins dismissal of lawsuit on AIG disclosures

“(Reuters) – Bank of America Corp has won the dismissal of an unusual lawsuit in which shareholders accused it of concealing a $10 billion fraud case brought by American International Group Inc.”

Bank of America could face $6.8 billion fine if it settles FHFA case on J.P. Morgan’s terms

“It’s been a few days since a big bank announced a multi-billion-dollar settlement over dubious mortgage practices. But don’t get comfortable: This saga will keep churning for a long time.”

Dutch Gamble on U.S. Housing Debt After Patience Wins

“The Dutch government’s decision to hold onto U.S. mortgage debt acquired during the 2009 bailout of ING Groep NV has paid off so far as prices of the securities soared, more than doubling in some cases from lows that year.”

Financial firms cutting thousands of jobs

“Financial firms are cutting tens of thousands of jobs because of a slowdown in the mortgage business, the sluggish economy, the growth of online banking and new regulations.”

If It Looks Like a Bank, Regulate It Like a Bank

“Five years after a crisis that almost took down the world economy, regulators are still groping for a way to address one of the global financial system’s most obvious weaknesses: the trillions of dollars in banking activity that happens outside traditional banks.”

Dallas Fed’s Fisher Doesn’t Rule Out Backing Taper by March

“Federal Reserve Bank of Dallas President Richard Fisher, who has criticized the central bank’s bond buying program, said he wouldn’t rule out backing a tapering of purchases by March depending on economic conditions.”

Is the housing boom running out of gas? Pending home sales face largest monthly drop since home buying-tax credit expired in 2010. Median price nationwide drops.

“There are now signs that the unrelenting housing price boom is slowing down. Pending home sales faced their largest monthly drop since the home-buyer tax credit expired back in 2010. If you notice a pattern, any time the government even remotely hints at pulling back the housing market suddenly reverses. The Fed’s hint of a taper ending sent mortgage rates soaring. Of course the taper never materialized and the Fed even became more aggressive in QE. The government shutdown did impact housing from data we are seeing. Existing homes sales pulled out a weak performance and the drop in pending sales, a leading indicator are showing signs of a slowing housing market. In this boom and bust market with no middle ground, are we now to expect a “normal” healthy market after this recent boom?”

HUD ANNOUNCES SETTLEMENT WITH BANK OF AMERICA RESOLVING ALLEGATIONS OF LENDING DISCRIMINATION AGAINST WOMEN ON MATERNITY LEAVE

“WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) announced today that Bank of America will pay $45,000 as part of Conciliation Agreements resolving allegations the lender discriminated against pregnant women seeking mortgage loans. HUD had alleged that the Bank of America refused to refinance the mortgages of two couples in California and Texas, because the women were on maternity leave.”