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Real Estate News 2.27.14

Here’s where home prices are about to take off

“FORTUNE — “The time to buy is when there’s blood in the streets.” That quote, attributed to 18th-century financier Baron Rothschild, means that buying when everyone else is panicking is a great idea, as that’s when prices are at their lowest.”

It’s still a lot cheaper to buy than rentIt’s still a lot cheaper to buy than rent

“FORTUNE — Home prices have been rising steadily for more than year, with the most recent Case-Shiller index reading showing the biggest year-over-year increase in nearly a decade. But that doesn’t mean that it is a bad time to buy.”

Freddie Mac profit moves U.S. housing bailout further into black

“(Reuters) – Freddie Mac (FMCC.OB) said on Thursday it will soon send the U.S. Treasury a $10.4 billion dividend after posting a ninth straight quarterly profit, putting taxpayers further into the black on their bailout of the mortgage giant.”

Realtors® Oppose Tax Plan to Limit Mortgage Interest Deduction, Real Estate Provisions

“WASHINGTON (February 26, 2014) – The following is a statement by National Association of Realtors® President Steve Brown…”

Durable goods orders mixed, jobless claims rise

“(Reuters) – Orders for long-lasting U.S. manufactured goods excluding transportation unexpectedly rose last month as did a gauge of business spending plans, but that will probably not change views that factory activity is slowing.”

Foreclosures Climaxing in New York-New Jersey Market: Mortgages

“Feb. 26 (Bloomberg) — The epicenter of the U.S. foreclosure crisis is shifting to New Jersey and New York, threatening a housing rebound in one of the country’s most densely populated areas.”

Camp to Cap Mortgage Benefit While Ending State Tax Break

“A tax plan from House Ways and Means Committee Chairman Dave Camp would further limit the mortgage-interest break and end the deduction for state and local taxes, according to a nonpartisan congressional summary.”

BofA under probe over US housing program, forex

“Bank of America may have a new mortgage problem on its plate, saying on Tuesday that federal investigators are looking into whether the bank violated requirements of a U.S. government housing program.”

WellFargo cuts 700 mortgage jobs

“Wells Fargo & Co. said Wednesday that it is cutting 700 employees, including 203 in the Twin Cities, as demand for mortgages continues to shrink.”

Potential Conflicts Cited For Mortgage Servicer

“New York State’s top banking regulator said he had new concerns about Ocwen Financial, one of the nation’s largest mortgage servicing companies, creating another regulatory headache for the company.”

Senate committee advances repeal of mortgage registration fees

“A bill that would repeal mortgage registration fees moved forward from a Senate committee Wednesday.”

Morgan Stanley offers $275M to absolve bad mortgage bonds

“Morgan Stanley is finalizing a $275 million agreement with the U.S. Securities and Exchange Commission to settle the SEC probe into the bank’s toxic subprime mortgage bond trades going back to 2007.”

Bank earnings are booming, but there’s a big problem

“Commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. posted the 17th quarterly increase since 2009 due to an $8.1 billion decline in loan-loss provisions in the fourth quarter of 2013.”

Federal judge sides with Fannie, Freddie shareholders

“Court of Federal Claims Judge Margaret Sweeney granted the Fairholme Funds motion for discovery against America.”

Institutional investor home buys hit 22-month low

“Institutional investor home sales continue to decline as a portion of all home sales, hitting a 22-month low.”

The key to successfully growing your mortgage lending operation

“The mortgage market is quickly drying up and lender competition is heightening in order attract the remaining drops of business thus making lender relationships more important than ever.”

4 game changers for selling homes this tax season

“New-homes sales reached a five-year high Wednesday morning, showing that buyers are still jumping into the market.”

Lansner: Time to sell real estate?

“If the local real estate market is taking a breather this winter after a fast rebound, should you be thinking of selling?”

Index: L.A.-O.C. home prices up 20.3%, but market is leveling off

“Home prices in the Los Angeles-Orange County area jumped 20.3 percent in December compared with a year earlier, the 18th consecutive month of annual gains, housing figures released Tuesday show.”

Los Angeles Real Estate Heats Up With Mogul Money

“Numbers don’t lie. Like box office grosses, home sales reflect economic reality. Per real estate news firm Data Quick, year-over-year residential real estate sales prices are up 18.4% across the Los Angeles area in early 2014 and the inventory of homes and condos for sale remains low. At the upscale end of the market, often in those Los Angeles neighborhoods favored by showbizzers, demand is the strongest, resulting in multiple offers over asking price for contempo properties and select empty lots.’

HUD AND CENSUS BUREAU REPORT NEW RESIDENTIAL SALES IN JANUARY

“WASHINGTON – Sales of new single-family houses in January 2014 were at a seasonally adjusted annual rate of 468,000, according to estimates released jointly today by the U.S. Department of Housing and Urban Development and the Census Bureau.”

The myth of real estate and economic mobility: Americans face lowest geographic mobility in over two generations. Is staying put the new American Dream?

“Americans like to believe that they are movers and shakers and will follow the opportunity wherever it may be. The idea of selling your home and moving across the country for a great new job opportunity seems to be a common notion of how things happen. However the data shows us a very different reality. Americans are largely staying put. We can blame this on negative equity but this trend actually goes back to the 1980s. In fact, American mobility is at all-time record lows. What this means is people are staying put like our golden handcuffed baby boomers. I was thinking about this carefully and I think one major reason for this is the massive subsidies given to homebuyers creates incentives for staying put. Think of California with Prop 13 and the ability to write-off many housing items including interest when being a homeowner. The system is setup to keep people locked in. For a young person in a high cost of living area the best economic option may be to move and start in another state. However the facts point to a very different picture.”

Freddie Mac Prices $1 Billion Reopening of .875% Three-Year Reference Notes® Security

“MCLEAN, VA–(Marketwired – Feb 27, 2014) – Freddie Mac (OTCQB: FMCC) announced today that it auctioned a $1 billion reopening of its .875% three-year USD Reference Notes® security that matures on February 22, 2017. The stop yield for the issue, CUSIP 3137EADT3, was .724%, priced at 100.442508. The bid-to-cover ratio was 4.8 to 1.”

Fixed Mortgage Rates Continue Gradual Climb Higher

“MCLEAN, VA–(Marketwired – Feb 27, 2014) – Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates mixed with the fixed-rate products moving higher for the fourth consecutive week, while adjustable rate mortgages eased.”

Freddie Mac Announces $1 Billion Reopening of .875% Three-Year Reference Notes® Security

“MCLEAN, VA–(Marketwired – Feb 27, 2014) – Freddie Mac (OTCQB: FMCC) announced today that it plans to launch a $1 billion reopening of its .875% three-year USD Reference Notes® security that matures on February 22, 2017. The issue will price today, Thursday, February 27, 2014, and will settle on Monday, March 3, 2014.”

Freddie Mac Reports Fourth Quarter and Full-Year 2013 Financial Results

“MCLEAN, VA–(Marketwired – Feb 27, 2014) – Freddie Mac (OTCQB: FMCC) today reported its fourth quarter and full-year 2013 financial results and filed its annual Form 10-K with the U.S. Securities and Exchange Commission.”

CFPB Director Calls for Increased Financial Literacy

“For Richard Cordray, the equation is simple: In the Land of the Free and the home of the free market, American citizens should be as informed about and capable of self-governance in their personal finances as they are in the democratic process, especially when it comes to borrowing for a mortgage.”

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Real Estate News 2.21.14

Spotlight on economy: More home sales blues?
“Severely cold weather in January stopped many construction projects from breaking ground and slowed work on existing sites. The cold snap probably kept more house hunters indoors instead of making the rounds at open houses.”

$187B bailout now profitable. Surprised?
“U.S. taxpayers have recouped all of the $187 billion they gave mortgage giants Fannie Mae and Freddie Mac in one of the most expensive bailouts of the financial crisis.”

Housing: Top 10 most affordable small cities
“Latest from the Housing Opportunity Index from the National Association of Home Builders and Wells Fargo.”

Tech workers squeezing out renters in San Francisco, Seattle
“Low- and middle-income residents of San Francisco, Oakland, Seattle and other metro areas, are getting pushed out of their homes as an influx of deep pocketed tech workers drive up rents.”

Regulators fear more bad mortgage practices
“You may have gotten a mortgage through the local branch of one of the megabanks, but did you know there’s a good chance your bank turned around and sold the rights to service your loan to somebody else?”

Wall Street Landlords Buy Bad Loans for Cheaper Homes
“Wall Street-backed landlords are showing a greater appetite for bad mortgages as a source for cheap property as the supply of foreclosed homes declines while housing prices continue to climb.”

MBA CEO David Stevens: CFPB’s Antonakes ‘went just a bit too far’
“Steven Antonakes, deputy director of the Consumer Financial Protection Bureau, walked away from a silent, shocked audience after his speech Wednesday morning at the Mortgage Bankers Association’s National Mortgage Servicing Conference & Expo in Orlando.”

Foreclosure Starts Fall to 2006 Level as Home Prices Rise
“The rate of new foreclosures in the U.S. dropped to the lowest level in eight years as rising property prices erased negative equity and allowed more delinquent homeowners to sell without losing money.”

Another ‘Subprime’ Adventure? Behind Wells Fargo’s Move To Ease Mortgage Lending
“Wells Fargo & Co. announced this month it would reduce minimum credit scores for certain mortgages eligible for government backing, prompting some declarations that subprime mortgages were making a comeback.”

Is Homeownership a Fleeting American Dream?
“Opinion: People of color are also disproportionately impacted by an overly restrictive housing market; between 2007 and 2012, loans to African Americans and Latinos have fallen by 73 percent and 66 percent respectively.”

Leading data signal ‘resilient’ economy in 2014
“WASHINGTON (MarketWatch) — The economy will likely “remain resilient” in the first half of 2014, with underlying conditions improving, the Conference Board said Thursday as it reported monthly growth and stable trends for its gauge of leading economic indicators.”

Apartment Sector Healthy, But Fundamentals Moderate
“The multifamily sector continues to perform well four-plus years after its recovery began, two analysts reported.”

NFIP reformists fire warning shot at Congress
“It may be just a rumor of war they’re hearing, but Taxpayers for Common Sense and SmarterSafer.org are firing a warning shot across the Capitol about plans they say are in the works for yet another vote on the Biggert-Waters Flood Insurance Reform Act of 2012.”

Wingspan CEO: 3 keys to success for servicers
“Dallas-based Wingspan Portfolio Advisors finished this past year with several key profile acquisitions that significantly increased the company’s size and revenue, but that’s not where the storybook ends.”

Asia investors bullish about private real estate
“Private real estate investors headquartered in Asia look set to be very active in the asset class over the next 12 months, according to an investor survey by Preqin, a leading alternative asset data and intelligence analysis firm.”

The real estate 1% and the S&P 500 are secretly connected
“Analyst Sam Khater at CoreLogic (CLGX) walks through a look comparing ultra high-end home sales versus homes sales on the lower end of the pricing segment.”

Apollo charts new course for loan strategy in 2014
“Apollo Residential Mortgage is preparing to provide loans to third parties that are purchasing residential properties with plans to resell the properties, and will then probably finance purchases by next buyers, CEO Michael Commaroto said on a conference call today.”

Student loans pinching home sales? Real Estate Open House
“This is the inaugural Front Porch open house, a weekly roundup of real estate news and information for home buyers and sellers. I’ll be checking the comments throughout the day Friday, so leave your real estate questions or links to real estate news stories I missed.”

How to hunt for the right real estate agent before hunting for a home
“If you’re planning to purchase a home in the Washington area this spring, you may face competition from other buyers for the still-limited inventory in the market.”

Serfdom nation: First time where a six year period of household formation of renters outpaced that of homeowners. Purchase applications back to levels last seen 20 years ago.
“I think it is safe to say that investor activity in the housing market has changed the face of real estate buying.  Back when the crisis hit in 2007, some analysts were cheerleading the hedge fund crowd as a tiny blip in the market.  It is hard to call it a blip when 30 to 40 percent of all purchases are going to investors for close to half a decade.  A recent analysis from RealtyTrac found that the estimated monthly home payment for a regular three bedroom home (costs include mortgage, insurance, taxes, maintenance, and subtracting the income tax benefit) rose an average of 21 percent from a year ago in 325 US counties.  What about household incomes?  That is another story.  So it is no surprise that we are largely becoming a nation of renters.  It is also no shocker that young households are largely unable to begin household formation via buying a home.  Many are living with parents well into “young” adulthood.  For the first time in history, we had a six year stretch where we added more renter households than that of actual homeowners.”

Fewer Prospective Homeowners to Clash Over Homes
“Home buying competition rose over the month of January but was down from last January, according to national real estate brokerage Redfin, which took the year-over-year decline as a sign that low inventory and rising prices are thwarting demand in the housing market.”

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Real Estae News 2.18.14

Commercial Mortgages: Deal-hungry lenders open toolboxes
“Back in 2011, U.K. alternative band The Wombats had a hit song “Jump into the Fog” that had nothing to do with commercial real estate lending, but aptly describes many lenders today.”

4 signs the real estate market is in trouble
“I wish I’d said this (and in a few weeks I will have, I’m sure) but Ramsey Su at Acting Man Blog did it first and in a way I’ve been searching for the words to explain.”

The 7 ‘dirty’ words of mortgage lending
“It’s hard to resist this post on Forbes, because it starts by saying the mortgage business is filled with dirty words.”

Can Colorado keep dropping in foreclosure auction sales?
“Colorado new foreclosure auction sales fell to the lowest level in a decade and were down 41.4% in 2013 from 2012, according to a report from the Colorado Division of Housing.”

Wingspan keeps open mind for acquisitions in 2014
“Dallas-based Wingspan Portfolio Advisors completed 2013 with several significant profile acquisitions that drastically increased the company’s size and expanded its capabilities.”

TransCentra processes 100 million transactions
“TransCentra, a provider of billing and payment software and services, announced its suite of software solutions now processes nearly 100 million mortgage transactions annually and streamlines customer communication efforts to meet the operational and compliance needs of servicers.”

LRES launches new REO operating model
“LRES unveiled Monday its new REO operating model which is designed to increase efficiency and accommodate the influx of new clients with portfolios of assets in various stages of the foreclosure process.”

National Tax Search launches flood determination service
“Based in Chicago, National Tax Search, a provider of property tax management services, announced the launch of its flood determination services.”

Miles Says ‘Big Stick’ of Rate Hike Too Blunt for Housing Market
“Bank of England official David Miles said policy makers will only use interest rates as a last resort to cool Britain’s housing market if it begins to overheat.”

US Homebuilder Confidence Sinks in February
“U.S. homebuilders’ confidence in the housing market has declined sharply as the severe weather battering much of the nation keeps many would-be buyers at home.”

Hypo Real Estate ‘bad bank’ to privatize services unit
“(Reuters) – Germany’s FMS Wertmanagement, the bad bank of nationalized lender Hypo Real Estate, said it would start the sale of its services business in the second quarter of this year.”

HomeSteps® Announces Incentives for Homebuyers and Real Estate Agents in 23 States
“MCLEAN, VA–(Marketwired – Feb 18, 2014) – HomeSteps®, the real estate sales division of Freddie Mac (OTCQB: FMCC), today announced a special 2014 Winter Sales Promotion that will pay cash incentives to real estate agents who list or sell HomeSteps homes in 23 select states between February 18, and April 15, 2014. The 2014 HomeSteps Winter Sales Promotion also offers homebuyers a choice of incentives, including funds to cover condominium association fees.”

Will Housing Take Gold?
“MCLEAN, VA–(Marketwired – Feb 18, 2014) – Freddie Mac (OTCQB: FMCC) released today its U.S. Economic and Housing Market Outlook for February showing that despite the Federal Reserve’s taper activity, long term rates have eased over the past month, providing a chance for some borrowers who are holding older mortgages an opportunity to refinance. A short preview video, and the complete February 2014 U.S. Economic and Housing Market Outlook are available here.”

Why Is Mortgage Demand Falling In 2014?
“By just about every measure the housing market is looking better — home values of the rising, new construction is on the increase, foreclosures are down and millions of people have gotten mortgages to finance and refinance their homes in the past few years.”

New QM Rules Produce Higher Costs and Elevated Risk Factors
“Although the new QM rules are expected to bring stability to loan manufacturing, the many nuances of compliance have resulted in doubling the cost of loan origination. This assessment was offered by Tom Showalter, Chief Analytic Officer at Digital Risk, a top provider of risk, compliance, and transaction management solutions.”

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Real Estate News 1.15.2014

Bill Seeks to Extend Federal Tax Exemption for Forgiven Mortgage Debt
“Congressman Bill Foster (D-Illinois) introduced the Homeowners Debt Relief Extension Act (H.R. 3856) on Tuesday. The bill would extend the mortgage debt tax exemption that’s been in place since 2007 for another two years.”

Early Earnings Reports Reveal Effects of Declining Mortgage Volume
“This season’s bank releases kicked off Tuesday with dual quarterly earnings reports from JPMorgan Chase and Wells Fargo—and as projected, weakened origination figures took their toll.”

Florida Law Firm Rebrands and Expands Service to Puerto Rico
“The veteran-, minority-, and woman-owned default law firm founded by Marisol Morales, Esq., announced its expansion into Puerto Rico and a name change from Morales Law Group, PA, to Millennium Partners.”

New Fed Survey Assesses Consumer Expectations
“A recently launched survey from New York’s Federal Reserve Bank shows consumer expectations for the next year remaining fairly flat in December.”

Which Hidden Gems Make Cut as Year’s Hottest Neighborhoods?
“Redfin on Tuesday came out with its annual list of the country’s “hottest” neighborhoods. The company ranked 105 neighborhoods across 21 major markets that have grown the most in popularity during the four months leading into 2014.”

Bank of America profit impresses Wall Street
“Bank of America impressed Wall Street Wednesday with better-than-expected earnings and revenue for the fourth quarter, continuing a trend of solid results from the nation’s largest banks.”

Fannie, Freddie watchdog in probe of alleged Wall Street front running
“(Reuters) – A U.S. government watchdog is involved in an investigation of whether bank traders manipulated markets and engaged in front running of orders from Fannie Mae and Freddie Mac in the interest-rate swaps market, according to an FBI intelligence bulletin reviewed by Reuters.”

The end of the mortgage party? Home lending plummets at Wells Fargo, J.P. Morgan Chase
“The mortgage party is officially over.”

Trade group expects less mortgage loan activity this year
“Mortgage loan activity this year will be less than expected because of higher interest rates and fewer applications, the Mortgage Bankers Association said Tuesday.”

QM storm could hit in weeks
“The Consumer Financial Protection Board’s Qualified Mortgage (QM) rule is going to constrict access to mortgage credit and possibly stall housing, and members of Congress and mortgage industry leaders want a lot more flexibility in dealing with the CFPB’s regulations that went into effect Jan. 10.”

December Gain in Retail Sales Gives U.S. a Lift: Economy
“Retail sales (RSTAXAGM) rose in December as frigid temperatures prodded Americans to buy discounted winter clothing and shop online for the holidays, capping what may have been the strongest quarter for consumer spending in three years.”

Volcker Rule Curbs on Banks Owning CDOs Eased in U.S.
“U.S. regulators granted banks an exemption from Volcker Rule limits for collateralized debt obligations composed mostly of small-bank securities, according to a statement from regulators.”

House Republicans voice support for $1.1 trillion spending bill
“(Reuters) – Republicans in the House of Representatives voiced tentative support on Tuesday for a $1.1 trillion spending bill, signaling likely passage and removing one source of potential drama ahead of the 2014 elections.”

3 key takeaways from JPMorgan earnings call
“JPMorgan Chase (JPM) released its fourth-quarter earnings this morning, and it fared pretty well considering the never-ending series of legal settlements it had to overcome.”

Mortgage apps up 11.9%
“Mortgage applications increased 11.9% from a week ago, according to data from the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey for the week ending Jan. 10, 2014.”

Fed’s Fisher says QE is ‘beer goggles’ for investors
“Dallas Federal Reserve Bank President Richard Fisher, always one for colorful speeches, said he is confident and certain that it’s time to come down from the $1 trillion a year money printing and bond buying.”

Congress takes a bite out of housing agency budgets
“A proposed $1 trillion congressional spending bill means less money for key housing agencies, analysts claim.”

JPMorgan With Wells Fargo Lose Share to Small Rivals: Mortgages
“The two largest U.S. home lenders are feeling the bite of competition from smaller firms as mortgage originations tumble at the fastest rate since 2011.”

REAL ESTATE: Up again, December home prices – by 28 percent
“Home sale prices across Southern California were poker-hot in December, the latest real estate information report from San Diego-based DataQuick suggests.”

The Market Is Rethinking That Disastrous Jobs Report
“Markets are already acting as if the bad jobs numbers released Friday may have been just noise, and that the economy is still doing fine. Already we’re seeing interest rates rise again, and other markets continue to bet that the Fed will move toward tightening.”

Do Real Estate Agents Practice What They Preach?
“Trulia’s Chief Economist Jed Kolko dives into Census data to reveal whether real estate agents walk the walk, or if they are all talk. Turns out, they do: their homeownership rate is high even after taking demographics into account. The same goes for appraisers, architects, and construction workers.”

Real Estate Matters | How to get your finances in home-buying shape
“Money makes the world go around. And every year we make resolutions to save more of it, invest it more profitably and spend more wisely.”

County new home prices hit record high
“The median price for newly built single-family homes and condos in San Diego County shot up to a record high in December, while the number of new homes sold hit a record low for a December.”

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Soliciting private money for flipping vs. buy & holding

Question:

Hi Tony…and thanks a million for this invaluable forum!

Got one for you about private lenders. I’ve started talking it up. I’m going to focus primarily on flipping in the beginning but I want to hold some as well once I get rollin. When I explain the dual focus some are asking the rate difference. I explain that the rate to retail is higher than holding on rentals. I’d like a better answer.

What should the difference be? If retail is say 9% what would long term be?

(if that was answered in your course…plz forgive me!)

Last one…should the Note provide the ability for the lender to convert if they like? It seems prudent to craft that in with friendly language along the lines of “we have the right to convert” so people know it’s possible from the outset and so I don’t have to go back and explain it once things are in motion.

One person said straight out…”I like the rate and security but aren’t crazy about it being short term.” I’m guessing that on occasion I’ll need to finance out retail money with different lenders who would be happy with less for a longer term. But it would be nice to convert people if I choose and/or if I need to because the property isn’t selling for one reason or another.

Did I say thanks?

Many, many, MANY thanks Tony.

-M.

Answer:

Okay, out of the gate let me just make one point very clear. When you’re trying to solicit money from people that have it, they’re motivation for lending it is as varied and different from one to the other as are grains of sand in the ocean.

You’re job is to attract the money based on the probability of a successful outcome. The two things that anyone lending money is typically focused on is:

1. The return ON their investment
2. And the return OF their investment
(the latter being the most important).

How you structure the notes (conversion) or the interest rates is solely up to you. What they will accept, you’ll soon find out, is solely up to them. I have found that what buys me the most leverage when wanting to skew those negotiations or numbers in my direction, typically have to do more with how good my deals are and how good I am at making them reach a happy and profitable conclusion.

I cannot, in good conscience, give you specific advice on what interest rate you should offer between short-term and long-term money, as I honestly believe this is a moot issue. Industry standards on this topic are clear and available for anyone who cares to look for them. Most investors know they can easily place their money with professional, respected hard money lenders like The Norris Group and earn an easy, effortless 12% on short-term and 9% on eight year financing.

I have found that the more geographically local the investor lender to my specific Target Market, the more familiar they are with my individual properties, my level of knowledge and experience, and successful track record, the more motivated they are to jump on my wagon and the stronger position I hold for negotiating. This typically becomes a “their money is chasing my deals” rather than the other way around.

I hope this helps.

Your friend always,
The Big Cheese
Tony
;D

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Today’s Real Estate News 10.30.2013

Summary:

In today’s news, CNN Money reports private sector hiring lowest in 6 months. Reuters shares Janet Yellen, president of the Federal Reserve Bank of San Francisco, was concerned over the housing bust but chose not to go public. Senate Majority Leader, Harry Reid, stated Yellen’s confirmation for head of the Federal Reserve should go smooth. Freddie Mac claims to have securitized $1 Billion of HAMP Performing Mortgage Loans. DS News reports serious delinquencies hit a five-year milestone. The MBAA reports an increase of mortgage applications this week. Since 2010, “foreclosure rescue schemes” have more than doubled according to the Housing Wire. Housing Wire also reported more uncertainty among mortgage servicers, the Office of the Comptroller of the Currency called for banks to practice effective risk management whether the banks chose to do it themselves or seek outside assistance and banks & business trade groups called for more “checks and balances” for the Consumer Financial Protection Bureau. Wells Fargo plans to donate $6 Million to 67 different nonprofits for the “2013 Leading the Way Home Program Priority Markets Initiative” which will help to revive heavily distressed neighborhoods. Multi-family loan provider, Greystone, introduces an affordable multi-family loan program. San Diego’s local newspaper shares La Jolla resident sentenced to five years in prison and fined $1.4 million in restitution for deceiving homeowners around the nation he could help modify their home loans. MSN shares a story of an oddly small & narrow house built on a lot out of spite, you have to see the pictures to appreciate this story!

Private sector hiring slowest in 6 months

“Private sector employers added just 130,000 jobs in October — their lowest level of job growth since April, according to a report by payroll processor ADP. The pace of hiring has been slowing since June, but the government shutdown earlier this month appears to be a main reason for the sluggish hiring in October.”

INSIGHT-Yellen feared housing bust but did not raise public alarm

“Oct 30 (Reuters) – When Janet Yellen became president of the Federal Reserve Bank of San Francisco in June 2004, a massive real estate bubble was building in the vast nine-state area that it oversees.”

Reid expects Yellen to be ‘easily’ confirmed as Fed chair

“Oct 29 (Reuters) – U.S. President Barack Obama’s nomination of Janet Yellen to head the Federal Reserve appears headed toward a smooth confirmation by the Democratic-led Senate, Senate Majority Leader Harry Reid said on Tuesday.”

Freddie Mac Securitizes $1 Billion of HAMP Performing Mortgage Loans

“MCLEAN, VA–(Marketwired – Oct 30, 2013) – Freddie Mac (OTCQB: FMCC) announced today that it has begun securitizing performing Home Affordable Modification Program (“HAMP”) modified mortgage loans held in the company’s mortgage-related investments portfolio. These loans were modified to assist borrowers who were at risk of foreclosure, thereby assisting them with keeping their homes. Since the US Treasury launched the program in March 2009, 229,000 borrowers have received permanent HAMP modifications on Freddie Mac-owned loans.”

Serious Delinquencies Hit Five-Year Milestone

“Mortgage delinquencies are on the decline, according to a report from Equifax. Home finance write-offs so far this year total $96.3 billion, down 22 percent compared to the same time period last year, the company says.”

Mortgage Applications Increase in Latest MBA Weekly Survey

“WASHINGTON, D.C. (October 30, 2013) — Mortgage applications increased 6.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 25, 2013.”

Foreclosure rescue scheme complaints more than doubled

“Foreclosure rescue schemes have more than doubled since 2010, according to data collected by federal regulatory agencies.”

Uncertainty about the future plagues servicers

“Mortgage servicers flourished during the financial crisis and have exponentially grown their businesses, largely through acquisitions of credit-impaired residential mortgage servicing portfolios. But all of this is about to change, according to a recent report from Moody’s Investors Corp. (MCO).”

OCC sounds alarm on risk management of third parties

“Banks need to practice effective risk management regardless of whether the bank performs the activity internally or through a third party, the Office of the Comptroller of the Currency said Wednesday.”

Banks, business trade groups push for CFPB reform

“The Consumer Financial Protection Bureau lacks the check and balances, the financial accountability and the transparency that is generally found at other financial regulators operating out of Washington D.C., experts told the House Financial Services Committee on Tuesday.”

Wells Fargo donates $6 million to revitalize communities

“Wells Fargo (WFC) will donate $6 million across 67 nonprofits through the 2013 Leading the Way Home Program Priority Markets Initiative to help revitalize and stabilize neighborhoods.”

Greystone premieres affordable loan program

“Greystone, a provider of multifamily loans, premiered its Greystone Affordable Loan Program, which provides long-term, fixed, forward rate-lock financing for affordable multifamily housing.”

La Jolla man popped for sham loan mods

“A La Jolla man has been sentenced to five years in prison and ordered to pay $1.4 million in restitution for defrauding homeowners around the country who had turned to his sham company for help modifying their loans.”

This weird, tiny house in Seattle was built out of spite, locals say

“A house this small and strange-looking would be interesting on its own, but local legend says the reason it exists is pure spite. Known as the Montlake Spite House, this pie-shaped Seattle house is only 830 square feet and was recently for sale for $397,500. Why would anybody build a house like this? The widely accepted story is that a neighbor offered to buy the small corner lot from the property owner. The lowball offer he made was so insulting that the owner built this house on the lot just to annoy his cheap neighbor. Is that what actually happened? There’s some debate there, but why let that get in the way of a good story?”

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Today’s Real Estate News 10.28.2013

Summary:

CNN Money shares six items that home insurers don’t cover. The Wall Street Journal visits the real estate hurdles of the super storm, Sandy, aftermath in Jersey Shore and explores ways a qualified borrow can still get approved for a mortgage. Fortune reports that the tax credit offering companies a tax credit for hiring vets is expiring this year and claims that the big banks are “too big to fail” citing a relationship between Washington and the banks. Realtor.org explores the changes in technology within the past ten years. Also according to Realtor.org, Pending and Existing Home Sales are continuing to drop. According to Reuters, the economy is losing its’ momentum based on factory and housing data. Reuters reports that investors are waiting for housing reform, HUD and MBA leaders agree that there are many more “critical milestones” that must be achieved and Congresswoman Maxine Waters calls for a plan to mend the National Flood Insurance Program. Bloomberg reports that according to mortgage-bond pioneer, Lewis Ranieri, the new tight lending laws may cause more issues than the housing burst. According to Forbes, despite some of the poor media views of the real estate market, trends point to a “bright future.” Dr. Housing Bubble reports that many American think they will work until their deaths and homes are their only assets.

6 things home insurance won’t cover
“Your insurer won’t take care of everything life throws at you and your house. If one of these happens to you, you’re probably on your own.”

Sandy’s Legacy: Higher Home Prices
“ORTLEY BEACH, N.J.— John Anello had visited the Jersey Shore since he was a small child and always wanted a beach home there.”

Six Ways to Ensure Qualified Borrowers Can Get Mortgages
“A new paper raises concerns that mortgage lending standards — after becoming dangerously lax during the housing bubble — could now lock out qualified entry-level homeowners, leading policymakers and industry officials to learn the wrong lessons from the housing bust.”

Veterans may face yet another employment hurdle
“A tax credit that offers companies incentive to hire veterans is set to expire at the end of the year, potentially putting a damper on a growing — and fragile — segment of the American working population.”

New bank meme: Too connected to fail
“FORTUNE — Move over “too big.” There’s a new knock on the mega banks: ‘Too connected to fail.'”

Then and Now: A Decade of Technology in Real Estate
“More buyers than ever are taking advantage of the latest technology and online tools to search for a place to call home. As a result, Realtors® are leveraging new technologies to better assist their more tech savvy clients. A 10-year history of the National Association of Realtors® annual Member Profile shows Realtors®’ evolving use of technology, the Internet and social media and the essential role that technology plays in the real estate transaction.”

Pending Home Sales Continue Slide in September
“WASHINGTON (October 28, 2013) – Pending home sales declined for the fourth consecutive month in September, as higher mortgage interest rates and higher home prices curbed buying power, according to the National Association of Realtors®.”

Existing-Home Sales Down in September but Prices Rise
“After hitting the highest level in nearly four years, existing-home sales declined in September, but limited inventory conditions continued to pressure home prices in much of the country, according to the National Association of Realtors®.”

U.S. factory, housing data suggest economy losing steam
“(Reuters) – U.S. manufacturing output barely rose in September and contracts to buy previously owned homes recorded their largest drop in nearly 3-1/2 years, the latest signs the economy’s momentum ebbed as the third quarter ended.”

Investors sit on the sidelines waiting for housing reform
“Regulators and mortgage industry professionals spent part of the day Monday discussing the future mortgage finance market at the 100th Annual MBA Convention & Expo.”

HUD, MBA leaders say it’s time to fight an overcorrection in mortgage lending
“Policymakers and mortgage industry leaders took to the podium Monday, highlighting the significant progress the mortgage industry has made over the past century, but also pointing out some of the critical milestones that still need to be reached.”

Rep. Maxine Waters rolls out aggressive national flood insurance repair program
“Congresswoman Maxine Waters, D-Calif., introduced an aggressive bipartisan plan to fix the National Flood Insurance Program this past week.”

Ranieri Says Tight Mortgage Lending May Be Worse Than Crisis
“The U.S. mortgage market has experienced an “irrational restriction” of credit as lenders and regulators overreact to the loose lending during the bubble that burst in 2007, mortgage-bond pioneer Lewis Ranieri said.”

Forget Affordability — Housing’s Trends Signal A Bright Future
“It seems that whenever something happens in the housing market, a flock of articles pop up explaining why the signs are ominous and housing is destined to flounder. To me, the oddest one has to do with existing home sales this year. Prices have risen, and the inventory of homes for sale has fallen. This happy concurrence has been met with tsk-tsking that both changes will harm the recovery.”

The house broken American: Many Americans believe they will work until they die and the only asset many have is their home.
“Americans for the most part are bad at saving money. In fact, the entire credit boom and bust was largely fueled by people and banks living way beyond their means. Even after the recent boom in the stock market and housing market, many Americans are not in a better financial position. The problem with housing is that this is like having golden handcuffs. You will likely only unlock the wealth when you sell it. As we have discussed many are simply reluctant to sell. So in essence, the wealth is locked away. To sell a home also costs money and real estate for the most part is illiquid. And since the recession ended a large portion of home purchases have gone to investors. Never in the history of the US have we seen so many large institutions dive into the housing market in aspiration of being a landlord. Recent surveys show that many Americans plan on working until they end up in their grave. But what about the boom in housing? Unfortunately many are locked in a granite countertop laden sarcophagus.”