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Real Estate News 1.8.2014

Why 2014 is the year to get out of debt

“When it comes to your personal finances, 2014 may be your best chance to take advantage of low interest rates and get out of debt — before it really starts costing you.”

Private sector adds more jobs than expected in December

“(Reuters) – U.S. private employers hired staff at the fastest pace in 13 months in December, data from a payrolls processor showed Wednesday, burnishing expectations that similar figures due later in the week from the government will confirm the U.S. economy was gathering steam at the end of last year.”

U.S. mortgage applications edge up in latest week: MBA

“(Reuters) – Applications for U.S. home mortgages edged higher in the latest week, rebounding from a 13-year low set at the end of last year, an industry group said on Wednesday.” New FHFA chief reverses course on

Fannie, Freddie loan-fee hikes

“(Reuters) – The U.S. regulator for Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) on Wednesday instructed the two taxpayer-owned mortgage finance companies to delay the increase in fees on government-backed loans that the agency announced last month.”

New regulator Watt signals shift in U.S. housing policy

“(Reuters) – Mel Watt, who was sworn in on Monday to head the agency that regulates mortgage finance firms Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), has signaled a new approach to U.S. housing policy that will put more of an emphasis on ensuring access to credit.”

Commercial Mortgage Lender Appetite Expected to Exceed that of Borrowers in 2014

“WASHINGTON, D.C. (January 8, 2014) — Commercial and multifamily mortgage lending is expected to increase in 2014, as lenders’ appetites to place new loans grow even stronger, according to a new Mortgage Bankers Association survey of the top commercial and multifamily mortgage origination firms.”

Mortgage Applications Increase in Latest MBA Weekly Survey

“WASHINGTON, D.C. (January 8, 2014) — Mortgage applications increased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 3, 2014.”

Wells Fargo Creates SWAT Team to Keep Loans In-House: Mortgages

“Wells Fargo & Co. (WFC:US), the largest U.S. home lender, has assigned about 400 underwriters to originate mortgages for the bank to hold, with as many as 40 percent of those loans likely to fall outside government guidelines taking effect this week.”

New mortgage rules protect American dream: Column

“Let me tell you a common story I hear. It starts with a woman in 2005 or 2006 who took out a mortgage to buy her first home. After two years, her teaser interest rate expired. Her monthly payments doubled so she could no longer afford them.”

Investor & Lender Changes Continue; Freddie & Fannie: Golden Gooses?

“Teach your children about taxes: eat 30% of their ice cream.” They’ll also learn something about percentages. If 30% of cities have rebounded to pre-2007 levels, even I can deduce that 70% have not, but…is this late breaking news? “Higher mortgage rates, tight lending standards and price increases driven by a limited supply of homes for sale are discouraging some prospective buyers.” Apparently.”

Mortgage Grader lands patent for lender, broker compliance technology

“As lenders and brokers search for solutions to ensure they are not violating new lending rules due out this week, one company is building a compliance technology to keep the industry in check.”

Americans build larger, more costly homes

“Newly built single-family homes in the United States are getting bigger, costlier to build and more expensive, according to the National Association of Homebuilders. This news comes on the heels of news that home prices climbed 11.8% between November 2012 and November 2013.”

HEMET: Alleged squatter thwarts Christmas short sale

“When Scott and Tammy Laffin got a call from their real estate agent, they expected to hear the long-awaited news that their Hemet short sale home passed inspection from the buyer and would close escrow at Christmas.”

Odd-Ball Real Estate Play

“Equity investors typically play real estate through real estate investment trusts (REITs), which have done very well for quite a while – until recent Taper talk brought the prospect of rising interest rates into focus.”

The Benefits of Investing in Commercial Real Estate

“What little known investment should people be turning to more often?What little known investment should people be turning to more often?”

Real Estate Matters | What home sellers can expect in the market this year

“A year ago, we saw far fewer “For Sale” signs. And this year, there are even fewer.”

A Real Estate Revival?

“Real estate ranked as one of the worst-performing categories of 2013. In a year when the S&P 500 returned 32 percent, real estate funds gained 1.6 percent, according to Morningstar. Rising interest rates have contributed to the weak showing. Real estate and other dividend-rich sectors often sink when rates rise. Investors tend to sell dividend stocks and shift to fixed income as bond yields become more competitive.”

Real-Estate Tech Takes NYC

“For years, the commercial real-estate industry has lagged behind other industries when it comes come to embracing cutting edge Internet technology to provide old services in a new way.”

Burbank to Brookline Soar in Suburb Shift: Real Estate

“Clarion Partners LLC, a real estate owner overseeing almost $30 billion, made millions buying Manhattan office buildings and towers in Seattle and Houston after the U.S. property crash began six years ago. It’s now moving to the outskirts of big cities.”

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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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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.