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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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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 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 1.3.2014

Job search: One year and counting…
“Lena Rouse has merely one resolution for 2014: Finally get a job.”

The smart home is a pipe dream
“At next week’s Consumer Electronics Show in Las Vegas, the tech industry will try to convince us that our homes will be completely automated in the next five years. Don’t believe the hype.”

Sell your home without a real estate agent
“How do I sell my home without using a real estate agent? — Bill, Chicago”

Luxury sales drive Manhattan home prices higher
“New York’s new mayor is vowing to shrink the divide between the wealthy and everyone else. But when it comes to the real estate market, he is facing an uphill battle.”

Fannie Mae, Freddie Mac got $7.9 billion in bank settlements in 2013
“WASHINGTON —  Fannie Mae and Freddie Mac collected $7.9 billion from large financial institutions to settle suits over bad mortgage-backed securities purchased by the seized housing finance giants during the subprime housing boom, their federal regulator said.”

Fannie Mae, Freddie Mac may be too profitable to shut down
“WASHINGTON — Federal officials swooped in to rescue mortgage finance giants Fannie Mae and Freddie Mac in 2008 with the largest of all the financial crisis bailouts — a combined $187.5 billion — because they were considered too big to fail.”

Morningstar Executive Gives Assessment of New CFPB Rules
““Under the new CFPB [Consumer Financial Protection Bureau] rules, servicers will have to provide very detailed and accurate information to borrowers about each aspect of their loans and/or any foreclosure procedures that may occur,” according to Richard Koch, SVP at Morningstar Credit Ratings.”

Industry Completes 50K Loan Modifications for Homeowners in October
“The HOPE NOW Alliance recently announced that an estimated 50,000 homeowners received permanent, affordable loan modifications from mortgage servicers during October 2013. This total includes modifications completed under both proprietary programs and the government’s Home Affordable Modification Program (HAMP).”

Alternate Home Price Index Records Weaker Gains
“While the S&P Case-Shiller Home Price Indices for October showed a significant 13.6 percent year-over-year leap, other measures saw more subdued gains for the month.”

Average private RE investment vehicle reaches $511M
“The average size of private real estate investment vehicles that closed in 2013 hit $511 million — the highest level recorded by Preqin since the start of its data analysis.”

Residential construction spending hits 2008 levels
“Construction spending on private, residential projects reached a seasonally adjusted annual rate of $346 billion in November, up 17% over November 2012. That’s the fastest pace since mid-2008.”

Lenders search for plan B
“Lenders and borrowers are looking to other avenues of borrowing as mortgage rates continue to rise and competition heightens among financial institutions.”

2014 housing forecasts filled with euphoria: Estimates looking at higher rates combined with higher prices and stagnant incomes.
“Euphoria unlike housing inventory is in plenty supply when it comes to 2014 real estate forecasts.  The glue holding the housing market comes from investors and generous banking policy.  The one thing about economics unlike other hard sciences is that it happens in real-time.  It also assumes certain rules are fixed but that really act more like clay to fit the whims of the power structure.  It was interesting to see how few analysts at the end of 2012 predicted the massive run-up in real estate prices during 2013.  What is typical of course is that analysts usually go with the momentum so it is no surprise that predictions for 2014 are rosier than they were for 2013 even though most are forecasting higher interest rates and most will acknowledge that this current pace is unsustainable.  Yet higher rates will add pressure on income constrained households.  Investors are already showing signs of pulling back in certain markets.  Let us examine the 2014 real estate forecasting landscape.”

3 ways Dodd Frank law will roil real estate in 2014
“Chris Dodd and Barney Frank have long since retired, but the namesake legislation they craftedfour  years ago is about to unleash sweeping changes in the mortgage and real estate markets.”

Can Selling Real Estate Make You Rich?
“When Roman Serra, a 29-year-old with a master’s degree in art, decided to switch careers, he enrolled in a two-week real-estate course. He took a personality test online and went through a short interview at Chicago real-estate firm Baird & Warner, where he took the class. If he passes his broker’s license examination in January, he is guaranteed a spot as an independent contractor and a desk at one of the company’s 22 offices. He says studying wasn’t difficult compared with his days in college. “I wouldn’t personally consider it intense,” he says.”

AZ real estate player, reality TV star in trouble for operating without license
“PHOENIX (CBS5) – A reality TV star made a name for himself bidding on foreclosed homes. Now he’s underwater, accused of operating without a license.”

Three Northern California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure Auctions
“WASHINGTON—Three Northern California real estate investors have agreed to plead guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.”

Real Estate in 2014: A Need-to-Know Guide
“After year of struggles, the housing market roared back to life in 2013. The rebound will continue in 2014, but the pace will slow.”

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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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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

Posted on

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?”

Posted on

Today’s Real Estate News 10.22.2013

Summary: CNN Money reports that the unemployment rate has fallen yet hiring has slowed. Fortune explains how the jobs report won’t be accurate for the next few months. Reuters shares that U.S. construction spending is showing hopeful signs in a 4 ½ year high. Bloomberg reports that lenders are shrinking in the mortgage business, BofA is said to endure three more legal probes into its’ mortgage-bond sales and China’s real estate bubble is affecting Manhattan. CNBC explains how the JPMorgan deal could affect homebuyers in qualifying for a mortgage. The Motley Fool shares how the online real estate market has become a huge aspect of the business and Fox Business educates on why location is such an important role in real estate.

Unemployment falls but hiring slows

“The unemployment rate fell to its lowest level since November 2008, but the government’s latest jobs report still shows a muddled picture of the economy.”

Why the jobs report has become meaningless

“FORTUNE — Employers added 148,000 to their payrolls in September, about 20% less than economists expected and the third smallest monthly increase in the past year. But the unemployment rate dropped to 7.2%, which is the lowest level in nearly five years. And the number of people actively looking for work was up, meaning people are more optimistic about their prospects for finding work.”

U.S. construction spending approaches 4-1/2 year high

“(Reuters) – U.S. construction spending hit a near 4-1/2 year high in August, boosted by increases in both private and public outlays, a hopeful sign for third-quarter economic growth.”

Shrinking Lenders in Mortgage Hub Cut Into Recovery: Real Estate

“CashCall Inc., a lender run by racehorse aficionado Paul Reddam, is one of the mortgage industry’s biggest office tenants in Orange County, California. It’s about to get smaller.”

BofA Said to Face Three More Probes of Mortgage-Bond Sales

“Bank of America Corp., sued by U.S. attorneys in August over an $850 million mortgage bond, faces three more Justice Department civil probes over mortgage-backed securities, according to two people with direct knowledge of the situation.”

China’s Real Estate Bubble Hits Manhattan

“Fosun International Ltd., a Chinese conglomerate that invests in everything from steel to pharmaceuticals to Club Med, has agreed to buy the office tower at 1 Chase Manhattan Plaza from JPMorgan Chase & Co. for a whopping $725 million. This isn’t an isolated incident.”

Jumbo loan availability lifts Chicago housing

“In recent years, the inability to access higher-priced mortgages left many Chicago residents – especially those pursuing properties valued above the area’s conforming loan limit – without the option of moving up to newer, larger homes.”

FHA single-family mortgage guarantee program squeezes taxpayers

“The Federal Housing Administration’s single-family mortgage guarantee program moved dramatically from having a net savings to costing taxpayers money as higher-than-expected borrower defaults hit the firm.”

How the JPMorgan deal could curtail credit

“The Justice Department’s potential $13 billion settlement with JPMorgan may go a long way toward appeasing consumers’ anger at big banks for the financial crisis, but it probably won’t help those same consumers get a mortgage. In fact, it may make it harder.”

How to Play the Online Real Estate Market

“The Internet has become the first place to look for real estate. In 2007, more than 80% of home buyers actively used the Internet as part of their research process before buying real estate and before contacting an agent. This proportion keeps increasing, making online real estate a very attractive market. However, competition in this space is very fierce. Most real estate agents and companies have already built their own sites, and invest heavily in online marketing.”

Why Location Matters in Real Estate

“Ask just about any real estate agent to list the three most important things a property should have, and you’ll likely hear: “location, location, location.” That phrase has been in use at least since 1926, according to The New York Times, and is just as relevant now as it was then.”