Category Archives: Real Estate

Real Estate market response to higher interest

November’s sudden spike in interest rates could have negative consequences for the housing market in 2017, according to Freddie Mac’s monthly Outlook.

If President-elect Donald Trump passes a fiscal stimulus plan in early 2017 which includes infrastructure spending and tax cuts, it could bring higher real economic growth. The downside, however, will be that this growth could be partially offset by a rise in interest rates, according to the report.

“Much like in 2013, we expect housing markets to respond negatively to higher mortgage rates — they will drive down homebuyer affordability, dampen demand and weaken home sales, soften house price growth, and slow the growth in new home construction,” Freddie Mac Chief Economist Sean Becketti said. “And mortgage market activity will be significantly reduced by higher mortgage rates, especially refinance originations, which are likely to be cut in half.”

However, the economy is still expected to have a better year in 2017 with growth of 1.9% year-over-year. Freddie Mac expects 2017 to end with unemployment at 4.7%, and says this year’s slower hiring rate is due to the market being at full employment.

At this point, the market is 100% sure that it will see a rate hike in December, and experts speculate over how many rate hikes will occur next year. Freddie Mac estimates that the 30-year fixed rate mortgage will hover at just over 4% at the end of 2017.

However, it stated that this increased interest rate could slow the pace of housing starts to about 1.26 million, and will decrease total home sales by 220,000 units. Through all of this, Freddie Mac predicts that home prices will continue to increase, hitting a pace of 4.7% in 2017.

House Financial Services

The halls and chambers of Congress are certainly going to look different when the 115th Congress begins its term in January.

The leadership of the House Financial Services Committee, on the other hand, will look just the same as it has in the last two Congressional terms, as Rep. Jeb Hensarling, R-Texas, and Rep. Maxine Waters, D-Calif., will again serve as the committee’s leaders.

Hensarling currently serves as chairman of the House Financial Services Committee, and will serve his third term in that role beginning in January.

In his time as the chairman of the House Financial Services Committee, especially in his most recent term, Hensarling pushed for regulatory rollback.

Earlier this year, Hensarling introduced a bill in the House that would replace the Dodd-Frank Wall Street Reform Act with a “pro-growth, pro-consumer” alternative that would bring significant reforms to the Consumer Financial Protection Bureau, and much more.

The bill, called the Financial CHOICE act, passed out of the House Financial Services Committee in September.

The bill looks to gain traction in the next Congress, as President-elect Donald Trump is already signaling that his administration plans to “dismantle” Dodd-Frank.

Recently, at the Housing America’s Families Forum hosted by the J. Ronald Terwilliger Foundation for Housing America’s Families, Hensarling called Dodd-Frank a “grave mistake” and said Republicans will work to repeal it in 2017.

“I am humbled by the support and trust of my colleagues to continue my service as chairman of the Financial Services Committee,” Hensarling said of his upcoming term.

“In the coming Congress, we will continue our important work of helping to grow the economy for all Americans, not just those at the top,” Hensarling continued.

“We will focus on ending taxpayer-funded bailouts and too big to fail. We will work to hold both Wall Street and Washington accountable, because consumers must be vigorously protected from fraud as well as the loss of their economic liberty,” Hensarling concluded. “As chairman, I look forward to working with the incoming Trump Administration to advance bold and ambitious solutions that will help make America better, stronger and more prosperous.”

Fighting Hensarling at every step of the way when it comes to dismantling Dodd-Frank will be Waters, who was recently re-elected unanimously by the Democratic Caucus to serve as Ranking Member of the House Financial Services Committee.

It will be Waters’ third term as Ranking Member.

“I am honored to have been re-elected to lead the House Financial Services Committee in the 115th Congress,” Waters said.

“We face many challenges in the years ahead, with President-elect Trump threatening to dismantle Dodd-Frank, putting our financial stability and consumer protections at risk,” Waters continued. “It is more important now than ever for Democrats to fight for what they believe in, and I will continue to lead that fight for American consumers and our most vulnerable populations.”

Executives leading mortgage industry

As the door closes on 2016, the mortgage industry is full of good news. Increasing home prices mean the vast majority of homebuyers have positive equity in their home, and the number of foreclosures continues to drop to pre-Recession levels. Millennials are starting to step into the market and both GSEs and private companies are making room for first-time homebuyers with low down payment programs and alternative credit models.

But the challenges of 2017 lie right around the corner.

Any new presidential administration signals change for our industry, but this year’s changes could be unprecedented. As the mortgage industry continues its slow but steady recovery from the financial crisis and the Great Recession, a new administration will have weighty decisions to make.

Amid the potential new direction from the president, congress and regulators, leadership in our industry is more important than ever. Understanding and planning for a changing environment will test the proficiency of mortgage lenders, servicers, investors and real estate professionals across the country.

Which is why HousingWire is proud to present the 40 winners of our 2016 Vanguard award. These leaders from all segments of the mortgage ecosphere demonstrate that our industry is more than capable of meeting the challenges that lie ahead.

Our Vanguard winners excel in a variety of skill sets, but all share the ability to energize and mobilize their employees. We asked each of our winners to answer questions about what has made them successful, and many chose to point out that their most valuable resource is not a strategic plan or a key technology — it’s the team of people they work with every day.

Strong teams under inspired leadership ensure that the future of our industry is bright indeed.

Our 2016 Vanguard winners:

David Battany

Allen Beydoun

Vladimir Bien-Aime

Jeff Bode

Jeff Bradford

David Brickman

John Button

Brent Chandler

Paul Clifford

Uday Devalla

David Gansberg

Vishal Garg

Cathleen Schreiner Gates

Nima Ghamsari

Kristi Harris

James Hecht

Jim Helfric

Blythe Hughes

Dominic Iannitti

Ty Jenkins

JP Kelly

Andrew Kernan

Frank Martell

Matt Martin

Damir Matic

Phil McCall

Gary McCarthy

Reactions to Ben Carson

Last week, as we all waited for Ben Carson to accept Donald Trump’s initiation to run the Department of Housing and Urban Development, reactions poured in from all sides about whether HUD Secretary Ben Carson is a good idea or not.

Well, now that’s officially official, with an announcement coming Monday that Carson accepted Trump’s offer, reactions are no longer based on hypotheticals about Carson as a potential choice.

Carson is Trump’s choice to run HUD.

Here’s a sampling of the reaction.

Vice President-elect Mike Pence took to Twitter on Monday to celebrate Carson’s nomination, saying that the retired neurosurgeon will help “strengthen communities” while at HUD.

While some Republicans feel that Carson is a good choice, much of the media reaction to Carson’s nomination focuses on his lack of experience in housing and urban development and the impact that will have.

Over at the Wall Street Journal, Nick Timiraos and Damian Paletta have a good recap of what HUD means for the country and what Carson is walking into on his first day.

From the article:

HUD, with a budget of $47.9 billion and some 8,400 employees, has played critical roles stabilizing the housing market after last decade’s boom and bust. The federal government currently insures one in every six new home-purchase mortgages made through the Federal Housing Administration, which is part of HUD. The department also oversees funding for some 1.2 million low-income households in public-housing units managed by some 3,300 local housing agencies.

Much of the reaction to Carson as HUD secretary tends to point out (as the WSJ does) an op-ed authored by Carson in The Washington Times in 2015.

From the WSJ:

Critics say the rules undercut local control by making it too easy to advance lawsuits questioning zoning decisions. The GOP platform approved earlier this year said the rules went beyond the government’s “legitimate role in enforcing nondiscrimination laws.”

Mr. Carson echoed the party’s stance when he called those policies “mandated social-engineering schemes” that repeated a pattern of “failed socialist experiments in this country” in a 2015 op-ed published in The Washington Times.

In the New York Times, Sheryl Gay Stolberg recaps some of why Carson’s “critics” are concerned about his nomination.

One of the critics not cited in Stolberg’s article is the Washington Post Editorial Board, which calls Carson’s selection as HUD secretary “beyond baffling.”

Americans again expect home prices to start rising

Consumers became more optimistic about the housing market immediately following the election, according to Fannie Mae’s Home Purchase Sentiment Index. What’s more, the share of Americans who expect home prices will only continue to increase grew four percentage points to 35%, reversing the three-month downward trend.

The HPSI decreased in November for the fourth consecutive month, sliding down 0.5 points to 81.2. Four of the six components of the HPSI decreased. The election created a great divide in confidence levels from before and after election day.

“The November Home Purchase Sentiment Index outcome is difficult to interpret as the data collection period occurred across the Presidential election timeline,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “The results are fairly evenly split between responses collected before and after the election, and there is evidence of an increase in consumer optimism in the immediate aftermath of the election.”

Those who said now is a good time to buy a home decreased by one percentage point to 30%, while those who said now is a good time to sell fell by six percentage points to 13% in November. Those who said now is a bad time to sell even rose two percentage points to 38%.

“However, if mortgage rates continue their recent rise, we may see a dampening in home purchase attitudes,” Duncan said. “There are clear predecessors for rapid market changes that ultimately dissipated, which urges caution in the interpretation of stability in short-term rate changes.”

Those who say mortgage rates will go down over the next twelve months decreased by six percentage points to -51%, while those who say they are not concerned about losing their job fell five percentage points to 64%.

Americans who answered their household income is significantly higher than it was 12 months ago rose 11 percentage points to 15%, reversing the decrease seen in October.

Fannie Mae forecasts only modest growth in the next 12 months.

Refinance as mortgage rates keep rising

The loan origination report is derived from publicly recorded mortgages and deeds of trust collected by ATTOM Data Solutions in more than 950 counties accounting for more than 80% of the U.S. population.

“The nominal increase in overall originations compared to a year ago masks divergent refinance and purchase loan origination trends during the quarter,” said Daren Blomquist, ATTOM Data Solutions senior vice president. “Refinance originations increased 16% compared to a year ago while purchase originations were down 11% and Home Equity Lines of Credit originations were down 6%.”

“Uncertainty surrounding the outcome of the presidential election may have kept some would-be homebuyers on the sidelines while the prospect of rising interest rates following the election may have prompted many homeowners to refinance to lock in low interest rates,” Blomquist said.

In the third quarter, 876,633 refinances loans were originated. That is an increase of 7% from the second quarter, and 16% from last year. Refinance originations made up 45.7% of total originations during the third quarter, up from 42.1% last quarter and 39.5% last year.

Many homeowners are rushing to refinance their homes before interest rates increase. While rates are currently still at historical lows, the 30-year mortgage rate recently hit its highest point since July 2015.

On the other hand, purchase originations totaled 743,880 during the third quarter. This is down 8% from last quarter and 11% from last year. This is the first decrease after nine months of consecutive annual increases in purchase originations. Purchase originations totaled 38.8% of all originations, down from 41.4% last quarter and 43.8% last year.

In fact, according to a new report from Kroll Bond Rating Agency, 2016 will likely be the peak year for mortgage originations for “years to come,” as a fall in origination volume will occur in 2017 and beyond.

Acquires TigerLead from Move

Earlier this year, Fidelity National Financial, the nation’s largest title insurance company, acquired Commissions, Inc., a provider of web-based real estate marketing and CRM software for residential real estate agents and agent teams, pledging to grow the company’s business.

When the companies announced the deal, Fidelity National Financial Chairman William Foley said that CINC’s “strong revenue and customer growth has been largely organic, with minimal sales force efforts needed,” adding that the title insurance giant planned to “leverage FNF’s title sales force to proactively cross-sell the CINC product suite to our leading customers.”

Now, CINC’s product suite is about to get a little larger, as the company plans to acquire TigerLead, a real estate agent lead generator, from Move, Inc.

Move acquired TigerLead in 2012, before bringing the company with it when News Corp bought Move in 2014.

Move, which operates for the National Association of Realtors, said that it plans to “focus its attention” on and its other properties moving forward.

“Move will focus its attention and resources on its products, and the evolution of our professional software businesses, including: Top Producer, Market Snapshot, FiveStreet, ListHub and Reesio,” Move spokesperson Janice McDill said in a statement to HousingWire.

McDill said that Move determined that Commissions Inc., which she called “a leader in its space,” would best serve TigerLead’s customer base.

“Commissions, Inc. recognizes that the TigerLead customer base is amongst the best agents/teams in the country and will continue to invest in their future success,” McDill said. “The transition of ownership of TigerLead to CINC is planned to be seamless and imperceptible to TigerLead customers.”

Financial terms of the deal were not disclosed.

HousingWire contacted Fidelity National and TigerLead for comment, but as of publication, neither company has responded.

This article will be updated if either company responds.

Police presence becomes real estate

The state of New York is taking the next step in its fight against abandoned foreclosures and neighborhood blight by unveiling a consumer bill of rights for borrowers facing foreclosure.

The consumer bill of rights is part of series of “sweeping” new laws announced by the state earlier this year designed to reform the state’s foreclosure process and address the state’s issues with abandoned foreclosures, also called zombie homes. New York has one of the longest foreclosure timelines in the nation, averaging 1,070 days to foreclose in the third quarter.

According to the office of New York Gov. Andrew Cuomo, the new laws combat the blight of vacant and abandoned properties by expediting the rehabilitation, repair and improvement of these properties, and enable the state to assist homeowners facing foreclosure.

Additionally, the new laws also impose a pre-foreclosure duty on banks and servicers to maintain zombie homes, create an electronic registry of abandoned properties, and expedite foreclosure for vacant and abandoned properties to get those houses back on the market.

Included among the tenets of New York’s new laws is the establishment of a bill of rights for consumers facing foreclosure, which Cuomo and the New York Department of Financial Services introduced Wednesday.

The consumer bill of rights, which can be read in full here, reminds consumers of the various rights they have before, during, and after the foreclosure process.

First and foremost, the bill of rights tells consumers that they can and should seek the assistance of a lawyer or a housing counselor if they are facing a foreclosure in New York.

The bill of rights also tells borrowers that they have the right to stay in their home during the foreclosure process.

“You have the right to stay in your home and the duty to maintain your property unless and until a court orders you to vacate,” the bill of right states.

“If you abandon your home, the plaintiff (bank or mortgage servicer) may be able to foreclose on your property through an expedited process in court,” the bill of rights continues. “To prevent this outcome, stay in your home and carefully review and respond to documents you receive from the plaintiff or the court in your foreclosure case. A failure to respond or appear in court when required to do so could make it easier for the plaintiff to show that your property is vacant and abandoned, which could put you at risk of an expedited foreclosure.”

The bill of rights also walks borrowers through the various steps of the foreclosure process and their rights throughout, including their legal options and their right to seek “loss mitigation” options.

Again, click here for the full consumer bill of rights.

“These reforms help ensure New Yorkers at risk of foreclosure know their rights, that banks and mortgage servicers are held to their obligations, and that neighborhoods across the state are protected from the blight of zombie properties, which threaten property values, as well as public safety,” Cuomo said. “These steps will help protect the quality of life in our communities and preserve the American Dream in New York.”

Additionally, the New York Department of Financial Services finalized the new regulations it proposed earlier this year as part of the state’s new foreclosure laws.

Under the state’s new laws, lenders and mortgage servicers must complete an inspection of a property subject to delinquency within 90 days and must secure and maintain the property where the bank or servicer has a reasonable basis to believe that the property is vacant and abandoned, in addition to other requirements.

Plane crashed into home at Pearl Harbor

Today, Americans remember the day that the U.S. got pulled into World War II. Old stories begin re-circling as witnesses recount what they saw on that day.

One such story was published in the Honolulu Star Bulletin newspaper on the day of the attack. While the Japanese mainly focused their attack on the naval base, some of the attack also breached civilian areas.

One of the enemy aircrafts crash-landed into a home in a town near Pearl Harbor, according to the newspaper article. The plane and two houses nearby were destroyed by a fire caused by the crash.

Many lives were lost on that memorial day, including military and civilians. A total of 2,403 lives were lost, 68 of which were civilian and other others all military, and 1,178 were wounded, of which 35 were civilian, according to the U.S. Census Bureau.

The attack lasted one hour and 15 minutes, but changed many lives forever. In fact, I might could even go as far as to say there is not a single American alive today whose life was not affected by that day.

To see more stories and pictures of events from the attack on Pearl Harbor, click here.

As we think back on the events that took place 75 years ago today, we remember the stories, the heroes, the sacrifices. We haven’t forgotten. So, to those who served on that day, and to those who continue to serve in our militaries today, thank you.

Caliber Home Loans new fully digital

For consumers and lenders alike, the mortgage process can be a cumbersome and time-consuming process.

Recent data from Ellie Mae showed that on average, it takes about a month and a half to close a mortgage loan.

But Caliber Home Loans wants to change all that.

On Thursday, Caliber Home Loans, a mortgage origination and servicing company, unveiled a fully digital mortgage that the company claims can shrink the loan process from 45 days down to 10 days or less.

HousingWire got a preview of the program, which Caliber Home Loans calls the “Caliber Ultimate Homebuying Experience.”

According to details provided by Caliber, the “Ultimate Homebuying Experience” is a streamlined application, approval and closing experience for conventional, government, and Caliber portfolio loans.

The program takes nearly all of the mortgage process online, using various technological advancements to automate the process, from application all the way through closing.

Caliber boasts that this program is different than some other digital mortgages because of the company’s “best-in-class” loan officers and account executives, who work with the borrower throughout the process.

According to the company, the program can “simplify the mortgage process and to reduce stress” on borrowers.

So how does Caliber close a loan in 10 days or less?

According to the company, its “Ultimate Homebuying Experience” automates much of the home buying process, including appraisals in some cases, which several other lenders recently cited as a impediment to shorter loan closing times.

Caliber said that it developed a full application process that takes only minutes, as well as electronic verification for some of the “most important” parts of the mortgage application, including income, assets and employment.

That electronic verification reduces the need for loan applicants to provide physical documents, like W-2 forms or bank statements.

Using those technological advancements, Caliber claims that it take a loan from application to closing in less than 10 days on eligible mortgages, all while providing “personalized assistance” from Caliber loan officers and account executives to help borrowers through the entire loan process.

Sanjiv Das, the CEO of Caliber Home Loans and a former CEO of CitiMortgage, said that the shorter loan process does not mean that the lender’s underwriting standards are impacted in any way.

“We place the consumer experience at the center of all the products and services we offer, and this program underscores that commitment,” Das said.

“The Caliber Ultimate Homebuying Experience will make mortgage applications, approvals and closings easier and faster and does not impact our robust underwriting guidelines,” Das added.