Stocks are down, so are interest rates.

For those interested in legislation concerning banks, there is a new bill sponsored by Sherrod Brown (D-Ohio) and David Vitter (R-LA).  It is called Terminating Bailouts for Taxpayers Fairness Act. "The bill focuses on three key points: loosening the capital requirements for community banks, new regulatory enticements for community banks and raising the highest asset bucket threshold from $400 billion to $500 billion, an article from Compass Point said."  This would raise asset requirements for the largest banks to 8%.  They don't think they have the votes to pass it, but have you noticed our community banks are disappearing while the largest banks are growning larger.  I think I will write my senators and recommend they vote to pass this. 
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Becky Crawford, agent at Prudential, has a blog that is just the right mix of fluff and real estate news.  She has a good bit of advertizing for her company, but the blog is terrific.  If you don't live in Atlanta, it won't be as valuable.  Look for a good blog or two for your area.  If  you don't have one, consider being the go-to person for your state or local blog.  Cudos to Becky C.
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Sonja Bullard also has a blog.  She is an MLO at Angle Oak.  I would like to see blogs from the builders in the Atlanta area.  Information is power.  Let's help each other succeed in our businesses.  Subscribe to the blogs you find most helpful.
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Nat'l Real Estate Post:
Pintrest is the new Facebook for advertizing.  Use the Pin it button to link to your site.  Remember hashtags and key words are very important.
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The nation wide real estate market is starting to moderate.  Still, there are cities in which are prices are rising rapidly.  They are, "According to Zillow, five markets it covers saw a year-over-year appreciation of more than 20%: Phoenix (up 24%), Las Vegas (up 22.3%), San Jose (up 22.1%), San Francisco (up 21.4%) and Sacramento (up 20.1%)." 

"The national housing market has rebounded strongly over the past year. But the sometimes dramatic home value run-ups experienced during these months were never expected to be sustainable, and recent slowdowns are indicative of a market that is slowly finding its natural level," said Zillow Chief Economist Dr. Stan Humphries.

"Looking forward, we expect annual home value appreciation to continue to slow, as more inventory comes up for sale," Humphries added.-- mhopkins@housingwire.com

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"The housing market is now being driven by local economic fundamentals," said Denk. "Energy states and those driven by agricultural commodities are seeing their housing markets turn around the fastest."

States that fell the farthest during the downturn — California, Florida, Nevada and Arizona — bottomed out as much as 10% to 20% of normal production, but are showing indications of a turnaround. In many of these markets, home prices are returning to normal and near-normal levels. This is due, in large, to an easing of foreclosure rates.

By the end of 2014, the top 20% of states will be at or above 87% of normal production, compared to the bottom 20%, which will still be below 60%, according to Denk. --HousingWire
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The 30-year rate in Freddie’s survey was down a basis point from the previous week at 3.4%, the average 15-year rate was down three basis points at 2.61%, the average five-year hybrid Treasury rate was down two basis points at 2.58% and the average one-year Treasury ARM rate was down one basis point at 2.62%.

Average points during the week ending April 25 were 0.8 of a point for 30-year loans, 0.7 of a point for 15-year loans, 0.5 of a point for five-year Treasury hybrid loans and 0.3 of a point for one-year Treasury ARMs.

A year ago, the weekly average for 30-year loans was 3.88%, the weekly average for 15-year loans was 3.12%, the weekly average for five-year Treasury hybrids was 2.85% and the weekly average for one-year Treasury ARMs was 2.74%.

--- Bonnie Sinnock in Origination News
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When you're faced with temptation, move forward with a decision to just do the right thing. When you know someone is hurting as a result of your actions, help them to heal by just doing the right thing. When someone is upset with you and it's extremely hard to move pass your ego to create resolve, remember to just do the right thing.
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A week or two ago I asked why the  building supplies were so expensive.  Here is an answer: 

Building-material manufacturers “are raising prices dramatically, and once they’re convinced that these prices are going to stick, they’ll start reinvesting in those plants,” helping ease supply constraints, said John Burns, chairman of Irvine, California-based John Burns Real Estate Consulting, which provides research to developers, construction-product manufacturers and investors. “Those can take a year to get up and running.”

Good news

Housing starts are up 46.7% from a year ago!  Home completions rose 36.3% from a year ago.  Home buyers are itching for their dream home, but without enough inventory, they are opting to build.--  kpanchuck@housingwire.com
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".... the average timelines for loans liquidated through short sales are about 12 months shorter than those liquidated through real estate-owned properties." -- cmlynski@housingwire.com  (I hope every one sees that short sales are far superior to foreclosures.  For too long banks have refused to work with home owners.  This allows more inventory, less damage to the home  owner's credit score and more revenue for the banks.  A win all the way around.)
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Nat'l Real Estate Post:
HUD has been there for us in the good times, but because of continuing their philanthropic pursuits during the bad times, they are in the hole.  They are raising the MI due to the hit on their funds.  If borrowers take an FHA loan, the MI stays with them through the entire loan.  If they go conventional, they can drop the MI eventually.  So, those who have no choice are the ones who will take the FHA loans now and those with good credit can go with conventional loans.  Now those who are less credit worthy will be the ones who get loans through the federal gov't, those who are more likely to be foreclosed on.  FHA is suppose to be bringing money into the federal gov't, but this will eventually be a drain on those same funds.  (My comment is that the federal gov't encourages risky behavior by forcing the tax payers to fund those who want to do silly things.  Return the responsibility to the states which are more responsive to the needs of the citizens.)
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Real Estate Agents control 45% of lender choices for the buyers.  The worst problems are due to underwriters doing piecemeal and last minute requests, appraisors and changes in underwriting policies.

Real estate agents added that the uncertainty of closing dates is disruptive and expensive for borrowers. In fact, 65% of agents said they would be more willing to recommend a particular lender if they provided a mobile "app" to track the status of scheduled mortgage closings. --
HousingWire
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Freddie Mac announced Monday its new free, online tutorial called CreditSmart, that will provide working families and new or inexperienced borrowers with the basic information they need to buy their home.

CreditSmart will include information on building savings, personal credit and making wise financial decisions. The online tutorial is a comprehensive, multilingual financial educational curriculum, reaching more than 3 million consumers in 33 states.

Christina Diaz Malone, Freddie Mac’s vice president of corporate relations and housing outreach, said, "Our new online CreditSmart tutorial is a stepping stone to homeownership, especially for working families who are unsure how to start household budgets or build the personal savings and strong credit for the future."

She added, "Today's announcement underscores Freddie Mac's commitment to help America's next generation of borrowers achieve long-term financial stability."

For future borrowers, the online tutorial includes advice on topics such as banking, budgeting and credit.

For current homeowners, it is tailored to helping them avoid foreclosure, maintaining their home and succeeding as homeowners.-- HousingWire

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Building supply costs continue to rise.  This is hurting the ability of the builders to compete  with foreclosures.  However, we are entering a period of deflation which will lower prices, and the oil and gas prices are falling due to the increased domestic supply we have here in the US.  We are also reestablishing the supply lines for supplies and workers since the recession.  I know the builders I talk to are not happy with continued increased costs.  With the continuing increasing regulations, we are in a war of the gov't vs. the consumer. 
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Phoenix home prices rise almost 30% in twelve months.  Over all in the US housing market, there is still a sales-to-list price ratio of 95% which means more homes are still selling below the asking price.  All of this depends on the specific market, so watch your own market!
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There are crowdfunding sites springing up specifically for real estate.  Should be interesting to follow. 
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In order to make housing affordable for rural towns and cities, the USDA has a USDA Rural Housing Service.  The town must have a population less than 25,000, but two senators are trying to raise that cap to 35,000 until the year 2020,  "Providing these loans, grants, and loan guarantee programs helps younger generations stay in the communities they’re from, and ensures rural housing markets have access to private credit." -- cmlynski@housingwire.com
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More homeowners are putting money into their homes.  Existing home sales were up almost 9% last year and with the increase in home values, owners are starting to invest in their own homes again.  However, construction supplies costs are still rising rapidly which is unusual in this economic climate.  Maybe with gas prices dropping, the cost of supplies will begin dropping as well.
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One of the economists I subscribe to, and whom I trust, is saying that the home buying investor bubble is about to pop.  This will leave only the foolish investors still buying or trying to buy homes in bulk.  This is good for the buyers as this will halt the tremendous rise in home prices, but will hurt the sellers by keeping many of them under water.  Check out Mike Larson at Money and Markets.  He has a very good finger on the pulse of investing from what I have seen in the past couple years. 
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Nat'l Real Estate Post:
Back in 2007 Fannie and Freddie put a fee on mortgages because we were in a declining market and they were getting hammered.  It is called the Adverse Market Fee.  It was for loans which didn't make certain credit scores but still got the loans.  But now, when we are on a price rise and Fannie and Freddie are making oodles, that fee still exists at 1/4 to 1/2 bip (?).  It is like the telegraph tax which the gov't instituted to pay for the Mexican-American War back in 1846 that anyone who has a landline is still paying for.  Last year Fannie did $371 billion in mortgage loans plus  $12.32 in non-Fannie agency securities and $65 billion in non-Fannie, non-agency securities for a total in over $633 billion in mortgage loans.  If you add in the additional quarter in all those loans you get an additional $1,582,500,000 of income for Fannie alone.  Fannie has done nothing to recind it even though we are no longer in a declining market and Fannie is making oodles.  So, if you feel like it, write to Fannie and ask nicely for them to stop  the fee.  However, if Fannie and Freddie stop making the banks pay this fee (which is passed along to us citizens), the banks will probably continue to charge us that same fee.  This is because the gov't is putting more and more regulation on the banks outside of Frank-Dodd and Basel III.  In the first quarter of 2013 the banks had the best quarter in the history of the FDIC at $39 billion profit.  This makes some in gov't want to make higher and higher capital reserve requirements for the banks which will push the banks to continue to loan only to those with the highest credit scores.  It seems like the more gov't interfers with the banks, the worse off we the people are.
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***

...the House finally passed the Cyber Intelligence Sharing and Protection Act (CISPA), a bill that allows private Internet companies to share personal details about your online activity with the U.S. government.

CISPA was widely disputed over privacy fears but was sold as a way to prepare the U.S. against cyber attacks, following repeated warnings by U.S. intelligence officials that these attacks could inflict serious damage to the nation’s infrastructure and industry.

We find it ironic that CISPA, which was supposedly a measure to protect our country against cyber attacks, took more than a year to get through the House.

Meanwhile, an act to allow Washington insiders to continue to line their pockets from illicit trading didn’t even take a week (the STOCK act).-- Brad Hoppman at Uncommon Wisdom Daily

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"Housing construction is starting to pick up, but is well below historical averages," Nothaft said. "Supported by low mortgage rates, we expect more homes to be built in 2013 than in any year since 2007. This increased construction employment should continue to help bring down the overall unemployment rate."

It's a careful balance for now, but as long as interest rates remain low enough to attract buyers, and housing prices grow enough to attract builders, the construction recovery will continue to grow and help spur overall growth in employment.----  Illyce Glink with MoneyWatch

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Jill Pierce is a real estate agent for RealEstateAuctions.com






 

A double minded housing industry

"Two thousand thirteen and 2014 are going to be transition years," says Mark Fleming, CoreLogic's chief economist. "The market's improving, but it's not totally healed."
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Some say we are creating another housing bubble, some say we aren't.  I think we need to wait and see what the investors do this year and maybe next.
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I am hearing sounds of different parts of the gov't wanting to ease credit.  Until enough parts come together, we will keep the high credit requirements and high down payments.  There are too many penalties to get the mortgage companies to ease up at this time.  Until the gov't decides not to penalize the mortgage companies for having "too many " defaults, the banks will not want to risk their good names and funds.
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One of my investor news letters is saying that due to the world economies having difficulties, the dollar is in good condition and it will stay that way for a while.  The readers are encouraged to invest in, among other things, real estate.  This year may remain good for those who make a living at this. -
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Nat'l Real Estate Post:
CFPB has just fined MGIC, Radian, Genworth and United Guarentee $15 million for paying kickbacks, referral fees, to lenders for directing business their way.  While HUD started the investigation a while back, they are giving the CFPB the money.  That is because HUD keeps saying they need a bailout and will probably get it while the CFPB is underfunded and probably couldn't get more from congress.  The mortgage insurance companies are restricted from doing this for 10 yrs.  Question: what will make referral fees any more legal, moral or ethical in 10 yrs?  The price of mortgage insurance has been decreasing recently, but if the MI companies continue to be fined, the price of MI will rise.  However, the price increases are just going to fund gov't departments.  (Sounds like a sneaker tax to me).
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HUD's Office of Native American Programs is once again lending to Native Americans and Alaska Native families with the Section 184 Home Loan Guarrentee Program.  This can be used for rehab's, new construction and purchasing a home, but not refi's.  This is in 37 states and will probably expand.
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The 20 best cities for buying rentals are:
1)  Memphis, TN
2)  Saginaw, MI
3)  Toledo, OH
4)  Ocala, FL
5)  Las Vegas, NV
6)  Palm Bay, FL
7)  Atlanta, GA
8)  Jacksonville, FL
9)  Deltona, FL
10)  Springfield, MO
11)  Tampa, FL
12)  Port St. Lucie, FL
13)  Orlando, FL
14) Phoenix, AZ
15)  Detroit, MI
16)  Lakeland, FL
17)  Kansas City, MO-KS
18)  Dayton, FL
19)  Syracuse, FL
20)  Ogden, UT
kpanchuck@housingwire.com
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National Real Estate Post:
Fannie Mae just got $116 billion from the Treasury dept to cover the losses in the dark years while recording $17 billion in profits and have paid back $36 billion.  Over the next 10 years they will be able to pay back all of it with interest. 
Housing inventory is still in short supply.  Until the homeowners who are presently underwater recover enough to sell their homes, that will continue and prices will rise.  It will take 2-4 yrs to make the transition.- Barry Habib
The average time to foreclose went up in 39 states in the first quarter this year.
Combo purchase money loans (piggybacking)- what home buyers used in the past to skirt the mortgage insurance requirement.  It is a first loan of 80% and a second loan of, say, 15% and 5% down payment.  This is what put Fannie Mae in the hole the last time around.  Navy Federal Union and the Nassau Federal Union are offering loans of 100% financing which are not VA loans.  These, along with hard money loans, are making a comeback.  (So my question is, who is monitoring these developments which are contrary to the laws voted into being to prevent these questionable practices?)
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I don't know if you have noticed how that over the last few months the housing news has been quite contradictory.  It shows how in flux we still are in the economy.  Until the housing regulations and the other new laws are enforced or voted out, we will still have great uncertainty in all sectors except maybe the oil and gas industry.  Housing is a manifestation of wealth not the creator of it.
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When investors pull out of the market, more homes will be bought with loans than with cash.
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Most people are as happy as they make up their minds to be.-- A. Lincoln
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National Real Estate Post:
In Arizona, Realtors are getting around a HUD requirement that says when a home becomes HUD property, the pool must be emptied, but when it is under contract and appraised, the pool must be full.  The Realtors are filling the pool a couple days before the appraisal, so the filter and pump seem to be in working order.  (Works for me.)
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National Real Estate Post:
A recent offer was accepted on a home which wasn't the highest or cash.  Instead, the offer was accompanied by a letter explaining how the home was perfect for their family, how they weren't investors, and pictures of the offering family.  That offer won over an offer that was $70k above asking price. 
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Remember that an internal memo in the IRS has been discovered which says they have the right to read your emails. 
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The Home Affordable Refinance Program has been extended by two years to Dec. 31, 2015.-- cmlynski@housingwire.com
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February home prices rose 10.2 % from a year ago and the most in seven years, says CoreLogic.  The steepest price rises were in Nevada (19.3%), Arizona (18.6%), California (15.3%), Hawaii (14.6%) and Idaho (13.5%).  The states in which home prices dropped are Delaware(4.4%), Alabama (1.5%) and Illinois (1%).  --kpanchuck@housingwire.com
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Sarah Butcher with eFinancialCareers has an interesting article in which she reports that a slew of young women in their 20s ( in Europe) are now considering entry into investment banking. --kpanchuck@housingwire.com
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TBWSDailyShow: 
In 2007 Fannie and Freddie defaulted.  Then we got Dodd-Frank, CFPB and the g-fees.  The g-fee is a tax on mortgage borrowers and will not pay anything toward the debt that Fannie and Freddie owe the treasury department.  It is merely another tax on the citizens.  It is set to expire in 10 yrs, but have you ever seen Congress rescind a tax?  Congress wants to scrap Fannie and Freddie because of the four years when they had all sorts of trouble; only four years of the 75 Fannie Mae has been in business.  Fannie Mae just reported $7.6 billion in 2012 4th quarter earnings which is the single most profitable quarter in the entire history of the GSE.  They have also paid back $35.6 billion dollars in dividends to the US treasury.  However, the treasury decided to take all of Fannie's profits and apply it to the interest of the loan instead of the principle of $116 billion.  Without Fannie and Freddie, there would be far fewer homeowners.  Do we really want Congress to scrap the GSE's?  Since the GSE's are now making a profit, should we really get rid of them?  Does Congress have a problem with profit?   
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The price of materials for the building industry continues to rise dramatically.  I am not sure the reason, but I can guess that it is the price of gasoline and the flood of new regulations.
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90% of Millennials still plan to own a home what with rising rents and low interest rates. 
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TBWSDailyShow:
New NCNANINCNP Refi Program-No Credit No Asset No Income No Collateral No Payment refinance program.  If you have had your loan for at least 12 months, and have a greater than 80% loan to value, and if  you quit making payments for 90 days up to 2 yrs, you automatically qualify for this program, no documentation needed.  The only thing you need to qualify is to not make your payment.  This is coming from FHFA.  Your loan rate goes down to the prevailing rate or to the present rate, which ever is lower and your loan is put on a 40 yr fixed mortgage.  No cost, no documentation.  If  you happen to be upside down you will pay no interest on a portion of your loan up to 30%.  This is the GREAT MORTGAGE COMPROMISE OF 2013.
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The Fed is still buying bonds, including mortgage bonds, at the rate of $85 billion/month.
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Did you know that Fannie Mae and Freddie Mac originate most of the new mortgages in the country and control over half of all mortgage debt?  This means we may have the GSE's for a long, long time.
--kpanchuck@housingwire.com
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Almost four million single family homes have become rentals in the last eight years.  Because of the over abundance, rents have leveled out.  It is possible that your local rents are higher than mortgage payments.  Renters will now have more negotiating power in some parts of the country.  Check to see where your housing industry is in the mix. 
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The US employment participation is now at 1979 levels.  That's low!
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The CFPB reached a deal requiring four mortgage companies to pay a total of $15 million in penalties for allegedly paying kickbacks to lenders in exchange for business.  The CFPB cited the following firms: Genworth Mortgage Insurance Corp. ($9.49 0%), United Guaranty Corp., Radian Guaranty Inc. ($10.22 0%) and Mortgage Guaranty Insurance Corp ($4.87 0%).
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TBWSDailyShow has changed its name to National Real Estate Post, so I too must make the change:
Head line in the Washington Post says, "Obama administration pushes banks to make home loans to people with weaker credit"   Right now Freddie Mac's average allowed credit score is 740.  The administration wants to bring that down to 625.  The problem with this is that all the rules and regulations that put banks in a squeeze the last go round are still in place.  If the mortgage with the lower credit score fails, the bank is harshly punished for it.  The only way the lending companies will consent to this push is for the authorities to put something in writing, in stone, to promise there will be no retaliation for loans written at this low credit score point if they default. 
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jpierce@realestateauctions.com