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Millennial mortgage problem: Down payments and expensive cities #realestate #Homeowner #Economy #Investing

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The Power of the Underwriter

In industries where price competition is fierce, finding other ways to bolster a company’s brand is vital for success and survival. Loan officers and loan processors want an underwrite as quickly as one can be completed. Research* shows that across underwriting service providers, turn time (or speed of the underwrite) is one of the most important characteristics associated with a best-in-class underwriter. However, pricing and underwriting speed are essentially irrelevant when a loan does not receive an approval. In order to steadily drive more business, underwriting service providers must ensure that they remain competitive in pricing without losing focus on other key customer service attributes. All of these can be characterized as traits of good customer service, which illustrates a significant dynamic: price is not everything when generating new business. Regardless of why customer service may rank higher than pricing, the importance of customer service can be used to an underwriter’s benefit. And, good customer service has a compounding effect on new business generation. Could your company’s customer service plan be better focused?

What Are the Benefits of Investing in Global Real Estate?

It’s often a key diversification factor in their portfolios. But what about global real estate? So far, the global real estate market is performing very well. According to research from CNBC, 18 out of the 23 European housing markets had exponential growth with double-digit successes in global real estate funds in 2016. “International real estate funds are priced less than U.S. [funds]. Investors can make significant earnings by purchasing real estate in any of these areas. When an investor focuses only on their own domestic market instead of considering the world of real estate as a whole, they face a higher degree of risk.

FHFA Director Watt gives small glimpse into status of 3% down programs

Since Fannie Mae and Freddie Mac unveiled their low down mortgage programs back in 2014, there hasn’t been a lot of detail given around the status or success of the programs. Both programs from the government-sponsored enterprises are intended to help more first-homebuyers and other qualified borrowers jump into the market. And so far, according to the latest data, first-time homebuyers are beginning to trust it. The information is still sparse, but it’s one of the first times the government has put out information on the programs. “FHFA continues to work with the Enterprises on other access to credit initiatives, including low-down payment programs,” said Watt. Between 2015 and June 2017, the GSEs have purchased more than 130,000 mortgages with a 3% down payment. “The enterprises also allow reduced fees when the borrower’s income is at or below the area median income,” said Watt.

How Strong Is the Multifamily Market?

In fact, a new survey commissioned by Freddie Mac found that 60 percent of multifamily industry participants expect the market to grow over the next 3-5 years, while only about 15 percent see it slowing down. Baby boomers are looking to downsize, while many millennials want to start new households. Consumers are also showing a growing preference for renting, with Freddie Mac’s recent renter research finding that an increasing number are planning to rent their next home. Meanwhile, supply continues to remain scarce in most markets. The United States is facing an annual shortfall of about 400,000 housing units. Freddie Mac Multifamily has made innovation a competitive advantage, offering financing to serve the full spectrum of borrower and housing needs across the market. Learn more at

U.S. New-Home Sales Declined in August

new-home sales continued to fall in August, and the supply of available homes expanded. Purchases of newly built single-family homes fell 3.4% to a seasonally adjusted annual rate of 560,000 in August, the Commerce Department said Tuesday, the second straight monthly decline and hitting their lowest level since December. That was below the 591,000 sales pace that economists surveyed by The Wall Street Journal had expected. More broadly, new-home sales were up 7.5% in the first eight months of 2017 compared with a year earlier. Supply levels continued to rise in August. At the current sales pace, there were 6.1 months of new homes on the market at the end of the month, a figure that has crept up in recent months and in August hit its highest level since July 2014. The median sale price for a new home sold in August was $300,200. The Commerce Department also said it corrected price data for new-home sales going back nearly three years, covering October 2014 through January 2017, to include previously omitted response data.

Your Dream – Owning Your Home and Dreaming Forward

Living Your American Dream – where it begins and how it continues. Whether that adventure entails emotional or financial risk or both, you need your safe haven with a moat around it and a drawbridge that you pull up in times of peril or reflection. Security empowers risk taking from a risk-free home base. Still, real estate alone is not the American Dream. Only you can decide what your American Dream is. It was as recent as 1841 when a band of 70 pioneers first blazed the Oregon Trail beginning from Independence, Missouri, going west along the Platte River, through the Rocky Mountains, and northwest to the Columbia River.

Opportunities in U.S. Commercial Real Estate Debt Investing

. The commercial real estate (CRE) market has undergone a significant recovery since the global financial crisis of 2008-2009. In the following interview, portfolio managers Devin Chen and Jeffrey Thompson discuss the state of the market, including risks and opportunities for investors. So while prices in major CRE markets have increased by more than 45% since the peak, values in non-major markets have risen only 11% (see Figure 1). Against this backdrop banks and insurers are actively lending – perhaps the most in recent memory. Meanwhile, the commercial mortgage-backed securities (CMBS) market, which at its peak in 2007 was the largest source of CRE financing, is also much smaller. Much of this is driven by regulations and by the Office of the Comptroller of the Currency (OCC), which in 2016 raised concerns about growing concentration risk and loosening underwriting standards in banks’ CRE credit loan portfolios. Investments in commercial real estate debt and mortgage loans are subject to risks that include prepayment, delinquency, foreclosure, risks of loss, servicing risks and adverse regulatory developments, which risks may be heightened in the case of non-performing loans. The value of real estate and portfolios that invest in real estate may fluctuate due to: losses from casualty or condemnation, changes in local and general economic conditions, supply and demand, interest rates, property tax rates, regulatory limitations on rents, zoning laws, and operating expenses. There is no guarantee that these investment strategies will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market.

How automation is threatening the appraisal industry

. Subscribe to our RSS feed to get the latest realty news. You can get our headlines via email as well, or follow us on Twitter. Zillow is famous for its Zestimate tool, which relies on machine learning technology, plus public records, MLS data and brokerage information to accurately determine property values. Zillow is constantly updating its Zestimate algorithms to make the program more accurate. Another sign of impending doom for appraisers came by way of Freddie Mac earlier this summer, when it announced that it to would use automated valuations for some of its refinancing loans. Freddie Mac’s system is called Automated Collateral Evaluation (ACE), which is essentially a computer algorithm that relies on data from multiple listing services, public records and historical home values to determined a property’s collateral risk. The rise of automated appraisals is perhaps in part a response to the declining number of professional appraisers working in the industry. According to The Appraisal Institute, there were just 78,500 real estate appraisers in 2015, a decline of more than 20 percent since 2007. Moreover, many real estate pros have had issues with Zillow’s Zestimate values.

California Today: Amid Housing Pain, Most Californians Have Weighed a Move

. The San Francisco Bay Area is often trotted out as the worst example of the state’s housing crisis — understandably. Berkeley, a majority of residents in every major region of the state — including the Central Valley and other parts of Northern California — have considered moving as a result of housing pressures. All told, roughly 56 percent of California respondents in the poll said rising housing costs had led them to consider moving. In the Los Angeles area, nearly 60 percent of residents said they had given thought to a move. Roughly a third of the state’s residents spend most of their income on housing costs. Army officers at the Presidio of San Francisco gave Mr. Norton a uniform.

The Housing Industry: Then and Now

Perhaps no other decade has impacted the housing industry as much as the last 10 years have, but successfully navigating that period has led to a sea of change in terms of innovation. Take a look at what Jason Allnutt, General Manager at, had to say about the past and future of and the industry as a whole. DS News: Reflecting on the last decade, what changes have you witnessed in the industry? Although inventory amount has tapered from historically high levels, the industry continues to evolve, and we are finding that online marketplaces continue to gain share based on improved outcomes. This growth is a direct result of the out-of-the-box approach that we’ve witnessed from industry leaders with their implementation of new ways of thinking and innovative solutions to address the challenges presented to them. DS News: I understand is rebranding in conjunction with its 10th anniversary. DS News: What have you learned over the course of the past decade that helps you continue to steer forward? Each of these qualities validates the importance of having an experienced and committed team in place—one that keeps our buyers’ and sellers’ needs top-of-mind in effectively presenting the most optimal disposition strategies in the market. The creativity fostered by our team positions to best serve our sellers through a faster, more cost-effective method of disposing of their assets, and our buyers by providing the level of education and supporting resources needed to empower them to bid in confidence. DS News: What is next for the industry?


Slow-Growth California Cities Get Ready for State’s New Housing Rules

“The idea is that we have to comply with these laws of the state of California now,” said Berkeley Mayor Jesse Arreguín, whose city has been defined for years by fights between pro- and slow-development forces. Now officials in San Jose, San Luis Obispo, Redondo Beach and other locales are exploring how to work within the new rules—on their own terms. One will require cities that aren’t meeting their state-determined targets for housing production to offer developers an alternative, “streamlined” approval process. Many cities call it a usurpation of local authority. Arreguín said he is developing a Berkeley-specific streamlining process that would be available to developers in addition to the new state process. “If we set local requirements that still give the city some flexibility in shaping—not denying—but shaping projects, we can ensure compliance with [new laws] and still maintain some degree of control,” Arreguín said. A similar conversation is taking place across San Francisco Bay in Corte Madera, a small town in Marin County. It’s not clear that secondary units will accommodate the town’s housing needs indefinitely. The city attorney’s office and the Department of Community Development are looking into how the various housing bills would affect planning decisions. “We’re going to have to start having more conversations with state legislators” about adjusting those targets, said Nehrenheim.

First Steps to Tax Reform