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Hurricane impact lessens as mortgage delinquencies drop

As the impact from last year's turbulent hurricane season fades, mortgage delinquencies once again began to decline in November, according to the latest Loan Performance Insights Report from CoreLogic, a property information, analytics and data-enabled solutions provider. During November, about 5.1% of all U.S. mortgages were in some stage of delinquency, or 30 days or more past due including those in foreclosure, the report showed. This represents a decrease of 0.1 percentage point from the year before, when the delinquency rate was 5.2%. “Serious delinquency rates are up sharply in Texas and Florida compared with a year ago, while lower in all other states except Alaska.” “In Puerto Rico, the serious delinquency rate jumped to 6.3% in November, up 2.7 percentage points compared with a year before,” Nothaft said. “In the Miami metropolitan area, serious delinquency was up more than one-third from one year earlier to 5.1%, and it more than doubled to 4.6% in the Houston area.” The rate of foreclosure inventory, which measures the share of mortgages in some stage of the foreclosure process, also decreased to 0.6% in November, falling 0.2 percentage points from 0.8% in November 2016. This rate of 0.6%, which, aside from the bump after the hurricanes, held steady since August 2017, and is the lowest level since June 2007. Early stage delinquencies, or those that are 30 to 59 days past due, decreased 0.1 percentage points to 2.2% in November. The serious delinquency rate, or loans that are 90 days or more past due, also decreased, rising 1.9% from October to 2% in November. “In many of the harder-hit regions, such as the Houston and Miami metropolitan areas, housing stock availability has taken a hit as many homes were damaged and are no longer habitable. The number of underwater homes shrank in the fourth quarter of 2017, despite the turbulent hurricane season, according to the 2017 U.S.

Real Estate ICOs Are Moving In, But Investors Aren’t Floored

In fact, there are at least four ICO issuers right now with a real-estate component – BitRent, a way to speed up financing construction projects; Etherty, real-estate management through equity access; Caviar, a fund that tempers the volatility of crypto investments with loans to real estate projects; and Trust, a way to tokenize equity in real estate and other real-world assets. Nussbaum said: "If done responsibly and legally, I do think these types of projects can advance the industry by offering previously inaccessible liquidity and investment opportunity to individuals." And Nussbaum isn't alone in his thinking. Yet, even with new momentum for this particular token use case and increasing interest by consumers and businesses in cryptocurrency, there are still hurdles to tokenizing real estate on a blockchain. Liquid land The concept of selling shares of a property is nothing new – real estate investment trusts (REITs), modelled after mutual funds, own and manage properties, allowing investors to buy in for small amounts. And not only that, but tokenizing home equity could also make the space, which has been attractive to investors but difficult to trade, more liquid. Scott Hoch, an analyst at Apex Token Fund explained, "A new level of liquidity is created when tokenizing traditional assets. "There has to be a lot shaken out in the blockchain world," he told CoinDesk. Tokens at the town hall Yet, there are signs that the right people are taking an interest in crypto tokens for real estate. Not only is Cook County interested in updating the law to accommodate crypto, but a handful of locations – a city in Vermont being the most recent – around the world have launched pilots to determine whether putting land titles on a blockchain would offer efficiencies and other benefits.

New online real estate investment platform launches in Arizona

Online crowdfunding platforms for real estate financing continue to emerge across the industry and in new marketplaces. The latest example: Sharestates has expanded and launched in Arizona. Sharestates, an online real estate investment platform, announced its inception into the Arizona Banking Department roster of lenders as Sharestates Investments, LLC. With this launch, Sharestates will be offering its loan products to the real estate speculation and development community in a statewide effort. Sharestates’ launch into Arizona coincides with its overarching goal of providing both borrowers and investors with a user-friendly and hassle-free way to make investments within the greater real estate ecosystem. Moving into Arizona is an opportunity for our company to make an impact on a growing real estate market,” said Sharestates CEO Allen Shayanfekr. “Growth, more importantly sustained growth, is essential for the stability of Sharestates. We are excited about providing borrowers in Arizona the premium services and products that have come to be expected from the Sharestates brand. We look forward to working in conjunction with the existing lenders and origination teams in Arizona to expand our footprint in this evolving movement known as real estate marketplace lending.” While real estate marketplace lending continues to grow throughout the United States, Sharestates remains the preeminent resource for borrowers and institutional investors looking to optimize returns and make a significant impact on the industry. The event will be held March 14-15, 2018.

Earn a Million Purchasing, Renovating, Marketing, and Selling

A full time rehab investor needs to manage the four phases of every deal. Becoming a rehab millionaire means having at least 16 deals in work every month and maybe more. Four deals turning a $20,000 profit each month will bring in $960,000 each year. But if you want to be a million dollar real estate investor, you’ll systematize the process to keep the pipeline full. Have a Plan Having four deals in each phase is a full time job managing your own business. You’ll need a system to keep it organized. Decide how much time you are going to dedicate to this business. It all starts by putting the first deal together and then growing your business one deal at a time. The houses you want, won’t actually sit on the market for months. Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for seven years.

Tax-Savvy Investment Strategies for Retirement Accounts

While most people receive Social Security, a secure financial retirement depends on also having significant savings in a retirement account. Many of us now live beyond this life expectancy, so the amount of funds accumulated in retirement accounts depends not only on what you contribute during your work life (and how well those investments did), but on your investment returns after you retire. A Coordinated Approach If you have more than one retirement account, such as a 401(k) at work and a personal IRA, it’s essential to coordinate your investment strategies across all your holdings. If you put them in your tax-deferred retirement account, the interest on the bonds effectively becomes taxable because all of your distributions are taxed as ordinary income, regardless of the source of the earnings. Factors in Making Investment Choices There’s no single strategy that’s right for all individuals. As inflation pushes interest rates higher, the value of an investment in a bond fund declines. Certificates of deposit (CDs) don’t have fees, but there are fees for investments in mutual funds, annuities and various other types of investments. Compare the fees and consider them to be one factor in your investment strategy. There’s no bar to investing in real estate, but there are various restrictions that make direct investments in realty impractical for most people. To make good choices for your personal situation, take advantage of investment advice that may be offered by your employer or the mutual fund hosting your account.

7 Types of Real Estate Allowed in a Self-Directed IRA

Self-directed IRA investing offers great tax advantages to real estate investors, though the exact benefit will depend on the type of account used. Choose between rental properties (both residential and commercial), undeveloped land, fix-and-flip opportunities, and more. In this article, we will describe some of those opportunities by exploring seven types of real estate that can be held in a self-directed IRA: Single-Family Homes Single-family homes are the most common type of residential property, and the most common type of real estate found in self-directed IRAs. If your self-directed IRA doesn’t have enough cash for these types of investments, your IRA can even apply for a non-recourse loan or partner with other funding sources. You could use your savings to be a real estate lender and help others purchase homes while also bringing in a profit for yourself. The payments will go directly to your retirement account. While this may not be a great choice for generating immediate rental income, these properties can be developed to produce a profit, sold to developers at a profit, or even sold to the government for use by the state. There are also things to consider, such as performing the proper due diligence and educating yourself not only on the tax laws in the United States, but the tax implications and transaction process in the country where you are investing. For more information, consult a financial professional or tax advisor about real estate transactions and banking outside of the U.S. Real Estate-Owned Properties If a property has been foreclosed and taken back by the bank, it is referred to as real estate owned, or REO. Before you invest in this business sector using your IRA, it is best to consult with your investment, legal and tax advisor.

Perceived Barriers Keep Many From Owning a Home

The U.S. housing market might be experiencing its best year in a decade in 2017 but misconceptions about mortgage and the home buying process were holding back many potential home buyers according to a recent blog published by Freddie Mac. According to the blog, that cited the fifth annual America at Home survey by NeighborWorks America, 74 percent adults and 84 percent of the millennials surveyed felt the homebuying process was complicated. The average millennial also thought the minimum down payment to buy a home was 21 percent and 70 percent adults felt they didn’t have enough money saved for a down payment. The survey, based on responses from 1000 U.S. adults and 500 millennials (adults aged 18-34 years), also revealed how much the burden of student loan debt is delaying homeownership. It found that in 2017, 29 percent of adults knew someone who delayed the purchase of a home because of student loan debt. Among millennials, 38 percent knew someone who delayed buying a home because of student loan debt. In addition, the survey found that relatively few consumers know where to find knowledgeable advice about how to qualify for a mortgage and buy a home with approximately 73 percent of all consumers and 62 percent of millennials saying they were not aware or were unsure about down payment assistance programs in their communities for middle-income homebuyers. Urging home buyers to separate myth from fact, the Freddie Mac blog stated that the average down payment among first-time homebuyers in 2016 was 6 percent and 14 percent for repeat buyers, with programs like the Freddie Mac Home Possible Advantage mortgage providing down payment options that were as low as 3 percent. “A great place to start is right where you live. Many state, county, and city governments provide financial assistance for people in their communities who are well qualified and ready for homeownership,” the blog noted.

Millennials Are Out of the Basement and Into Buying Homes

Homeownership in the United States peaked in 2004, when 69.2 percent of all U.S. households owned their dwellings. The rate bottomed at 62.9 percent in the second quarter of 2016, a level not seen since 1965. Let’s look at bit closer at each in turn: • Employment: As was reported this morning by the Bureau of Labor Statistics, the job market continues to improve. • Rents: Ever since the financial crisis, rents have been rising nationwide. Now, rents have caught up with buying, even for entry level properties. U.S. Census Bureau data show that homeownership rates are highest for those householders ages 65 years and over (79.2 percent) and lowest for the under-35 age group (36 percent). The state of housing is, to a great extent, being determined by millennials -- after moving out of their parents’ basements and forming households, the next step tends to be having kids. And, I suspect, this demographic is likely to continue being the central force in the real estate market for decades to come. Admittedly, ground zero in the financial crisis was the credit market. But credit and housing are inexorably linked.

Single-Family Rental Lease Expirations and Vacancy Rates Improving

Both lease expirations and vacancy rates among single-family rental securitizations showed continued improvement in December 2017, according to the latest data from Morningstar Credit Ratings, LLC. According to Morningstar, single-borrower, single-family rental lease expirations declined for the second consecutive month, dropping from 5.2 percent in November to 4.5 percent in December. This fits with long-established trends, as typically renters are less likely to move during the winter months. The retention rate for expiring leases dipped slightly, hitting 78.0 percent in November 2017 (which is the most recent data available, according to Morningstar). In spite of Houston topping the charts, vacancy rates in H-Town actually improved for two months straight, after six consecutive months of increasing vacancies. The MSA with the second highest vacancy rate for December was Nashville, Tennessee, which declined from 8.0 percent in November to 7.5 percent in December. The Morningstar monthly performance summary covers 24 single-borrower deals with over 88,000 properties. You can read the full report by clicking here. The event will feature top subject matter experts and skilled SFR practitioners leading discussion panels and training sessions that will answer questions and offer viable solutions related to property acquisition and management, financing, strategies for small, mid-cap, and large investors, and new developments related to technology and professional services. You can find out all the details by clicking here.

FHFA extends deadline for industry to provide input on alternatives to FICO

Originally, the deadline for industry participants to provide feedback on the credit score issue was Feb. 20, 2018. The FHFA announced Friday that it is extending the deadline to March 30, 2018. “FHFA is seeking input on all aspects of a potential change from the current Classic FICO requirement, including feedback on the operational and competition considerations of continuing to use a single credit score model or allowing the use of more than one credit score model,” the FHFA said in its announcement. In its request for input, the FHFA laid out several different scenarios for how Fannie and Freddie could use credit scoring models in the future, including: Option 1 – Single Score: The Enterprises would require delivery of a single score –either FICO 9 or VantageScore 3.0 – if available on every loan. Option 2 – Require Both: The Enterprises would require delivery of both scores, FICO 9 and VantageScore 3.0, if available, on every loan. This option would require policy decisions about how to treat borrowers with a credit score from one provider but not the other. This option would require policy decisions on the length of time a lender or correspondent would need to commit to a certain credit score. Additionally, policy decisions would need to be made on whether to require mortgage aggregators and brokers to adopt a single score approach or whether to allow them to aggregate loans underwritten with FICO 9 or VantageScore 3.0 scores. Where a borrower did not have a credit score under the primary credit score, a lender would have the option to provide the secondary credit score. FHFA and the Enterprises would need to determine how a secondary credit score option would interact with each Enterprises’ automated underwriting systems’ ability to evaluate a loan application where the borrower(s) do not have a credit score and how to apply the policy for manually underwritten loans.


Here’s How Many Americans Can’t Afford to Buy a Median-Priced Home

A median-priced home was out of reach for Americans in 84% of counties in the third quarter of the year, according to ATTOM Data Solutions' third-quarter Home Affordability Report. Ouch. (ATTOM assumed that buyers had at least a 3% down payment and were taking out a 30-year fixed-rate mortgage. That's bad news for bargain hunters, as home prices rose at a faster rate than wages in about 86% of the counties in the report. "People have moved from more expensive coastal markets to Denver ... [and] they're able and willing to pay more," says Blomquist. It's bad news for people who live there and are making the average wages, because those folks are getting locked out of homeownership." Denver County was followed by Arapahoe County, in the Denver metro area; Tarrant County, TX, in the Dallas metro area; Kent County, MI, which encompasses Grand Rapids; and Jefferson County, CO, which is also part of the Denver metro area. (ATTOM looked only at counties with at least 500,000 residents.) So while wages were high enough relative to their incomes, they were paying the highest share of their earnings on homes. "Those are country club housing markets where there's a limited few who can afford to buy there," says Blomquist.