By Katherine Tarbox, Senior Editor, REALTOR® Magazine
It took me some years to figure this out: The moment you take something for granted, you’ve lost it. I’ve had to learn this lesson enough times when it comes to the most important things such as health, relationships, jobs, and even homes. I think many people, sadly, had a fresh awakening about taking housing for granted as Hurricane Irene battered much of the East Coast this past weekend.
I've never seen grocey store aisles so bare, as people bought weeks worth of canned food to prepare for Hurricane Irene
I am scheduled to ride the Home Ownership Matters Bus for the next two weeks. I left for Connecticut on Friday to attend an event on Saturday. I knew that I was essentially flying to a hurricane to get stuck in it. I kind of liked the idea of having a front row seat for mother nature’s extremes.
Connecticut was declared a state of emergency Saturday morning and alas, they canceled the event. I immediately went into my version of survival mode and headed to the grocery store to stock up on water, batteries, a flashlight, and food. I learned that Pop Tarts were the most in-demand hurricane food and were sold out at both grocery stores I went to. My mother lived through Hurricane Gloria in 1983 and remembered that parts of Connecticut were without power for up to a month. I didn’t know what to expect. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
A few months ago we heard from real estate practitioners about a short-sale contract addendum that lenders were requiring of borrowers to curb fraud, so we talked with David Sunlin, Bank of America senior vice president and operations executive for short sales, to learn more about his company’s version of that form. He said it had been incorporated into the process in part because of a Freddie Mac policy requiring borrowers to vouch that their deal is an arm’s-length one. “They came to us and said, ‘We, as an investor, require you to do this,’ said Sunlin. “And then we looked at it and thought it was a good practice, so we extended it to our entire portfolio that we service.”
As a follow-up to that conversation, we spoke with Kathleen Cooke, fraud investigation manager at Freddie Mac, in mid-June, and she said her company’s requirement was simply putting into formal practice what the industry had informally required all along: that parties to a short-sale transaction show there’s no collusion between them.
Cooke said fraud continues to be an issue with short sales, mainly flipping arrangements, but other types of fraud are cropping up, too. The impact of her company’s anti-collusion affidavit is preventative: some parties that are thinking of colluding aren’t, because the affidavit takes away the legal gray area: Once you vouch for the fact that the deal’s at arm’s length, you have nothing to hide behind if you’re shown to be colluding. Cooke thinks the affidavit is succeeding in combating fraud.
Here are the highlights of our conversation with her: Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
Being innovative doesn’t necessarily mean diving into new technologies all the time. It doesn’t mean trying to reinvent the wheel. And it certainly doesn’t mean focusing lots of your energy on something perceived to be hip or avant-garde to the detriment of the core of your business.
That was the message from Matt Dollinger, vice president of strategic development at brokerage @properties, and Eric Bryn, vice president of digital innovation at brokerage Baird & Warner, in separate presentations at the Xplode conference in Chicago last week.
Dollinger — his presentation slides are here — said he’s amazed by the amount of time real estate practitioners spend on things that aren’t bringing them business. “More people have done a transaction off of an open house than off of Twitter,” he said. “But they spend a lot more time on Twitter.”
He argued that technology won’t save your business, then quoted real estate consultant and commentator Rob Hahn: “It ain’t the technology. All technology does is make what you do more efficient. If what you do is crap, it makes crap more efficient. If what you do is valuable, then it makes that more efficient. Microsoft Word is an amazing piece of technology, but it can’t write the next Great American Novel for you.”
True innovation, especially when you lack time and resources, requires a concentrated approach rather than a try-anything-and-everything system. Thus, when it comes to being innovative, Dollinger recommends doing the following: Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
If you’re wondering when we’re going to get to the era of mobile, you’re contemplating the wrong question, says Bob Hale, CEO of the Houston Association of REALTORS®. Instead, you should be thinking about how to optimally deliver your content via mobile devices right now.
“It’s here. There’s no question that we’re at a critical mass,” said Hale, in remarks about where multiple listing services (MLS) are headed last week at the Xplode conference in Chicago.
Speaking on a panel moderated by National Association of REALTORS® Director of Digital Engagement Todd Carpenter, both Hale and Midwest Real Estate Data (MRED) CEO Russ Bergeron said they’re taking steps to accommodate mobile users.
MRED now offers what Bergeron termed “public-service apps,” such as resources from Fannie Mae on short sales and downpayment assistance. Also, the organization is developing apps that can be branded by brokers and individual agents as their own, Bergeron said. HAR is also rolling out new apps, targeted at both members (for searching the MLS and editing listings) and consumers (using geolocation to search for nearby listings and opens). Continue reading »
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
While the stock market continues its wild ride and as things begin to look gloomy for Europe, NAR Chief Economist Lawrence Yun is optimistic that the conditions needed for a housing recovery are present in today’s economy. “The market is trying to gain traction,” Yun told an audience of association executives at the National Association of REALTORS® Leadership Summit in Chicago today. “It’s not a nice recovery, but rather a struggling recovery. It’s frustrating.”
He noted that while GDP grew less than 1 percent in the first half of 2011, which indicates that the U.S. is on the brink of another recession, the number of jobs is increasing — albeit slowly. Consumers spending is also up. Last week, the U.S. Commerce Department announced that retail spending was up 0.5 percent in July. This small shift in the job market should force some sales, said Yun, as should the fact the affordability is high and rent prices are beginning to soar.
However, Yun said that buyers are still hesitant to purchase while the economy is fragile, and he believes that many deals are falling through because of financing. Yun estimates that if Fannie and Freddie lowered the credit score required for first-time home buyers from 762 to 720, housing sales would increase from 15 to 20 percent. Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
For someone whose life has been filled with so much rejection and loss, Dick Vitale seems like a very happy man.
The colorful ESPN basketball commentator and coach, of course, has experienced plenty of success as well, which he related yesterday afternoon to attendees at the National Association of REALTORS® Leadership Summit in Chicago. But there were times early in his career when he questioned whether he had what it took to reach his goals.
What got him through that difficult period was a nugget of wisdom from his mother, who told him, “Don’t allow ‘can’t’ to be part of your life, Richie.” That advice, he said, inspired him to redouble his efforts. As a result, he went from coaching sixth grade basketball to the NBA in just six years. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
A group of academics writing in a New York Times opinion piece yesterday, “White Picket Fence? Not So Fast” (Aug. 17, 2011), call for a phasing out of Fannie Mae and Freddie Mac and ending the government support of home mortgages that flow through them. To their credit, Viral Acharya, Matthew Richardson, Stijn Van Nieuwerburgh, and Lawrence White say the phase-out should be gradual to “minimize the system-wide shock” that would follow if the secondary mortgage market were closed down overnight.
But the writers use figures and make logical inferences that cry out for more scrutiny.
First, they say the mortgage interest deduction costs the government more than $100 billion a year, and they cite the Congressional Joint Committee on Taxation saying MID costs $700 billion over five years. But as economists and academics will acknowledge, determining how much MID costs the government is as much art as science, because the number you come up with depends on the numbers you put into the calculation. And what those numbers are aren’t widely agreed upon.
John Weicher, FHA commissioner under President George W. Bush and the assistant secretary of policy development and research under the first President Bush, says MID costs are closer to $20 billion a year, and he’s not alone in saying that. Other academics put the number in that range. The reason? They use a calculation that factors in the changes of behavior among households if MID is curtailed or eliminated. The idea goes something like this: as MID shrinks, households put their money into other tax-saving assets. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
For the past several months it’s been all QRM all the time, but now there’s QM.
As many real estate professionals are familiar with by now, thanks in part to an NAR Call for Action and lots of communication on the matter, banking regulators’ proposed qualified residential mortgage (QRM) rule has gotten consumer groups, mortgage insurers, real estate professionals, and a good portion of the lending industry up in arms over the rule’s 20-percent down payment requirement and other standards. A majority in Congress in both chambers are up in arms over the proposal, too.
The ball’s in regulators’ court now. They’re looking at thousands of comments and will be signaling at some point their intentions for how they’ll change their proposed rule, if at all. (The regulators are HUD, FDIC, OCC, SEC, Federal Reserve, and the Federal Housing Finance Agency.) Continue reading »
By Robert Freedman, senior editor, REALTOR® Magazine
Flood insurance is commonly thought of as a coastal issue but flood plains are located throughout the country and in fact, in some Midwestern states, almost 10 percent of homes are in flood plain zones.
For that reason, it’s not just a coastal issue if the National Flood Insurance Program expires at the end of September, which is when the federal fiscal year ends.
NAR has been talking with lawmakers and their staffs about renewing the program (there’s a bill that would renew it for five years and make NAR-supported reforms), because if the federal government stops issuing the insurance, purchases of homes in flood plains can’t close.
Whats the potential universe of impacted properties? NAR estimates the number at more than 1,300 a day.
Most of those are in the South, but almost half are in the other three regions: Midwest, Northeast, and West.
Selma Hepp of NAR Research talks about how she derived the number and how that 1,300-a-day figure breaks out regionally in the 3-minute video above.
By Robert Freedman, senior editor, REALTOR® Magazine
The economic news continues to be bad but there’s one area that’s benefitting from the bad news: Elko, Nev. That’s because the town of about 20,000 is the gold mining capital of the United States, and as the economy goes bad, the price of gold goes up. It’s now at about $1,700 an ounce. With gold that high, a lot of it is being mined. That requires jobs. And these jobs are well paying ones.
The result has been something of a boom for the town, which up until a few years ago was the country’s cattle ranching capital.
To be sure, the town and surrounding area didn’t escape the recession. Home sales and prices dropped a few years ago, but within a year of the downturn’s low point, sales and prices were moving back up, and today the market is looking relatively strong. Foreclosures haven’t been an issue, helping to keep prices from sinking too low.
Sales still aren’t as high on an annual basis as they used to be, but they’re not far off the mark. Prices are in their third year of recovery.
Rental housing is and has long been scarce. That’s helping to keep the sales market pretty healthy, too.
Of course, not everything is great. Even households with good incomes are often finding it a challenge getting financing. But to a certain extent, households have contributed to the problem. During the boom, many of them relied on low- and no-down payment loans to get into housing. Although their salaries were pretty good, many of them simply didn’t save. Instead, they bought a lot of what real estate associates in the area call toys: motorcycles, boats, and RVs. So, exotic loans were the best way for them to buy a house.
It took a while after the downturn for households to tighten up their spending and improve their credit so they could buy without having to rely on risky financing. Real estate brokers and associates in the area played a role in changing households’ thinking. They used media channels to educate consumers about financial management strategies. Now, households are better at managing their credit, practitioners say.
Elko is the second in our Markets Across America video series. It chronicles the area’s transition from ranching to mining and looks at how practitioners have engaged buyers and renters since the downturn.
The first video in our series looks at San Gabriel Valley, Calif., where households from China and other Asian countries have helped keep that area strong during the downturn. Access that video.
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