Monthly Archives: May 2016

The news for increase housing market

A new survey from Zillow shows the importance of Millennials in the housing market. This new generation may not only be fueling the housing market, but also changing it, according to the survey.

The 160-question survey gathered information from a total of 13,249 consumers, including 3,003 buyers, 3,003 sellers, 3,082 homeowners, 3,000 renters and 1,161 long-term renters. Zillow weighted the survey group first, so it matched the U.S. population on age, gender, income, ethnicity and region.

“Young home buyers and sellers share their grandparents’ romantic notions about homeownership, and we’re finally seeing their home buying dreams come true in the data,” Zillow Chief Marketing Officer Jeremy Wacksman said. “These savvy consumers are doing things differently: they juggle shopping for homes to buy and rent at the same time, and they bring deep research and their vast social networks to the process.”

Millennials make up over half of today’s homebuyers and are bringing a savvier, deeply researched approach that is unlike any past generation, according to the survey.

“We knew the Millennial generation was playing an increasingly large role in the housing market,” Zillow Chief Economist Svenja Gudell said. “But this consumer research allows us to get a fascinating, behind-the-scenes look at how their expectations and approach are playing out in the housing market.”

“These young adults came of age during a recession, but they are buying their first homes in a high-priced and fast-paced market,” Gudell said. “They’re using every available resource, including online research and real estate professionals, and taking on the challenge with gusto.”

While this generation is waiting longer to buy a home than previous generations, there is one significant difference. The modern day starter home is nearly as large as the median home for move-up buyers and costs about 18% less.

What’s more, the younger buyers don’t have as high of expectations about their Realtor getting back to them. About 52% of the Silent Generation buyers expect agents to get back with them within a few hours, compared to 47% of Baby Boomers, 40% of Gen Xers and 40% of Millennials.

Real estate finance that you should know

download-22Women in real estate finance, a small but steadily growing group, now have a place online to go to strengthen their network and exchange ideas and information about the industry, answering increasing calls for such a platform within the market.

On Tuesday, the Mortgage Bankers Association launched a new networking platform for women in the real estate-finance industry, mPower, which stands for MBA Promoting Opportunities for Women to Extend their Reach.

Marcia Davies, chief operating officer at the Mortgage Bankers Association, explained that last year the MBA started hosting its first networking events for women in real estate finance. “It was informal in nature since I wanted to see the level of interest to share information,” she said.

Well, there was definitely interest, and it’s only growing.

“What started out as a hunch and was tested with a few starting events, we realized very quickly was filling a void,” said Davies. “And the positive feedback we have gotten since clearly indicated that we not only are filing a void, but we also struck a nerve and need that’s out there.”

Davies stated that mPower is designed to recognize and promote the rise of women in the real estate finance industry, as well as the overall workforce.

According to the MBA, members can access the platform through this newly created webpage. Once someone joins the networking group, they can receive notices of MBA’s women’s events, gain access to its resources and information, and join their peers in a private, member-only online community.

Davies added that the MBA is launching the website now, before next week’s 2016 MBA Annual Convention & Expo in Boston, to raise awareness.

Davies explained that through the website women can know immediately where the other events are and who the speakers are, as well as have immediate access to some of the recent data and studies that have come out.

At MBA Annual in Boston, the MBA is hosting an event titled “Women in Mortgage Banking Networking Event Featuring MSNBC’s Mika Brzezinski.

According to Davies, more than 350 women have already indicated that they are going to come.

Davies added that an important factor in this launch is that it’s not just women that are supporting this; it’s the industry as well.

Davies said that one of the biggest advocates for this is the president and CEO of the MBA, David Stevens, who wanted to make sure the MBA took a strong formal approach.

“He was the one who saw the trend, and during one of our meetings said,  ‘I really want you take this to the next level,’” Davies said.

“Addressing the needs of this important segment of our workforce is essential to our industry’s success,” said Stevens. “MBA can be the catalyst for creating a strong, diverse network of women in our industry.”

Looking back at the early stages of this, at the MBA’s Secondary Market conference in May, the MBA dedicated a lunch on one of the conference days to the women in real estate finance, featuring Davies and Kim Azzarelli, chair and co-founder of Cornell Law School’s Avon Global Center for Women and Justice and partner at Seneca Point Global.

Even before all this became more formalized, there was a lot of interest from the industry, as the room that day was filled to the brim with women eager to learn more from each other and connect.

What do you know for housing market

Traditionally, Greenwich, Connecticut, was the suburb of choice for those on Wall Street, and the home values reflected that. The same can’t be said today, according to an articleby Patrick Clark for Bloomberg.

The small town is just 30 miles northeast of New York, and has about 60,000 residents. It is now known for having “lousy property investments,” according to the article.

In fact, Barry Sternlicht, Starwood Capital Group founder, said at the CNBCInstitutional Investor Delivering Alpha Conference that Greenwich may have the worst housing market in the country.

From the article:

“You can’t give away a house in Greenwich,” he said.

This is an overstatement, of course—the median home value is $1.4 million, according to Zillow. It’s also not quite news to local sellers, who have been complaining about a soft market for at least five years. Lower pay on Wall Street has left the market short of buyers willing to pay millions for a home in the U.S. hedge fund capital, even as the national economy has emerged from the recession.

Lower Wall Street compensation is just one reason for the soft market, according to the article. Another factor driving down demand is the longer commute.

Home Loans in unpaid bills

download-23The New York Department of Financial Services is already reportedly looking intohow Caliber Home Loans and its parent company, Lone Star Funds, after receiving complaints from consumers about how the companies handle foreclosures.

But now, the companies have another fight on their hands over their foreclosure practices, and it comes from an unlikely source – one of their own vendors.

Chronos Solutions, formerly known as Matt Martin Real Estate Management, is suing Caliber Home Loans and Lone Star Funds, accusing the companies of failing to pay approximately $2.9 million in expenses to Chronos for work done on foreclosures owned by Lone Star Funds.

The lawsuit, filed in Dallas County and obtained by HousingWire, states that Caliber contracted Chronos in May 2014 to help with the repair and sale of foreclosed properties.

Over the last few years, Lone Star Funds has become one of the housing industry’s biggest buyers of non-performing loans from Fannie Mae and Freddie Mac through its trust, LSF9 Mortgage Holdings.

In just over the last year, LSF9 Mortgage Holdings purchased more than $3 billion in non-performing loans from Fannie Mae and Freddie Mac, chronicled here.

Lone Star Funds also purchases non-performing loans from the Department of Housing and Urban Development, a practice that’s rankled several community organizations and even some prominent members of Congress, including Sen. Elizabeth Warren, D-Mass.

After purchasing the distressed mortgages, Lone Star engages Caliber Home Loans, its wholly owned subsidiary, to service the mortgages and in some cases, foreclose on the mortgage.

According to Chronos’ lawsuit, Caliber will foreclose on the non-performing loans “when it is in Lone Star Funds’ financial interest.”

Chronos’ lawsuit states that after foreclosing on a property, Lone Star Funds uses Caliber to sell the property for the highest price possible, which is often done by repairing and making other improvements to the properties.

That’s where Chronos comes in.

According to the lawsuit, Caliber used Chronos for a variety of services, including obtaining an estimated sales price for a foreclosed property either “as is” or “with repairs.”

Chronos would then present these estimates to Caliber, which would then decide whether to follow Chronos’ recommendation and then whether to obtain bids for the suggested repairs or not.

According to the lawsuit, Caliber had the “ultimate decision-making authority” as to whether a property would be repaired or sold in its current condition. Chronos states that it did not have authority to make expenditures without Caliber’s approval.

If instructed by Caliber to do so, Chronos would obtain bids for the suggested repairs and provide the bids to Caliber, the lawsuit states. Caliber again then decided whether to proceed with the suggested repairs or to sell the property as is.

Then, if Caliber told Chronos to move forward with the repairs and capital improvements, Chronos would hire contractors and pay them from Chronos’ own funds.

Under the terms of the agreement between Chronos and Caliber, Caliber was supposed to reimburse Chronos’ out-of-pocket expenses for making the repairs.

But that’s not what happened, according to Chronos. Chronos’ lawsuit states that Caliber required the use of an electronic platform to request reimbursement from Caliber.

According to Chronos, the platform did not perform as intended, which led to more than $820,000 in reimbursement requests that were either improperly denied by the system or were stuck in the system and therefore never received by Caliber.

Additionally, Chronos said that because of the problems with Caliber’s chosen system and its related issues, more than $2 million in of Chronos’ additional out-of-pocket costs were never formally submitted or processed.

Chronos’ lawsuit states the Caliber is aware of all the costs Chronos incurred on each subject property.

“In fact, after the repairs were performed by contractors, evidence of completion was provided to Caliber and Caliber then instructed Chronos to pay the contractors,” the lawsuit states.

The lawsuit provides one example of an email exchange between employees at Caliber and Chronos where the costs of repairs ($24,000 in this instance) is discussed and then approved by Caliber.

“This property is just one of numerous examples in which Caliber instructed Chronos to order repairs; Caliber was provided with evidence of completion of the repairs; Caliber instructed Chronos to pay for the repairs; and now Caliber refuses to reimburse Chronos its out- of-pocket costs incurred in paying for the repairs,” the lawsuit states.

Caliber also set the sale price for each property, and Chronos did not have authority to lower it without Caliber’s approval. Chronos also did not have the authority to accept any offers on the properties, even if the offer was above list price, without communicating it to Caliber.