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LLOYD MARTIN PLC
9316-A Old Keene Mill Road
Burke, Virginia 22015-4285
703-584-7744
(F) 703-584-7746
lmartin@pwtitle.com
[A Virginia Professional Limited Liability Company]

    December 31, 2019

    The 2010s: A decade that changed the way agents work

    Desk time, cold calls, and wet-ink signatures have gone out of style

    By Kathleen Howley, Housing Wire --  The 2010s marked a tectonic shift in the way real estate agents conduct business.

    It wasn’t the most tumultuous decade in real estate history. The 2000s have that distinction because of the record-setting crash that
    started in 2007. But looking at the way agents spend their days, few 10-year stretches have seen such change.

    Here’s a look back:

    Once upon a time – a decade ago – all the people who wanted to buy houses had to meet with real estate agents in person to sign
    disclosures with pens. Think brick-and-mortar offices and stick-or-click pens with a choice of blue or black ink. Today, most
    disclosures are signed electronically.

    Agents went to the office more, back then, and many were required to do “desk time” at least once a week. That meant sitting in the
    front to answer the brokerage’s main telephone line and greet walk-in visitors, hoping to nab a client.

    Yes, back then people cold-called brokerages looking for information on buying and selling a home. And, agents cold-called potential
    customers, as a way to generate leads.

    “Who calls people anymore?” said David Michonski, who sold real estate for more than three decades and now is the CEO of Quigler,
    an app to track compliance for agents and clients. “If you don’t recognize a caller ID, you don’t answer it, ‘cause it’s all robo-callers.”

    Today, agents tend to purchase leads from online sources such as Zillow and other real estate websites, he said. Clients tend to call
    agents on their cell phones after finding them on the internet, Michonski said.

    “Prospecting has changed quite a bit,” he said.

    For the most part, weekly office meetings for agents and their coworkers to collaborate are a thing of the past, said Michonski, who
    ran several brokerages.

    “I used to insist that agents come into the office because I felt there was a synergy, a shared energy, and people bonded, but most
    brokerages have stopped doing that in the last 10 years,” Michonski said. “More agents now are sort of siloed, as opposed to being
    part of a unit.”

    A decade ago, agents with customers looking at homes were more likely to be driving them around. That led to the distinction
    between a “listing car,” used to visit a potential seller with a marketing packet and a contract to be signed in-person with a pen, and a
    “showing car” that needed to be free of dog hair and Cheerios because it was used to ferry potential buyers to an array of properties.

    Smartphones were new inventions, back in 2010, and people tended to rely on verbal directions, rather than using Google Maps or
    another GPS app. Part of the value agents brought to a transaction was a geographical knowledge of their market.

    Today, agents are more likely to text an address to customers and meet them at the property. And, the buyers are more likely to have
    vetted available homes online and have a clearer idea of what they’re interested in seeing.

    In 2010, the nation had just passed the zenith of the foreclosure crisis: 3 million families lost their homes in 2009. Only about 60% of
    Americans thought homeownership was a good idea, as opposed to about 92% today, as measured by Fannie Mae.

    And, being a real estate agent was not seen as a fabulous life choice. Membership in the National Association of Realtors tumbled
    30% between October 2006 and March of 2012.

    Today, some of the shine is back on the real estate industry. NAR membership reached a record high of 1.41 million in October.

    One problem agents didn’t have back then is a shortage of homes for sale. In May 2010, the seasonally adjusted “months supply” of
    homes for sale, meaning the time it would take to sell off the entire inventory, was 9.3 months.

    In November, it was 3.9 months, the lowest ever recorded for that month. Most economists consider a 6-month supply to be a
    balanced market.


    November 22, 2019

    Federal Reserve united against Trump’s demand for negative interest rates

    The use of negative rates carries too much instability risk, Fed policymakers said

    By Kathleen Howley, Housing Wire --  President Donald Trump has extolled negative interest rates on Twitter and in speeches,
    making clear he wants the Federal Reserve to slash its benchmark rate below zero, a policy it has never used before.

    Fed policymakers are unanimous in their distaste for the idea, judging from the minutes released on Wednesday for the Fed’s
    October meeting. The use of negative rates carries “risks of introducing significant complexity or distortions to the financial system,”
    according to the minutes.

    It’s the first known time the policymakers on the Federal Open Market Committee, or FOMC, have had an on-the-record discussion
    about the possibility of using the monetary policy the European Central Bank introduced in 2014.

    At the Oct. 29 to 30 meeting, the Fed cut its rate by a quarter of a percentage point to a range of 1.5% to 1.75% and signaled it likely
    was done with easing, for now.

    “All participants judged that negative interest rates currently did not appear to be an attractive monetary policy tool in the United
    States,” the minutes said. “It was unclear what effects negative rates might have on the willingness of financial intermediaries to lend
    and on the spending plans of households and businesses.”

    The adoption of negative interest rates by the European Central Bank has failed to stave off a slowdown. Economic growth in the
    Euro Area probably will fall to 1.1% this year and 1% in 2020, according to the average estimate of economists in a Bloomberg poll.
    Last year, the growth rate was 1.9% and in 2017 it was 2.7%.

    “Remember we are actively competing with nations who openly cut interest rates so that now many are actually getting paid when they
    pay off their loan – known as negative interest,” Trump said in a speech to the Economic Club of New York on Nov. 12. “Whoever
    heard of such a thing? Give me some of that. Give me some of that money. I want some of that money. Our Federal Reserve doesn’t
    let us do it.”

    Under a negative rate policy, banks and other financial institutions have to pay interest for parking excess reserves with the central
    bank. It’s a way to encourage banks to lend to businesses and consumers, who don’t get paid to borrow, contrary to the president’s
    description.

    “Differences between the U.S. financial system and the financial systems of those jurisdictions suggested that the foreign experience
    may not provide a useful guide in assessing whether negative rates would be effective in the United States,” the Fed minutes said.
    “Negative rates could have more significant adverse effects on market functioning and financial stability here than abroad.”


    November 15, 2019

    U.S. housing market experiences largest inventory decline since 2018

    In October, the number of homes for sale grew 3.9% from the previous year

    By Alcynna Lloyd, Housing Wire --  In October, America’s home sales rose by 3.9%, marking the fourth month of the past six to post
    a year-over-year increase in sales, according to the RE/MAX National Housing Report.

    “October continued a recent win streak for home sales, and the market is positioned much better than it was a year ago,” said
    RE/MAX Holdings CEO Adam Contos. “Demand is strong, due in part to low-interest rates, but buyers have limited options because
    inventory remains such a challenge.”

    RE/MAX reports that although sales increased last month, the nation’s housing inventory posted a steep decline. According to the
    company, housing inventory fell 9% year-over-year across the report’s 54 housing markets, representing the largest retreat since
    May 2018.

    Furthermore, October posted a 3.1-month supply of inventory, marking the lowest October amount in the report’s 11-year history.
    RE/MAX indicates homes spent 49 days on the market, which is the second-lowest figure for October in report history.

    As the nation’s housing inventory dwindles, home prices continue to rise across the country, Contos said. However, key forecasts
    suggest an increase in new-homes moving onto the market next year, which Contos said may help address inventory constraints and
    potentially slow steady price gains.

    According to the report, the median price for a home was $254,000 in October, climbing 8.4% from last year. Going back to October
    2013, last month’s total now marks the highest annual increase for the month.

    NOTE: The RE/MAX National Housing Report is based on MLS data in approximately 53 metropolitan areas, including all residential
    property types, and is not annualized. For maximum representation, many of the largest metro areas in the country are represented,
    and an attempt is made to include at least one metro from each state.

    October 20, 2019

    What’s the Outlook for Housing Market Potential for the Rest of 2019?

    By Mark Fleming, First American Economic Insights --  In September 2019, the housing market performed to its potential, as
    actual existing-home sales were a marginal 0.04 percent, or an estimated 2,340 seasonally adjusted annualized sales, below market
    potential. Housing market potential decreased relative to last month, but increased 3.8 percent compared with September of last year.
    Indeed, in September of last year, rising mortgage rates dampened market potential and existing-home sales underperformed market
    potential by 7.2 percent, or an estimated 445,200 sales. The market dynamics and outlook has improved significantly in the last 12
    months, begging the question: what’s changed?

    “Lower mortgage rates have a dual effect on the housing market: they incentivize homeowners to move as the rate 'lock-in'
    effect fades and they boost demand by making homes more affordable.”

    Then vs. Now

    In September 2018, the 30-year, fixed-rate mortgage was 4.63 percent and reached a high of 4.87 percent in November. Today,
    mortgage rates are more than one percentage point lower than one year ago, and 1.26 percentage points lower than the November
    2018 zenith. In September of last year, rates were forecasted to continue to rise, as many experts believed the Federal Reserve
    would continue to increase the Federal Funds rate and put more upward pressure on mortgage rates. Rising rates reduce home-
    buying power and decrease market potential for existing-home sales.

    But, in December 2018, the unexpected happened – volatility in the bond market helped drive mortgage rates lower. This trend has
    continued through most of 2019 and mortgage rates are now near historically low levels. Lower mortgage rates have a dual effect on
    the housing market: they incentivize homeowners to move as the rate “lock-in” effect fades, which slows or reduces the average
    tenure of homeowners, and they boost demand by making homes more affordable.

    Drag on Market Potential from Tenure Length Reduced Dramatically

    Changes in tenure length are largely the result of the strength of the rate “lock-in” effect, and seniors aging in place. The year-over-
    year growth in tenure length has been slowing since March of this year and it is conceivable that it could stabilize or even decline, if
    mortgage rates continue to trend lower. In September 2019, the impact of increasing tenure length on market potential resulted in a
    loss of 137,230 potential home sales, but that is dramatically less than the 421,260 in September of last year.

    Affordability Boosts Market Potential

    In 2019, housing affordability benefitted from lower mortgage rates and higher incomes driven by the strong labor market. In
    September 2019, house-buying power increased to $420,250, 15 percent higher than one year ago. The boost to house-buying
    power increased the market potential by 415,090 home sales, more than 10 times the annual gain in market potential boost of just
    34,390 potential home sales in September 2018.


    October 16, 2019

    U.S. foreclosure rate drops to 20-year low

    Home equity gains give homeowners “skin in the game,” CoreLogic’s Nothaft said

    By Kathleen Howley, Housing Wire -- The U.S. foreclosure rate fell to the lowest level in two decades in July as a strong labor
    market made it easier for Americans to pay their bills.

    The share of mortgages in foreclosure fell to 0.4%, compared with 0.5% a year earlier, CoreLogic said in a report on Tuesday. Other
    measures including the delinquency rate also fell. The share of mortgages with payments 30 days or more overdue fell to 3.8%,
    compared with 4.1% a year ago, CoreLogic said.

    “The fundamentals of the housing market remain very solid with foreclosure rates hitting lows not seen in over 20 years,” said Frank
    Martell, CoreLogic’s CEO. “We expect foreclosure rates may very well drift even lower in the months ahead as wage growth and lower
    mortgage rates provide support for homeownership.”

    Low mortgage rates spur gains in home prices as borrowers qualify for bigger mortgages. That increases the equity held by existing
    homeowners because it boosts values. The average equity per mortgage holder increased to $176,000 in 2019’s second quarter
    from $75,000 in 2011’s first quarter, according to CoreLogic data.

    “Homeowners have seen a big rise in home equity, which lowers foreclosure risk because owners have more ‘skin in the game,’” said
    Frank Nothaft, chief economist of CoreLogic. Average equity per borrower “rose $5,000 in the past year alone,” he said.

    Serious delinquencies, defined as all mortgages 90 days and more past due, fell in all states except Minnesota, Iowa, Nebraska, North
    Dakota and South Dakota, where the rates were unchanged.

    The U.S. unemployment rate fell to a 50-year low of 3.5% in September as the economy added 136,000 jobs, according to the
    Bureau of Labor Statistics. The average hourly earnings for all employees on private nonfarm payrolls rose 2.9% from a year earlier.


    October 2, 2019

    BBB Report Details Explosion of Business Email Compromise Scams

    American Land Title Association, communications@alta.org. -- Businesses and other organizations have lost more than $3 billion
    to business email compromise scams (BEC), according to study released by the Better Business Bureau (BBB).

    “This serious and growing fraud has tripled over the last three years, jumping 50 percent in the first three months of 2019 compared
    to the same period in 2018,” the BBB reports. “In 2018, 80 percent of businesses received at least one of these emails. From 2016
    through May 2019, the Internet Crime Complaint Center (IC3) received 58,571 complaints on BEC fraud, with reported losses in the U.
    S. totaling $3.1 billion. BBB’s report finds that the average BEC loss involving wire transfers is $35,000, while the average loss
    involving gift cards is $1,000 to $2,000. However, the cost to businesses can be much higher: Google and Facebook lost more than
    $100 million to BEC fraud before the perpetrator was arrested in 2017.”

    BEC fraud is an email phishing scam that typically targets people who pay bills in businesses, government and nonprofit
    organizations. It affects both big and small organizations, and it has resulted in more losses than any other type of fraud in the U.S.,
    according to the Federal Bureau of Investigations (FBI). BEC leads to wire transfer fraud. According to the FBI, there were real estate
    wire fraud resulted in losses of $149 million from 11,300 people in 2018.

    To put this into context, the average closing scam nets criminals $130,000 versus the average bank robbery collecting $3,816 and
    ransomware $722. These numbers are just the tip of the iceberg. The FBI estimates that only 12-15 percent of these crimes are
    reported to law enforcement.

    The FBI recognizes at least six types of activity as BEC or email account compromise (EAC) fraud, which differ based on who appears
    to be the email sender:

  • A Realtor or title company redirecting proceeds from a real estate sale into a new account. These targeted email phishing
    scams are sometimes called “spear phishing.”

  • a chief executive officer (CEO) asking the CFO to wire money to someone

  • a vendor or supplier requesting a change in invoice payment

  • executives requesting copies of employee tax information

  • senior employees seeking to have their pay deposited into a new bank account

  • an employer or clergyman asking the recipient to buy gift cards on their behalf

    A Realtor’s Story

    A real estate agent in Edwardsville, Ill., told the BBB that on the closing date for a house she helped sell, the buyer received an email
    appearing to come from the agent, requesting that the buyer wire funds to a specified account. This was contrary to the agent’s
    instructions that the buyer bring a certified check to the closing. While the agent did not send the email nor was it from her true email
    address, the amount requested was the actual closing price of the house. An attached PDF showed the letterhead of the real
    company handling the transaction. The account to which the money was to be wired was fake. The buyer did not comply and brought
    a certified check to the closing. Since the agent reported the incident to her manager and the title company, her company now warns
    clients to call the title company or real estate agent if they receive instructions to wire real estate closing money.

    Active efforts are being made to fight BEC fraud. In August, 80 defendants, believed to be responsible for at least $6 million in losses,
    were indicted in Los Angeles for BEC fraud in a major effort led by the FBI. In September, a worldwide law enforcement effort yielded
    74 arrests for BEC-related fraud in the U.S., 167 in Nigeria and 40 in several other countries, with nearly $3.7 million in assets seized
    from the fraudsters. The U.S. Justice Department has brought at least 22 cases in the last three years, many as part of a collective
    enforcement effort dubbed “Operation Wire Wire,” named for BEC fraud’s common name among Nigerian fraudsters.

    Email Not Coming From the Person Listed in the “From” Line

    According to the BBB, standard internet settings allow those sending email to have any name appear in the “from” line. So, fraudsters
    can simply send an email that says it’s from Eddie Alias in the inbox. However, if one looks closely, or hits reply, you can see that it’s
    really from IMAfraud@yahoo.com. A study by AGARI found that 82 percent of the time BEC gangs simply use display name
    deception. These tactics may be more effective when people are reading emails on their phones or on other devices, where the
    screen is small and the actual email is hard to read. So when an email comes “from” a superior or a trusted partner, there is a risk
    that people will not look closely, especially if it is marked urgent and the employee is anxious to please the supposed sender. One
    suggestion is to “forward” the email and type in the email of the known contact, rather than replying.

    Fraudulent Email Domain

    Fraudsters also will often set up an email domain that is similar to the real one. Fraudsters may register the domain name “exarnple.
    com.” Note, that unless you look closely, the eye reads the “r” and the “n” as an “m.” These emails may come from title@exarnple.
    com, and those getting the email may not recognize it is not from the title of “example.com.”

    Access to Email Accounts

    BEC emails may come from the email account of a legit business. Fraudsters can simply log in to someone else’s email account if
    they already have their username and password. Usernames and password combinations are frequently obtained through phishing
    attacks and are readily available for sale on the internet, often on the dark web. The BBB reports that getting access to someone else’
    s email seems to occur in only a small percentage of BEC cases, but the advantages are very large. It allows fraudsters to read all of
    the email and learn about ongoing transactions, such as real estate closings.

    In its report, the BBB says that with the introduction of Google Docs and DocuSign, important papers may come as email attachments.
    Logging into bogus phishing emails and opening those documents can allow fraudsters to steal email login credentials or release
    malicious malware programs.

    The BBB report recommends:

  • Businesses and other organizations to take technical precautions such as multifactor authentication for email logins and other
    changes in email settings, along with verifying changes in information about customers, employees or vendors. The report also
    urges culture and training changes in organizations – namely, confirming requests by phone before acting and training all
    employees in internet security.

  • Email system providers should consider enabling additional features to help prevent BEC fraud, including default settings with
    more security.

  • Law enforcement should recognize that BEC fraud gangs engage in many varieties of the fraud at the same time and focus on
    the key actors in the frauds, not just supporting actors such as money mules.

    The average American home listing price reaches $309,000 in August

    By Alcynna Lloyd, Housing Wire -- In August, the average American home listing price climbed 4.9% year over year, reaching a
    high of $309,000, according to Realtor.com’s Housing Trend Report.

    While this is an increase from last year’s price levels, the company indicates that August’s rate of growth was much slower than 2018’
    s pace of appreciation.

    “The nationwide median home list price was $309,000, 4.9% higher than a year ago. However, price growth is slower than last
    August, when the median list price grew by 7.3%,” Realtor.com writes. “Additionally, the median listing price in August fell by
    1.8% compared to July.”

    Although drops in monthly listing prices have occurred before, the company notes that this is the largest drop from July to August
    since 2012.

    “August’s data shows that economic anxieties could be causing an earlier seasonal slowdown, despite an expected boost in
    demand due to lower interest rates, which have increased buyer purchasing power,” Realtor.com writes. “Inventory growth in
    the U.S. has once again turned negative, however, the time a typical property spends on the market is now three days more
    than last year.”

    According to the company, the nation’s inventory declined 1.8% year over year in August. Additionally, homes spent a median of 62
    days on the market.

    In July, Realtor.com warned that the nation’s homebuyers were being pushed out of the market due to a mismatch between demand
    and supply.

    This discrepancy led the company to warn of an impending market shift that could affect homebuyers well into next year.

    And now it seems Realtor.com has doubled down on its projections, but with the added promise that the nation’s economic woes will
    also impact buyers even further.

    “The state of the housing market heading into the end of the year will be the result of a battle between two opposing forces:
    increased affordability and economic anxiety. Lower interest rates have resulted in an increase in affordability, saving home
    shoppers approximately 5% on monthly mortgage payment costs compared to August of last year,” Realtor.com writes.
    “However, concerns over a prolonged trade war, cutbacks in corporate spending, and contagion from a European recession
    may push some homebuyers to postpone their plans.”



    September 3, 2019

    CoreLogic: Home-price gains will pick up speed

    U.S. annualized home prices probably will jump 5.4% by July 2020, according to forecast

    By Kathleen Howley, Housing Wire -- Home-price gains will pick up speed in the coming year, with a 5.4% jump in the 12 months
    following July 2019, according to a forecast from CoreLogic. That would be a faster pace than the 3.6% annualized increase seen this
    July, CoreLogic said.

    Low mortgage rates coupled with a scarcity of inventory are driving gains in home prices because lower financing costs mean
    borrowers can qualify for bigger mortgages. A shortage of homes for sale, especially in lower-price segments of the market, are
    giving sellers the opportunity to hold out for the prices they want.

    Also supporting home-price gains is an increase in U.S. household income, said Frank Nothaft, CoreLogic’s chief economist. The
    unemployment rate was 3.7% in July, near May’s 3.6% that was lowest level since the 1960s. That’s forcing employers to pay higher
    wages to keep good workers. The U.S. median annual household income in June was 1.8% higher than a year earlier, according to a
    report from Sentier Research based on inflation-adjusted Census Department data.

    “With the for-sale inventory remaining low in many markets, the pick-up in buying has nudged price growth up,” Nothaft said. “If low
    interest rates and rising income continue, then we expect home-price growth will strengthen over the coming year.”

    CoreLogic’s projection is above the most-recent forecasts from the Mortgage Bankers Association and Fannie Mae. MBA estimates a
    3.8% gain for U.S. home prices over the next year, measuring the third quarter of 2020 from a year earlier. Fannie Mae, the largest
    mortgage finance company, puts it at 4.3%.

    Mortgage rates have tumbled through most of the last nine months, with the average U.S. rate for a 30-year fixed mortgage reaching
    a three-year low of 3.55% in mid-August, according to Freddie Mac. The average rate ticked up three basis points to 3.58% last
    week. A year earlier, the rate was nearly a percentage point higher, according to Freddie Mac data.


    August 8, 2019

    Nearly 10 million borrowers could lower their mortgage rate by 0.75% by refinancing right now

    Black Knight report shows borrowers' average monthly savings would be $267

    By Ben Lane, Housing Wire --  Just three days ago, data from Black Knight showed that 8.2 million borrowers could save big on their
    mortgages thanks to the recent decline in mortgage interest rates, but rates have continued to fall all week. Now, the number of
    borrowers that could benefit from a refinance has jumped to nearly 10 million.

    The latest mortgage interest rate data from Freddie Mac, which was released Thursday morning, shows that mortgage rates fell this
    week to a three-year low of 3.6%. Just one week ago, rates sat at 3.75%.

    That 15-basis point drop means that another 1.5 million borrowers would benefit from a refinance at the current mortgage rate, new
    analysis from Black Knight shows.

    According to Black Knight, there are now 9.7 million borrowers who could cut their interest rate by 0.75% by refinancing their
    mortgages right now. That’s the most refi-eligibility Black Knight has seen in its time reviewing this data.

    An interest rate decrease of that size would save the average borrower $267 per month over the life of their mortgage. Multiply that
    out by 30 years and that’s a savings of more $96,000 over the life of the loan.

    Think about what each of those folks could do with $267 more in their pockets each month, or what they could with an additional
    $96,000 over 30 years. That’s a compelling incentive to refinance.

    It should be noted that Black Knight defines refinance candidates as borrowers who currently have a 30-year mortgage with a
    maximum loan-to-value ratio of 80% and credit scores of 720 or higher.

    Black Knight notes that its criteria are “conservative by design,” adding that there are some lenders that will do non-cash-out refis for
    borrowers with up to 95% LTVs and some for those with credit scores as low as 680.

    As Black Knight notes, disregarding its own stated eligibility criteria, there are as many as 20 million mortgages that could
    hypothetically lower their respective interest rates by 0.75% by refinancing now.

    So, what’s driving the recent drop in interest rates? As our KK Howley wrote earlier this week, much of it is driven by the government’s
    escalating trade war with China.

    “Mortgage rates fell to fresh multi-year lows this week as intensifying trade tensions rattled markets,” Zillow Economist Matthew
    Speakman noted this week. “Bond yields, which influence mortgage rates, have been consistently sliding over the past few weeks, as
    investors eagerly expected an easing to monetary policy. This week, however, rates fell sharply after the U.S. and China each took
    steps to escalate their months-long dispute.”

    As Speakman said, the trade war has sent stocks tumbling, leading investors to move their money to the bond market. That increased
    competition has driven down bond yields, especially on the 10-year Treasury note, which usually tracks in line with 30-year mortgage
    rates. A drop in the 10-year Treasury typically signals a looming drop in mortgage rates as well.

    And, according to Speakman, the low rates of this week may be likely to stick around for a while.

    “Just a few months ago, it appeared that the two nations were on the cusp of a trade deal," he said of the U.S. and China. "Today,
    they are at an impasse, with an agreement nowhere in sight."

    “This week’s escalation of the conflict greatly overshadowed a series of market-moving economic reports – including July’s jobs data,
    typically the most-watched report each month – and pushed mortgage rates down sharply, as investors sought the safe haven of
    government bonds,” Speakman continued.

    “With a light dose of economic data on deck for the coming week, the market’s attention will likely remain on gauging the impact of the
    trade war on the global economy. Thus far, the developments haven’t been encouraging: In an effort to spark economic growth, the
    central banks in New Zealand, India and Thailand each cut interest rates by more than experts had expected,” Speakman added.
    “With trade-related uncertainty and the prospect of more rate cuts – both in the U.S. and abroad – unlikely to disappear in the near
    future, it appears that these multi-year low mortgage rates will be with us for a while.”

    And if that’s the case, the population of borrowers who could benefit from a refi will only continue to grow.



    July 18, 2019

    Renovation spending will slow in 2020 after record-setting year, Harvard report says

    Soft housing market will crimp demand for renovations

    By Kathleen Howley, Housing Wire -- While renovation spending rose to a record at the end of June and likely will reach a new high
    by the end of 2019, a slowdown is on the horizon.

    Americans spent $322 billion on remodeling and home repairs during the 12 months ending in June, a 6.8% jump from a year earlier,
    according to Harvard University’s Joint Center for Housing Studies. However, Chris Herbert, the center’s managing director, said he
    expects spending to slow next year.

    “Declining home sales and home-building activity coupled with slower gains in permitting for improvement projects will put the brakes
    on remodeling growth,” Herbert said. “However, if falling mortgage interest rates continue to incentivize home sales, refinancing, and
    ultimately remodeling activity, the slowdown may soften some.”

    For all of 2019, remodeling spending will probably total a record $331 billion, according to the index. By the end of 2020's second
    quarter, the furthest projection in the index, spending over the prior 12 months will probably total $323 billion.

    The index had several revisions after the center recalculated the numbers using updated Census data, said Abbe Will, a research
    associate at the center. As a result, the amount of estimated spending in prior years was reduced.

    Previously, LIRA estimated a homeowner improvement and repair market size of $336 billion in 2018 and projected that spending
    would grow to $353 billion in 2019. Using updated Census data for previously modeled estimates, the LIRA model indicates
    remodeling activity reached $313 billion in 2018 and projects spending will rise 5.8% in 2019.

    Sales of existing homes will probably total 5.35 million in 2019, barely budging from last year’s 5.34 million, according to a forecast
    from Fannie Mae. In 2017, existing home sales reached a post-housing-bust high of 5.51 million, according to National Association of
    Realtors data.

    Another gauge of the remodeling market that measures the confidence of building contractors who work on renovations showed a
    slight increase. Remodeling Market Index published by the National Association of Home Builders rose one index point to 55 in the
    second quarter of 2019. Since the second quarter of 2013, the RMI has been consistently above 50 — indicating that most
    remodelers report market activity is higher compared to the previous quarter. The index averages current remodeling activity and
    future indicators.

    “The demand for remodeling continues to hold strong throughout the country,” said Tim Ellis, of NAHB. “However, the lack of skilled
    labor continues to be one of the largest roadblocks in the industry.”


    June 14, 2019

    Fitch: Home price growth slowest in 7 years

    Slows "from a gallop to a trot"

    By Jessica Guerin, Housing Wire -- Home price growth has clearly slowed down in recent months as the housing market cools after
    a near six-year hot streak.

    Now, a report released by Fitch Ratings this week details just how much the market has slowed, revealing a full percentage point
    decline from the previous quarter.

    U.S. home prices nationwide grew by approximately 3% annually in first quarter of 2019, compared with 4% the previous quarter,
    prompting Fitch to describe the pace as moving “from a gallop to a trot.”

    But Fitch predicts prices will sold still at 3%.

    "Annual home price growth is now at the slowest rate in seven years, but the slowdown should plateau due to the recent drop in
    interest rates and the limited supply of new homes," said Managing Director Grant Bailey in Fitch’s quarterly sustainable home price
    report.

    The 30-year fixed mortgage rate has fallen to 3.82%, its lowest level in nearly two years, the report revealed. And, the monthly supply
    of new residential homes fell to under six months through April.

    Fitch also said only a limited number of housing markets appear to be at risk for a price correction.

    Its report pinpointed overvalued housing pockets concentrated in Texas, Florida, and California. It also said home price growth has
    slowed significantly in Los Angeles, where prices fell 1.3% annually last quarter.

    But Las Vegas wins the title of the most overvalued housing market in the country, Fitch said, with homes there overvalued by 20%
    -24%.



    May 10, 2019

    Leading indicators point to a May pick-up in home sales

    Applications for purchase mortgages surpass last year

    By Kathleen Howley, Housing Wire -- Mortgage credit availability is the highest ever recorded for the spring market. Fixed rate for
    home loans are near 4% and wages are up.

    Hmmmm. What can that mean for the spring selling season? Unless Americans don’t want to own houses anymore – and that hasn’t
    happened yet – it means this month’s data should look pretty good.

    But until we see hard numbers showing this month’s home sales, and while we’re awash in housing data reflecting the stagnant first
    quarter, let’s focus on leading indicators that hint at what’s happening in the spring housing market.

    First, the purchase index from the Mortgage Bankers Association, which measures applications for mortgages to buy homes,
    increased 5% during the first week of May compared with the previous week, and was 5% higher than the same week one year ago.

    But, those are applications, right? How likely will they turn into home sales? MBA’s mortgage credit availability index for April was the
    highest reading for that month in the eight-year index. And, it was near the record high seen in mid-2018. A high reading means it’s
    easier to get home loans and a low reading indicates a credit crunch.

    At the end of March, the U.S. average rate for a 30-year fixed mortgage had the largest one-week decline in more than 10 years,
    dropping to 4.06%, according to Freddie Mac. Since then, it has bounced around in a narrow band, and this week averaged 4.1%.
    That's almost half a percentage point lower than it was a year ago, according to Freddie Mac data.

    Sales of new home, which are recorded when a contract is signed, rose 4.5% in March, according to the Commerce Department.
    Pending home sales, reflecting existing homes with newly signed contracts, rose 3.8% in March, according to the National Association
    of Realtors.

    “There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years,”
    Lawrence Yun, chief economist of NAR, said in the report.

    The next report on new home sales will be released on May 23, and data on pending sales of existing homes will be released on May
    30. Until then, track the mortgage applications index – specifically “purchase apps” – MBA issues every Wednesday to monitor the
    temperature of the spring market.

    But, you can’t get a mortgage without enough income, and there are also positive indicators on that. Wage growth has picked up
    steam in recent months, after years of stagnation. Federal Reserve Governor Lael Brainard cited the positive news about wages in a
    speech on Friday in Washington.

    “Employment rates of adults in their prime working years have been rising steadily during the expansion and recently reached their
    pre-recession peak,” Brainard said. “Importantly, wage growth has begun to pick up after years of slow gains.”


    May 3, 2019

    CFPB accuses two of the nation’s largest credit repair companies of tricking and cheating
    customers

    Lexington Law and CreditRepair.com accused of violating federal laws

    By Ben Lane, Housing Wire -- Two of the largest credit companies in the nation illegally charged customers for credit repair services
    and used deceptive advertising to trick and cheat consumers, the Consumer Financial Protection Bureau claims.

    The CFPB this week filed a lawsuit against CreditRepair.com and Lexington Law, which the bureau claims are two of the country’s
    largest credit repair companies, alleging that the companies violated the Telemarketing Sales Rule by requesting and receiving
    payment of prohibited upfront fees for credit repair services.

    The lawsuit also claims that the companies violated the Consumer Financial Protection Act by making false claims in its ads, or by
    “substantially assisting” others in doing so.

    The lawsuit also names sever other companies, all of which are either related to or associated with the consumer-facing outlets
    CreditRepair.com and Lexington Law.

    The CFPB lawsuit names PGX Holdings and subsidiaries Progrexion Marketing, Progrexion Teleservices, eFolks, and CreditRepair.
    com; and against John C. Heath, Attorney at Law, which does business as Lexington Law.

    The companies’ relationships are complicated with different subsidiaries performing operations on behalf of other companies, and in
    the case of Lexington Law, Progrexion conducts most of Lexington Law’s core business operations, but Heath, operating as Lexington
    Law Firm, serves as the face of Lexington Law, according to the CFPB.

    The companies also allegedly use each other as lead-generation outlets for credit repair services, and that, according to the CFPB,
    is where the issues begin.

    “Defendants operate two of the largest credit repair companies in the country, Lexington Law and CreditRepair.com. They market
    their services through various media, including online and over the telephone, offering to help consumers remove negative
    information from their credit reports and improve their credit scores,” the CFPB said in its lawsuit.

    “Consumers sign up for Defendants’ credit repair services and pay hundreds of dollars in fees seeking to improve their credit scores
    and get better access to credit products, on better terms,” the CFPB continued.

    To generate business, the companies allegedly use a network of marketing affiliates that advertise a variety of products and services,
    often related to consumer credit products, the CFPB said.

    But that advertising isn’t always on the up and up, the CFPB claims.

    “Progrexion’s marketing affiliates have used deceptive, bait advertising to generate referrals to Lexington Law’s credit repair service,”
    the CFPB said.

    In one example, one of Progrexion’s “most productive marketing affiliates falsely advertised” that it guaranteed “ANYONE a 0-3.5%
    Down Home Loan no matter how bad their Credit is when we start!”

    But, according to the CFPB, the affiliate did not provide any loans at all. Rather, interested consumers were told that in order to
    participate in the (non-existent) loan program, they had to sign up with Lexington Law.

    According to the CFPB, the Progrexion companies paid this marketing affiliate for each credit repair sale that resulted from its efforts,
    despite knowing that it engaged in deceptive practices.

    Beyond that, the companies also allegedly violated the law by demanding and accepting payment upfront for certain credit repair
    activities.

    As the CFPB states, federal law forbids requesting or receiving payment upfront for certain telemarketed credit repair services.
    Specifically, if a company offers services claiming to remove derogatory information from, or improve, a person’s credit history, credit
    record, or credit rating, fees can only be collected after a certain period of time has elapsed and it has been demonstrated that the
    promised results have been achieved.

    But according to the CFPB, Progrexion companies charged consumers when they signed up for their credit repair services and on a
    monthly basis thereafter, ignoring the appropriate waiting period and without demonstrating that the promised results were achieved.

    According to the CFPB, Progrexion makes most of its money by selling the credit repair services offered by Lexington Law.

    And the company sells those services by working with “affiliates” that send business to the companies through several methods,
    including a “hotswap” call program.

    Through this program, the Progrexion companies partner with companies that offer certain products such as rent-to-own housing
    contracts, mortgages, auto loans, or personal loans.

    The affiliates market their loans through inbound and outbound calls. During those calls, the affiliates identify consumers who could
    potentially be in need of credit repair services.

    While those people are still on the phone, their call is transferred from the affiliate to one of the Progrexion companies so the
    company may begin selling their credit repair services. This call transfer is called a “hotswap.”

    According to the CFPB, the hotswaps usually happen directly after a caller has been denied a loan.

    “The Hotswap Program is intended to convince consumers to purchase credit repair services when they have been denied a product
    or service they wanted,” the CFPB said. “According to Progrexion’s website, ‘This call-based program is so effective because it
    connects people to credit repair at the moment they’ve been denied credit.’”

    According to the CFPB, a “significant amount” of the companies’ credit repair business is generated through these hotswaps.

    In other instances, some of these affiliates used “advertisements that included fake real estate ads, fake rent-to-own housing
    opportunities, fake relationships with lenders, false credit guarantees, and false and unsubstantiated statements about past
    consumer outcomes,” along with “false and unsubstantiated statements about consumers’ likelihood of success in obtaining products
    and services such as rent-to-own housing contracts, mortgages, or personal loans,” as enticements to try to get consumers to call in.

    In one case, one of Progrexion’s most prodigious lead sources was a company that supposedly offered low-interest mortgages,
    access to rent-to-own housing, and other products or services, but in reality did not provide any such products or services.

    According to the CFPB, the company admitted that it simple acted as an “affiliate call center that transfers potential clients to
    Lexington Law.” The unnamed company was responsible for sending Progrexion more than 100,000 people who signed up for credit
    repair services over a five-year period.

    The CFPB is suing the Progrexion companies to stop them from “engaging in ongoing, unlawful practices that harm consumers
    nationwide by charging consumers unlawful advance fees in connection with credit repair services and by marketing and
    telemarketing those services through deceptive representations, and to obtain relief for consumers who were harmed by these
    practices.”

    A copy of the complaint filed in federal district court in the District of Utah is available at: https://files.consumerfinance.
    gov/f/documents/cfpb_pgx-holdings_complaint_2019-05.pdf

    April 24, 2019

    HUD sued over new down payment assistance rules for FHA mortgages

    Native American group claims "unlawful destruction" of down payment program

    By Ben Lane, Housing Wire -- Last week, the Department of Housing and Urban Development announced it was issuing new rules
    for down payment assistance on mortgages backed by the Federal Housing Administration.

    According to HUD and the FHA, the new rules were meant to provide clarity around what documentation would be required for
    borrowers who are using funds from another person or entity to cover part of the FHA’s minimum down payment requirement of 3.5%.

    But, according to one group, those rules do much more than that. In fact, the Cedar Band of Paiutes, the Cedar Band Corporation,
    and the CBC Mortgage Agency claim that the new rules effectively put their down payment assistance program out of business.

    And now, the group is suing HUD to get the rule change overturned.

    The Cedar Band of Paiutes is a federally recognized American Indian band that operates the Cedar Band Corp., a band corporation
    chartered by the Department of the Interior.

    The Cedar Band Corp. operates the CBC Mortgage Agency, which provides down payment assistance to borrowers nationwide
    through its Chenoa Fund.

    Through its programs, CBC Mortgage Agency earns money that goes to the Cedar Band, which uses the money to fund economic,
    cultural, and educational programs, and maintain the Cedar Band’s buildings on a reservation.

    But the Cedar Band group claims that HUD’s new rules are not the “informal guidance” they appear to be. Rather, the group claims
    that the rules will lead to the “unlawful destruction” of its down payment assistance program and the end of CBC Mortgage Agency’s
    business.

    “In fact, the Mortgagee Letter represents a radical shift in longstanding HUD policy that effectively outlaws CBCMA’s business and
    pulls the rug out from under many borrowers, who now will be unable to close on their home purchase,” the group claims.

    According to the group, HUD’s letter on the new rules “prohibits national housing finance agencies owned by Native American tribes
    from providing down payment assistance to anyone except tribal members purchasing properties on their own reservation,” adding
    the restriction “effectively puts such organizations out of business immediately.”

    The group claims that HUD issued the rules both in violation of the law and outside its normal procedures for making rule changes of
    this type.

    “HUD released the letter without prior notice, without soliciting comment, without consulting with affected American Indian tribes and
    bands, and without gaining the approval of necessary executive branch officials, including the President,” the group stated.

    “HUD does not have the statutory authority to establish the rules contained in the Mortgagee Letter, and it infringed Plaintiffs’ due
    process right to fair notice,” the group continued. “The Mortgagee Letter also encroaches on tribal sovereignty and contradicts the
    established federal policy of promoting the economic development of American Indian tribes and bands.”

    The group claims that HUD’s move “unlawfully targets American Indian tribes and bands by prohibiting them from participating in
    home-purchasing assistance programs and thus threatens a critical source of revenue for the Cedar Band.”

    And therefore, the group is suing HUD.

    “The harm that HUD has inflicted on CBCMA and the members of the Cedar Band with this administrative action is staggering,” the
    group’s lead counsel, Helgi Walker of Gibson Dunn & Crutcher, said in a statement.

    “CBCMA has operated as a governmental provider of down payment assistance for years, indeed pursuant to regulations that
    expressly allow tribes to provide down payment assistance,” Walker continued. “But now HUD has changed the rules without notice,
    throwing CBCMA and borrowers into a state of chaos. We intend to rectify this unlawful agency action and vindicate our client’s legal
    rights.”

    The group said that it plans to continue fighting and believes a court will strike down the rule changes.

    “Mortgagee Letter 19-06 is an effort to force American Indians back onto the reservation,” the group said. “The Cedar Band of
    Paiutes, Cedar Band Corporation, and CBCMA are confident that the court will swiftly put this unlawful, unconstitutional, and
    discriminatory action on hold and ultimately strike it down permanently. The Cedar Band and its subsidiary corporations strongly urge
    HUD to do the right thing and withdraw the Mortgagee Letter.”


    April 22, 2019

    Keller Williams to begin buying and selling houses

    Real estate giant become latest to jump on iBuyer trend

    By Ben Lane, Housing Wire -- Following a path previously laid out by the likes of real estate search engines Zillow and Redfin, and
    taking a page out of the playbook of iBuyer platforms Opendoor, Offerpad, and others, real estate agency Keller Williams is about to
    start buying and selling houses.

    Next month, Keller Williams will launch an iBuyer offering, which will be called “Keller Offers.”

    The news of Keller Williams expanding into direct homebuying was first reported by Andrea Riquier of MarketWatch.

    According to details provided to HousingWire, Keller Offers will initially launch in the Dallas/Fort Worth market in May 2019. From
    there, the company plans to expand its homebuying and selling operations.

    Keller Williams Spokesperson Darryl Frost told HousingWire that the company expects Keller Offers to be operating in six to eight
    “major” markets by the end of this year.

    “While we believe the addressable market for iBuyers represents less than 10% of the overall market, we do see this as an important
    additional option for KW agents to be able to offer their sellers,” Frost said in a statement. “Our goal is to minimize the cost to the
    consumer.”

    According to Frost, unlike other iBuyers, consumers using Keller Offers will have a fiduciary (a KW real estate agent) working on their
    behalf and serving as “trusted advocate” throughout the process.

    Frost said that the company plans to use $100 million this year on the operations of its iBuyer program. An iBuyer is the catchall term
    for online real estate investors, who seek to reduce transactional property costs via digital tools. These investor will typically make an
    "instant" offer on a home. Thus, the term i(nstant)Buyer.

    The expansion of KW’s business model is the latest in a series of moves meant to transform the company from a traditional real
    estate brokerage into a more technologically advanced one.

    That transformation was touted by the company’s co-founder, Gary Keller, when he returned to the company as CEO earlier this year.

    Last year, the company acquired startup SmarterAgent, which allows agents to create their own branded apps, and has a platform
    that connects more than 650 multiple listing services.

    And now, Keller Williams is joining the suddenly crowded field of iBuyers, which, as mentioned earlier, includes Zillow, Redfin, and
    more.

    Both of those companies expanded beyond real estate and online listings into the iBuyer market, which already featured several
    companies that made direct homebuying their sole business.

    Companies like Opendoor, Offerpad, Perch, and others have been operating in the space for some time, and in certain cases, have
    raised money hand over fist.

    Offerpad has raised more than $1 billion in capital, while Opendoor was valued at nearly $4 billion during its last capital raise.

    Now, Keller Williams wants a piece of the action.


    April 4, 2019

    Average home listing price reaches all-time high

    Home prices projected to set new records in 2019

    By Alcynna Lloyd, Housing Wire -- In March, the average American home listing price reached $300,000 for the first time ever,
    according to Realtor.com’s Housing Trend Report.

    “The typical U.S. home list price has set a new high right on the cusp of the spring homebuying season, and despite a slowing growth
    rate, home prices will likely continue to set new records later this year,” Realtor.com Chief Economist Danielle Hale said.

    Unfortunately, Hale does not expect housing inventory to set records, especially as supply continues to lag.

    “Heading into spring, U.S. prices are expected to continue to rise and inventory is expected to continue to increase, but at a slower
    pace than we’ve seen the last few months as fewer sellers want to contend with this year’s more challenging conditions,” Hale said. “A
    buyer’s experience will vary notably depending on the market and price point they’re targeting.”

    In fact, according to Realtor.com’s analysis, entry-level inventory scarcity continues as homes priced $200,000 or below decreased
    9% year-over-year.

    That being said, inventory of for-sale homes priced over $750,000 rose by 11% from the previous year.  

    There were 56,000 additional homes were for sale in March compared to last year, amounting to a 4% increase year-over-year,
    according to the report. Realtor.com attributes this growth primarily to the nation’s 50 largest markets, which grew by 9% from the
    year prior.

    The number of newly listed properties hitting the market declined by 0.4% from 2018, suggesting that although buyers may have
    more options, the share of “fresh properties” for sale has not increased, according to the company.


    March 25, 2019

    World’s biggest banks accused of price-fixing Fannie Mae, Freddie Mac bonds

    Bank of America, Barclays, Deutsche Bank, others sued

    By Ben Lane, Housing Wire -- More than a dozen of the world’s largest financial institutions conspired to fix the prices on more than
    $485 billion in bonds issued by Fannie Mae and Freddie Mac over a five-year period, according to a new blockbuster lawsuit.

    The lawsuit was filed this week by the state of Pennsylvania, which claims that Bank of America; Barclays Capital; BNP Paribas;
    Citigroup; Credit Suisse; Deutsche Bank; Deutsche Bank Securities; First Tennessee Bank; FTN Financial Securities; Goldman
    Sachs; JPMorgan Chase; J.P. Morgan Securities; Merrill Lynch; and UBS Securities conspired to both overcharge and underpay
    investors on debt bonds issued by Fannie and Freddie between 2009 and 2014.

    The lawsuit, filed by Pennsylvania Treasurer Joe Torsella, is a class action lawsuit that claims that the state invested in the bonds but
    was financially harmed by the financial institutions alleged actions.

    The lawsuit seeks to have other aggrieved parties join it, but the lawsuit states that the groups’ supposed conduct may have harmed
    “at least thousands” of other investors.

    It’s important to note that the bonds in question are not mortgage bonds. They are bonds issued by the government-sponsored
    enterprises to support their operations. The bonds are traded “over the counter,” which means that investors work with the bond
    trading desks at the named institutions to buy and sell the bonds.

    Since the bonds are not traded on a public exchange, the broker wields more control over pricing, as comparative bond trading is not
    made public. Bond values must then be derived based on a price the buyer is willing to pay and what the seller is willing to sell for;
    known as derivative trading.

    The lawsuit claims that the named institutions conspired to fix the prices on those bonds, which allowed them to underpay sellers and
    overcharge buyers.

    “Because the FFB market is an opaque, OTC market, Defendants were able to charge fixed prices without revealing their conspiracy
    to their customers,” the lawsuit claims.

    According to the lawsuit, the named financial institutions controlled more than 64% of the total underwriting of Fannie and Freddie
    bonds during the time in question, with each institution underwriting at least $28 billion in bonds.

    “Defendants have consistently been the 10 largest FFB underwriters in the United States, and each underwrote more than $28 billion
    in FFBs during the Class Period,” the lawsuit claims. “Thus, Defendants as a bloc dominated control of FFB supply and were well-
    positioned to use that dominant position to fix the prices of FFBs charged to their customers, the Commonwealth Funds and the
    Class.”

    And the lawsuit isn’t the only trouble those institutions are facing in this regard. According to the suit, the Department of Justice is also
    investigating the companies for price-fixing the GSE bonds, which was reported by Bloomberg last summer.

    From the lawsuit:

    On June 1, 2018, four confidential sources revealed that the DOJ Antitrust Division is conducting a criminal investigation into
    collusion among dealers to fix FFB prices.

    These confidential sources revealed that the investigation concerns the prices that dealers in the FFB market charged to
    investors, such as the Commonwealth Funds and the Class. Specifically, the investigation focuses on illegal activities of bank
    traders suspected of coordinating to benefit the institutions they work for. Sources said prosecutors from the Justice
    Department’s antitrust division and criminal division are working on the investigation into the dealers’ behavior in the secondary
    market.

    And the lawsuit states that market data shows conclusively that a conspiracy was indeed in effect.

    “Consistent with the DOJ Antitrust Division’s investigation, empirical, economic price data and other market facts demonstrate that
    Defendants used their control over FFB supply to fix the prices of these instruments, causing the Commonwealth and the Class to
    pay too much (when buying FFBs) and receive too little (when selling FFBs) on their FFB transactions during the Class Period,” the
    lawsuit states.

    According to the lawsuit, Torsella’s office obtained the pricing data for more than 13,117 unique FFBs and a total of 1.6 million FFB
    transactions. The lawsuit states that the data shows “highly anomalous” pricing on the Fannie and Freddie bonds, including highly
    inflated, “supracompetitive” prices on newly issued bonds.

    Additionally, the lawsuit claims that the financial institutions inflated the prices of older bonds in the days leading up to the sale of new
    bonds to establish a higher benchmark, which then allowed them to sell the new bonds at higher prices to earn “excess, unlawful
    profits.”

    Also, the lawsuit claims that evidence shows that the institutions, rather than competing with each other for Fannie and Freddie bond
    business, “agreed to inflate the prices at which they sold FFBs to investors (the “ask” price), or deflated the price at which they
    purchased FFBs from investors (the “bid” price), or both.”

    According to the lawsuit, a comparison of the pricing of the bonds during the time period in question against the pricing of bonds after
    2014 shows prices “markedly decreased” after that time “for no other apparent economic reason.”

    The lawsuit claims that the questionable conduct appeared to “statistically diminish” in April 2014, when government regulators began
    looking into banks’ trading business after the LIBOR scandal first became public knowledge, wherein banks were accused of
    manipulating the LIBOR interest rate for profit.

    According to the lawsuit, before April 27, 2014, the prices charged for new Fannie and Freddie bonds were eight times higher than
    what was charged after that date.

    Torsella’s office claims that an initial analysis shows that four Pennsylvania Treasury funds lost “millions” as a result of the alleged
    price manipulation by the named institutions.

    “Time and time again, we have witnessed Wall Street institutions enrich themselves at the expense of Main Street investors with little
    to no consequence,” Torsella said. “When I believe that Pennsylvania taxpayers have been taken advantage of, I intend to stand up
    and fight, and recover for Pennsylvanians what is rightfully theirs. It’s long past time that the big Wall Street institutions remember that
    the rules apply to them and that breaking them has consequences.”

    To read the full lawsuit, click here.


    March 20, 2019

    Supreme Court makes it harder for borrowers to fight foreclosures in non-judicial states

    May invalidate "thousands" of current lawsuits where homeowners are fighting foreclosure

    By Jacob Gaffney, Housing Wire --  Law firms, mortgage lenders and servicers were just awarded more protection in serving non-
    judicial foreclosures, according to a recent Supreme Court ruling.

    The ruling is a victory for the mortgage industry in its fight to retrieve property from delinquent homeowners. One attorney claims the
    ruling may eliminate thousands of similar homeowner lawsuits.

    In the case of the Obduskey v. McCarthy & Holthus decision from earlier today, the homeowner tried to fight his non-judicial
    foreclosure in Colorado.

    Each state differs in foreclosure requirements, but generally fit into two category: foreclosures that get to be decided by the courts or
    foreclosures that are not — a non-judicial foreclosure. Colorado is a non-judicial foreclosure state.

    Homeowner Dennis Obduskey alleged that once he received a foreclosure notice from law firm McCarthy & Holthus, he invoked
    protection under the federal Fair Debt Collection Practices Act.

    This act protects consumers and maintains that: "a 'debt collector' must 'cease collection' until it 'obtains verification of the debt' and
    mails a copy to the debtor," the Supreme Court ruling states.

    However, McCarthy & Holthus is not a debt collector by definition, as it only pursues non-judicial foreclosures, the Court ruled.

    From the ruling:

    Obduskey argues that McCarthy engaged in more than security-interest enforcement by sending notices that any ordinary
    homeowner would understand as an attempt to collect a debt. Here, however, the notices sent by McCarthy were antecedent
    steps required under state law to enforce a security interest, and the Act’s (partial) exclusion of “the enforcement of security
    interests” must also exclude the legal means required to do so.

    "This decision essentially gives law firms and lenders more protection in non-judicial foreclosure states,” said David Scheffel, partner
    at law firm Dorsey & Whitney.

    “In these jurisdictions, homeowners and borrowers will no longer be able to file lawsuits under the Fair Debt Collection Practices Act
    (FDCPA) against law firms who are pursuing foreclosures,” he added.

    “This essentially eliminates a heavily used practice by plaintiffs' attorneys," Scheffel added. "Ultimately, this should have the effect of
    reducing the cost that lenders/servicers bare in terms of getting to a final foreclosure in these states as the FDCPA lawsuits delay this
    process significantly. At the end of the day, this decision will eliminate thousands of these lawsuits in non-judicial foreclosure states
    like Massachusetts, California, Colorado, and Minnesota.”


    March 12, 2019

    Class-action lawsuit takes aim at buyer broker compensation rules

    Home seller claims NAR, MLS providers have conspired in violation of anti-trust laws

    By Jessica Guerin, Housing Wire --  A class-action lawsuit filed last week by a Minnesota home seller is taking aim at the big four
    multiple listing services that have transformed the real estate business.

    The suit alleges that the National Association of Realtors has driven up costs to sellers and has stifled competition by requiring
    brokers to offer buyer broker compensation when listing a property on an MLS site.

    Filed against the NAR, Realogy, HomeServices of America, RE/MAX and Keller Williams, the suit alleges that the MLS providers
    conspired with NAR to require sellers to pay buyer’s broker’s fees at inflated rates in violation of anti-trust laws.

    “The conspiracy has saddled home sellers with a cost that would be borne by the buyer in a competitive market,” the complaint
    states. “Moreover, because most buyer brokers will not show homes to their clients where the seller is offering a lower buyer broker
    commission, or will show homes with higher commission offers first, sellers are incentivized when making the required blanket, non-
    negotiable offer to procure the buyer brokers’ cooperation by offering a high commission.”

    The suit goes on to allege that the conspiracy has kept buyer brokers’ commissions in the 2.5-3% range despite their diminishing role
    in the transaction, as “a majority of homebuyers no longer locate prospective homes with the assistance of a broker, but rather
    independently through online services.”

    The suit states that it will represent any sellers who paid a broker commission during the sale of their property in the last four years in
    areas covered by regional MLS sites, which includes sellers in Texas, Maryland, North Carolina, Ohio, Colorado, Michigan, Florida,
    Nevada, Wisconsin, Minnesota, Pennsylvania, Arizona, Virginia, Utah and Washington, D.C.

    A spokesperson for NAR told HousingWire that suit was unfounded.

    “The complaint is baseless and contains an abundance of false claims. The U.S. Courts have routinely found that multiple listing
    services are pro-competitive and benefit consumers by creating great efficiencies in the home-buying and selling process,” The
    spokesperson said. “NAR looks forward to obtaining a similar precedent regarding this filing.”


    February 25, 2019

    Mortgage prepayments near 2-decade low

    Reduced home sales outweighed rate-driven increase

    By Kelsey Ramírez, Housing Wire --  While interest rates fell in recent weeks, January’s prepayment rate neared a two-decade low,
    according to the latest First Look report from Black Knight.

    The prepayment rate in January fell to its lowest level since November 2000 – an 18-year low, according to the report. This is down
    more than 10% from December 2018 and down more than 25% from January 2018.

    The report showed seasonal reductions in home sales outweighed any interest-rate-driven increase in refinance incentive.

    With January dropping even year over year, lenders may need to brace for a slower home buying season this year, especially if
    interest rates once again begin to rise.

    And Black Knight’s report isn’t the only one showing a slowdown. In January, new home sales fell 8% on an annual basis, declining
    the most in western housing markets, according to the latest data from Redfin.

    However, Black Knight explained that housing turnover typically bottoms out in January and February, and that prepayments could
    pick up again if mortgage rates remain low through the early spring home buying season.

    The First Look report also showed the national delinquency rate dropped 3.5% from December and 13% from last year in January.

    Foreclosure starts rose slightly month over month, about 8.4%, but are still down 19.4% from January 2018. The number of loans in
    active foreclosure continued to decrease, falling by 6,000 properties from December to January, and by 72,000 properties from
    January 2018 to January 2019.


    February 18, 2019

    Only half of houses for sale are affordable for the average buyer

    Housing affordability remains at a 10-year low

    By Jessica Guerin, Housing Wire --  Housing affordability continues to hover near a 10-year low, and the National Association of
    Home Builders is urging policymakers to do something about it.

    Of the new and existing homes sold in the fourth quarter of 2018, just 56.6% were affordable for those earning the country’s median
    income of $71,900, according to the NAHB/Wells Fargo Housing Opportunity Index.

    This is up just barely from the previous quarter, as a slight increase in interest rates offset a small decline in home prices, the report
    stated.

    The national median home price was $263,000 in Q4, down from $268,000 in Q3.

    But at the same time, the average mortgage rate is increasing, up 17 basis points to 4.89% in Q4 from 4.72% in Q3. This marks the
    fourth-straight quarter of rate hikes and is the highest level since 2011, the report noted.

    NAHB Chairman Randy Noel housing is an early indicator of overall economic health, urging officials to take action.

    "Builders are finding it increasingly difficult to build at price points most consumers need because they are struggling with
    burdensome regulations, higher material costs and shortages of lots and labor," said Noel. "Historically, housing has been the canary
    in the coal mine, and these ongoing affordability woes should serve as a wake-up call to policymakers to take immediate action."

    NAHB Chief Economist Robert Dietz said home price appreciation has outperformed wage growth, and that is stifling housing
    affordability.

    "To keep housing moving forward, policymakers at all levels of government should make it a priority to address affordability concerns
    that are hurting homebuyers and home builders alike," Dietz said.

    The report also highlighted the most and least affordable markets across the country.

    Youngstown-Warren-Boardman, Ohio-Pennsylvania, was the most affordable major housing market, with 92.7% of homes sold in Q4
    affordable for those earning the area's median income of $60,100.

    For the fifth-straight quarter, San Francisco was the nation's least affordable major market, with just 6% of the homes sold in Q4
    affordable for those earning the area's median income of $116,400.


    February 13, 2019

    Google reveals plans to invest $13 billion in real estate across U.S.

    Will create more than 10,000 new construction jobs as it builds data centers and offices

    By Jessica Guerin, Housing Wire --  Google announced plans Wednesday to invest $13 billion in real estate across the U.S. in the
    coming year to build data centers and offices.

    In a blog post authored by Google CEO Sundar Pichai, the company announced its plans to grow in 2019, which includes expanding
    into 14 states, bringing its total footprint to 24 states.

    “These new investments will give us the capacity to hire tens of thousands of employees, and enable the creation of more than
    10,000 new construction jobs in Nebraska, Nevada, Ohio, Texas, Oklahoma, South Carolina and Virginia,” Pichai wrote.

    Pichai added that 2019 will mark the second year that the company has grown more outside the Bay Area than in it.

    The tech giant will open new data centers in Nebraska, Ohio, Texas and Nevada, and will expand existing centers in Oklahoma and
    South Carolina, Pichai said. It will also make significant renewable energy investments as it builds.

    Google also plans to double its workforce in Virginia and Georgia, and to build new offices in states that include Washington,
    California, Massachusetts, Texas and Maryland.

    Google has invested more than $9 billion in real estate over the past year, including a $1 billion deal inked in November to expand its
    Mountainview headquarters and the purchase of a building in New York City’s Chelsea Market for $2.4 billion.

    Click here to view a map provided by Google depicting the locations of its planned investments:


    February 5, 2019

    Study assesses long-term financial impact of living in your parents' basement

    More young adults are living with their parents, and it's not improving their homeownership prospects

    By Jessica Guerin, Houwing Wire -- The image of a Millennial living in their parents’ basement or childhood bedroom while dishing
    out tech advice is perhaps a cliché, said the Urban Institute, but the numbers give it some weight.

    The number of young adults ages 25 to 34 living with their parents increased from 12% in 2000 to 22% in 2017, according to a new
    study released by the institute, amounting to an additional 5.6 million Millennials who are shacking up with their parents.

    Student debt, the high cost of rent, tight credit conditions and a stagnant labor market all play a role in this trend, the institute wrote.  

    But presumably, young adults who are saving money by failing to leave the nest will be in a better position to save money for a down
    payment on their future home, right? Wrong.

    According to the study, this life choice has long-term consequences. Those who opted to stay with their parents did not stash away
    enough cash to put down a larger down payment, and they were less likely to become homeowners 10 years later, than whose who
    ventured out on their own earlier.

    And, for those who did eventually buy their own home, they did not buy more expensive homes or take on lower mortgage debt than
    those who moved out earlier.

    Moreover, those who pursued homeownership later in life were worse off in the long run than their counterparts who jumped to it
    earlier.

    Research shows that those who buy homes earlier in life amass the greatest amount of housing wealth in their later years, with
    homeowners 25 and younger seeing the greatest return on their investment. This means that delaying homeownership could have a
    negative impact on your wealth in the long term.

    The data prompted the Urban Institute to conclude that moving in with Mom and Dad might not be the best choice for your financial
    future.

    “Living with parents does not better position young adults for homeownership, a critical source of future wealth, and may have
    negative long-term consequences for independent household formation,” the researchers wrote.

    January 24, 2019

    Massive data breach involving millions of mortgage documents just got much worse

    Original mortgage documents found on separate exposed server

    By Ben Lane, Housing Wire -- The massive data breach involving more than 24 million mortgage and banking documents just got
    much, much worse as an investigation unearthed a separate unprotected server that provided access to some of the original
    documents to anyone who happened upon it online.

    The details of the expanded breach come again from TechCrunch, which has done yeoman’s work on exposing this incredible breach
    in mortgage and banking security.

    In the original breach, digital files were located on an unprotected server that contained the information from 24 million mortgage and
    banking documents, but the data was scraped from the original documents using OCR, a computer process that converts paper
    documents into electronic documents.

    The original mortgage documents were converted into digital files that were not easily readable, but people’s highly sensitive personal
    information, including names, addresses, dates of birth, Social Security numbers, and other information was accessible in the
    database for at least two weeks.

    But Thursday, the problem worsened, as TechCrunch now reports that an investigation found a separate unprotected and exposed
    server that housed some of the original mortgage and banking documents themselves, including mortgage applications and W-9
    forms.

    From the latest TechCrunch report:

    Independent security researcher Bob Diachenko and TechCrunch traced the source of the leaking database to a Texas-based
    data and analytics company, Ascension. When reached, the company said that one of its vendors, OpticsML, a New York-
    based document management startup, had mishandled the data and was to blame for the data leak.

    It turns out that data was exposed again — but this time, it was the original documents.

    Diachenko found the second trove of data in a separate exposed Amazon S3 storage server, which too was not protected with
    a password. Anyone who went to an easy-to-guess web address in their web browser could have accessed the storage server
    and see — and download — the files stored inside.

    According to the report, the database contained 23,000 pages of PDF documents that contained borrowers’ highly sensitive personal
    information, the type of information that they would typically provide for obtaining a mortgage.

    It’s unknown at this time how long the documents were left exposed or who may have accessed them during that time.

    For more on the story, click here.


    January 10, 2019

    Trulia: Homebuyer pessimism grows among young adults

    Only 71% of young adults say buying a home is essential to the American dream

    By Alcynna Lloyd, Housing Wire --  Trulia’s end-of-year survey shows that the idea of homeownership is part of the American dream
    is shrinking most among younger adults and the group's pessimism about home buying is increasing.

    While the share of Americans that say homeownership is, in fact, part of the American dream increased from 72% to 73%, those aged
    18 to 34 beg to differ.

    In this age group, just 71% of younger adults said buying a home was a part of the American dream, according to the survey. This is
    a significant drop from 2015, when 80% said homeownership was an important part of the equation.

    “Last year marked a break from the unrelenting and accelerating home price growth that characterized the market for several years
    straight – growth fueled by high demand, limited inventory and cheap financing,” Trulia Senior Economist Cheryl Young said.

    “But while that break may ultimately prove beneficial to some, the shifting dynamics seem to be giving many buyers, sellers and
    renters pause as we enter a new year: Younger would-be buyers are more pessimistic on the value of homeownership; financial
    obstacles are proving stubborn to overcome; and sellers are less bullish," Young concluded.

    The report explained that pessimism from young adults can be attributed to financial concerns, as 30% cited not having a job  was a
    burden, followed by 26% that said student debt was an obstacle to homeownership.

    Although financial woes appear to be a large deterrence for young adults, Trulia highlights this issue impacts every age group.

    In fact, 95% of U.S. renters wanting to enter the housing market said financial concerns were a barrier to homeownership. Of these
    renters, 53% said saving enough for a down payment was a hurdle, followed by 33% that cited bad credit and 29% that said
    qualifying for a mortgage was a hindrance.

    To make matters worse, Trulia notes that continual home price growth is also frustrating potential homebuyers. According to their
    analysis, 36% of renters who want to purchase a home said one of their biggest obstacles was rising prices.

    Additionally, mortgage interest rates have impacted potential buyers, as 19% of renters cited rising mortgage rates as one of their
    biggest hurdles to owning a home. This is a 6% increase from spring 2017 when the percentage sat at 13%.

    ATTOM Data Solutions’ latest Home Affordability report showed that the index fell to 91 in the fourth quarter of 2018, marking the
    least affordable level since the third quarter of 2008 when affordability fell to 87.

    This lack of affordability has contributed to a slowdown in the housing market, and Trulia’s data indicates that sellers are becoming
    less than optimistic.

    “With slowing home price appreciation, Americans appear to be more circumspect about the benefits of selling this coming year,"
    Trulia writes. "More continue to think this year will be a better year to sell than 2018 was, but the gap between those thinking next
    year will be better and those thinking it will be worse has significantly narrowed.”