Feds Crack Down on Luxury All-Cash Real Estate Sales

Posted on in Economy, FHA, Government, GSE, Housing, Industry, Mortgages, TV Appearances

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January 14, 2016

If you’re reading this — we guess you didn’t win Power Ball last night, neither did we, so we’ll try to help you cash in at the office. Here’s what you need to know:

Feds Crack Down on Luxury All-Cash Real Estate Sales

The Treasury Department will begin tracking sales of high-end real estate in two of the country’s most expensive markets—Miami and Manhattan—to try to crack down on money laundering.

The feds will temporarily require certain title companies to identify individuals behind companies that buy properties exceeding $3 million in these two markets with all-cash transactions.

The government said it’s concerned that some of these real estate deals are made by corrupt foreign government officials or international criminals who use expensive real estate to launder dirty money.

The disclosure requirements would apply for 180 days beginning in March, according to the announcement.

“It will clearly have an impact on a percentage of the sales done with cash,” says Rood, “These markets are still among the best in the world to park money, and will continue to be for the foreseeable future”.

High-end home prices in both Manhattan and Miami have soared over the past year. The median Manhattan home sold for $1.15 million at the close of 2015—a 17.3% leap from a year ago, according to the real estate brokerage Douglas Elliman.

Rood says, “I am sure that there are a thousand lawyers working on solving this problem for their clients….let’s see how this shakes out moving forward.”

NY Post: GM building sets rent record at $200 per square foot

There’s a new top rent dog in NYC.

Boston Properties’ 767 Fifth Ave., aka the GM Building, has edged out Sheldon Solow’s 9 W. 57th St. by signing three deals with starting rents of more than $200 per square foot . One of those, Belfer Management, kicked off at $220 a square foot, while another four were more than $100, a new report reveals.

But that record could be shattered this year if hedge fund Citadel inks a $300-per-square-foot-plus pact for the top floor and more than 200,000 square feet of base space at L&L Holding’s upcoming 425 Park.

Citadel signed a short expansion for 119,911 square feet at 601 Lexington Ave. that also launches at more than $100 per square foot.

read more: http://nypost.com/2016/01/12/gm-building-sets-rent-record-at-200-per-square-foot/

Mortgage Applications Bounce Back

Mortgage application volume increased 21.3 percent last week versus the previous week according to the Mortgage Bankers Association.

“The good news for the new year is that following the holidays, application activity last week resumed at levels just exceeding those observed during early December, suggesting that the purchase market has picked up right where it left off,” said Lynn Fisher, MBA’s vice president of research and economics.

Applications to refinance loans increased 24 percent last week from the previous week but were 38 percent lower than the same week one year ago.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.12 percent last week from 4.20 percent the previous week.

American Banker: Time to Actually Earn Those Mortgage Referrals

Mortgage lenders are going to have to work harder on getting referrals from real estate agents the old-fashioned way: earn them.

Lenders have long relied on formal contracts with agents, known as marketing services agreements, to get referral business. These agreements spell out how the parties will advertise together or provide other services to consumers.

But in 2015, the Consumer Financial Protection Bureau, while not outlawing the practice, put the industry on notice that it considers certain forms of MSAs to violate of the Real Estate Settlement Procedures Act ban on payments for a referral.

In response, several major lenders, including Wells Fargo, PHH Mortgage and Prospect Mortgage, announced they would terminate their MSAs. With these arrangements on their way out, traditional word-of-mouth referrals become more critical for driving new business.

read more: http://www.americanbanker.com/news/consumer-finance/time-to-actually-earn-those-mortgage-referrals-1078559-1.html

Bloomberg: Can We Fix American Cities by Tearing Them Down?

Maryland Governor Larry Hogan held a sidewalk press conference last week in Baltimore’s Sandtown-Winchester neighborhood. He promised to revitalize the city by spending $75 million to tear down 4,000 vacant houses.

“Fixing what is broken in Baltimore requires that we address the sea of abandoned, dilapidated buildings that are infecting entire neighborhoods,” he said.

Then the yellow paw of a Komatsu excavator ripped the face from a nearby row house, and Baltimore joined a growing club of declining U.S. industrial hubs that have decided they have more housing than their populations can support. The logic is that removing blighted sections of the city will help the larger body thrive, eventually clearing the path for redevelopment. The hard part is conceding that some areas are beyond short-term redemption.

“When you demolish with no plans for new residential development, you’re admitting that right now there’s no demand for this block, this neighborhood, this city,” said Erika Poethig, a fellow at the Urban Institute. “It takes a certain amount of political courage to do that.”

http://www.bloomberg.com/news/articles/2016-01-13/can-we-fix-american-cities-by-tearing-them-down-

Fitch Sees Global Mortgage, Housing Growth Ahead

Fitch Ratings says in its latest annual Global Housing and Mortgage Outlook report that it expects housing and mortgage markets to be stable or improve in most of the 22 countries covered in the study.

Closer to home, Fitch says, despite the prospect of rate hikes, they do not expect performance in the mostly fixed-rate US market to deteriorate significantly.

The number of global outlooks that have changed (six improving and three deteriorating) since the previous year report is higher than it was in 2015, reflecting shifts in relative performance and greater disparity of conditions globally. While most markets are seen to be stabilizing or improving, a combination of macro-prudential controls and affordability constraints will constrain growth prospects.

Fitch says low mortgage rates, GDP growth, improving employment and price rises will support the mortgage performance of many markets. But where one or more of these are missing – as in Brazil, South Africa, and Singapore – outlooks have worsened since last year. All of the markets with improved outlooks are located in Europe, where the peripheral eurozone markets continue to rebound.

read more: http://www.reuters.com/article/idUSFit94364820160113

Washington Post: Home buyers don’t seem to be using new tool to shop for mortgages

If you’re planning to buy a home with a mortgage in 2016, you’re virtually certain to encounter a new consumer-friendly federal disclosure: the Loan Estimate.

But will you use it as a shopping tool, comparing competing lenders’ offers in detail, as the Loan Estimate’s designers hoped you would?

Based on interviews with a group of large and small lenders plus real estate brokers, the answer may well be: Probably not.

But shouldn’t smart buyers be making the most of what it offers?

First, some background. In October, the Consumer Financial Protection Bureau, or CFPB, launched its ambitious package of new disclosures and rules governing home-mortgage transactions as part of its “Know Before You Owe” campaign. The Loan Estimate is the upfront piece — lenders must provide it three business days after you apply — and it replaces the traditional Good Faith Estimate and Truth in Lending disclosures.

read more: https://www.washingtonpost.com/realestate/home-buyers-dont-seem-to-be-using-new-tool-to-shop-for-mortgages/2016/01/11/f174ccbc-b87f-11e5-99f3-184bc379b12d_story.html?hpid=hp_hp-cards_hp-card-realestate%3Ahomepage%2Fcard

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Have a prosperous day!

Lou Giserman

Senior Media Consultant

The Collingwood Group LLC

1700 Pennsylvania Avenue NW

Washington, D.C. 20006

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