Housing to the Rescue of Stock Markets

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

Everything you need to know to stay ahead of your competitors

January 19, 2016

Welcome back to work. There are some key housing numbers ahead for the Martin Luther King Holiday-shortened week. We see the first later this morning with the Housing Market Index, but the big number comes out on Friday with the all-important Existing Home Sales report for December. Maybe these home numbers can get the equity markets out of their funk. Oil continues to move lower to roil the equity markets, but shouldn’t cheap gas push buyers toward homes? Drop us a line with your take on that.

While you ponder that question — here’s a look at stories you need to know:

Bloomberg: Rise of the Robots Will Eliminate More Than 5 Million Jobs

Over five million jobs will be lost by 2020 as a result of developments in genetics, artificial intelligence, robotics and other technological change, according to World Economic Forum research.

About 7 million jobs will be lost and 2 million gained as a result of technological change in 15 major developed and emerging economies, WEF founder Klaus Schwab and managing board member Richard Samans said in “The Future of Jobs.” The findings are taken from a survey of 15 economies covering about 1.9 billion workers, or about 65 percent of the world’s total workforce.

The blurred lines between physical, digital and biological spheres amount to a Fourth Industrial Revolution, according to the WEF, which will address the idea as the ideaat its annual meeting of policy makers, academics and economists in Davos, Switzerland. It’s already a hot topic thanks in part to books such as ‘The Second Machine Age’ and ‘The Rise of The Robots,’ while Bank of England Chief Economist Andy Haldane has warned that the millions of jobs at risk from automation are creating issues officials need to address.

“To prevent a worst-case scenario — technological change accompanied by talent shortages, mass unemployment and growing inequality — reskilling and upskilling of today’s workers will be critical,” the authors said. “It is simply not possible to weather the current technological revolution by waiting for the next generation’s workforce to become better prepared.”

Administrative and office jobs will account for two-thirds of the losses, with “routine white-collar office functions at risk of being decimated,” and there will be gains in computer, mathematical, architecture and engineering-related fields. Women will be disproportionately hit by the changes because of their low participation in the STEM fields of science, technology, engineering and mathematics.

read more: http://www.bloomberg.com/news/articles/2016-01-18/rise-of-the-robots-will-eliminate-more-than-5-million-jobs

Miami Herald – A New Trend? – BankUnited stops making retail mortgage loans, lays off workers

BankUnited has stopped offering retail residential mortgage loans to consumers and laid off some of its workers.

South Florida’s largest locally based bank said new residential mortgages weren’t generating enough business but current mortgage holders won’t be left in the lurch.

“We remain committed to honoring all of our current loan commitments,” said Mary Harris, a spokeswoman for BankUnited.

Harris said the Miami Lakes-headquartered bank is maintaining other aspects of its mortgage business, including mortgage warehousing, buying mortgages around the country and its servicing business. She declined to say to how many workers had been laid off.

South Florida banking consultant Ken Thomas said he was “shocked” by the news.

“One of the biggest needs we have in this community is affordable housing, and when you have the biggest South Florida-based bank backing off residential mortgage lending that raises eyebrows,” he said. “If a small bank did this, that’s one thing. But this is BankUnited.”

read more: http://www.miamiherald.com/news/business/banking/article54968560.html#storylink=cpy

Wall St Daily: Fannie and Freddie Shares Down Big Time

Have you looked at the stocks of the Federal National Mortgage Association (FNMA), better known as Fannie Mae, and the

Federal Home Loan Mortgage Corporation (FMCC), better known as Freddie Mac, recently?

They’re far from a pretty picture.

Yet for those who’ve followed Fannie and Freddie’s stories from the financial crisis to today, the common and preferred stocks of these firms may actually be a ”Buy.”

Here’s a quick refresher: Fannie Mae and Freddie Mac, while government-sponsored enterprises (GSEs), are still private companies. And as separate companies, they compete with one another.

They also have the same business model, wherein they buy mortgages on the secondary mortgage market, pool those loans, and then sell them to investors as mortgage-backed securities in the open market.

The main difference between Fannie and Freddie is that Fannie Mae mostly buys mortgage loans from commercial banks, while Freddie Mac mostly buys them from smaller banks, often called “thrifts.”

Here’s the issue, though: If interest rates are still very low (they started the year below 4%) and housing is thriving in many parts of the United States, why are the stocks of these enterprises so depressed?

The problem boils down to this: Fannie and Freddie were never really in trouble during and after the financial crisis.

Rather, they were seized by the government in order to provide a backdoor bailout to truly vulnerable large banks and simultaneously restore confidence to the traumatized financial markets.

The stocks of Fannie and Freddie declined rapidly in 2007-08 along with the rest of the panicked market. The government, nevertheless, allowed and actually encouraged their widespread naked short selling.

In doing so, the government provided additional ammunition for its argument that it was necessary for them to “rescue” Fannie and Freddie.

Finally, it was announced on Tuesday that captive insurance companies are losing Federal Home Loan Bank Membership.

This is actually good news in that these mortgage investors had been using a loophole to access low-cost, government-backed financing, coupled with the fact that captives insure the risk of the companies that own them.

So consider the twins (common and preferred) in 2016 – but keep your eye on the courts.

read more: http://www.wallstreetdaily.com/2016/01/15/fannie-mae-freddie-mac/


Triple Header: Collingwood Group Media Places CEO on CNBC, BloombergTV & WSJ Video

Auction.com has rebranded to Ten-X, CEO Tim Morse explained why in interviews scheduled by Collingwood Group Media (click below):

CNBC> https://www.youtube.com/watch?v=Kl6DQragW0E

Bloomberg> https://youtu.be/U3_aMFnWhlY

WSJ> https://youtu.be/DQry2GPPB_U

Contact us to learn what Collingwood Group Media can do for you.


Boston Herald: Homebuyers not using new mortgage shopping tool

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 the question is: 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. Last October, the Consumer Financial Protection Bureau 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.

In three pages, it provides you an in-depth scan of the mortgage you’re considering: It details not only the mechanics of the loan — interest rate, annual percentage rate (APR), monthly principal and interest payments, property taxes, insurance and other escrow items — but also the itemized charges you’ll be hit with and the amount of cash you’ll need to close the transaction. Better yet, you can pretty much depend on the cost disclosures as the final ones you’ll pay because lenders face massive financial penalties if they play games and charge you more at closing. Under the previous system of disclosures, you couldn’t be certain about your final expenses, and the Good Faith Estimate didn’t even tell you how much you’d need for closing.

Under the CFPB’s rules, after you receive your Loan Estimate you have 10 days for shopping the competition before finally agreeing to the deal or ditching it. The CFPB recommends borrowers obtain Loan Estimates “from three or more lenders” before making a final choice. Sounds sensible, but are buyers actually doing that?

Apparently not so much. Bill Emerson, chief executive of Quicken Loans, the country’s second highest volume mortgage lender, says his firm is seeing no surge in shopping by applicants using the Loan Estimate. “I don’t think consumers are changing the way they shop simply because” they have a new tool to do so, Emerson said in an interview. The process of buying and financing a home is so complicated and emotional that many people find it easier to simply locate a reputable lender quoting a good interest rate, he said, and go with that lender rather than making multiple applications and comparing Loan Estimates.

read more: http://www.bostonherald.com/business/real_estate/2016/01/homebuyers_not_using_new_mortgage_shopping_tool

Real Deal: Millionaire, show thyself: What does the Treasury’s move mean for NYC real estate?

In an attempt to pinpoint the source of funds pouring into New York real estate, the U.S. Treasury said last Wednesday it would start tracking luxury all-cash property purchases made through shell companies. “We are concerned about the possibility that dirty money is being put into luxury real estate,” Jennifer Shasky Calvery, a top Treasury official, told the New York Times, explaining the decision. The Real Deal spoke to many top players across the real estate ecosystem to get their take. Some said the move is likely to cause major heartburn for an industry that has long benefited from relative opacity and minimal regulation. Others reacted with nonchalance, characterizing the initiative as a minor annoyance. But among the varied reactions one common theme emerged: confusion. – read more: http://therealdeal.com/2016/01/14/millionaire-show-thyself-what-does-the-treasury-dept-s-move-mean-for-nyc-real-estate/?utm_source=feedly&utm_medium=rss&utm_campaign=millionaire-show-thyself-what-does-the-treasury-dept-s-move-mean-for-nyc-real-estate#sthash.WDhTiNTG.dpuf

CNBC: Fed’s Dudley: Rates to rise gradually, outlook unchanged

Interest rates will continue a gradual climb, and the outlook has not changed significantly since the last Federal Reserve policy meeting, a top Fed official said Friday amid a new sell-off in stocks.

In prepared remarks in New Jersey, New York Federal Reserve President William Dudley reiterated the central bank’s point that future rate increases will depend on economic data. But he noted that recent indicators have been disappointing, adding that global economies pose a risk to the United States.

“In terms of the economic outlook, the situation does not appear to have changed much since the last FOMC meeting,” he said. “Some recent activity indicators have been on the softer side, pointing to a relatively weak fourth quarter for real GDP growth.”

read more: http://www.cnbc.com/2016/01/15/feds-dudley-rates-to-rise-gradually-outlook-unchanged.html

Bloomberg: Hitting Home: How Healthy Is Your Real Estate Market?

Are you thinking about moving to a new home? If so, you aren’t alone. Americans are now spending an average of just 15.4 years in their houses, 2014 census data show, down from a nationwide average of 17.1 years in 2012, according to a study by New York financial technology company SmartAsset. The study shows that residents in Nevada stay in their homes the shortest span of time, for an average of just 12.21 years. Washington, D.C., a city recreated with each election cycle, has the second shortest home ownership rate, at 12.22 years. At the other end of the scale are West Virginia and Pennsylvania, where residents tend to hunker down for nearly 18 years on average after paying closing costs. SmartAsset said it came up with its report by crunching and interpreting data from Zillow and the Census Bureau.


LA Times: L.A.’s hottest zip codes

If you were a seller, the Southern California housing market was a good one last year.

The economy improved. Sales jumped after a lethargic 2014. And prices climbed even higher, making an already expensive region even more so. By the end of November, the median home price for the six-county market was $438,000, up 6.8% from the same month a year earlier, according to the data from CoreLogic.

Still, the real estate frenzy cooled through late summer and fall. To what extent the slowdown could be blamed on the typical seasonality of home sales or to the price hikes that have made housing increasingly unaffordable is unclear. A better picture of the market’s health should emerge during the busy spring buying season.

Economists generally expect further improvement in the market, though they predict that the price increases will slow as fewer families are able to buy into it — a trend that started in 2013.

“Affordability is dulling demand,” said Leslie Appleton-Young, chief economist for the California Assn. of Realtors, which projects the state’s median home price to increase 3.2% this year, about half the pace of the 6.2% gain in 2015.

For now, many of Los Angeles County’s hottest burbs fall into two categories: Westside areas in the midst of a tech-industry boom and communities near downtown coveted for their older homes and short drive to an increasingly vibrant city center.

read more: http://www.latimes.com/business/realestate/la-fi-la-county-top-neighborhoods-20160117-pictures-htmlstory.html

CT Post: Real estate market bracing for GE exodus

Even with a worst-case scenario that could see 800 high-priced houses hitting the market in a short time span, local real estate experts say they are holding true to a basic principle — don’t panic.

But following Wednesday’s announcement that General Electric will leave its Fairfield headquarters for Boston, the future of its employees’ homes has agents keeping a close eye on the situation.

Mary Beth Grasso, a Realtor in Trumbull with Keller Williams who is a member of the CT Realtors executive committee, said the region has learned to adapt to crises.

“If you think of what we’ve been through, back in 2008, ’09 and ’10, we’ve been through a lot worse,” she said in reference to the housing market collapse. “We get smarter every time we make it through a challenging event.”

GE said it is moving 200 corporate employees from Fairfield to a new headquarters to be built in Boston, but what will happen to the other 600 or so people based in Fairfield is the great unknown. The company has said some will be retained in office space it leases in Norwalk.

read more: http://www.ctpost.com/realestate/article/Real-estate-market-bracing-for-GE-exodus-6762276.php

NY Post: Bowie’s apartment building has a $11.7M penthouse available

While the world continues to mourn the loss of legendary rock icon David Bowie, New Yorkers are flocking to 285 Lafayette St., where Bowie lived with supermodel Iman since 1992, to pay their respects.

The area outside the building is now cordoned off, a shrine to Bowie filled with flowers, candles, letters and love.

Real estate watchers should take note of a penthouse in the building that is currently on the market for $11.7 million, down from its original $12.99 million asking price in March 2015.

The 2,890-square-foot penthouse includes four bedrooms, 3½ bathrooms, five terraces and a private master floor.

read more: http://nypost.com/2016/01/14/bowies-apartment-building-has-a-11-7m-penthouse-available/

Week Ahead

This Morning

Housing Market Index due at 10am ET follows last months’s index that showed homebuilder sentiment came in at 61 out of 100 — the third-highest reading of last year and a steady three points higher than the 12-month average.


Housing Starts come at 10am ET, after starts in November rebounded from a seven-month low and permits surged to a five-month high, showing signs of strength in the housing market


Existing Home Sales for December will be reported at 10am ET. The National Association of Realtors is forecasting that total existing-homes sales in 2015 increased 6.5% compared with 2014. As of December, existing-home sales were at an annual rate of around 5.26 million – the highest since 2006, but roughly 25% below the prior peak set in 2005 (7.08 million), NAR says in its 2016 forecast.

Have a prosperous day!

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