Archive for May, 2013

CFPB loosens rules for smaller lenders

Good news for small local banks and credit unions. After a several months of accepting comments from industry groups and the public, the Consumer Financial Protection Bureau made several changes to its ability-to-repay rules — changes that are a boon for smaller lenders.

Background

CFPB’s ability-to-repay rule is the standard that all loans must meet. It explains what a lender must consider when offering a mortgage. It’s to prevent lenders from offering loans to people who can’t afford them. (Click here for the Buzz post that explains it.)

Some loans, called qualified mortgages (QM), automatically meet those ability-to-repay rules. These loans have no excess points or fees, can’t be interest-only or have increasing principal, and require a 43 percent or better debt-to-income ratio.

Finally, only lenders in ‘rural or underserved’ areas could offer loans with balloon payments (a large final payment) and still have them considered QMs.

So what’s the big deal now?

After hearing the outcry from smaller lenders, CFPB made some changes to what qualifies for QM status.

0. It defined "small creditors" as those A) with no more than $2 billion in assets, and B) that don’t write more than 500 first-lien mortgages a year.

1. Some lenders get a looser definition of QM. A small creditor that keeps a loan on its own books for at least three years doesn’t have to worry about the borrower’s debt-to-income ratio. (Normally 43 percent would be required.) These lenders can be in rural/underserved areas or not.

2. More lenders are allowed to offer balloon-payment mortgages… at least for now. Staring January 10, 2014, for two years small lenders in any area can offer balloon-payment mortgages and still have those loans be considered QMs, if they hold the loans.

3. Some lenders are exempt from ability-to-repay rules, period. Non-profits that offer mortgages only to low-to moderate income consumers (and no more than 200 of them a year) don’t need to follow ability-to-pay regulations. Neither do "Community Development Financial Institutions," "Community Housing Development Organizations, and "Downpayment Assistance Providers of Secondary Financing" (various government agencies define those terms).

* * *

CFPB is trying to ride the lines between A) making sure that lenders don’t repeat their mistakes and give loans to people who can’t repay (and then beg you and me to bail them out); B) ensuring that people who can afford loans don’t have a hard time getting them; and C) helping those who need help afford the homeownership part of the American Dream.

We wish director Richard Cordray and his crew good luck with that.

Want the gory details? Click here for the CFPB’s explanation of the tweaked regs. (Scroll down to page 4.)

Interest rates: soaring, skyrocketing, or just going up?

I find this headline from DSNews amusing: "Freddie Mac: Fixed Rates Soar to Highest Level in a Year."

Yep, interest rates have risen almost a half-percent since the beginning of May. Now they are 3.81 percent (assuming 0.8 points). What’s funny is talking about interest rates soaring to 3.81 percent. I remember being thrilled when I got 7.5 percent on my house in Roanoke, way back when!

The point, of course, is that interest rates are showing signs of picking up.

Maybe that will spur more potential buyers into the market ("Honey, we should do it now before mortgages skyrocket to four percent!").

Maybe it will bring in more sellers ("Let’s get the house on the market before mortgages go up and no one wants to buy!").

My bet: Fewer buyers if interest rates continue to rise. Higher rates will eventually slow down the stock market (’cause bonds start to look better). So people will freak out and be afraid to buy.

Then again, my business card says "analyst," not "expert."

Are we doing the right thing?

Banner_175x350_gift-cardVAR launched our 2013 all-member survey yesterday, and we’re already seeing great results.

Have you taken it yet? Please do — your opinion is important.

We need to know what we do that works … and what we do that doesn’t. We want to know how you feel about the services we provide, and about how we represent you.

So please take five minutes to answer these questions. And here’s an incentive: if you fill out the survey by 5 pm on Friday, June 21st you’ll be entered to win one of three $100 American Express gift cards!

CLICK HERE TO TAKE THE SURVEY

NoVA sees jump in listings

For much of the state, the problem lately has been a lack of listings — low inventory (for a variety of reasons) has been pushing us into a sellers’ market.

But — according to Lisa Sturtevant in the Washington Post — that trend may (may) be turning around.

Looking at the number of listings in various parts of the metro DC area, she found that listings had jumped significantly from April 2012 to April 2013.

First, listings were up 22 percent from March to April. Now, we’ve said many times that year-to-year numbers are more important than month-to-month ones, but this is an exception. As Sturtevant points out, "An increase in new listings this large is not a typical March-to-April bump. In fact, last year, the number of new listings in April was lower than the number in March."

Looking at the bigger picture, from April 2012 to April 2013, the DC area saw a jump of 16 percent. Stafford saw the biggest bump — up 42.6 percent year to year. But other areas were no slouches:

Fredericksburg was up 34.2 percent. Alexandria was up 26.7 percent. Montgomery was up more than 23 percent. And so on. All told, there were more than 11,100 new listings in the area in April 2013. In fact, as Sturtevant notes,

This is the first time since the beginning of the housing market recovery that there have been year-over-year increases in new listings across most of the region’s jurisdictions.

So there’s potential for good news there. Playing Devil’s advocate, though, the article noted that while April to April showed an increase in listings, March to March showed a decrease. So this could be a one-off or it could be the sign of more sellers entering the market.

Claire Forcier-Rowe completes NAR Leadership training

Congrats to Claire Forcier-Rowe of Fredericksburg, who graduated from NAR’s Leadership Academy last week in Washington, D.C.

The Leadership Academy is a seven-month program that trains and develops Realtors from around the country as future leaders in their profession and in their association.

Through training with experts, meetings with NAR leaders, and workshops, the academy members learn to create a more effective connection with their peers and staff, develop their communications skills, and improve their understanding of NAR’s long-term goals.

So once again, congratulations to Claire and the entire 2013 NAR Leadership Academy Class.

Here she is holding her academy certificate, flanked by VAR leadership — from left to right, treasurer Bill White, 2013 president Mary Dykstra, and 2013 president-elect Brad Boland:

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April home sales report (selling season is here)

According to April home sales data, its a great time for homes to be put on the market.  The Virginia numbers match the positive buzz humming nationally.  Housing is once again contributing to economic growth and the job market is looking more hopeful.  So, let’s look at the signs for Virginia:

  • Sales volume is accelerating.  At the start of the year, volume was larger than the preceding year, but it has also grown faster as we start into the peak sales season.
  • Increased volume is accompanied by steadily rising prices and an increased pace of sales.  This combination is a good sign because houses are selling and rising prices will attract more inventory.
  • Homes remained on the market for an average of 78 days in April, the the fewest DOM we have seen in years.
  • There are reasons for demand to increase.  First, interest rates remain low.  30-year mortgage rates even lowered a little from March to April.  Second, the Virginia unemployment rate continues to fall.

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Click here to view full April 2013 Home Sales Report

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Realtors helping Realtors: Oklahoma edition

EDIT: The Oklahoma Housing Foundation is managed by the Oklahoma Association of Realtors (not the Oklahoma City Metro Association); the mailing address was also incorrect.

At least 16 Realtors lost their homes in the EF-5 (!) tornado that destroyed Moore, Oklahoma on Monday. When things like this happen, the informal — but highly effective — Realtors helping Realtors network springs into action.

The Oklahoma City Metro Association of Realtors is already providing some emergency assistance to Realtors, and now they’re working to help for the longer term, including managing the funds and assistance from other organizations.

You can help through the Oklahoma Housing Foundation Realtor Disaster Relief Fund. It’s run by the non-profit Oklahoma Housing Foundation, and its job is to help Realtors who lose their homes in natural disasters.

1. Click right here to make a donation online, or

2. Send a check to:
Oklahoma Housing Foundation – Realtor Relief Fund
9807 N Broadway Ext.
Oklahoma City, OK 73114.

You can click here to read more from NAR, or click here for the Oklahoma Association of Realtors relief page.

Here they areVirginia’s two major gubernatorial candidates — Ken Cuccinelli and Terry McAuliffe — will make a joint appearance just for Virginia Realtors on June 17. Yes, you’re invited. And yes, it’s free.

Come listen to each of the candidates attempt to convince the crowd that he would be the best choice for Realtors. Ask pointed questions. Make ‘em sweat. And show them that Realtors are involved.

Here are the details:

. Where: University of Richmond Jepson Alumni Center

. When: Monday, June 17; 9:00 – 11:00 AM

. Register (free, but required): RARealtors.com or (804) 422-5000

. Submit questions to: egreenfield@rarealtors.com

The event is presented by the Richmond Association of Realtors, in cooperation with the Fredericksburg, Southside, Williamsburg, and Virginia associations.

Realtor.com to offer enhanced commercial listings

Move, Inc., which runs Realtor.com for NAR, will begin offering "enhanced commercial search functionality" on the site later this year.

Working with commercial-real estate data provider Xceligent — which owns CommercialSearch.com — the site will begin to offer "amplified commercial functionality" including

hundreds of thousands of commercial listings Xceligent has aggregated into CommercialSearch from multiple sources including: its fully-researched markets, hundreds of MLSs, CIEs (Commercial Information Exchanges) of every market size, and the majority of the top 50 companies who provide commercial listings in the country.

Besides commercial listings, Realtor.com will also offer data on those properties via Xceligent’s CDX research product, which uses "hundreds of researchers proactively gathering information on every commercial building in a market."

Read more about it in this NAR press release.

Realtors make more — 25 percent more in 2012, says NAR

Congrats on the raise.

According to NAR’s 2013 Member Profile, Realtors are doing much better this year — earning 24.6 percent more in 2012 than they did in 2011. (That’s two years in a row that Realtor’s income rose.)

Essentially, fewer Realtors + more total sales = more money for each Realtor.

Here are some specifics to mull over:

In 2012…

  • Median gross income for a Realtor was $43,500 (up from $34,900 in 2011), on a sales volume of $1.5 million, spread over 12 transaction sides.
  • Realtors with 16 years or more experience had a median gross income of $57,300.
  • Realtors with two years or fewer experience had a median gross income of
    $9,700.
  • Property managers managed a median of 49 properties each, the highest number ever recorded.
  • The median business expenses for a Realtor were $4,900 — 37 percent of which were vehicle expenses. (Note to grammar nazis: Yeah, yeah.)
  • 24 percent of residential brokerage specialists had at least one commercial transaction side in the last year.
  • The typical agent had one transaction side involving a foreclosure and one involving a short sale.

See all the details in NAR’s 2012 Member Profile.