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CoreLogic – March loan performance lowest delinquency rates in 11 years

–  Rising Home Equity and Employment Support Delinquency Decline

–  March Foreclosure Rate Declined 0.2 percentage Points Year Over Year

–  Early-Stage Delinquency Rates Were Unchanged from March a Year Ago

CoreLogic released its monthly Loan Performance Insights Report. The report shows that, nationally, 4.3% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in March 2018, representing a 0.1 percentage point decline in the overall delinquency rate, compared with March 2017 when it was 4.4%. As of March 2018, the foreclosure inventory rate – which measures the share of mortgages in some stage of the foreclosure process – was 0.6%, down 0.2 percentage points from 0.8% in March 2017. Since August 2017, the foreclosure inventory rate has been steady at 0.6%, the lowest level since June 2007, when it was also 0.6%. The March 2018 foreclosure inventory rate was the lowest for that month in 11 years; it was also 0.6% in March 2007. Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To monitor mortgage performance comprehensively, CoreLogic examines all stages of delinquency, as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next. The rate for early-stage delinquencies – defined as 30 to 59 days past due – was 1.7% in March 2018, unchanged from March 2017. The share of mortgages that were 60 to 89 days past due in March 2018 was 0.6%, also unchanged from March 2017.

The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 1.9% in March 2018, down from 2.1% in March 2017. The March 2018 serious delinquency rate was the lowest for that month since 2007 when it was 1.5%. “Unemployment and lack of home equity are two factors that can lead to borrowers defaulting on their mortgages,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Unemployment is at the lowest level in 18 years, and for the first quarter, the CoreLogic Equity Report revealed record levels of home equity growth with equity per owner up $16,300 on average for the year ending March 2018.” Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30 days past due was 0.7% in March 2018, up from 0.6% in March 2017. By comparison, in January 2007, just before the start of the financial crisis, the current- to 30-day transition rate was 1.2%, while it peaked in November 2008 at 2%. “As we enter the summer, the risk of hurricane and wildfire damage to homes increases as does the risk of damage-related loan default,” said Frank Martell, president and CEO of CoreLogic. “Last year’s hurricanes and wildfires continue to affect today’s default rates. Serious delinquency rates are more than double what they were before last autumn’s hurricanes in Houston, Texas, and Naples, Florida. The serious delinquency rates have also quadrupled in Puerto Rico.”

Producer prices up 0.5% from April, 3.1% in past year

US wholesale prices last month posted the biggest 12-month gain since January 2012, a sign that the strong economy is beginning to rouse inflation. The Labor Department said Wednesday that its producer price index— which measures inflation before it reaches consumers— rose 3.1% from May 2017. The index rose 0.5% from April, biggest one-month increase since January. In April, producer prices rose just 0.1%. Energy prices, pulled higher by surging gasoline prices, rose 4.6% last month from April, the biggest jump in three years. Food prices rose just 0.1%, and seafood prices fell a record 13.1%. Core wholesale prices — which excludes the volatile food and energy sectors — rose 0.3 from April and 2.4% from May 2017. The Federal Reserve is expected to raise short-term interest rates Wednesday for the second time this year and the seventh time since December 2015 as inflation hits the central bank’s annual 2% target. On Tuesday, the Labor Department reported that consumer prices rose 0.2% in May, largely on soaring gasoline costs, and 2.8% over the past year, fastest 12-month jump since February 2012. But core consumer prices have risen a milder 2.2% over the past 12 months.

MBA – mortgage credit availability increased in May

Mortgage credit availability increased in May according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) which analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool. The MCAI increased 1.5% to 180.6 in May. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI increased (up 2.0%) and the Government MCAI increased (up 1.0%). Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 2.2% while the Conforming MCAI increased by 1.9%. “The expansion of offerings across all loan types drove credit availability to its highest level in three months. In particular, the conventional index and jumbo index both rose to their highest levels since March 2011. This was mainly caused by increased investor interest in jumbo loans and high balance conforming loans,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. The MCAI increased 1.5% to 180.6 in May. The Conventional MCAI increased (up 2.0%) and the Government MCAI increased (up 1.0%). Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 2.2% while the Conforming MCAI increased by 1.9%

The Conventional, Government, Conforming, and Jumbo MCAIs are constructed using the same methodology as the Total MCAI and are designed to show relative credit risk/availability for their respective index. The primary difference between the total MCAI and the Component Indices are the population of loan programs which they examine. The Government MCAI examines FHA/VA/USDA loan programs, while the Conventional MCAI examines non-government loan programs. The Jumbo and Conforming MCAIs are a subset of the conventional MCAI and do not include FHA, VA, or USDA loan offerings. The Jumbo MCAI examines conventional programs outside conforming loan limits while the Conforming MCAI examines conventional loan programs that fall under conforming loan limits. The Conforming and Jumbo indices have the same “base levels” as the Total MCAI (March 2012=100), while the Conventional and Government indices have adjusted “base levels” in March 2012. MBA calibrated the Conventional and Government indices to better represent where each index might fall in March 2012 (the “base period”) relative to the Total=100 benchmark.

Small business optimism jumps to second-highest level ever; tax cut cited

–  The NFIB’s small business optimism index rose 3 points to 107.8 in May, the second-highest level in the index’s 45-year history.

–  Within the index, expectations for business expansion and reports of positive earnings trends hit record highs.

–  Reports of compensation increases also hit their highest in the history of the index.

Small business optimism rose in May to its highest level in more than 30 years, helped by all-time highs in some key index components, the National Federation of Independent Businesses said Tuesday. Expectations for business expansion and reports of positive earnings trends hit record highs, while expectations for strong increases in real sales reached their highest since 1995. Reports of compensation increases also hit their highest in the history of the index. Small businesses account for about 40% of total hiring and are a good indicator on overall economic activity, Joseph Lavorgna, chief economist for Americas at Natixis, said in a note Tuesday. The% of firms in the NFIB survey expecting higher real sales tends to lead GDP by one quarter, which indicates second quarter growth should pick up to at least 3%, Lavorgna said. The US economy grew at a 2.2% annualized rate in the first quarter, according to the second estimate from the US Department of Commerce. “Small business owners are continuing an 18-month streak of unprecedented optimism which is leading to more hiring and raising wages,” NFIB chief economist Bill Dunkelberg said in a statement. “While they continue to face challenges in hiring qualified workers, they now have more resources to commit to attracting candidates.” Overall, the small business optimism index’s reading of 107.8 in May marked an increase of 3 points from the prior month and the second-highest level in the index’s 45-year history. The record high hit in 1983 is just 0.2 points more at 108.0. “The new tax code is returning money to the private sector where history makes clear it will be better invested than by a government bureaucracy,” a commentary in the NFIB report said. “Regulatory costs, as significant as taxes, are being reduced.”

Olick – weekly mortgage applications drop 1.5% as rates turn higher again

–  Rates are on the move higher again, and that caused mortgage application volume to drop 1.5% last week.

–  Volume was 15.4% lower than a year ago, according to the Mortgage Bankers Association.

–  Refinance volume turned back to bleeding, down 2% for the week and off nearly 34% from a year ago.

The mortgage market found some new energy for a few weeks, when interest rates suddenly dropped, but it was remarkably short-lived. Rates are on the move higher again, and that caused mortgage application volume to drop 1.5% last week from the previous week and 15.4% than a year ago, according to the Mortgage Bankers Association’s seasonally adjusted report. Refinance volume, which saw a significant gain the previous week, turned back to bleeding, down 2% for the week and off nearly 34% from a year ago, when interest rates were lower. Refinance demand is most sensitive to even the smallest moves in interest rates. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.83% from 4.75%, with points increasing to 0.53 from 0.46 (including the origination fee) for 80% loan-to-value ratio loans. Mortgage rates loosely follow the yield on the 10-year Treasury bond. “Despite lingering uncertainty over a potential trade war, investors moved away from Treasurys, pushing yields up for the week,” said Joel Kan, an MBA economist. “Overall mortgage application activity declined as rates rose, but government applications increased, driven largely by increases in FHA applications, reflecting stronger demand by first-time homebuyers.”

FHA, the federal insurance entity that backs home loans, allows for down payments as low as 3.5%. First-time homebuyers have been struggling to find affordable homes, as housing continues in a supply crisis. The FHA share of total applications increased to 10.6% from 9.7% the week before. The severe shortage of homes for sale is more of an issue for homebuyers than interest rates and continues to weaken purchase demand. Mortgage applications to buy a home fell two% for the week and were 0.2% lower than the same week one year ago. Purchase applications have largely been higher on a year-over-year basis, so this drop could signal more weakness ahead. Home prices continue to rise, and the gains in some market are getting bigger, as supply falls. More homes came on the market for the spring season, but they were quickly bought up by hungry buyers, often in bidding wars. Homes are spending less and less time on the market, meaning buyers have less time to secure financing, especially if they need more than they expected. Mortgage rates are now sitting near seven-year highs again, but that could change swiftly on upcoming economic news. The policymaking Federal Open Market Committee is expected to raise its lending interest rate on Wednesday afternoon, but comments from members could move mortgage rates as well. “The Fed announcement could push rates quickly higher or lower in the afternoon. Less than 24 hours later, the European Central Bank is out with their own hotly anticipated policy update,” said Matthew Graham, chief operating officer of Mortgage News Daily. “In both cases, investors aren’t wondering about rate hikes (we already know the Fed will and the ECB won’t). Rather, it’s the accompanying details that run the risk of causing significant volatility for rates.”

Merrill Lynch ordered to pay $15.7M for cheating customers in mortgage bond trades

Merrill Lynch will pay $15.7 million to settle allegations that its employees misled mortgage bond customers and overcharged those customers residential mortgage-backed securities trades during a three-year period from 2009 through 2012, the Securities and Exchange Commission announced Tuesday. According to the SEC, an investigation found that Merrill Lynch RMBS traders and salespeople tricked the bank’s customers into overpaying for mortgage bonds by lying about the price Merrill Lynch paid to acquire the securities. For those unfamiliar with RMBS trading, mortgage bonds are not publicly traded on an exchange and pricing information for the bonds is not publicly available. Therefore, RMBS buyers and sellers use broker-dealers to execute individually negotiated transactions. In its investigation, the SEC found that Merrill Lynch RMBS traders deceived customers about the prices of mortgage bonds, raising the prices in order to make more money on the deals. “During the Relevant Period, Merrill personnel who purchased and sold non-agency RMBS made false or misleading statements, directly and indirectly, to Merrill customers and/or charged Merrill customers undisclosed excessive mark-ups,” the SEC said in its order. “By engaging in this conduct, Merrill personnel acted knowingly or recklessly.”

According to the SEC, Merrill Lynch’s RMBS traders and salespeople illegally profited from excessive, undisclosed commissions, which, in some cases, were more than double what the customers should have paid. The SEC also stated that Merrill Lynch had policies that prohibited traders from making false or misleading statements and the ability to monitor traders’ communications for such statements. But the SEC stated that the company failed to “reasonably” implement procedures to monitor and prevent those types of “false or misleading” statements. “Merrill also had policies that prohibited excessive mark-ups and procedures to monitor for excessive mark-ups on transactions in non-agency RMBS, but the policies and procedures were not reasonably designed and implemented,” the SEC said. “Due to these deficiencies, Merrill failed reasonably to perform a meaningful review of potentially excessive mark-ups on certain non-agency RMBS transactions, including transactions that are the subject of the Order.” The SEC found that that the Merrill Lynch traders violated antifraud provisions of certain federal securities laws and that Merrill Lynch failed to reasonably supervise the traders. “In opaque RMBS markets, lying to customers about the acquisition price can deprive investors of important information,” said Daniel Michael, chief of the SEC Enforcement Division’s Complex Financial Instruments Unit. “The Commission found that Merrill Lynch failed in its obligation to supervise traders who allegedly used their access to market information to take advantage of the bank’s own customers.” As part of the settlement agreement, Merrill Lynch will pay a fine of $5.2 million to the SEC and will repay more than $10.5 million to its customers. Merrill Lynch neither admits to nor denies the SEC’s findings, but agrees to be censured by the SEC. In a statement provided to HousingWire, Merrill Lynch said these issues have long since been remedied. “We have addressed issues raised in this matter, which occurred between 2009 and 2012, and taken steps to improve our procedures,” the company said in its statement.

Maurice Wutscher LLP – 9th Cir. rejects FCRA putative class action relating to short sale credit reporting

In a putative class action alleging violations of the federal Fair Credit Reporting Act, the US Court of Appeals for the Ninth Circuit recently held that:

(1) the credit reporting agency’s reporting of short sales was not inaccurate or misleading, even though it knew that a government sponsored enterprise misinterpreted its short sale code as a foreclosure, because FCRA does not make credit reporting agencies liable for the conduct of its subscribers;

(2) the credit reporting agency’s consumer disclosures were clear and accurate, and 15 USC. § 1681g did not require the credit reporting agency to disclose its proprietary codes that could confuse unsophisticated consumers; and

(3) the plaintiffs failed to establish a right to statutory damages because the credit reporting agency conduct was not objectively unreasonable.

The plaintiffs brought this action against a credit reporting agency alleging violations of the federal Fair Credit Reporting Act, 15 USC. § 1681, et seq., based on the credit reporting agency’s reporting of short sales and its related consumer disclosures. The credit reporting agency delivered its credit reports in a proprietary computer-generated format that displays credit information “in segments and bits and bytes,” but the credit reporting agency provides technical manuals that enable its subscribers to read and understand the credit reports they receive. As you may recall, a short sale is a derogatory credit event that furnishers report to the credit reporting agencies. When the credit reporting agency receives data reporting a short sale, it translates the data into its proprietary coding before it can export the data to subscribers. The credit reporting agency’s technical manual coded short sales as follows:

(1) Account type: A mortgage-related account, such as a first mortgage or home equity line of credit.

(2) “Account condition” and “payment status” code: 68, which corresponds to a Special Comment of “Account legally paid in full for less than the full balance.” The 68 automatically populates a 9 into the first position on the payment history grid to display the “Settled” status.

(3) Payment history grid showing the final status (“Settled”) in the first digit, followed by 24 months of payment history information.

(4) Date in 25th month in the payment history grid corresponds to the date the furnisher reported the “Settled” status to the credit reporting agency.

In other words, the credit reporting agency reported account condition code 68 (“Account legally paid in full for less than the full balance”) for short sales, which then automatically inserted the number 9 into the payment history grid (to display a “Settled” status). However, a lead payment history code of 9 can represent multiple, derogatory, non-foreclosure statuses, including “Settled, Insurance Claim, Term Default, Government Claim, Paid by Dealer, BK Chapter 7, 11 or 12 Petitioned, or Discharged and BK Chapter 7, 11 or 12 Reaffirmation of Debt Rescinded.”

Foreclosures are reported with a lead payment history code of 8 and an account condition and payment status code of 94 (“Creditor Grantor reclaimed collateral to settle defaulted mortgage”). According to the credit reporting agency’s technical manuals, it was impossible for its credit reports to reflect a foreclosure with a lead payment history code of 9. A government sponsored enterprise (“GSE”) that purchased mortgage loans from certain lenders used a proprietary underwriting software. Its rules required that a consumer with a prior foreclosure must wait seven years before obtaining a new mortgage, but consumers with a prior short sale need wait only two years. The GSE’s underwriting software analyzed credit report data from the credit reporting agencies. In doing so, the software relied on the GSE’s payment code, which corresponded to the credit reporting agency’s lead payment history code. Until 2013, the software “identified [mortgage accounts] as a foreclosure if there [was] a current status or [payment history code] of ‘8’ (foreclosure) or ‘9’ (collection or charge off).” Thus, the GSE elected to treat code 9 the same as it treated code 8, even though it knew from the instructions of the credit reporting agency that code 9 did not represent a foreclosure, and that it was “necessarily capturing accounts that [were] not actually foreclosures.” The GSE’s treatment of lead payment history code 8 and 9 imposed a seven year waiting period on consumers with a prior short sale, when the waiting period should have only been two years. In 2010, consumers and the credit reporting agency raised this issue with the GSE, but neither entity changed its coding.

Between 2012 and 2013, the plaintiffs disputed the credit reporting agency’s reporting of their prior short sales. However, the plaintiffs were able to obtain new loans after their prior short sales because their lenders either understood that they had a prior short sale, not a foreclosure, or the lender did not use the GSE’s underwriting software. In June 2013, the plaintiffs filed a putative class action against the credit reporting agency asserting claims for: (1) a reasonable procedures claim pursuant to 15 USC. § 1681e; (2) a reasonable reinvestigation claim pursuant to 15 USC. § 1681i; (3) a file disclosure claim pursuant to 15 USC. § 1681g. The plaintiffs requested damages pursuant to 15 USC. § 1681n. The case was stayed pending the Supreme Court’s resolution of Spokeo, Inc. v. Robins, 135 S. Ct. 1892 (2015). After the stay was lifted, the credit reporting agency moved for summary judgment. The trial court granted summary judgment in favor of the credit reporting agency. This appeal followed. The Ninth Circuit began its analysis on the plaintiffs’ reasonable procedures and reasonable reinvestigation claims. As you may recall, FCRA’s compliance procedures provide that: “[w]henever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” 15 USC. § 1681e(b). Liability under this reasonable procedure provision “is predicated on the reasonableness of the credit reporting agency’s procedures in obtaining credit information.” Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995). To bring a section 1681e claim, the “consumer must present evidence tending to show that a credit reporting agency prepared a report containing inaccurate information.” Id., 45 F.3d at 1333. Additionally, a credit reporting agency must conduct a free and reasonable investigation within 30 days of a consumer informing the agency of disputed information. 15 USC. § 1681i(a)(1)(A). Consumers must show that “an actual inaccuracy exists” for a section 1681i claim. Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010).

The plaintiffs argued that the credit reporting agency’s short sales code combination 9-68 was “patently incorrect” because it caused the GSE to treat short sales as a potential foreclosure. However, the Ninth Circuit noted that the credit reporting agency reported short sales with code combination of 9-68. Account status code 68 automatically inserted 9 into the lead payment history spot, signifying that the account was “Settled” and “legally paid in full for less than the full balance.” This, according to the Ninth Circuit, was the very definition of a short sale. Further, the Ninth Circuit explained that even if code combination 9-68 stood for other derogatory events, and thus could be misleading, that alone did not render the credit reporting agency’s reporting actionable. The reporting must be “misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.” Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1163 (9th Cir. 2009). As the Ninth Circuit explained, the credit report agency reported foreclosures with code 8-94, which meant “[c]reditor [g]rantor reclaimed [the] collateral to settle defaulted mortgage.” And, as the Ninth Circuit further explained, a foreclosure did not occur where a mortgage account is “legally paid in full for less than the full balance” like a short sale. Thus, in the Ninth Circuit’s view, the credit reporting agency’s code system accurately distinguished short sales and foreclosures. The plaintiffs also argued that the credit reporting agency’s reports were misleading because it knew the GSE was misreading its technical manuals and failed to take remedial action. However, the Ninth Circuit rejected this argument because FCRA did not make the credit reporting agency liable for the misconduct of its subscribers. Thus, because the Ninth Circuit determined that the plaintiffs failed to point to any inaccuracies on their credit reports, it did not have to consider whether the credit reporting agency had reasonable procedures or conducted reasonable reinvestigations.

Next, the Ninth Circuit turned to the plaintiffs’ arguments regarding the credit reporting agency’s consumer disclosures. As you may recall, 15 USC. § 1681g(a) provides, in relevant part, that “[e]very consumer reporting agency shall, upon request, clearly and accurately disclose to the consumer: [a]ll information in the consumer’s file at the time of the request.” A consumer’s file includes “all information on the consumer that is recorded and retained by a [credit reporting agency] that might be furnished, or has been furnished, in a consumer report on that consumer.” Cortez v. Trans Union, LLC, 617 F.3d 688, 711-12 (3d Cir. 2010). First, the plaintiffs argued that the credit reporting agency’s consumer disclosures violated section 1681g(a)(1), because it placed the designation “CLS” (Closed) in the lead spot on the payment history grid on each consumer disclosure, instead of one of the code 9 statuses. The plaintiffs argued that because the status category on a consumer disclosure (“Paid in settlement”) was a separate category from the lead digit in the payment history grid on a credit report, these categories served different purposes. The Ninth Circuit disagreed. It found that the credit reporting agency complied with section 1681(g) because it provided the plaintiffs with all information in their files at the time of their requests in a form that was both clear and accurate. Specifically, the credit reporting agency’s consumer disclosures conveyed the same information it reported to its subscribers. Additionally, the Ninth Circuit determined that the credit reporting agency was not required to report the actual code 9 in a consumer disclosure. Requiring the credit reporting agency to provide its proprietary code, in the Ninth Circuit’s view, would contradict section 1681g(a)’s requirement that the disclosure be “clear.” In order for a consumer to understand code 9, the credit reporting agency would have to report account status code 68 and release its complicated technical manual, which would further confuse unsophisticated consumers.

Moreover, the Ninth Circuit was unpersuaded by the plaintiffs’ argument that the credit reporting agency violated section 1681g(a)(1), because “there was a material disconnect between the information displayed in [their] consumer reports and the information displayed in [their] consumer disclosures due to the presence of the catchall code 9.” As the Ninth Circuit explained, this was in essence the same argument based on an incomplete interpretation of the credit reporting agency’s coding system. The credit reporting agency’s account status code 68 clarified the account’s status and the specific derogatory event attached to it. Thus, the Ninth Circuit held that the plaintiffs failed to identify what information the credit reporting agency improperly excluded from its disclosures. Additionally, the Ninth Circuit found that the plaintiffs failed to establish a right to statutory damages under 15 USC. § 1681n, which required a showing that the credit reporting agency willfully failed to comply with FCRA. The Ninth Circuit stated that even if the credit reporting agency had violated section 1681g, it did not act in an objectively unreasonable manner by electing not to list code 9 in its consumer reports. Further, the Ninth Circuit noted that the Consumer Financial Protection Bureau investigated the short sale-foreclosure problem and determined that the underlying issue was not due to inaccurate reporting by furnishers or credit reporting agencies. Accordingly, the Ninth Circuit affirmed the trial court’s grant of summary judgment in favor of the credit reporting agency.

Oil prices fall as US, Russia supplies grow

Oil prices fell on Monday, pulled down by rising Russian production and US drilling activity creeping to its highest in more than three years. Analysts expect surging US output to start offsetting efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to withhold production, which have been in place since early 2017 and have pushed up prices significantly in the first half of this year. Brent crude futures, the international benchmark for oil prices, were at $76.21 per barrel at 0504 GMT, down 25 cents, or 0.3%, from their last close. US West Texas Intermediate (WTI) crude futures were down 21 cents, or 0.3%, at $65.52 a barrel. Prices were weighed down by another rise in the number of rigs drilling for new oil production in the United States. The rig count crept up by one to its highest since March 2015 at 862, according to energy services firm Baker Hughes on Friday. That implies US crude output, already at a record high of 10.8 million barrels per day (bpd), will rise further. “Non-OPEC supply is expected to rise sharply in 2019 led by US shale growth, along with Russia, Brazil, Canada and Kazakhstan,” US bank JPMorgan said in its quarterly outlook published on Friday, adding that it was bearish on the oil price outlook going into the second half of the year.

Ben Carson backtracks on rent raise

The US Department of Housing and Urban Development released a plan in April that HUD Secretary Ben Carson says will push millions of low-income households toward self-sufficiency. Under the current system, Carson explained many low-income earners are discouraged from, or even penalized for, finding higher-paying jobs as they would lose their current benefits and perhaps be worse off than when they earned a lower income. But HUD’s proposed plan quickly earned criticism as an analysis by the Center on Budget and Policy Priorities showed it would raise rates for the poorest Americans by about 20% and would raise the minimum rent from $50 to $150 per month. However, now it seems Carson is reconsidering that plan. At the Bipartisan Policy Center Friday, he said additional funding from Congress eliminated the immediate need to raise rents. “The reason we had to consider raising rents at all is because we were dealing with a $41 billion budget,” Carson said. “And in order to be able to keep from raising rents on the elderly and the disabled, and in order to not displace people who are already being taken care of, that was necessary.” “Now that the budget has been changed, the necessity for doing that is not urgent,” he said.

Trump issues warning to trade partners over retaliatory tariffs

President Donald Trump warned trading partners not to retaliate against US duties on steel and aluminum imports, before departing from the Group of Seven summit in Quebec on Saturday. “If they retaliate, they’re making a mistake,” Trump told reporters in a short but stern remark. The president met with leaders from Canada, Britain, Italy, France, Germany and Japan in Quebec, where trade talks dominated the summit. Trump has asked countries to end tariffs and trade barriers in his push for “fair and reciprocal” trade. Trump’s administration last week ended a two-month exemption to steel and aluminum imports from Mexico, Canada and the European Union. Mexico slapped a 25% import tariff on US steel products, as well as 20% on pork products, 25% on bourbon and duties on other agricultural goods including cranberries. Canada issued its own threat of tariffs, which don’t go into effect until July. Meanwhile, the European Union – the world’s largest trading bloc – announced last week it would impose retaliatory tariffs on the US beginning in July, over Washington’s duties on steel and aluminum imports from Europe. The EU said it will impose the “rebalancing” tariffs on about $3.3 billion (2.8 billion euros) worth of US steel, bourbon, agricultural products including sweet corn, orange juice, cranberries and certain clothing made of cotton.

Zillow begins rollout of significant Premier Agent changes

Back in April, Zillow Group announced it was rolling out changes to its Premier Agent program. Now, those changes have begun. Zillow previously disclosed that it would soon bring several significant changes to its Premier Agent program “over the next several months.” Now, reports have reached HousingWire that this rollout has begun. The new changes will certainly be beneficial to consumers, however real estate agents are still unsure about the changes. Previously, real estate agents could purchase leads, which Zillow would send to them either via phone call or email. If the agent did not answer the phone, they were able to call the lead back at a later time. But Zillow pointed out several pitfalls to this system, both for real estate agents and consumers alike. For consumers, the pitfalls were obvious – there wasn’t always an instant connection to a real estate agent when they tried to contact someone to get their questions answered. Real estate agents also complained due to the value of the leads they would receive, as often times the callers were already working with another agent, and just wanted to ask questions. Also, several different real estate agents were able to purchase the same zip codes, meaning if they missed the call and other agent called the consumer back first, they would keep the lead.

Now, however, Zillow is changing the game. It will now have its own representatives screen incoming calls. They will make sure the caller is actively looking to buy or sell a home, not yet working with an agent and ready to speak to an agent. Once this screening process is complete, Zillow will connect the real estate agent to the caller. However, if the agent doesn’t pick up, Zillow will automatically transfer the call to the next agent in line. “We’ve implemented these changes to deliver higher quality leads to agents while also ensuring a great experience for consumers looking to connect with agents,” a Zillow spokesperson told HousingWire. “This will allow potential buyers to schedule time to speak to an agent when it’s convenient for them and the agent. And, when an agent misses a call for any reason, they don’t lose their place in the queue, they receive the next connection.” If a consumer requests a specific real estate agent, the lead will be sent to that agent, and will remain with them regardless of whether or not they answer the initial phone call. However, Zillow explained this occurrence in rare. “Our data shows the majority of home shoppers do not specifically select an agent when submitting an inquiry on a listing,” the company said. “However, when a home shopper does select an agent, that lead is much more likely to convert.”

And Zillow does warn that real estate agents’ lead volume might change, but expresses its hope that the leads agents are provided with will be of better quality. “Your lead volume may change; however, you’ll continue to receive leads in proportion to your Premier Agent Advertising share of voice,” the company stated. “We’re now focusing on quality over quantity. Each lead you receive will be validated, ready to speak to you and directly connected to you by phone.” The company will continue to roll out its new program across the US throughout 2018. To see if Zillow has begun using its new Premier Agent validated leads in your area, click here and enter your zip code.

Oil sinks further as OPEC and Russia look to raise output

Oil prices extended losses on Monday as Saudi Arabia and Russia said they may increase supplies while US production gains show no signs of slowing. Brent crude futures stood at $75.35 a barrel at 0913 GMT, down $1.09 from the previous close and after touching a three-week low of $74.49 earlier in the session. US West Texas Intermediate (WTI) crude futures were at $66.69, down $1.19, after hitting a six-week low of $65.80. The Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia began withholding 1.8 million barrels per day (bpd) of supplies in 2017 to tighten the market and prop up prices that in 2016 fell to their lowest in more than a decade at less than $30 a barrel. Prices have soared since the start of the cuts last year, with Brent breaking through $80 this month, triggering concerns that high prices could crimp economic growth and stoke inflation. “The pace of the recent rise in oil prices has sparked a debate among investors on whether this poses downside risks to global growth,” Chetan Ahya, chief economist at US bank Morgan Stanley, wrote in a weekend note.

To address potential supply shortfalls Saudi Arabia, de-facto leader of producer cartel OPEC, and top producer Russia have been in talks about easing the cuts and raising oil production by 1 million bpd. “Given that our crude balance is short some 825,000 bpd over [the second half of the year], a gradual increase of about 1 million bpd would probably limit stock draws to quite some extent,” Vienna-based consultancy JBC Energy said. Meanwhile, surging US crude production showed no sign of abating as drillers continue to expand their search for new oilfields to exploit. US energy companies added 15 rigs looking for new oil in the week ending May 25, bringing the rig count to 859, its highest since 2015, in a strong indication that American crude production will continue to rise. US crude output has already surged by more than 27% in the past two years, to 10.73 million bpd, ever closer to Russia’s 11 million bpd.

Military members most likely to utilize zero-down mortgages

The home buying preferences of service members and veterans differ from the rest of the population. Military members often face very different lives than the rest of the population, so it stands to reason that their preferences and actions when it comes to buying a home would also be different. One of the most notable differences is the down payment, or lack thereof, according to NAR’s 2018 Veterans and Active Military Home Buyers Profile. About 56% of active duty members and 41% of veterans take advantage of zero down or 100% financed mortgages, compared to just 7% of non-military members. Of course, while there are some zero-down mortgage options available to certain homebuyers, it is much easier for military members and veterans to take advantage of these programs through the US Department of Veterans Affairs.

The US needs 50,000 truck drivers to avoid a shipping squeeze

Retailers are facing a shipping squeeze, and the trucking industry just can’t keep up. According to the American Trucking Associations, there’s a shortage of roughly 50,000 truck drivers across the country. And it’s hitting both businesses and consumers in the wallet. Companies are complaining about how the driver shortage is impacting their business. Meanwhile, the cost of convenient shipping is starting to catch up with consumers. Amazon recently hiked its Prime membership to $119 a year from $99 a year. The retail giant said one of the reasons for the price jump was increased shipping costs. But the driver shortage isn’t just because of demand created by online shopping. There’s a lot going on behind the scenes, according to Bob Costello, chief economist at American Trucking Associations. “We have a demographics problem, demand is strong, trucks haul over 70% of the freight tonnage, our average age is very high, [and] we don’t have enough females,” said Costello. “So much of it revolves around demographics.” To be fair, the trucking lifestyle isn’t exactly an easy sell. Truck drivers work long hours, they’re away from home for weeks on end, and oftentimes sleep inside the trucks themselves. Now, there’s a new technology limiting the hours a truck driver can work in a given day – electronic logging devices (ELDs). And then there’s Elon Musk. He’s using Tesla to develop a fully electric semi truck that could change the industry. He’s not the only one looking to disrupt trucking as we know it. Goldman Sachs estimates that self-driving cars could cost American drivers up to 25,000 jobs a month. But the trucking industry isn’t quite ready to go autonomous yet. “Driverless trucks are decades away,” Costello said. “That is not the solution.” The ATA says we’ll need 898,000 more drivers over the next decade to keep up with growth and demand. It’s not exactly clear how the trucking industry is going to shake out. But until the shortage issue is resolved, companies and consumers alike will likely be stuck with the trickle-down effects of this driver shortage.

NAR – existing-home sales slide 2.5% in April

After moving upward for two straight months, existing-home sales retreated in April on both a monthly and annualized basis, according to the National Association of Realtors®. All four major regions saw no gain in sales activity last month. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 2.5% to a seasonally adjusted annual rate of 5.46 million in April from 5.60 million in March. With last month’s decline, sales are now 1.4% below a year ago and have fallen year-over-year for two straight months. The median existing-home price for all housing types in April was $257,900, up 5.3% from April 2017 ($245,000). March’s price increase marks the 74th straight month of year-over-year gains. Total housing inventory at the end of April increased 9.8% to 1.80 million existing homes available for sale, but is still 6.3% lower than a year ago (1.92 million) and has fallen year-over-year for 35 consecutive months. Unsold inventory is at a 4.0-month supply at the current sales pace (4.2 months a year ago). Properties typically stayed on the market for 26 days in April, which is down from 30 days in February and 29 days a year ago. Fifty-seven% of homes sold in April were on the market for less than a month.’s Market Hotness Index, measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in April were Midland, Texas; Boston-Cambridge-Newton, Mass.; San Francisco-Oakland-Hayward, Calif.; Columbus, Ohio; and Vallejo-Fairfield, Calif. According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage increased for the seventh straight month to 4.47% in April (highest since 4.49% in September 2013) from 4.44% in March. The average commitment rate for all of 2017 was 3.99%. First-time buyers were 33% of sales in April (highest since last July), which is up from 30% last month but down from 34% a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 20175 – revealed that the annual share of first-time buyers was 34%. “Especially with mortgage rates going up in recent weeks, prospective buyers should visit with more than one lender to ensure they are getting the lowest rate possible,” NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “Receiving a rate quote from multiple lenders could lead to considerable savings over the life of the loan. Ask a Realtor® for a few recommendations of lenders to contact to get a quote.” All-cash sales were 21% of transactions in April, which is up from 20% in March and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 15% of homes in April (unchanged from last month and a year ago).Distressed sales – foreclosures and short sales – were 3.5% of sales in April (lowest since NAR began tracking in October 2008), down from 4% last month and 5% a year ago. Three% of April sales were foreclosures and 0.5% were short sales.

Single-family home sales declined 3.0% to a seasonally adjusted annual rate of 4.84 million in April from 4.99 million in March, and are 1.6% below the 4.92 million sales pace a year ago. The median existing single-family home price was $259,900 in April, up 5.5% from April 2017.Existing condominium and co-op sales increased 1.6% to a seasonally adjusted annual rate of 620,000 units in April (unchanged from a year ago). The median existing condo price was $242,500 in April, which is 3.4% above a year ago. April existing-home sales in the Northeast fell 4.4% to an annual rate of 650,000, and are 11.0% below a year ago. The median price in the Northeast was $275,200, which is 2.8% above April 2017. In the Midwest, existing-home sales were at an annual rate of 1.29 million in April (unchanged from March), and are 3.0% below a year ago. The median price in the Midwest was $202,100, up 4.6% from a year ago. Existing-home sales in the South decreased 2.9% to an annual rate of 2.33 million in April, but are still 2.2% above a year ago. The median price in the South was $227,600, up 3.9% from a year ago. Existing-home sales in the West declined 3.3% to an annual rate of 1.19 million in April, and are 0.8% below a year ago. The median price in the West was $382,100, up 6.2% from April 2017.

Oil price retreats on potential supply boost

Oil prices fell on Friday, on the possibility that more supply will hit the market, making up for the drop in supplies from Venezuela which, along with OPEC’s output cutback have helped rebalance the market. Oil’s rally has accelerated in recent weeks on the potential for another supply reduction as sanctions could curb Iranian exports. On Friday, Russian Energy Minister Alexander Novak said he has had talks with Saudi Energy Minister Khalid al-Falih on an easing of the terms of the global oil supply pact. OPEC and some non-OPEC members agreed to work together to curb output in order to balance an oversupplied market 17 months ago. The agreement was reached after months of depressed prices, which were a result of a global supply glut. The pact worked, with the oil markets now much more balanced, which has buoyed prices. According to Reuters, the energy ministers of Saudi Arabia, Russia and the United Arab Emirates are debating an output increase of about 1 million barrels per day

President Trump signs Dodd-Frank rollback into law

President Donald Trump signed a major Dodd-Frank rollback into law Thursday, hoping to bring regulatory relief to community banks across the US On Tuesday afternoon, the House of Representatives passed S. 2155, also known as the Economic Growth, Regulatory Relief and Consumer Protection Act. The bill rolls back reforms from the 2010 Dodd-Frank Act. “Dodd-Frank’s costly regulations gave large banks a negative advantage at the cost of small banks throughout the country,” Trump said at the signing. The president explained Dodd-Frank made it impossible to open up new businesses. But now, the new law will “liberate small banks.” Consumer Financial Protection Bureau Acting Director Mick Mulvaney also voiced his support for the bill, saying it will improve consumers’ access to credit and reduce regulatory burdens. “As Acting Director of the Bureau of Consumer Financial Protection, I am pleased to see the long-overdue reforms to the regulations governing mortgage lending,” Mulvaney said. “These changes will allow community banks and credit unions to focus on making prudent loans to prospective homebuyers without being tied up in expensive and excessive red tape.” “I stand ready to work with Congress and the rest of the Administration to implement these new reforms that will promote a brighter, more prosperous future,” he said. The bill cleared the Senate in March and was sent back to the House for approval.

The bill, which aims to ease regulations on small banks, was sponsored by Banking Committee Chairman Mike Crapo, R-Idaho, with nearly 20 bipartisan co-sponsors, and was introduced in the Committee on Banking, Housing and Urban Affairs. “NAFCU and our members again appreciate all House and Senate lawmakers who worked on this bill and pushed it through to final passage – especially Senate Banking Committee Chairman Mike Crapo and House Financial Services Committee Chairman Jeb Hensarling,” said Dan Berger, National Association of Federally Insured Credit Unions president and CEO. “We appreciate President Trump signing the bill, as we can now look towards the future and continue to work with Congress on further regulatory relief measures to ensure robust growth of the credit union industry,” Berger said. And other members of the housing industry joined in their excitement for the law’s passage. “We applaud the President for signing the Economic Growth, Regulatory Relief, and Consumer Protection Act today,” NewDay USA Executive Chairman Thomas Lynch said. “This new law will help protect my fellow veterans, active duty military and their families as they access the VA home loan benefits they have earned.” “It helps provide better access to their benefits, but most importantly, it goes a long way in defending them from predatory lenders who are not working in the best interest of the veteran,” Lynch said. But while the new law is bipartisan and holds significant support from the housing industry, it does still have its critics. Read more about the debate, here.

Fiat Chrysler recalling 4.8 million US-made vehicles

Fiat Chrysler Automobiles said Friday it is recalling an estimated 4.8 million US-market vehicles to upgrade software in the mechanism that operates the vehicles’ cruise-control. In response to driving conditions such as varying road grades, cruise-control systems automatically initiate acceleration, as needed, to help vehicles maintain driver-selected speeds, the company said in a statement.  “In certain vehicles, if such an acceleration were to occur simultaneously with a short-circuit in a specific electrical network, a driver could be unable to cancel cruise-control,” the company said. “However, if this sequence of events were to occur, cruise-control acceleration can be overpowered by the vehicle’s brakes.” The company, which said it is unaware of any related injuries or accidents, also said recalled vehicles may also be stopped by shifting into neutral and braking accordingly. The remedy will be provided free of charge. FCA US will begin alerting affected customers as early as next week so they may schedule service appointments.

Florida – sales, median prices, new listings up in April 2018

In April, Florida’s housing sector reported more closed sales, higher median prices and more new listings from owners ready to enter the market, according to the latest housing data released by Florida Realtors®. “Not enough for-sale inventory, especially in the range for first-time homebuyers, is an ongoing challenge for many local housing markets,” said 2018 Florida Realtors President Christine Hansen, broker-owner with Century 21 Hansen Realty in Fort Lauderdale. “Pent-up demand continues to put upward pressure on prices. In April, sellers continued to get more of their original asking price at the closing table. Sellers of existing single-family homes last month received 96.6% (median percentage) of their original listing price, while those selling townhouse-condo properties received 95% (median percentage). “But there is some positive news for buyers: New listings for single-family homes in April rose 9.8% year-over-year, while new townhouse-condo listings increased 8.3%. This trend will hopefully continue, which would help ease the too-tight inventory in many areas.”Sales of single-family homes statewide totaled 24,804 last month, up 4.1% compared to April 2017. Meanwhile, the statewide median sales price for single-family existing homes was $253,895, up 8.1% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Thestatewide median price for townhouse-condo properties in April was $190,000, up 10.5% over the year-ago figure.

April was the 76th month in a row that the statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. The median is the midpoint; half the homes sold for more, half for less. Looking at Florida’s townhouse-condo market, statewide closed sales totaled 11,236 last month, up 9.2% compared to a year ago. Closed sales data reflected dwindling short sales and foreclosures in April: Short sales for townhouse-condo properties dropped 27.5% and foreclosures fell 41.8% year-to-year; while short sales for single-family homes declined 48.8% and foreclosures fell 50.7% year-to-year. Closed sales may occur from 30- to 90-plus days after sales contracts are written. “More often than not, the pace for Florida’s busy spring and summer homebuying season seems to be set in March and April,” said Florida Realtors Chief Economist Dr. Brad O’Connor. “On the heels of a somewhat slow month of March this year, it’s good to see that state existing home sales rebounded quite nicely in April. With last month’s sales factored in, we’re ahead of last year’s pace of single-family home sales by about a half of a%. “Demand for single family homes remains strong across the state and this abundance of buyers continues to deplete active inventories and drive up prices.” For-sale inventory in April remained tight, at a 3.8-months’ supply for single-family homes and 5.8-months’ supply for townhouse-condo properties, according to Florida Realtors.

NAHB – multifamily builders and developers remain positive about the apartment and condo market as demand continues

Confidence in the multifamily housing market remained positive in the first quarter of 2018, according to the Multifamily Production Index (MPI) and the Multifamily Vacancy Index (MVI) released today by the National Association of Home Builders (NAHB). The MPI remained unchanged from last quarter, coming in at a reading of 53, while the MVI remained essentially unchanged at 42.The MPI measures builder and developer sentiment about current conditions in the apartment and condo market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse. The MPI is a weighted average of three key elements of the multifamily housing market: construction of low-rent units—apartments that are supported by low-income tax credits or other government subsidy programs; market-rate rental units—apartments that are built to be rented at the price the market will hold; and for-sale units—condominiums. The component measuring low-rent units edged down two points to 54, while the component measuring market rate rental units increased two points to 56 and the component measuring for-sale units remained even at 49.

The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry’s perception of vacancies, remained essentially unchanged with an increase of one point to 42. The MVI is a weighted average of current occupancy indexes for class A, B, and C multifamily units, and can vary from 0 to 100, where any number over 50 indicates more property managers report more vacant apartments. A reading of 42 is seen as a healthy number for the multifamily market. “Multifamily builders and developers are reporting solid demand around the country, as shown in the vacancy rate for the first quarter,” said Steve Lawson, president of The Lawson Companies in Virginia Beach, Va., and chairman of NAHB’s Multifamily Council. “We anticipate steady demand through the rest of the year as household formations continue to grow.” “The stability of multifamily builder confidence is consistent with NAHB’s view that the market has reached a healthy, sustainable level of production,” said NAHB Chief Economist Robert Dietz. “The overall strong economy is supporting demand and balancing supply-side issues many builders are facing, including shortages of labor and buildable lots, and the recent surge in lumber prices.” Historically, the MPI and MVI have performed well as leading indicators of US Census figures for multifamily starts and vacancy rates, providing information on likely movement in the Census figures one to three quarters in advance.

House approves bill rolling back Dodd-Frank in boost for small banks

Members of Congress are working to ease some of the financial restrictions put in place under the Obama administration in the wake of the 2008 financial crisis. The House on Tuesday approved a measure that would roll back some of the provisions put in place under the 2010 Dodd-Frank banking law. The Senate approved the bill in March. It will now head to President Donald Trump’s desk. Dodd-Frank was enacted to protect investors from another financial crisis. Here’s what members of Congress are looking to alter:

‘Too big to fail’

As the law currently stands, banks with assets in excess of $50 billion are deemed as being potentially “too big to fail,” and are therefore subject to a host of rigorous testing and regulation. That includes annual stress tests. Some have argued the $50 billion threshold is too low and hits medium-sized financial institutions as well as community lenders, hindering their ability to both loan and grow. The new bill seeks to raise the “too big to fail” threshold to $250 billion, which means institutions such as American Express and Barclays could be exempt from the regulation. Federal Reserve Chair Jerome Powell said during congressional testimony in February that he did not believe any banks were still too big to fail.

Volcker Rule

The bill also aims to eliminate Volcker Rule requirements on banks with assets under $10 billion. The Volcker Rule prohibits banks from making risky investments with their own money. After its implementation, financial institutions were forced to overhaul their trading operations. Fed officials have said that banks, particularly those with smaller trading desks, spend too much time interpreting and trying to follow this rule.

Mortgage lending

Congress is also seeking to give small banks a reprieve from mortgage lending rules that require banks to disclose detailed information on whom they are lending to. Banks originating less than 500 loans each year would no longer have to report racial data, including the race and ethnicity of their borrowers. Smaller banks with less than $10 billion in assets would not be required to follow the underwriting standards set forth under Dodd-Frank, which aim to ensure institutions are not loaning to people who are likely to default.

Credit freezes

In the wake of a slew of massive hacks in recent years, notably the Equifax cyberattack that exposed the sensitive information of more than 147 million Americans, Congress is seeking to require the three major credit agencies – Equifax, TransUnion and Experian – to freeze and unfreeze consumers’ credit reports for free.

Oil falls as investors grow wary of OPEC commitment to supply deal

Oil fell on Wednesday, under pressure from a potential increase in OPEC crude output to cool the market’s recent rally and cover any shortfalls in supply from Iran and Venezuela. Brent crude futures were down 75 cents at $78.82 a barrel by 0940 GMT, while US crude <CLc1> fell 46 cents to $71.74 a barrel. Oil prices have gained nearly 20% so far this year, with Brent briefly rising above $80, driven primarily by coordinated supply cuts by the Organization of the Petroleum Exporting Countries and partners including Russia. The price has also been affected by rising geopolitical tensions that could dent global output just as demand is set to hit 100 million barrels per day in the final quarter of this year, according to the International Energy Agency. In addition, the United States plans to reimpose sanctions on major oil producer Iran, while an economic crisis has decimated Venezuela’s crude output. Based on the prospect of a shortfall in supply relative to demand, investors had driven their bets on a sustained rise in the price of oil to record highs earlier this year. But with so much uncertainty over how sanctions might affect Iranian supply, fund managers have cut their holdings of crude futures and options by more than 10% in the last seven weeks to the lowest level this year. “It does seem like any move above $80 attracts selling interest right now and that could potentially lead us to a period of consolidation, where I think $77.50 or even $75 might be in focus,” Saxo Bank senior manager Ole Hansen said. “We still have the unquantifiable impact of US sanctions against Iran.” OPEC may decide to raise oil output as soon as June due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC and oil industry sources familiar with the discussions told Reuters. “Investors are mindful of upcoming talks between Russia and Saudi Arabia about whether they should look at a controlled relaxation of over-compliance with their output cut agreement,” ANZ said in a note. Rising supply in the United States, where shale production is forecast to hit a record high in June, has limited the upward move in prices. US crude and distillate stockpiles fell last week, while gasoline inventories increased unexpectedly, data from the American Petroleum Institute showed on Tuesday.

Black Knight – first look at April 2018 mortgage data

Black Knight, Inc. (NYSE:BKI) reports the following “first look” at April 2018 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.

–  Mortgage Delinquencies Buck Upward Seasonal Trend in April, Fall to Second Lowest Point in 12 Years

–  Historically, mortgage delinquencies have risen 85% of the time in April; this month they declined 1.6% – about equal to the size of their average usual increase

–  April’s improvement halted a seven-month trend of annual increases in the national delinquency rate

–  Areas impacted by Hurricanes Harvey and Irma led April’s delinquency improvement, but slight declines were seen in non-affected areas as well

–  Over 90,000 seriously delinquent mortgages (90 or more days past due) attributed to the 2017 hurricane season remain in affected areas of Texas, Florida and Georgia

–  Foreclosure starts declined 5.4% overall and 30% from March in hurricane-affected areas

–  The number of mortgages in active foreclosure hit its lowest point since August 2006

–  Prepayment activity fell 4.3% in April from last month and was down slightly from last year’s level

Consumer groups ask US agency to probe Tesla ‘Autopilot’ ads

Two US consumer advocacy groups urged the Federal Trade Commission on Wednesday to investigate what they called Tesla Inc’s “deceptive and misleading” use of the name Autopilot for its assisted-driving technology. The Center for Auto Safety and Consumer Watchdog, both non-profit groups, sent a letter to the FTC saying that consumers could be misled into thinking, based on Tesla’s marketing and advertising, that Autopilot makes a Tesla vehicle self-driving.  Autopilot, released in 2015, is an enhanced cruise-control system that partially automates steering and braking. Tesla states in its owner’s manual and in disclaimers that when the system is engaged, a driver must keep hands on the wheel at all times while using Autopilot. But in the letter, the groups said that a series of ads and press releases from Tesla as well as statements by the company’s chief executive, Elon Musk, “mislead and deceive customers into believing that Autopilot is safer and more capable than it is known to be.”

MBA – Mortgage Rates Increase, Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 2.6% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 18, 2018. The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3% compared with the previous week. The Refinance Index decreased 4% from the previous week to its lowest level since December 2000. The seasonally adjusted Purchase Index decreased 2% from one week earlier. The unadjusted Purchase Index decreased 3% compared with the previous week and was 3% higher than the same week one year ago.   The refinance share of mortgage activity decreased to 35.7% of total applications from 35.9% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.8% of total applications. The FHA share of total applications remained unchanged at 10.3% from the week prior. The VA share of total applications decreased to 9.8% from 10.3% the week prior. The USDA share of total applications remained unchanged at 0.8% from the week prior.

Lowe’s 1Q earnings fall short

Lowe’s reported a 1Q profit of $1.19 per share, missing the estimate for $1.22. Revenue came in at of $17.4 billion. The estimate was for $17.45 billion. The company said prolonged unfavorable weather led to a delayed spring selling season. Sales for the first quarter increased  3% over the same quarter in 2017. Lowe’s reported a profit of $0.70 a share in the year ago quarter. On Tuesday, the company announced that current JCPenney CEO Marvin Ellison would be taking over at Lowe’s, replacing longtime CEO Robert Niblock.

Can Fannie and Freddie help fix the housing shortage?

The challenges facing the mortgage market are many: a significant shortage of housing, rising interest rates and first-time homebuyers who need specialized underwriting are just the start. But leaders from Fannie Mae and Freddie Mac assured attendees at the MBA Secondary Marketing Conference on Tuesday that the GSEs were ready to partner with them to meet these challenges. Desmond Smith, senior vice president and head of customer delivery at Fannie Mae, and Kevin Palmer, senior vice president of single family credit risk transfer at Freddie Mac, outlined their agencies’ efforts to make the entire mortgage process simpler and easier. And that’s a good thing, since the agencies facilitate the lion’s share — maybe even the elephant’s share — of the secondary mortgage market. Fannie Mae’s Day 1 Certainty program, which gives rep and warrant relief to lenders who follow specific guidelines, continues to grow. Smith said that $300 billion of the deliveries the agency receives now contain at least one component of Day 1 Certainty. More than 70 vendors and sellers have partnered with Fannie on the program, which allows it to offer lenders a wide choice of services. Likewise, Freddie Mac is looking to offer maximum flexibility to lenders. “We have been hearing customers talk around the broader theme of how can we make it faster, easier and more cost efficient to originate that loan? Making it cost efficient is more important today than ever before,” Palmer said.

The housing shortage that continues to plague the industry has no easy fixes. Smith said that half of the people employed in construction work left the industry after the housing crisis and up to 4 million homes have been diverted into rentals. In addition, the US is contending with an aging housing stock that will need renovation investment before being habitable. Fannie Mae has responded by making some major changes to its HomeStyle renovation product, making it easier to for lenders to sell those loans to Fannie Mae. It is also exploring how it can increase sales of manufactured homes and even modular homes. “At Fannie Mae, we’re going to take a leadership position to help solve [the housing shortage]. We want to get to the root cause and solutions,” Smith said. Fannie Mae’s biggest contribution could be the way it is trying to simplify its construction to perm program, which has been a complicated process that sees lenders holding onto the loan for six to nine months or longer.  “if we can buy that product at the time of closing, I think a whole lot of builders could come into market,” Smith said. At the same time, Freddie Mac is addressing what it sees as one of the biggest challenges the market is facing: the lack of affordability, combined with a change in demographics that demands a different underwriting structure. Freddie Mac continues to update its Home Possible program, revising income limit requirements to focus on serving low to moderate-income borrowers. The new requirements take effect at the end of July. Freddie Mac also recently rolled out its Home One program, which lets first-time homebuyers pay as little as 3% down. “Right now the number of first-time homebuyers is at a 10-year high,” Palmer said. “Our Home One program is just one way we’re expanding credit responsibly in this area.”

Freddie Mac is under the same Duty to Serve requirement as Fannie Mae, and Palmer said his agency is looking at a single-close process for manufactured homes that could be a game-changer for that segment of the market. “Right now there are over 40 million households struggling with the high demand and low supply of affordable single family homes,” Palmer said. “Under these changing demographics we are studying how Freddie Mac can help.” Those changing demographics also include a whole new type of borrower who works in the gig economy and often has multiple jobs. “With our ‘borrower of the future’ campaign we are partnering with a lot of external firms studying this change in demographics, to understand and anticipate their needs,” Palmer said. “You’ve got a lot of borrowers today who choose to have a much more flexible lifestyle. We want to be able to underwrite them better.” Smith echoed that sentiment. “We have to think differently. The largest transportation company doesn’t own cars. The largest retailer doesn’t own brick and mortar stores,” Smith said. Fannie Mae is conducting a pilot to figure out how to enable loans that leverage income from Airbnb rentals. “Can we use this income? Is it stable enough to qualify to purchase a home or refi?” Palmer noted that the challenge with Airbnb income is not simply to figure out the origination, but also what happens in a foreclosure scenario or with servicing.

During the Q&A session following the panel, Fannie Mae said it is currently conducting a single-source validation program with two lenders and expects to add three more in the next quarter. The agency is working to make sure the data — which is submitted differently by different lenders — can truly be verified. Freddie Mac is conducting a pilot program on employment verification and income verification, testing out how best to instill confidence in the borrowers that this is done in safe and secure way. Both GSEs take a collaborative approach to deciding which lenders to use in pilot programs. Freddie Mac said it finds these opportunities by talking with lenders and Fannie Mae said it uses its co-development panels. Smith recommended going through relationship managers to make a connection on projects lenders are interested in. A particularly hot topic for the conference, MSR liquidity, also made its way into the Q&A session, when the GSEs were asked about their acknowledgement agreements. Palmer said Freddie Mac is seeking to be more transparent to lenders in what they are financing. “What’s important to Freddie is the health of the nonbank originators. Can they be healthy in normal times and in more volatile times?” Palmer said. Smith said Fannie Mae believes the best way to be more transparent is to make changes to its acknowledgement agreement, which it has done. Both GSE leaders also expressed a desire to rethink the entire condo financing process to make it less burdensome.


Highest foreclosure rates

The foreclosure rate is broadly in decline across the country as the economy continues to recover from the 2008 recession. But some states are still struggling with high foreclosure rates, according to a report from Experian. Overall, residential foreclosures dropped 27% last year to 676,525 – the lowest level since 2005, Attom Data Solutions reported. On average, one in every 1,776 US homes is currently in foreclosure. According to Experian, it’s primarily coastal states where foreclosure numbers are still trending high. The credit rating agency recently looked at the 10 states with the highest foreclosure rates:

  1. New Mexico

One out of every 1,386 homes are in foreclosure, and the three major foreclosure categories – pre-foreclosure, auctions, and bank-owned home repossessions – are all up significantly, according to Experian. Pre-foreclosures were up 17.7% in the state during the first quarter, while bank-owned repossessions spiked by 34.9%.

  1. Nevada

The city of Las Vegas alone recorded about 500 home foreclosures per month in the fourth quarter of 2017 – up from just 32 per month in the third quarter. “A state government law that changed the way Nevada handles foreclosures seems to have stalled foreclosures as the law rolled out, but home repossessions are back up again as banks and lenders have a better grip on how the new legislation works,” Experian said.

  1. Ohio

One in every 1,289 homes was in foreclosure as of March. The state had a “skyrocketing” one-month bank-owned foreclosure rate of 77.3% from the middle of February to the middle of March, Experian reported.

  1. South Carolina

One in every 1,120 homes was in foreclosure in the first quarter, with 59.1% in pre-foreclosure, according to Experian. The state say auction, pre-foreclosure and bank-owned foreclosure all up more than 20% in the first quarter.

  1. Florida

Florida is still in the top 10 states with the most foreclosures, but “does seem to be on the comeback trail,” Experian said. The state had 24,215 foreclosures filed in 2017 – compared to 43,772 in 2016.

  1. Connecticut

One out of every 1,468 homes were in foreclosure as of March, Experian reported. However, the foreclosure situation in Connecticut seems to be improving, as bank-owned foreclosures dropped 35.8% between March of 2016 and March of 2017. However, in the last year, bank-owned foreclosures have risen 6.3%, Experian reported.

  1. Illinois

Illinois has a 0.86% foreclosure rate, one of the highest in the country – and is also losing residents left and right. Between July of 2016 and July of 2017, more than 33,000 residents left Illinois – the most in the US – many due to onerous tax burdens.

  1. Maryland

Maryland had a 0.95% foreclosure rate at the end of 2017 – about one in every 1,069 homes.

  1. Delaware

Delaware saw a 16% spike in foreclosures last year, according to Experian. The state has a 1.13% foreclosure rate.

  1. New Jersey

New Jersey has the highest foreclosure rate in the nation, with one in every 605 properties in some stage of foreclosure in 2018, Experian reported. That’s a 1.61% foreclosure rate. Bank repossessions in New Jersey hit an 11-year high last year, while the rest of the United States saw repossessions hit an 11-year low.

US ready to impose sanctions on European companies in Iran, Bolton says

National Security Adviser John Bolton warned Sunday that Washington is prepared to impose sanctions on European companies if their governments don’t heed President Donald Trump’s demand to stop dealing with Iran. “Europeans are going to face the effective US sanctions,” Mr. Bolton said on ABC’s “This Week.” Mr. Bolton’s comments are the latest salvo in the Trump administration’s campaign to put economic pressure on Iran and America’s European allies to accept a new agreement that would impose tougher restrictions on the Iran’s nuclear activities, constrain its missile program and roll back its support for militant groups. The new agreement would supplant the Iran nuclear accord, which Mr. Trump formally abandoned last week but which the leaders of Britain, France and Germany have vowed to preserve. European officials have said they looking for ways to help their companies escape the brunt of the US sanctions. France’s foreign minister said Friday he had asked for exemptions or longer grace periods for the exit of French companies such as oil-and-gas giant Total SA and car maker Peugeot SA that have returned to the Iranian market since the 2015 nuclear accord. Secretary of State Mike Pompeo told “Fox News Sunday” that he is planning to approach European diplomats in the next several days to pursue the new deal, which would dispense with the US rationale to sanction European companies. But Mr. Pompeo’s diplomatic effort faces obstacles.

European diplomats have complained that the Trump administration pulled out of the Iran agreement when they were still eager to continue consultations and without explaining Washington’s new nuclear demands on Tehran. The Trump administration’s demands that Iran abandon its aggressive posture in the Middle East also goes beyond what many European diplomats believe Iran would accept. On Tuesday, the administration urged Iran to stop its support for Hezbollah, the Lebanese group that has joined Iranian forces in supporting Syrian President Bashar al-Assad. It also demanded that Iran cease supplying weapons to the Houthi rebels, who have been at war with Tehran’s archenemy Saudi Arabia, end cyberattacks against the US and its allies, stop menacing US military ships in the Persian Gulf and abandon its rhetoric about destroying Israel. In the other areas, US and European diplomats have some shared views on how to approach Iran, which could be carried over if there were a new agreement. In recent months, US and European diplomats have agreed on ways to constrain Iran’s missile program and discussed how to strengthen inspections of Iran’s nuclear program. “That work is not going to be for nothing,” a State Department official said. Despite complaints in European capitals, Mr. Bolton suggested that European allies might agree to new US approach once they digest the Mr. Trump’s decision and face the threat of sanctions. “They’re really surprised we got out of it, really surprised at the re-imposition of strict sanctions,” he said in a separate appearance on CNN. “”I think that will sink in and we’ll see what happens then.”

Federal Reserve Board to vote on lifting Wells Fargo’s growth restrictions

Back in February, the Federal Reserve announced it would restrict the growth of Wells Fargo until it “sufficiently improves its governance and controls,” citing what it called compliance breakdowns and widespread consumer abuses as the primary motivations for the order. Now, following pressure from Democratic Senator Elizabeth Warren, D-Mass., Fed Chair Jerome Powell has indicated that the Federal Reserve Board of Governors will hold a vote to decide whether or not to lift those growth restrictions placed on the megabank, according to an article from Reuters. From the article: “The Fed’s policy shift could make it tougher for Wells Fargo to shake off the unprecedented sanctions that the bank said on Thursday are expected to crimp earnings by around $100 million. In February, the Fed ordered Wells Fargo to keep its assets below $1.95 trillion until it had improved its governance and risk controls following a wave of sales practices scandals. The regulator previously said Fed staff would assess the adequacy of the bank’s remediation plan, which would also be reviewed by an independent third party. During a congressional hearing in March and in a follow-up letter, however, Senator Warren pressed Fed Chair Jerome Powell to submit the bank’s remediation plan to a board vote and to consider publishing the third-party review.”

The terms of the consent cease and desist order require Wells Fargo to submit a plan to improve its risk management policies and to improve the effectiveness of its board of directors. During a Senate Banking Committee hearing in March, Warren pressed Powell to “consider requiring a vote of the Fed before” approving a plan, Powell agreed. Later in April, she urged him to commit to a public vote on the bank’s remediation plans and to consider releasing the third-party review required by the consent order. In a letter published by Warren’s office on Friday, Powell wrote to the senator and said that he’s accepted a request for a board vote. “After further consideration, the decision about terminating the asset growth restriction will be made by a vote of the Board of Governors,” Powell said in the letter, adding, “we will review that report to determine whether and to what extent the report can be publicly disclosed.” According to Reuters reporter Michelle Price, the Fed declined to comment on Friday beyond Powell’s letter, and a spokeswoman for Wells Fargo declined to comment on the Fed’s decision, too.

What’s on Beijing’s ‘shopping list’

Negotiators from the US and China are scheduled to meet in Washington on Monday, where, after months of trade tensions, Beijing is said to be open to purchasing a wider array of US goods and services. President Donald Trump has insisted that the countries reduce the $370 billion trade deficit with China by $200 billion. Officials from Beijing are expected to arrive in D.C. armed with a list of items they will offer to import from the US to meet that goal, The Wall Street Journal reported. China is likely to offer increasing its purchase of aircraft, autos, natural gas and some agricultural commodities, Dan Ikenson, director of the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, told FOX Business. He added that Beijing may also offer to give foreign companies greater access to its financial services industry. When a US delegation led by Treasury Secretary Steve Mnuchin met with officials in Beijing last week, no deal was reached largely because China refused a demand to cut the trade deficit by $200 billion within the next two years.

Less chance of an economic downturn through early 2019?

A Fed report, released Friday, said the economy looks “slightly stronger now than it did three months ago,” according to 36 forecasters surveyed by the Philadelphia Fed. The forecasters also predict that real GDP will increase at an annual rate of 3% for both this quarter and next quarter, growing slightly from previous estimates from three months ago, the report said. From the report: “The forecasters predict real GDP will grow at an annual rate of 3.0 % this quarter and next quarter, up slightly from the estimates of three months ago. On an annual-average over annual-average basis, the forecasters predict real GDP growing 2.8 % in 2018, 2.7 % in 2019, 1.9 % in 2020, and 2.0 % in 2021. The forecasters see a marginally brighter outlook for the unemployment rate. The forecasters predict the unemployment rate will average 3.9 % in 2018, 3.7 % in 2019, 3.9 % in 2020, and 4.0 % in 2021. The projections for 2018 and 2019 are slightly below those of the last survey, indicating a better outlook for unemployment.”


NAHB – new home sales rise 4% in March

Sales of newly built, single-family homes rose 4.0% in March to a seasonally adjusted annual rate of 694,000 units after an upwardly revised February report, according to newly released data by the US Department of Housing and Urban Development and the US Census Bureau. This the second highest reading since the Great Recession. “The March new home sales report is consistent with our solid builder confidence readings over the past several months,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “As consumer confidence grows and more prospective buyers enter the housing market, the sales numbers should continue to make gains.” Regionally, new home sales rose 28.3% in the West and 0.8% in the South. Sales decreased 2.4% in the Midwest and 54.8% in the Northeast. “We saw sales move forward in the West and the South regions, which is in line with recent evidence of faster growth in population, employment and single-family construction in these areas,” said NAHB Senior Economist Michael Neal. “But with nationwide economic growth and favorable demographics, we can expect continued strengthening of the housing market across the country.” The inventory of new home sales for sale was 301,000 in March, which is a 5.2-month supply at the current sales pace. The median sales price of new houses sold was $337,200.

After tax overhaul, mortgage interest deductions seen plummeting

Former Reagan Economist Art Laffer on the outlook for the US housing market.

As Americans look ahead to next year’s tax filing season, many fewer individuals are expected to claim once-popular deductions, including the mortgage interest deduction. Taxpayers filing for 2018 can expect to save a total of $25 billion by taking advantage of the mortgage interest deduction, down from nearly $60 billion for 2017, the congressional Joint Committee on Taxation said on Monday. It expects 13.7 million taxpayers take the deduction, down more than 57% from 32.3 million.The Tax Cuts and Jobs Act nearly doubled the standard deduction for individuals and married couples filing jointly, making itemizing less attractive for a larger proportion of filers. About 18 million households are expected to itemize under the new law, compared with more than 46 million for 2017. The largest share of those individuals who are still expected to itemize have incomes of $100,000 to $200,000 and $200,000 to $500,000. Those same higher-income individuals are also more likely to claim the mortgage interest deduction. While the Republican tax reform was being crafted in Congress, homebuilders lobbied to keep the mortgage interest deduction limit unchanged after the House proposed cutting it in half. Ultimately it was capped at $750,000, compared with $1 million under the previous law. In addition, state and local tax deductions were limited at $10,000, drawing concern that the changes would dent purchases of new homes in expensive markets including New York and California.

NAR – consumer interest trends towards sustainability, say Realtors

As consumer demand trends toward green and sustainable home features, Realtors® continue to work to promote environmentally responsible features and business practices. Sixty-one% of Realtors® reported that consumers are interested in sustainability according to the National Association of Realtors®’ REALTORS® and Sustainability 2018 report. The report,, which stems from NAR’s Sustainability Program, surveyed Realtors® about sustainability issues in the residential and commercial real estate markets and the preferences they are seeing in consumers in their communities. “Consumers continue to make it clear that environmentally friendly features and neighborhoods are an important factor in deciding where and what home to buy,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “Realtors® are leaders in the conversation about real estate sustainability, energy conservation and resource efficiency, and will continue to promote environmentally conscious strategies and best practices that benefit not just our clients, but also our communities.” Seventy-one% of agents and brokers reported that promoting energy efficiency in listings is either somewhat or very valuable. When asked what they consider to be the top market issues and considerations regarding sustainability, agents and brokers listed understanding lending options for energy upgrades or solar panels (36%), improving the energy efficiency of existing housing stock (34%) and the lack of information and materials provided to real estate professionals (30%).

Amazon founder Bezos’ $65M jet seen at airports near potential HQ2 sites

Amazon founder and CEO Jeff Bezos’ corporate jet visited airports at or near locations being considered for its second US headquarters about the time the company made announcements regarding its search. The billionaire’s Gulfstream G650ER was at Boston Logan International Airport just days before and after Amazon said last year that it would commence its hunt for its “HQ2,” according to the Puget Sound Business Journal, citing flight records of Bezos’ aircraft. The records do not say who was on board or what the purpose of the trip was. Then, after the company shared its shortlist of 20 finalists earlier this year, the jet was at Reagan National Airport, near Washington, D.C. Bezos, who owns The Washington Post, also has a home in the nation’s capital. So far this week, the aircraft has made flights to Dallas Love Field and California’s Hollywood Burbank Airport. Additional stops Bezos’ Gulfstream made this year include airports in Teterboro, New Jersey, near Newark; the Boulder airport in Colorado, near Denver; and Los Angeles International Airport. The aircraft visiting these locations is owned by Bezos’ holding company, Poplar Glen LLC, and costs $65 million. With the ability to carry eight passengers more than 8,600 miles at a speed slightly higher than 650 miles per hour, the G650ER is an appropriate choice for zipping across the US to visit other locations on Amazon’s shortlist. Amazon reached out to FOX Business following our report with the following statement: “There’s no connection between Jeff’s personal and business travel, and our HQ2 search.”

CFPB considers ending public access to bank complaints

A new report from the Wall Street Journal says the Consumer Financial Protection Bureau is likely to end the public’s access to a web portal used by consumers to file complaints against financial companies. The WSJ’s Yuka Hayashi reports that CFPB Acting Director Mick Mulvaney addressed his intention of eliminating access to the database on Tuesday during an address at the American Bankers Association’s conference, saying it contains information the government hasn’t fully vetted. “I don’t see anything in here that says I have to run a Yelp for financial services sponsored by the federal government,” Mulvaney told an audience at the conference while holding up a copy of the Dodd-Frank Act, according to the report. From the report: “Mr. Mulvaney said the bureau would continue to maintain a toll-free number and a website to gather consumer complaints and forward them to companies, but the database would be hidden from public view. Mr. Mulvaney’s remarks came as the CFPB formally gathers comments from the financial industry and public on its handling of consumer complaints, including whether the bureau should change how it operates the database. The CFPB under the Trump administration has in recent weeks asked for public feedback on a dozen issues as part of an effort to “ensure the bureau is fulfilling its proper and appropriate functions.” The effort covers key areas of the CFPB’s operations, from enforcement to rule-making, and could be a precursor to wholesale changes coming to the agency created under the Obama administration and long criticized by Republicans. ‘Yes, this is a different bureau than it was under our predecessors,” Mr. Mulvaney said. “That is the nature of the business and elections do have consequences.'” Aaron Klein, fellow policy director at the Brookings Institute, responded to the news about the database, tweeting: “Thanks to @CFPB complaint data base, people are more informed when they make choices, and businesses have greater reputational incentives, which promotes a more efficient and effective free market. Eliminating #CFPB database is an attack on free markets.”

Black Knight – delinquencies drop to 12-month low

National delinquencies fell in March to a 12-month low, but despite that, the recent hurricanes continue to have a negative effect on foreclosures, according to the latest report from Black Knight. The national delinquency rate improved 13.24% in March due to seasonal effects and continued hurricane-related improvements, according to the report. Annually, the delinquency rate increased by 3.09%. Serious delinquencies, delinquencies that are 90 days or more past due but not in foreclosure, fell by 65,000 to 632,000 March. But this is up by 43,000 serious delinquencies from last year. This monthly decrease was due, in part, from the decrease of 19,500 serious delinquencies attributable to hurricanes Harvey and Irma. However, this may not reflect that hurricane areas are getting better, in fact, it could mean they’re getting worse. Foreclosure starts increased by 12% in March, of which more than two-thirds came from hurricane-affected areas of Texas and Florida. But overall, the active foreclosure inventory level continues to see improvement. Active foreclosures fell by 10,000 in March to the lowest level since late 2006. Both Florida and Texas fell within the top five states by 90 days or more delinquent percentage. Florida was the top state with 3.34% of its homes with a mortgage being seriously delinquent, followed by Mississippi with 3.03%, Louisiana with 2.23%, Texas with 1.99% and Alabama with 1.97%.

Halliburton revenue jumps 34%

Oilfield services provider Halliburton Co. reported a 34% jump in first-quarter revenue on Monday as rising oil prices prompted North American companies to boost oil and gas production. The company’s revenue from North America jumped nearly 58% to $3.52 billion in the three months ended March 31, while revenue from international operations rose 9%. Total revenue jumped to $5.74 billion from $4.28 billion. Halliburton said it took a charge of $312 million in the quarter as it wrote down investments in Venezuela, which is struggling with political and economic challenges. Adjusting for items, Halliburton posted a profit of 41 cents per share in the latest reported quarter, in line with analysts’ estimates, according to Thomson Reuters I/B/E/S. Oilfield services companies were impacted by harsh weather conditions in the first quarter. Halliburton warned of 10 cents per share hit to first-quarter earnings in February due to delays in deliveries of sand used in fracking. Net income attributable to Halliburton was $46 million, or 5 cents per share to shareholders, in the three months ended March 31. The company posted a net attributable loss of $32 million, or 4 cents per share to shareholders, in the same quarter a year earlier.

Illinois foreclosures fall, still among highest in country

Illinois had the fourth-highest rate of foreclosure filings in the United States for the first quarter of 2018, according to a new report. For the first quarter of 2018, Illinois had 12,485 housing units with a foreclosure filing. Nationally, foreclosure filings for the first quarter of 2018 increased 4% when compared to the previous quarter but are still down 19% from a year ago, according to ATTOM Data, a multi-sourced property database. Foreclosure filings for the first quarter of 2018 are also 32% below the pre-recession average. Illinois had a 4.7% decrease in foreclosure filings when compared to the previous quarter and a 25.26% decrease in foreclosure filings when compared to the previous year. Nationwide, one in every 706 US housing units had a foreclosure filing in the first quarter of 2018. In Illinois, one in every 425 housing units was in foreclosure. For the month of March, foreclosure filings were up 21% from an all-time low in February but still down 11% when compared to a year ago. In Illinois, foreclosure filings for March were up 40.95% when compared to February but down 14.87% when compared to the previous year. In the first quarter of 2018, lenders started the foreclosure process on 92,703 properties in the country and a total of 189,870 properties had a foreclosure filing. Here’s how many foreclosure filings Illinois counties had in the first quarter of 2018:

Cook – 6,088

De Kalb – 113

DuPage – 704

Grundy – 25

Kane – 464

Kendall – 172

Lake – 700

McHenry – 414

Will – 909

Illinois had a year-over-year decrease in repossessions of 41%. Nationally, repossessions were down 2% compared to the previous quarter and down 28% when compared to a year ago. Along with Illinois, New Jersey, Delaware, Maryland, and South Carolina had the highest foreclosure rates for the first quarter of 2018. South Dakota, North Dakota, West Virginia, Montana and Vermont had the lowest rates of foreclosure filings in the US for the first quarter of 2018, according to the report. “Less than half of all active foreclosures are now tied to loans originated during the last housing bubble, one of several data milestones in this report showing that the US housing market has mostly cleared out the backlog of bad loans that triggered the housing and financial crisis nearly a decade ago,” Daren Blomquist, senior vice president at ATTOM Data Solutions, said in a press release.

Oil dips as rising US yields steer bulls

Oil prices were little changed at around $74 a barrel on Monday on rising US borrowing costs and the prospect of further output rises after another increase in the weekly rig count, although the overall picture for crude remained bullish. Brent crude futures were down 1 cent at $74.05 a barrel by 1145 GMT, while US West Texas Intermediate (WTI) crude futures were down 11 cents at $68.29 a barrel. Prices were supported by nervousness over the decision President Donald Trump must take by May 12 on whether to restore US economic sanctions on Iran. “Underlying sentiment is bullish … we’ve got an important decision from Trump coming up in May and we have OPEC potentially trying to ‘overtighten’ the market,” Saxo Bank senior manager Ole Hansen said. “(Fund managers) need a continuous flow of bullish news for their position to be maintained and this week, it’s not a matter of just watching the oil market.” Broader financial markets were under pressure from the rise in US government yields towards 3%, a level that in the past has triggered aggressive sell-offs in stocks, bonds and commodities. “Whether a break above 3% will have an impact on currencies remains to be seen, but to have an overall rising cost of finance at a time when Saudi Arabia is aiming at $100, something is going to give. Last time we were at $100, interest rates were rock-bottom and that wasn’t a concern to anyone. This time around, it’s a different story,” Hansen said. Despite slipping on Monday, the oil market remains well supported, especially by strong demand in Asia.

New York City foreclosures are back to financial crisis levels

–  Foreclosure rates in New York City are climbing to heights not seen since the recession.

–  There were 920 NYC foreclosures in the first quarter, up a 31% year-over-year.

–  The number of foreclosures in the city continued to climb this year, with Staten Island and Brooklyn seeing the largest upticks in scheduled auctions.

In the first quarter of 2018, 920 homes were slated for foreclosure for the first time — a 31% year-over-year increase, according to a new report by PropertyShark. This represents the largest number of foreclosures seen in any quarter since 2009. New foreclosures in Staten Island jumped 226% to 189, compared to 58 in the first quarter of 2017, according to the report. Brooklyn experienced a 64% increase year-over-year, logging 275 scheduled foreclosures. The Bronx followed with 113 foreclosures — a 33% increase — and Queens had 303, representing a 13% decrease year-over-year. Manhattan had just 38, compared to 2017’s 36. Foreclosures reached 3,306 citywide in 2017, marking the highest volume seen since 2009, according to a separate report by PropertyShark. It should be noted, however, that the number of lis pendens filed — the first step in the foreclosure process — was down 13% this quarter compared to the same time last year. So, while scheduled foreclosures continue to rise, a slowdown may be in sight.

Americans face highest pump prices in years

Americans are spending more at the pump than they have in years. Prices could rise even higher just as drivers hit the road for family vacations. “This summer, in terms of average gas prices, will likely be the highest since 2014,” said Patrick DeHaan, petroleum analyst at GasBuddy, a fuel-tracking app. “There’s been very little question about that.” Crude prices have jumped thanks to continuing production cuts by major exporters. As a result, gasoline is also becoming more expensive. According to the US Energy Information Administration, average regular retail gas prices reached $2.70 a gallon last week — the highest level since 2015. While higher fuel prices could herald an end to the glut that has plagued the energy market since 2014, they also threaten to dampen demand and hit consumers in their pocketbooks. Since the Organization of the Petroleum Exporting Countries and other major oil producers, including Russia, agreed to collectively limit output two years ago, US oil futures have risen about 40%, closing at $62.06 a barrel on Friday. Gasoline futures are up 8.6% this year. “What we’re seeing now at the pump is reflective of OPEC’s decision in 2016 to cut back on oil production,” said Mr. DeHaan.

Part of gasoline’s price increase has also been seasonal, as refiners tend to process less crude oil into fuel during maintenance and are starting to transition to summer-grade gasoline, which is more expensive to make. Prices will likely climb further as the weather warms and driving picks up, according to energy analysts. OPEC’s production cuts have helped offset growing output from US shale, which has repeatedly reached new record weekly highs this year. In January, US crude stockpiles fell to the lowest level since 2015, and are below the five-year average, a closely watched measure of excess supply. Analysts expect global crude inventories to fall to their five-year average this year as well. Gasoline stockpiles have fallen for five consecutive weeks, according to EIA data ended March 30. In recent months, the US has also exported record amounts of gasoline, mostly to Latin and South America. In January, exports totaled more than 33 million barrels, near an all-time monthly high set in November. “That’s a big difference from a decade ago, or even a few years ago,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service. “We’re kind of refiners to the entire Western Hemisphere right now.” Strong global demand has kept oil prices lifted, as synchronized economic expansion has contributed to increased fuel consumption.

ATTOM – the promise and pitfalls of ADUs as affordable housing panacea |

The following is an excerpt from a 9-page white paper published by ATTOM Data Solutions with more in-depth statistics on ADU building permit trends (displayed in easy-to-read charts) along with numerous interviews with real estate investors , developers and innovators across the country who are working with ADUs. Download the full white paper. A paucity of affordable housing that threatens to inflame a burgeoning homelessness crisis and trigger an exodus of well-paying jobs is forcing local governments to consider creative solutions to this intractable problem. One such solution is to streamline the development of accessory dwelling units (ADUs) in the hopes that real estate developers and single-family homeowners can create more affordable housing inventory one granny flat at a time. A trio of California laws that took effect in January 2017 is one of the examples of such attempt to streamline ADU development. The laws (SB 1069, AB 2299, and AB 2406), encourage cities to ease some of the common hurdles to the permitting and building of accessory dwelling units (ADUs) — also known as granny flats, in-law units or just second units — most notably parking requirements, setback requirements, and utility connection fees. An Accessory Dwelling Unit Memorandum published in December 2016 by the California Department of Housing and Community Development claims that these “changes to ADU laws will further reduce barriers, better streamline approval and expand capacity to accommodate the development of ADUs.”

The legislation certainly appears to be accomplishing its goal of accommodating the development of ADUs. Statewide in California, building permits for ADUs increased 63% in 2017 compared to 2016, the biggest increase among 20 states with at least 100 ADU building permits issued in 2017, according to an ATTOM Data Solutions analysis of building permit data from Buildfax. Nationwide, building permits for ADUs were unchanged in 2017 compared to 2016. California had the most ADU building permits issued in 2017 of any state, with 4,352, followed by Oregon (1,682), Washington (1,110), Florida (944) and Maryland (872). “As affordability worsens, the incentive for homeowners to build ADUs becomes greater. But the cities just have to let them. That’s the only barrier,” said Holly Tachovsky, CEO at Buildfax, who noted that the rise in ADU building permits in some inventory- and affordability-challenged cities reflects a larger trend she has noticed in remodeling in the wake of the Great Recession. “Americans are now spending more money remodeling homes than they are building new ones. This flipped in 2009 and it has stayed flipped since then. The previous trend in all of recorded data before that — decades and decades — was new construction dollars were more than remodeling dollars.”

Cryptocurrencies slide, shed hundreds of billions in market cap

The last 24 hours have seen big sell-offs in the major cryptocurrencies, with bitcoin falling as low as $6,630, according to CoinDesk, before rebounding a bit to trade above $7,000. Bitcoin peaked just below $20,000 in December. It isn’t just the largest cryptocurrency by market capitalization that is falling ether, Ripple XRP and bitcoin cash have all dropped to fresh lows for the year. There wasn’t any apparent trigger to the sell-off. The cryptocurrencies have struggled since they hit record highs that spread from late 2017 through January. According to data from CoinMarketCap, in the first week of January the major cryptocurrencies hit an overall market capitalization that exceeded $800 billion. As of Friday, the total market cap had dropped to about $275 billion.

Delaware foreclosures among highest in nation

As of February one of every 1,012 “units” in the state was a foreclosure, said Bayard Williams, president of the Delaware Association of Realtors. This puts Delaware among the top five states in the nation in terms of high foreclosure rates. Despite the dubious ranking, Mr. Williams believes there is reason for optimism. “It’s starting to pick up,” he said. “The number of properties that received a foreclosure filing in February was 19% lower than the previous month and that’s down 35% from the same time last year.” Mr. Williams believes that many factors play into the state’s high foreclosure rate. “It’s taken a long time to recover from the 2008 recession, and I don’t think we’ve recovered as quickly as some other parts of the country,” he said. “There’s been lag effect due to the local economy.” The damage caused by the recession appeared for many in the loss of home equity, said Mr. Williams. Homeowners who may haverefinanced on their homes before the recession hit found themselvesin a particularly bad position. “When they refinanced, they pulled as much equity back out as they were allowed prior to the downturn in the market — when the market went south, they ended up upside down on their loans,” he said. “We’re even seeing some people who’ve been in their homes for 20 or 30 years trying to sell and you’d think that they’d have a lot of equity at that point to put toward closing costs and the purchase of their next house. But, that’s not always the case anymore. It’s tighter now.”

On the purchasing end both the housing inventory is low and first time home buyers struggle more than they have in the past, noted Mr. Williams. “We don’t have a ton of high paying jobs in the state, many of the first time home buyers are suffering from stagnant wages and also have to work through heavy student loan debt,” he added. Although it’s too early to tell, Mr. Williams speculates that the state’s increase in the transfer tax rate last year has also had a negative effect on home sales. The rate was hiked 1% in July during the thick of the state’s budget negotiations. Before, the state had split the 3% transfer tax with counties, but the new revenue from the increase to 4% has been added to the state’s general fund. At the time, the change was estimated to take in another $45 million for state coffers during the remainder of 2017 and a possible $71 million this year. “It’s still early to know what the effect has been, but common sense tells you that both sellers and buyers have had to bring more money to the table to close — it’s just another contributing factor working against the market,” said Mr. Williams. Despite the downward pressures, Mr. Williams expects conditions to continue to improve, but not “overnight.” “We’re climbing out,” he said. “As the economy improves in the country and we pick up some extra jobs here in the state, things will likely continue to improve, but there are a lot of factors at play.

The rash of foreclosures isn’t as bad in Kent County (one in 1,221 units) as it is in New Castle County (one in 838 units). Cynthia Witt of Woodburn Realty in Dover, who’s been tracking foreclosures in Kent County for many years, said the rate remains high, but does seem to be slowly improving. “Last year, 11% of total real estate sales were sheriff sales,” she said. “We averaged almost 27% of sales that were either bank owned or sheriff sales. But, back in 2012 that was 37%, so numbers have been improving.” However, Ms. Witt points out that the character of the foreclosures seems to be changing. While in the wake of the recession many foreclosures seemed to be a product of lost equity, many of the newer foreclosure filings seem to be related to poorly timed refinancing and sluggish appreciation. “Shortly after 2008, a lot of sheriff sales went through because someone had bought something they could barely afford before the recession, and then they lost their job, got pregnant, got sick or divorced and wound up upside down on their mortgage,” said Ms. Witt. “Now, there are a lot of people who refinanced and just can’t get their money back out of the house. The rate at which houses appreciate has taken a dive, so that only makes it harder. “Back in the ‘80s we used to be able to confidently tell people if they stayed in a house for 3 years, they could sell it and walk away. “Now, someone may have bought a house for $259,000 five years ago and they’re selling it for $262,000. That’s not even enough to cover transfer taxes and closing costs.”

Heirs inheriting houses with more debt against them than they’re worth has also kept the foreclosure rate high, Ms. Witt thinks. Reverse mortgages, where a home owner agrees to sell back their home equity to a lender for regular payments usually to supplement retirement income, have been particularly pernicious in this respect. “There’s been a tremendous increase in the amount of sheriff sales for the property of deceased owners,” said Ms. Witt. “Lots of times an heir will inherit a property and they just don’t see the point of trying to go through the process of selling it because it isn’t worth what’s owed on it. It doesn’t hurt their credit to let it get foreclosed on, so that’s often what they do.” Kent County Sheriff Jason Mollohan noted that he’s seen a significant rise in the number of estates being represented by next of kin during recent auctions — usually indicating an inheritance of the property. However, like Mr. Williams, Ms. Witt sees room for hope. “Based on raw numbers I’d say the market is still healthy,” she said. “Numbers are still being bolstered up because there is still a lot of new construction being sold — particularly in the Smyrna, Camden and Magnolia areas. Many of the buyers seem to be out- of- staters possibly retiring here.”

Another encouraging trend Ms. Witt sees is that a scrappy cohort of contractors seem to be taking advantage of cheap real estate being foreclosed on. “I’m seeing a lot of this happening in Dover, some in Harrington and Smyrna too — it’s usually concentrated in the urban areas,” she said. “There are probably a dozen or so small contractors that are very active in picking up property that goes at a sheriff sale for way below what you’d expect. “They buy it, fix it up and flip it. There is a lot of this going on — probably about eight to ten houses per month. “They’re playing a very necessary role in the market right now. These houses would probably just be sitting and crumbling otherwise.” Through their activities, Ms. Witt says the contractors are upgrading housing stock that first time home buyers might have been steered away from by their realtors or home inspectors because of the upfront costs of renovation. “When I started this business, and old house was something built before 1800, but now, an ‘old house’ is something built over five years ago,” she laughed. “The work these contractors are doing, though, is bringing these older homes and neighborhoods downtown to a more desirable level. I believe if it continues, it may get to the point in five years where you drive through these neighborhoods and really notice the difference.” Sheriff Mollohan agrees, noting that he’s started to see a greater number of “familiar faces” at auctions. “That’s absolutely going on at our foreclosure sales. We’re seeing a good number of the same people come in,” he said. “Not only that, but the level of interest between both foreclosures and tax sales has been increasing on the bidder side. It’s tricky to judge because we don’t preregister people, but I can tell there is more interest lately.”

Housing obstacles can’t hold back homebuyer demand

It’s no secret that affordable housing continues to be more difficult to find, and competition among first-time homebuyers continues to remain fierce. Now, some cities are beginning to take action against the affordable housing crisis. Over the weekend, a 130-unit housing project in San Francisco will be the first to take advantage of a new law that allows developers to skip expensive and lengthy environmental reviews in exchange for building a certain amount of affordable apartments, according to an article by J.K. Dineen for the San Francisco Chronicle. From the article: “Under the law by state Sen. Scott Wiener, D-San Francisco, developers of certain projects can bypass the environmental analysis typically required. In exchange for expedited approvals the developer must commit to a certain percentage of permanently affordable units. The amount of affordable units ranges from 10 to 100%, depending on the community and how much housing it produces. In San Francisco, a developer looking to take advantage of SB35 must commit to making at least 50% of the units affordable.” Mission Economic Development Agency and the Tenderloin Neighborhood Corp. submitted an application to invoke Senate Bill 35. Developers explained this legislation could cut the process by six months to a year, and allows them to build an extra two stories. However, some say the legislation doesn’t go far enough, claiming that the minimum requirement of 10% doesn’t go far enough for the affordable housing needs of San Francisco.

MBA – mortgage applications up

Mortgage applications increased 4.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 23, 2018. The Market Composite Index, a measure of mortgage loan application volume, increased 4.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 8 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 39.4 percent of total applications from 38.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 7.0 percent of total applications. The FHA share of total applications decreased to 9.9 percent from 10.3 percent the week prior. The VA share of total applications decreased to 10.3 percent from 10.7 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

GDP jumps to 2.9%, stocks mixed

GDP grew by 2.9% according to the third revision, above the previously reported 2.5%, while surpassing the Thomson Reuters analyst consensus of 2.7%. The final reading on fourth-quarter GDP was a slight moderation from the third-quarter’s brisk 3.2% pace. For 2017, economic growth was 2.3%, well above the 1.5% experiences in 2016. Traders also digested the latest home sales data, which showed pending home sales snapped back in much of the country in February, with the National Association of Realtors’ Pending Home Sales Index increasing by 3.1% to 107.5. this data as well as an upcoming reading on home sales to try and pull stocks higher following Tuesday’s session which saw the Dow’s early triple-digit gain turn into a triple-digit loss. The Dow posted a triple-digit advance out of the gate while the Nasdaq Composite and S&P 500 were flat. Tuesday saw a topsy-turvy session, as technology shares took a hit on concerns about future regulation. The Dow was up by 244 points at one point, only to reverse course, plunging by 300 points as technology names such as Twitter and Facebook dragged on the market. The sell-off came a day after the Dow recorded its best single-day point gain since 2008 on fading fears of a U.S.-China trade war.

NAR – pending home sales reverse course in February, rise 3.1 percent

Pending home sales snapped back in much of the country in February, but weakening affordability and not enough inventory on the market restricted overall activity compared to a year ago, according to the National Association of Realtors. The Pending Home Sales Index grew 3.1 percent to 107.5 in February from a downwardly revised 104.3 in January. Even with last month’s increase in activity, the index is 4.1 percent below a year ago. Lawrence Yun, NAR chief economist, says the housing market has gotten off to an uneven start so far in 2018. “Contract signings rebounded in most areas in February, but the gains were not large enough to keep up with last February’s level, which was the second highest in over a decade (112.1)1,” he said. “The expanding economy and healthy job market are generating sizeable homebuyer demand, but the miniscule number of listings on the market and its adverse effect on affordability are squeezing buyers and suppressing overall activity.” Added Yun, “Expect ongoing volatility in the Northeast region at least through March. Although pending sales there bounced back in February following January’s cold weather-related decline, the multiple winter storms over these last few weeks likely put a chill on contract signings once again this month.”

With the start of the spring buying season in full swing, Yun believes that one of the top wild cards for the housing market in coming months will be how both buyers and potential sellers adjust to the steady climb in mortgage rates since late last year. Prospective buyers continue to feel the strain of swift price growth – up 5.9 percent so far in 2018 – and the higher borrowing costs will only add to the pressures placed on their budget. Meanwhile, more would-be sellers deciding to balk at listing their home for sale out of uneasiness of losing their low mortgage rate – especially if they refinanced in recent years – would not be good news for any alleviation of the ongoing supply shortages in much of the country. “Homeowners are already staying in their homes at an all-time high before selling2, and any situation where they remain put even longer only exacerbates the nation’s inventory crunch,” said Yun. “Even if new home construction starts picking up at a faster pace this year, as expected, existing sales will fail to break out if these record low supply levels do not recover enough to meet demand.” For the year, Yun now forecasts for existing-home sales to be around 5.51 million – flat from 2017. The national median existing-home price is expected to increase around 4.2 percent. In 2017, existing sales increased 1.1 percent and prices rose 5.8 percent. The PHSI in the Northeast surged 10.3 percent to 96.0 in February, but is still 5.1 percent below a year ago. In the Midwest the index inched forward 0.7 percent to 98.9 in February, but is 9.5 percent lower than February 2017. Pending home sales in the South rose 3.0 percent to an index of 125.7 in February, but are 1.5 percent lower than last February. The index in the West climbed 0.4 percent in February to 96.9, but is 2.2 percent below a year ago.

Will Buffett rescue GE?

General Electric’s (GE) shares jumped by the most in three-years on Tuesday amid a rumor that Warren Buffett could take a stake in the ailing industrial conglomerate. As reported by Bloomberg, an analyst at William Blair & Co. said the sudden increase in GE’s share price on Monday is due to chatter that that Buffett is interested in a position in the company.“It may be a plausible theory, given Buffett had recently spoken to the press that he might be interested in GE at the right price,” Nicholas Heymann said in a telephone interview with Bloomberg. Buffett has previously stated that he would be interested in GE or its assets for the right price. If it ends up being true, it won’t be the first time that Buffett has invested in the company. He helped inject capital into the company during the financial crisis, but in February he noted that his Berkshire Hathaway had mostly sold its GE stock. The latest 13f filing for Berkshire Hathaway shows no new positions in GE. GE’s share were climbing on Tuesday, but the stock’s value still reflects the financial struggles the company has been facing. Year-to-date shares are down almost 22% while over the past 12 months they have declined by almost 54%.

MBA – MBA releases 2017 rankings of commercial/multifamily mortgage firms’ origination volumes

According to a set of commercial/multifamily real estate finance league tables prepared by the Mortgage Bankers Association (MBA), the following firms were the top commercial/multifamily mortgage originators in 2017:


Wells Fargo

PNC Real Estate

Eastdil Secured

JP Morgan Chase & Company

CBRE Capital Markets, Inc.

Key Bank

Capital One Financial Corp.

Meridian Capital Group

Walker & Dunlop.

The MBA study is the only one of its kind to present a comprehensive set of listings of 131 different commercial/multifamily mortgage originators, their 2017 volumes and the different roles they play.  The MBA report, Commercial Real Estate/Multifamily Finance Firms – Annual Origination Volumes, presents origination volumes in more than 140 categories, including by role, by investor group, by property type, by financing structure type, and by the location of the originating office. By dollar volume, the top five originators for third parties in 2017 were:


Eastdil Secured

CBRE Capital Markets, Inc.

PNC Real Estate

Meridian Capital Group.

The top five lenders in 2017 were:

Wells Fargo

JP Morgan Chase & Company

Key Bank

Capital One Financial Corp.

Bank of America Merrill Lynch.

Ten different companies were at the top of the 11 lists reporting total originations by investor groups:

–  Deutsche Bank Securities, Inc., JP Morgan Chase & Company, and Eastdil Secured were the top originators for commercial mortgage-backed securities (CMBS)

–  PNC Real Estate, JP Morgan Chase & Company, and Key Bank were the top originators for commercial bank loans

–  HFF, MetLife Investment Management, and PGIM Real Estate Finance were the top originators for life insurance companies

–  Walker & Dunlop, Berkadia, and Wells Fargo were the top originators for Fannie Mae

–  CBRE Capital Markets, Inc., Walker & Dunlop, and Berkadia were the top originators for Freddie Mac

–  Greystone, Red Mortgage Capital, LLC, and Berkadia were the top originators for FHA/Ginnie Mae

–  TH Real Estate, CBRE Capital Markets, Inc., and HFF were the top originators for pension funds

– HFF, CBRE Capital Markets, Inc., and Marcus & Millichap Capital Corporation were the top originators for credit companies

–  Eastdil Secured, Capital One Financial Corp., and Meridian Capital Group were the top originators for REITS, Mortgage REITS, and Investment Funds

–  JLL, PCCP, and Walker & Dunlop were the top originators for specialty finance;

Wells Fargo, HFF, and Deutsche Bank Securities Inc. were the top originators for the “other investors” category

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