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The 10 Most Homebuyer Friendly Markets

Prospective homebuyers are gearing up for the home shopping season, but where should they go to find the most favorable conditions among the hottest metros? A new analysis from Zillow determined how hot a region’s housing market is compared to others by analyzing sale-to-list-price ratios, the percentage of listings with a price cut, and how long homes stay on the market.Among the nation’s 35 largest metro areas, Miami, Tampa, and Orlando combine to show that buyers in Florida will have an easier time shopping for a home than buyers in most other markets. All three have seen year-over-year home-value growth the same or higher than the nation as a whole. Here are the top ten in order: New York, New York; Miami, Florida; Baltimore, Maryland; Chicago, Ilinois; Philadelphia, Pennsylvania; Pittsburgh, Pennsylvania; Tampa, Florida; Orlando, Florida; Houston, Texas and Riverside, CA. On the opposite end of the scale, San Francisco, San Jose, Seattle, and Denver have seen home values grow slower than the nation over the past year, but remain the four hottest markets. Despite having some of the highest prices in the country, buyers face more competition for an even more limited inventory. Surprisingly,  the New York metro area is the most buyer-friendly market right now. People who can afford to buy in the New York metro have relatively little competition, and properties tend to sit longer on the market. Aaron Terrazas, Senior Economist at Zillow said  “Blanket seller’s markets are history, while inventory remains tight, it is starting to climb. The housing market has cooled and in a growing number of markets, buyers are gaining more and more leverage – especially those well-heeled buyers willing to pay top dollar in pricey communities. However, the crunch is still on in more affordable areas so the bulk of buyers continue to see some competition, though somewhat less than a few months ago.” Overall, the housing market still favors sellers but is slowing—trending toward historical norms. According to another Zillow analysis, inventory is the highest it has been in a year, and the number of homes that sold for over list price decreased from 21% in November to 19% in December–the largest month-over-month drop in seasonally adjusted data since at least 2012. The share has been declining steadily since its peak of 24% of homes sold above list price in May 2018.

Average tax refunds up 19%, now in line with 2018 levels, IRS says

The average tax refund, which had been lagging so far this tax season, is now in line with last year’s levels, according to data released Thursday by the Internal Revenue Service. Data from the week ending Feb. 22 showed the average refund was $3,143 – a 1.3% increase when compared with the same period last year ($3,103). It encompasses four weeks of tax season. That represents a meaningful jump when compared with last week’s data, which had the average refund pegged at $2,640, down by double digits when compared with the year prior. The Treasury Department attributed the sizable increase in average refund size to the remainder of the Earned Income Tax Credits and Child Tax Credits being paid out last week. It also cautioned that data is likely to fluctuate week to week, and it is therefore difficult to draw conclusions this early on in the filing season. The overall amount the IRS has paid in refunds is now only down about 3.6%. The total number of refund checks doled out is down 4.8%. So far this year more than 47 million returns have been processed, a decline of more than 4% when compared with the same period last year. More than 3% fewer returns have been received by the agency. Throughout the early weeks of this year’s tax season, many payers voiced frustrations over smaller or non-existent refunds – with some even owing the agency for the first time. On this note, the Treasury continued to emphasize that there is a difference between your tax liability and your tax refund. “The size of someone’s refund is a separate issue from whether their taxes have increased or decreased,” the department noted in a statement on Thursday. “Most people are benefiting from the Tax Cuts and Jobs Act by receiving larger paychecks throughout the year, instead of tax refunds that simply result from people overpaying the government throughout the year.” Overall, Treasury officials said they expect fewer Americans to get refunds this year when compared with last year. However, they said most Americans are still expected to see a net tax benefit as a result of the passage of the Tax Cuts and Jobs Act. A spokesperson for the Treasury Department previously told FOX Business that individual taxes will be lower for “approximately 80% of filers” thanks to the Tax Cuts and Jobs Act. Meanwhile, another 15% of people will see no change. That leaves about 5% who will owe more.

First American – Mortgage fraud risk climbs 4.6% in January

In January, declining mortgage rates mixed with higher loan applications led to more risk of fraud and other errors in the home loan applications, according to the latest First American Loan Application Defect Index. According to the report, the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications rose 4.6% from the previous month, increasing 9.6% from January 2018. Nationally, the Defect Index for refinance transactions moved forward 5.1% from December and is up a whopping 20.3% from the same time a year ago. Notably, the Defect Index for purchase transactions climbed 5.6% from December and is up 3.3% from 2018. First American Chief Economist Mark Fleming said: “Overall, the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications increased by 4.6% compared with the previous month. While overall fraud risk has been on the rise since July 2018 due partially to the impact of natural disasters, the last two months have experienced an acceleration in fraud risk – what could be driving this change?” According to Fleming, the rise is attributed to a plunge in rates and spike in mortgage applications. “Surprisingly, mortgage rates declined in December and continued falling into January, reaching their lowest levels since April 2018,” Fleming continued. “Prospective home buyers and existing homeowners reacted to the lower rates, resulting in a mini-boom in mortgage applications, both purchase and refinance.” Overall, Fleming said a rise in purchase and refinance applications, coupled with strong first-time home buyer demand and tight inventory, bodes well for an early spring home-buying season. However, Fleming notes that this could contribute to further increases in defect risk. “Historically, purchase transactions tend to be more at risk of defects, fraud and misrepresentation, and the pressures resulting from rising demand and a strong sellers’ market compounds that risk,” Fleming continued. “When home values are rising, and the housing market is competitive, more buyers want to enter in the market. As a result, misrepresentation and fraud are more likely on a loan application.”

Cuomo, New Yorkers’ Amazon HQ2 pleas too little, too late?  Ocasio-Cortez blamed

Some New York lawmakers are not ready to give up on the prospect of hosting Amazon’s HQ2 just yet. The state’s Democratic governor, Andrew Cuomo, has been trying to convince Amazon executives to recommit to plans in New York, the New York Times reported, citing two people with knowledge of the efforts. He has even reportedly connected personally with CEO Jeff Bezos while working “intensely behind the scenes to lure the company back.” According to the report, a recent conversation between Cuomo and Bezos marked the first time the pair had spoken since the lucrative deal fell through. Cuomo did not offer Amazon a new location for its facility, but is said to have promised support for the project. Amazon, however, did not indicate it was willing to reconsider. New York had offered $3 billion worth of incentives for Amazon to choose the location. It’s not just Cuomo who is hoping Amazon will change its mind. In an open letter published in The New York Times on Friday, local unions, businesses and other groups communicated support for the project. “A clear majority of New Yorkers support this project and were disappointed by your decision not to proceed,” the letter read. “Governor Cuomo will take personal responsibility for the project’s state approval.” Last month, Amazon announced its decision to abandon plans for its Long Island City, New York HQ2 location – taking along with it 25,000 high-paying jobs and a $2.5 billion investment. The company had been expected to generate billions of dollars’ worth of tax revenue for New York. Amazon’s November HQ2 announcement sparked fierce local opposition, including among some lawmakers – like Democratic Rep. Alexandria Ocasio-Cortez, who cheered the e-commerce giant’s eventual about-face. Cuomo recently hinted he believed Ocasio-Cortez’s surprise victory over Rep. Joe Crowley in the 2018 Democratic primary was at least partially to blame for Amazon’s decision.

DSNews – homebuyers stretching budgets for the American dream?

Buying a home can be a test of willpower, especially if a bidding war breaks out. Typically, it comes down to two options-spend more than the determined budget on that dream home, or make concessions and stick to inventory that is affordable. Some homebuyers choose to go for broke, others are willing to sacrifice amenities to avoid getting stretched too thin, and reaching either conclusion can be a harrowing ride. Speaking about the last year when mortgage rates were low and the market was competitive, NerdWallet’s home expert Holden Lewis described it as, “Homebuyers have been on a dizzying, twisty journey.” The company’s 2019 Home Buyer Report took data that showed how much American homebuyers compromised to make their homeownership dreams come true, and where they could have saved some money. It showed that nearly half (45%) of Americans who’ve purchased a home in the past five years ended up offering more than asking the price before having their offer accepted. That explains the 25% of American homeowners that said they no longer felt financially secure after purchasing their current home, and more than one-third of first-time home buyers could identify with them. By comparing mortgage rates among lenders, home buyers could save $776 million in a single year, that’s over $400 per borrower in the first year of a 30-year mortgage. Thirty-six% of Americans plan to buy a home in the next five years, of which  24% will be in the next year. The study also looked at how those getting back on track from foreclosure feel about the possibility of future ownership. Thirteen% of Americans have lost a home to foreclosure in the past 10 years—61% of those have not bought a home since, and 20% of those who haven’t repurchased say they never plan to again. Quoting CoreLogic, the report pointed out that foreclosures peaked in 2011 during the crisis. More than 1 in 10 Americans (13%) say they’ve lost a home in the past 10 years due to a financial event such as foreclosure, short sale or bankruptcy. More than 6 in 10 (61percent) of them have not purchased a home since their financial event. Twenty% of those who haven’t repurchased say they plan on never buying a home again. On the other hand, 58% say they plan to buy again in the next five years.

Former SoFi CEO Mike Cagney’s blockchain lending startup Figure raises $65 million

Figure Technologies, the blockchain lending startup co-founded by former SoFi CEO Mike Cagney, grew throughout its first year of business last year. The company entered the home equity lending market first, when it rolled out its signature product, Figure Home Equity, which is a hybrid between a traditional home equity loan and a HELOC that allows homeowners to borrow from their home equity. Then the company went after the reverse mortgage market and unveiled a new program that it called an alternative to reverse mortgages. The program, called Figure Home Advantage, sees the company buy a property outright from a homeowner, who then rents the house back from Figure for as long as they want to. And now, the company will have some new funding to continue its expansion. Figure announced this week that it raised $65 million in its Series B equity funding. According to the company, the latest funding round brings the company’s total equity funding to more than $120 million in just its second year of operating. The funding round was led by RPM Ventures and partners at DST Global, with participation from investors Ribbit Capital, DCM, DCG, Nimble Ventures, Morgan Creek, and others. Cagney, who left SoFi in 2017 after reports emerged about the alleged toxic culture at the online lender, said that Figure is “encouraged” by the company’s first-year results and is looking forward to growing thanks to the new funding. “We are encouraged by what we’ve accomplished in our first year, and this investment validates Figure’s market potential,” Cagney, who serves as Figure’s CEO, said. “We launched the fastest HELOC in the market, and we originate, finance and sell every one of our loans on the Provenance blockchain, an industry first,” Cagney continued. “From the diversity of our founding team to our alignment with our members’ financial success, we believe we’re building a different — and better — kind of technology company.” As Cagney noted, the company built and deployed its own blockchain system, which it calls Provenance. The company uses the blockchain for all of its lending activities, which has its advantages, according to the company. This is how Figure describes it: “The company leverages the security, efficiencies and cost advantage of blockchain for loan origination, financing and sales and has a diverse set of funds, banks and dealers active on Provenance today.” According to the company, Figure was the first loan originator on Provenance, but the company says that several other originators plan to use the platform by the middle of this year. The company also said that additional use cases, such as investment funds on blockchain, are also planned for this year. Beyond that, the company plans to expand its Figure Home Advantage reverse mortgage alternative, which is currently being rolled out in Texas, Illinois, and Nevada, and take the program nationwide this year.

CoreLogic – December home prices increased by 4.7% year over year

–  Twelve-month home-price growth rate was slowest since August 2012

–  Annual average price growth in 2018 was 5.8%, with annual average price growth forecast to slow in 2019 to 3.4%

–  After peaking in March, December marked the ninth consecutive month of decelerating annual HPI growth in the United States

CoreLogic released the CoreLogic Home Price Index (HPI™) and HPI Forecast for December 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 4.7% year over year from December 2017. On a month-over-month basis, prices increased by 0.1% in December 2018. (November 2018 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results each month.)

Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.6% on a year-over-year basis from December 2018 to December 2019. Comparing the annual average HPI and HPI forecast for 2018 and 2019, average price growth is forecasted to slow from 5.8% to 3.4%. On a month-over-month basis, home prices are expected to decrease by 1% from December 2018 to January 2019. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state. “Higher mortgage rates slowed home sales and price growth during the second half of 2018,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Annual price growth peaked in March and averaged 6.4% during the first six months of the year. In the second half of 2018, growth moderated to 5.2%. For 2019, we are forecasting an average annual price growth of 3.4%.”

According to the CoreLogic Market Condition Indicators (MCI), an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 33% of metropolitan areas have an overvalued housing market as of December 2018. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued, by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals (such as disposable income). Additionally, as of December 2018, 27% of the top 100 metropolitan areas were undervalued, and 40% were at value. When looking at only the top 50 markets based on housing stock, 40% were overvalued, 18% were undervalued and 42% were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10% above the long-term, sustainable level. An undervalued housing market is one in which home prices are at least 10% below the sustainable level.

In 2018, CoreLogic together with RTi Research of Norwalk, Connecticut, conducted an extensive survey measuring consumer-housing sentiment, combining consumer and property insights. The study assessed attitudes toward homeownership and the driving force behind the decision to buy or rent a home. When renters were asked how interested they were in owning a home or residence, 36% felt homeownership would allow them to fulfill a dream and provide a place to raise a family. Conversely, 45% of those surveyed claimed they could not afford to buy or take on the responsibility of ownership at this time. As home-price increases cool while incomes rise, we expect buyer affordability to improve and home sales to pick up. “The slowdown in the rate of home price appreciation reflects the impact of inventory shortages and growing affordability issues in many markets,” said Frank Martell, president and CEO of CoreLogic. “On the positive side, if home-price growth continues to moderate, interest rates remain stable and household incomes rise in 2019, it could help renters and first-time buyers to take the plunge and realize the dream of owning a home.”

Trump’s SOTU touts juiced job market

President Trump in his State of the Union address said the thriving US economy has enabled women to fill 58% of the new jobs created in the last year.

President Trump Opens a New Window.  wants you to know the US jobs recovery Opens a New Window.  is real dubbing it part of the “economic boom” Opens a New Window.  in his 2019 State of the Union address. To his point, in January, a whopping 304,000 jobs were created, blowing past expectations. Near record low unemployment and robust hiring in sectors that were long depressed, such as manufacturing, are now part of his economic track record and he detailed as much on Tuesday while noting, “We are just getting started”…

Some excerpts of his address:

Record Low Unemployment is Broad:

US unemployment hit 3.7% in late 2018 before ticking up to 4% in January 2019. “Unemployment has reached the lowest rate in half a century” Trump noted. “More people are working now than at any time in our history”… “African-American, Hispanic-American and Asian-American unemployment have all reached their lowest levels ever recorded. Unemployment for Americans with disabilities has also reached an all-time low” he said.

Female Power:

“No one has benefitted more from our thriving economy than women, who have filled 58% of the new jobs created in the last year” said Trump. He also noted in his remarks that more women than ever before are serving in the US Congress. According to the Associated Press, the  labor force participation rate is 57.5%, according to the Labor Department. The rate has ticked up recently, but it was higher in 2012 and peaked in 2000 at roughly 60%.

Jobs Created:

“We have created 5.3 million new jobs and importantly added 600,000 new manufacturing jobs — something which almost everyone said was impossible to do” he said. The numbers are slightly off, based on data from the Bureau of Labor Statistics,  which shows there have been about 4.9 million jobs created since January of 2017 of which 436,000 are manufacturing.

Rising Wages:

Wages are rising at the fastest pace in decades, and growing for blue collar workers. Trump’s top economic advisor Larry Kudlow has also highlighted the recovery for the blue collar workers as being significant. “The Trump economic incentive model has spurred blue-collar job growth at the fastest rate since the Reagan administration, he recently said. In December, wages grew 3.3% from the same period a year ago, the fastest in about a decade.

Miami estate sells for a record $50 million

An estate on Indian Creek Island sold for $50 million, making it the most expensive single-family home ever sold in the Miami area, according to people familiar with the deal. The property, at 3 Indian Creek Island Road, was not officially listed but had sold in 2012 for $47 million. At the time, that marked a record for the most expensive home ever sold in Miami-Date County. So with the current sale, the home will have set the Miami record twice. The sale comes as the real estate market in South Florida has gotten off to a strong start of the year, helped in part by the new tax law that makes it more attractive to live in low-tax states. The names of the buyer and seller of Indian Creek weren’t disclosed. The buyer of the property in 2012 was an LLC, and was purchased by a Russian businessman, according to news reports. The ultra-modern home stretches over 20,000 square feet on 2 acres overlooking Biscayne Bay. It has 10 bedrooms, 14 bathrooms, a 3,000-square-foot master suite, rooftop lawn, chromotherapy spa, a 3D movie theater and two kitchens. It also has a 100-foot swimming pool. The question of whether the sale will officially be the most expensive ever in Miami will remain a source of debate. Ken Griffin, the Chicago-based hedge-fund manager, bought two apartments — a penthouse and unit below — in the Faena House in 2016 for $60 million. But that sale was for a condo, and the Indian Creek home is a record for a single-family home.

GM determined to reallocate factory workers amid job cuts, President Mark Reuss says

General Motors President Mark Reuss on Tuesday told FOX Business that while the automaker takes steps to vacate several US plants, a huge investment in the latest Chevy Silverado at one of its Flint, Michigan, plants will help reallocate some employees impacted by job cuts. “We haven’t actually announced that we are closing any plants — we’ve ‘unallocated’ those plants,” Reuss explained to Jeff Flock in response to putting five plants up for possible closure, and he added that “this plant we’ve put about $1.2 billion in it since ’09, including a new paint shop, new body shop and we’re bringing 1000 employees from some of those unallocated plants to this plant here.” Last year, GM announced plans to slash 15% of its salaried workforce and halt production at plants in Ohio, Michigan, Maryland and Ontario. In addition, they are eliminating several car models in the US, including the Chevrolet Cruz and the Buick LaCrosse. The decision has drawn criticism from President Trump, who threatened to end subsidies for electric vehicles in the near future. However, Reuss remained tight-lipped on whether Trump’s disapproval changed his mind. “These are tough decisions, they affect employees and we take that very seriously,” he said. Reuss’s father Lloyd also served as president in the 1990s and was also criticized at the time for not making some tough decisions. While “those were very different times,” and he had just joined the company at the time of his father’s firing in 1992, dealing with the 2009 bankruptcy during the global financial crisis is motivation to turn the company around. “Mary [Barra] and I take that very, very seriously,” he said. “So we are going to get on the other side of this and make sure that we are healthy and strong and we’ve invested in the right plants and we fill those plants with as many workers and as many products as we can to make this a viable company for the future.”

Olick – weekly mortgage applications fall 2.5% despite a sharp drop in rates

–  Mortgage application volume fell 2.5% last week compared with the previous week, according to the Mortgage Bankers Association.

–  Volume was also nearly 10% lower than the same week one year ago.

–  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.69% from

Overall mortgage application volume fell 2.5% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was nearly 10% lower than a year ago. Purchase volume pulled back the most, with those applications falling 5% for the week and 2% annually. The signals are mixed, as real estate agents are reporting a surge in potential buyer activity through open houses in the past few weeks. Home sales fell at the end of the year, but so did mortgage rates, and agents report seeing higher demand in direct response to lower rates. “I absolutely think it’s the interest rate, especially when they’re getting a 30-year mortgage and they’re going to be stuck with it for a long time,” said Laura Barnett, a Dallas area real estate agent who was surprised by the crowd of house hunters who came to one of her open houses last Sunday. “They have to make a really wise decision. They can always refinance later if it goes down, but they can never get this rate again if it goes back up.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.69% from 4.76% last week, with points decreasing to 0.45 from 0.47 (including the origination fee) for loans with a 20% down payment. That rate was the lowest since April and just 19 basis points higher than one year ago. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 4.50% from 4.60%. “Despite more favorable borrowing costs, and after a three-week surge in activity, purchase applications have slowed over the past two weeks, and are now almost 2% lower than a year ago,” said Joel Kan, an MBA economist. “However, moderating price gains and the strong job market, including evidence of faster wage growth, should help purchase growth going forward.” Applications to refinance a home loan, which are far more rate-sensitive week to week, increased 0.3 from the previous week but were still 19% lower than a year ago. Many borrowers already refinanced to rates in the 3% range a few years ago, so there is not a lot of incentive now to go through the process. For those who want to take cash out, they are now more likely to take out a second loan or line of credit rather than give up their current rock-bottom rate. Mortgage rates started this week slightly higher, but then stabilized. There is no major economic data expected later this week to cause more volatility, but there is always the potential for political issues at home and abroad to cause major moves in the bond market.

CoreLogic – explaining to homeowners reconstruction costs versus other valuations

According to a recent CoreLogic Natural Hazard Press Release, the 2018 Camp and Woolsey Wildfires in California caused devastating losses between $15 and $19 billon. Because a home is most often a complete loss when it comes to wildfires, the destruction caused by these catastrophic events has been a personal and financial tragedy for many families. These and other natural hazards have forced Insurance Carriers to reevaluate the need for more accurate insurance coverage to better ensure their policyholders can be made whole again if a natural disaster should destroy their property. The consequence of underinsurance can affect the mortgage industry as well. Many times, if a homeowner doesn’t have enough insurance coverage to rebuild, they simply walk away from their mortgages. According to a recent Loan Performance Press Release, Dr. Frank Nothaft, chief economist for CoreLogic said, “The effects of 2018’s natural disasters have begun to show clearly in our delinquency data.” The report shows areas affected by natural disasters have seen an increase in delinquency rates while other parts of the country are experiencing a steady decline. While there is an increased focus within the Insurance and Mortgage industries on making sure ITVs (Insurance to Values) are more accurate, property insurance agents and carriers often receive questions from homeowners who don’t understand the difference between reconstruction cost values (insurance coverage) and market or appraisal values. Below are three of the most common questions property owners ask after receiving a quote from their agent or carrier.

Q: Why is my homeowner’s insurance coverage more than what my house is worth?

A: Many homeowners assume the cost to rebuild a property should be equal to what they paid for the property. However, insurers determine reconstruction cost values (RCVs) using sophisticated residential estimating tools that deliver RCVs at today’s prices. Reconstruction cost value is the cost to replace or rebuild a home to original or like standards at current material and labor costs within a certain geographical area. Meanwhile, a home’s market value is the price a consumer is willing to pay for the home. To illustrate this, Home A and Home B have similar property characteristics. Yet, due to the dilapidated condition of Home A, it has little to no market value. But to an insurer, the cost to rebuild both homes may be about the same (excluding site access, regional differences and land).

HOME A – Distressed Home

Year Built 1930

Square Footage 1300

Market Value $30,000

Reconstruction Cost Value $145,000

HOME B-  – Well Kept Home

Year Built 1930

Square Footage 1300

Market Value $130,000

Reconstruction Cost Value $145,000

Q My home is new, so why is the reconstruction cost value higher than what I paid for my home?

A: CoreLogic research has shown that reconstruction cost values average close to 12% more than new construction costs. This is because newly constructed communities can benefit from material discounts and labor efficiencies that a contractor rebuilding a home does not have. These factors can add up and include variables such as:

–  Restricted site access

–  Restricted utility access

–  Site improvements

–  Permits/fees

–  Working restrictions

–  Delivery access

–  Security concerns

–  Work interruptions

To be properly covered, a home should be insured for the amount it will cost to rebuild the home at current prices for building materials and labor costs, including constructing it to comply with current building codes.

A: Can I use the appraised or assessed value to determine my insurance coverage limits?

Q: Replacement Cost New (RCN), a term generally used by the assessor and appraisal industry, is not recommended to determine the cost to rebuild a home. This is because RCN is based on the cost to build, at one time, an entire building of equal utility, quality, features, and finishes with neither the contractor nor property owner being under duress to have it done in a shorter time frame. Building codes, as well as the prices used for labor, materials, overhead, profit, and fees are those in practice at the time the valuation was written and may not be current. RCN’s also use modern building methodologies and materials and don’t consider the cost of rebuilding an older home using period specific materials. Additionally, RCNs do not take into consideration the following costs usually associated with rebuilding after a catastrophic event: demolition, salvage of marketable building components, debris removal, extraordinary fees, site accessibility or premiums for materials and labor.

Black Knight – December 2018 Mortgage Monitor

–  All four major performance metrics – delinquencies, serious delinquencies, active foreclosures and total non-current inventory – ended the year below 2000-2005 pre-recession averages for the first time since the financial crisis

–  Both the national foreclosure rate and active foreclosure inventory have fallen below long-term norms; at the current rate of decline, both would reach near-record lows by the end of 2019

–  576,000 foreclosures were initiated in 2018, the lowest such annual total in more than 18 years

–  First-time foreclosures were also at historic lows, with over 60 percent of foreclosure referrals last year being repeat actions, the highest share ever recorded

–  Foreclosure sales (completions) hit a low of more than 18 years; 2018’s 175,000 foreclosure sales were down 25 percent from the year prior, and were 40 percent below their pre-recession average

The Data & Analytics division of Black Knight, Inc. released its latest Mortgage Monitor Report, based upon its industry-leading loan-level mortgage performance database. With full-year mortgage performance data in, this month’s report looked at 2018 in review. As explained by Ben Graboske, president of Black Knight’s Data & Analytics division, more than a decade past the start of the financial crisis, most metrics reflect a recovery to their long-term, 2000-2005 pre-recession averages. “Across the board, 2018 year-end numbers are good news from a mortgage performance perspective,” said Graboske. “All four major performance metrics – delinquencies, serious delinquencies, active foreclosures and total non-current inventory – ended the year below pre-recession averages for the first time since the financial crisis. Just 576,000 foreclosures were initiated throughout the entirety of 2018 – an 18-year low – and the vast majority of these were repeat actions. In fact, first-time foreclosures were down 18 percent from the year before, hitting the lowest point we’ve seen since Black Knight started reporting the metric in 2000. Even repeats – though making up more than 60 percent of all foreclosures – were down 6 percent from 2017.

“These year-end numbers are further proof of what we’ve been observing for some time now. The high credit quality and corresponding lower risk we’ve seen in the post-crisis origination market for the better part of a decade continues to pay dividends in terms of mortgage performance. In addition, the low interest rate environment we’ve enjoyed for so long had – until very recently – resulted in a refinance-heavy blend of originations for years. Refis, as a whole, tend to outperform their purchase mortgage counterparts, which has boosted mortgage performance as well. On top of that, we’ve had the benefit of strong employment and housing markets, which have helped the vast majority of homeowners meet their debt obligations, while those few who may have faced a possible default have gained enough equity to be able to sell rather than face foreclosure.” As the average interest rate on a 30-year mortgage ticked down again in January, falling below 4.5 percent for the first time since April 2018, Black Knight revisited the impact this change has had on the refinanceable population. The decline in rates has returned the interest rate incentive to refinance to 1 million homeowners, a 50 percent increase in rate/term refinance incentive over just the last two months. There are now 2.9 million homeowners with mortgages who could likely qualify for a refinance under broad-based criteria and also reduce the interest rate on their first mortgage by at least 0.75 percent by doing so, the largest this population has been since January 2018. Even if rates should hold steady – and certainly if they fall further – this could lead to an unexpected bump in refinance volumes in early 2019.

As was reported in Black Knight’s most recent First Look news release, other key results include:

–  Total U.S. loan delinquency rate: 3.88%

–  Month-over-month change in delinquency rate: 4.71%

–  Total U.S. foreclosure pre-sale inventory rate: 0.52%

–  Month-over-month change in foreclosure pre-sale inventory rate:  1.19%

–  States with highest percentage of non-current loans: MS, LA, AL, WV, AR

–  States with lowest percentage of non-current loans: ND, ID, WA, OR, CO

–  States with highest percentage of seriously delinquent loans:MS, LA, AL, AR, NC

GM expected to start cutting 4,000 jobs

It is Black Monday for workers at General Motors. The automaker is expected to start its next round of white-collar job cuts Opens a New Window.  Monday, but the carmaker apparently has fewer staff reductions left to make than has been anticipated. In November, GM said it needed to reduce its North American white-collar workforce by about 8,000. About 2,250 salaried workers volunteered to take a buyout, leaving as many as 5,750 workers still to be cut. But on Friday a GM spokesman said the automaker had trimmed about 1,500 contract jobs, meaning about 4,000 more staff jobs will be cut, according to the Detroit Free Press. Many salaried workers inside GM have said they and colleagues have been on pins and needles for the past two months, ever since GM said it would make    involuntary cuts. Those who spoke to the Free Press did so on the condition of anonymity for fear of losing their jobs. The employee said some department leaders have told workers to forego scheduling vacation time in the first two weeks of February, an insinuation that the involuntary cuts will be made at that time. Many of GM’s hourly workers in the United States and Canada have held protests and prayer vigils in a campaign to persuade the automaker to reverse its Nov. 26 GM announcement to indefinitely idle five plants in North America. More than 6,200 jobs are at stake. GM said its decision to cut nearly 14,000 jobs and idle five plants in North America will save $2 billion to $2.5 billion in 2019. GM is scheduled to release its fourth-quarter earnings on Wednesday.

Congress to consider proposal to privatize Fannie Mae, Freddie Mac

Congress may now finally be gearing up to reform government-sponsored enterprises Fannie Mae and Freddie Mac. Senate Banking Committee Chairman Mike Crapo (R-ID) released an outline Friday for housing finance reform legislation. The outline incorporates elements of many plans and principles for housing finance reform legislation that have been discussed by legislators, analysts, stakeholders and thought leaders. “We must expeditiously fix our flawed housing finance system,” Crapo said. “My priorities are to establish stronger levels of taxpayer protection, preserve the 30-year fixed-rate mortgage, increase competition among mortgage guarantors, and promote access to affordable housing.” “I invite my Senate and House colleagues, the Administration and all interested stakeholders to work together to enact this critically needed reform,” he said. Here are some of the goals for Crapo’s proposed legislation:

–  Reduce the systemic, too-big-to-fail risk posed by the current duopoly of mortgage guarantors

–  Preserve existing infrastructure in the housing finance system that works well, while significantly increasing the role of private risk-bearing capital

–  Establish several new layers of protection between mortgage credit risk and taxpayers

–  Ensure a level playing field for originators of all sizes and types, while also locking in uniform, responsible underwriting standards

–  Promote broad accessibility to mortgage credit, including in underserved markets

And the outline is already drawing support. “The outline released today by Senate Banking Committee Chairman Crapo is a great reflection on the work that has been done to date by members of the committee, including the chairman, and takes into account some of the key lightning rod concerns of stakeholders,” said David Stevens, former head of the Mortgage Bankers Association and Federal Housing Administration. “It draws a bright line between guarantors and banks,” Stevens said. “It limits the role of the guarantor. It provides for multiple private guarantors, reducing too-big-to-fail concerns. It protects the use of mortgage insurance on loan-to-values over 80%. It locks in a level playing field on pricing for all lenders and requires FHFA to approve all pricing. It takes into account the Ginnie Mae programs and its role as a securitization entity.” Former Ginnie Mae president Michael Bright, who is now president and CEO of the Structured Finance Industry Group, also announced his support. “A future state for housing finance should have clearly defined roles for who is taking on risk, private capital or the government,” Bright said. “It must also ensure that our housing markets work for all Americans. The current structure of conservatorship has helped our country to transition from crisis to economic growth, and the Federal Housing Finance Agency should be commended for the work it has done.” “But an opportunity exists to make meaningful changes that enhance consumer access to credit, add financial stability guardrails, and ensure a more vibrant and liquid secondary market that does not put taxpayers at direct risk of loss,” he said. “In our view, a role for Congress is critical to effectuate these important changes.”

Boeing seeing more airplane buyers paying cash, financing than ever before

Growing global demand and the profitability of airlines in North America have pushed Boeing, the world’s largest airplane maker, to increase production rates on two of its most successful aircraft models. “We’re seeing more customers with near-term demand and in the ability to either finance or pay cash than we’ve ever seen,” Boeing Chief Financial Officer Greg Smith said. The company will now produce 57 737s a month (up from 52) and will increase production of its 787 Dreamliner to 14 per month (from 12). The U.S. airplane maker has nearly 5,900 aircraft currently on backlog, valued at $490 billion. Over the course of the next 20 years, Boeing forecasts 8,800 airplanes will need to be delivered to airlines. “When you look at the assets that are in North America today … almost half of that is being replaced with much more efficient … [aircraft] than what they’re operating today,” Smith said, regarding operating costs. “So that’s creating a lot of demand.” Boeing shares have gained 20 percent year-to-date and are approaching their all-time closing high ($392.30), which was set on Oct. 3, 2018. The stock finished the week at $387.43. The ramp-up in production also carries a risk that Boeing has experienced before, according to analysts. That includes pileups of unfinished aircraft at its Renton, Washington assembly plant due to late arrivals of CFM’s LEAP-1B engines for the 737 MAX model and delayed deliveries of 737 fuselages made by Spirit AeroSystems.

Boeing CEO Dennis Muilenburg previously said the company is getting in front of those challenges by sending Boeing personnel to CFM – a joint venture between General Electric and French company Safran Aircraft Engines – and their sub-tier suppliers to address concerns and help make sure the engine maker can meet the increased demand. “The suppliers are now in much better position to have experienced those … teething issues,” Josh Sullivan of Seaport Global Securities told FOX Business. “So, the supply chain is much healthier this year.” While global traffic grew 6.6 percent through November last year, which is faster than the world’s GDP, according to Muilenburg, the U.S. still ranks lower when compared to other markets, particularly Asia. Because of this, Boeing forecasts 16,000 aircraft will need to be delivered to airlines in the region over the next two decades. “There’s a lot of replacement opportunity there near term and long term,” Smith said. “There’s also more growth there, and that just goes to the fundamentals of what’s happening within their society and their economy, with the growth in middle class and in the real desire to travel … within the region but also outside of the region.” And while Boeing hasn’t released an outlook for employment in 2019, the company still sees a demand for jobs as the rate of production and other programs increase or moderate. The aerospace giant brought in more than 30,000 workers last year (not all net hires – some due to the rate of attrition and retirement), and focuses on hiring the right talent.

Black Knight – First Look at December 2018 mortgage data

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

–  Despite rising seasonally in recent months, only 3.9% of mortgages were delinquent as of December month-end, the lowest year-end total since Black Knight began reporting the figure in 2000

–  The national foreclosure rate, while also edging seasonally upward in December, posted the lowest year-end figure since 2005, with just 0.52% of mortgages in active foreclosure

–  Foreclosure starts edged slightly upward with 46,300 starts reported for the month, a 2.4% uptick over November

–  Foreclosure starts were also up 4% year-over-year in December, though this increase was primarily driven by suppressed foreclosure start volumes in late 2017 due to hurricane-related moratoriums

–  Prepayments remained nearly unchanged in December, holding near the 10-year low set in November

Ford’s turnaround pinned on new fleet

Ford Motor Co. is trying to drive past a difficult 2018 with a slate of new vehicles and an aggressive overhaul of its operations, but with the problems that plagued the iconic carmaker last year poised to remain in 2019, analysts are skeptical of the company’s promise to improve earnings. Ford is in the midst of an $11 billion global restructuring effort that includes thousands of job cuts across Europe. Layoffs in the US could be next, analysts say, though the number is likely to be far less than competitors. As concerns grow, Ford CEO Jim Hackett downplayed the threat of US job cuts. “I’m confirming that there’s no blue collar cuts in the offing,” Hackett told FOX Business’ at the North American International Auto Show in Detroit earlier this month. Meanwhile, the Dearborn, Mich.-based company is facing millions of dollars in added costs in 2019 due to President Trump’s tariffs on steel and aluminum imports, higher taxes and a potential global economic slowdown that could further dent sales in lucrative markets like China. The company has provided few details on its financial outlook for the year, apart from suggestions that earnings could improve after a string of quarters of comparative, double-digit profit declines. And as rival General Motors’ stock is on the rise, Ford’s is spiraling to a nine-year low, spurring questions about the future of top executive Jim Hackett. “CEO longevity and stock price performance go hand-in-hand,” said Ivan Feinseth, chief investment officer at Tigress Financial Partners, during an interview with FOX Business. “GM over the past five years has significantly outperformed Ford.”

Ford, which declined to comment, has a plan to try to navigate the tumultuous environment. This year, the company is adding updates to its lineup including the Ford Escape, Explorer and Lincoln Corsair, along with the new Ford Ranger and Lincoln Aviator, offerings that could help bolster earnings in 2019, according to Morningstar’s David Whiston. “The company now makes cars people actually want to own instead of vehicles that are purchased only because of heavy incentives,” he wrote in a recent note. “Management by its own words needs to get the company more physically fit so it can better offset headwinds it cannot control, such as currency and commodities.” The company also recently announced the launch of a global alliance with Volkswagen AG to build commerical mid-sized trucks and self-driving cars, though the news largely fell flat on Wall Street. Ford’s struggles come amid a strong US auto market. As overall sales in 2018 brushed against record highs, Ford’s slipped 3.5% while GM sales fell 1.7% for the year. Investors “are growing concerned about pressure to the North America truck business and a lack of improvement abroad,” Goldman Sachs analysts wrote in a recent note. Ford, which is poised to report fourth quarter earnings on Wednesday, has “an opportunity to help quantify tailwinds, headwinds, regional expectations, and generally provide incremental detail of its improvement plans,” the analysts wrote. GM is plotting many of the same moves as Ford. The company – which earlier this month said it expects 2019 earnings above analyst expectations – recently announced it would lay-off thousands of employees and shutter several plants in North America as part of a refocus towards trucks, crossovers and SUVs, along with autonomous vehicles. While the decision spurred intense congressional backlash, Barra has defended her decision, most recently telling FOX Business “having a strong General Motors that can invest in the future that’s going to be here not just for a few years, but for several decades is our focus.” Among investors confidence in Barra appears high. Barra “is the greatest CEO of General Motors,” Feinseth, whose firm has a “strong buy” on GM, said. “She has a mission, she has a strategy and she has a process and has executed it well.”

NAR – existing-home sales see 6.4% drop in December

After two consecutive months of increases, existing-home sales declined in the month of December, according to the National Association of Realtors®. None of the four major US regions saw a gain in sales activity last month. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 6.4% from November to a seasonally adjusted rate of 4.99 million in December. Sales are now down 10.3% from a year ago (5.56 million in December 2017). The median existing-home price for all housing types in December was $253,600, up 2.9% from December 2017 ($246,500). December’s price increase marks the 82nd straight month of year-over-year gains. Total housing inventory at the end of December decreased to 1.55 million, down from 1.74 million existing homes available for sale in November, but represents an increase from 1.46 million a year ago. Unsold inventory is at a 3.7-month supply at the current sales pace, down from 3.9 last month and up from 3.2 months a year ago. Properties typically stayed on the market for 46 days in December, up from 42 days in November and 40 days a year ago. Thirty-nine% of homes sold in December 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 December were Chico, California; Midland, Texas; Odessa, Texas; Columbus, Ohio; and Fort Wayne, Ind. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.64% in December from 4.87% in November. The average commitment rate for all of 2017 was 3.99%. “The partial shutdown of the federal government has not had a significant effect on December closings, but the uncertainty of a shutdown has the potential to harm the market,” said NAR President John Smaby. “Once the government is fully reopened, I am hopeful that housing transactions will increase.” First-time buyers were responsible for 32% of sales in December, down from last month (33%), but the same as a year ago. NAR’s 2018 Profile of Home Buyers and Sellers – released in late 20184 – revealed that the annual share of first-time buyers was 33%. All-cash sales accounted for 22% of transactions in December, up from November and a year ago (21 and 20%, respectively). Individual investors, who account for many cash sales, purchased 13% of homes in December, the same as November but down from a year ago (16%). Distressed sales – foreclosures and short sales – represented 2% of sales in December, unchanged from 2% last month and down from 5% a year ago.

Single-family home sales sit at a seasonally adjusted annual rate of 4.45 million in December, down from 4.71 million in November, and 10.1% below the 4.95 million sales pace from a year ago. The median existing single-family home price was $255,200 in December, up 2.9% from December 2017. Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 540,000 units in December, down 12.9% from last month and down 11.5% from a year ago. The median existing condo price was $240,600 in December, which is up 2.3% from a year ago. December existing-home sales in the Northeast decreased 6.8% to an annual rate of 690,000, 6.8% below a year ago. The median price in the Northeast was $283,400, which is up 8.2% from December 2017. In the Midwest, existing-home sales fell 11.2% from last month to an annual rate of 1.19 million in December, down 10.5% overall from a year ago. The median price in the Midwest was $191,300, unchanged from last year. Existing-home sales in the South dropped 5.4% to an annual rate of 2.09 million in December, down 8.7% from last year. The median price in the South was $224,300, up 2.5% from a year ago. Existing-home sales in the West dipped 1.9% to an annual rate of 1.02 million in December, 15% below a year ago. The median price in the West was $374,400, up 0.2% from December 2017.

Federal Reserve to cut rates in 2020: Mohamed El-Erian

Fed will do nothing in 2019, but may cut rates in 2020: Mohamed El-Erian

Allianz chief economic adviser Mohamed El-Erian on why he believes that the Federal Reserve will cut rates in 2020 and the strength of the US economy.

The Federal Reserve will keep its hand away from the rate cut flames this year, but may consider trimming the federal funds rate in 2020, according to Allianz chief economic adviser Mohamed El-Erian. “In a sense that, they’ll do nothing this year and if they do anything next year, which is 2020, they’ll probably cut,” he said on Tuesday has indicated it will take on a “patient” approach towards monetary policy in 2019 while closely watching the economy and markets for signs of a global growth downturn. Wall Street’s most followed economist predicts the economy will not fall into a recession if the Fed decides push for a rate cut next year. “I think the US economy is in a really good place,” El-Erian said. “Just look at the last labor report, the US economy produced twice as many jobs as expected, wages are going up by 3.2%, and people are coming back into the labor force.” El-Erian warns that the US economy is at risk of becoming contaminated by the state of the European economy. “I’m not negative on the US economy,” he said. “I can understand the concerns about Europe and China, but I think people go too far in extending that to the US”

CoreLogic – homebuyers’ mortgage payments up three times faster than prices

While the median price paid for a home nationally had risen by just over 5% year over year as of last October, the principal-and-interest mortgage payment on that median-priced home had increased by 17%, mainly because of the 2018 rate hikes. However, some forecasts for home prices and mortgage rates indicate mortgage payments will rise at a much slower pace – closer to 7% – this year. That’s based on a 4.8% annual gain in home prices by October 2019, according to the CoreLogic Home Price Index Forecast, and a 0.2-percentage-point gain in mortgage rates over that period, based on an average of six rate forecasts. One way to measure the impact of inflation, mortgage rates and home prices on affordability over time is to use what we call the “typical mortgage payment.” It’s a mortgage-rate-adjusted monthly payment based on each month’s US median home sale price. It is calculated using Freddie Mac’s average rate on a 30-year fixed-rate mortgage with a 20% down payment. It does not include taxes or insurance. The typical mortgage payment is a good proxy for affordability because it shows the monthly amount that a borrower would have to qualify for to get a mortgage to buy the median-priced US home.

The US median sale price in October 2018 – $218,733 – was up 5.2% year over year, while the typical mortgage payment was up 17.0% because of a 0.9-percentage-point rise in mortgage rates over that one-year period. The CoreLogic HPI Forecast suggests the median sale price will rise 2.5% in real, or inflation-adjusted, terms over the year ending October 2019 (or 4.8% in nominal, or not-inflation-adjusted, terms). Based on that projection, coupled with the aforementioned consensus mortgage rate forecast, the real typical monthly mortgage payment would rise from $918 in October 2018 to $963 by October 2019, a 4.9% year-over-year gain. In nominal terms the typical mortgage payment’s year-over-year increase in October 2019 would be 7.2%. An IHS Markit forecast indicates that real disposable income will rise by just under 3% over the next year, meaning homebuyers would see a larger chunk of their incomes devoted to mortgage payments. When adjusted for inflation the typical mortgage payment puts homebuyers’ current costs in the proper historical context. While the real typical mortgage payment has trended higher in recent years, in October 2018 it remained 28.0% below the all-time peak of $1,275 in June 2006. That’s because the average mortgage rate back in June 2006 was about 6.7%, compared with an average rate of about 4.8% in October 2018, and the real US median sale price in June 2006 was $247,067 (or $197,200 in 2006 dollars), compared with an October 2018 median of $218,733.

MBA – mortgage applications down

Mortgage applications decreased 2.7% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 18, 2019. The Market Composite Index, a measure of mortgage loan application volume, decreased 2.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.3% compared with the previous week. The Refinance Index decreased 5% from the previous week. The seasonally adjusted Purchase Index decreased 2% from one week earlier. The unadjusted Purchase Index increased 4% compared with the previous week and was 13% higher than the same week one year ago. “Mortgage application activity cooled off last week after two consecutive weeks of sizeable increases. Both purchase and refinance applications saw declines but remained at healthy levels, with the purchase index remaining close to a nine-year high, and the refinance index hovering near its highest level since last spring,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Reversing the recent downward trend, rates increased for most loan types last week, due to better-than-expected unemployment claims, easing trade tensions and stabilization in the equity markets.” The refinance share of mortgage activity decreased to 44.5% of total applications from 46.8% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.3% of total applications. The FHA share of total applications decreased to 10.5% from 10.9% the week prior. The VA share of total applications decreased to 10.3% from 10.4% the week prior. The USDA share of total applications decreased to 0.4% from 0.5% the week prior.

NAR – Treasury, IRS give big win to real estate professionals in qualified business income rule

Late last week, the Treasury Department and the Internal Revenue Service issued final regulations regarding the new 20% deduction on qualified business income. As Americans begin preparations for the 2018 tax filing season, real estate professionals have been uncertain about the true impact of the 2017 Tax Cuts and Jobs Act on their respective businesses. Friday’s ruling from Treasury and the IRS, however, signaled a significant victory for the real estate industry and for many of the National Association of Realtors®’ 1.3 million members. “Friday’s ruling is a result of several months of advocacy and collaboration between NAR, our members, and the administration,” said NAR President John Smaby. “These final guidelines will allow real estate professionals to benefit from the Section 199A 20% pass-through deduction, a move that will empower Realtors® to expand their operations and provide improved services to consumers and potential homebuyers across the country. The National Association of Realtors® is grateful for the openness and transparency encouraged by Treasury and the IRS, and we thank them for their hard work to ensure the real estate community was heard throughout this rulemaking process.”

A central component of the new tax law is a reduction of the corporate tax rate – from 35 to 21%. However, since nine out of ten American businesses are structured as pass-through entities rather than corporations, the Section 199A provision provides critical tax deductions for small businesses and self-employed independent contractors, which is how many real estate professionals are classified. Within the 247-page rule issued last Friday, three major provisions for real estate professionals stood out as critical victories for members of the National Association of Realtors®.Most importantly, the regulation clarifies that all real estate agents and brokers who are not employees but operate as sole proprietors or owners of partnerships, S corporations or limited liability companies are eligible for the new deduction, which can be as high as 20%. This includes those whose income exceeds the threshold of $157,500 for single filers and $315,000 for those filing a joint return. Second, the rule simplifies the process that owners of rental real estate property must follow to claim the new deduction. As written in the Tax Cuts and Jobs Act, only income that is from a “trade or business” qualifies for the 20% write-off. However, because this distinction was not clearly defined by Congress when crafting the law, various court rulings and prior IRS guidance have caused confusion among tax professionals in determining which rental properties were merely investments and which could accurately be considered a business enterprise.

NAR strongly urged Treasury and the IRS to simplify the rules in order to give millions of rental real estate owners certainty surrounding their ability to qualify for this new deduction. Friday’s final regulations included a bright-line safe harbor test requiring at least 250 hours per year spent on maintaining and repairing property, collecting rent, paying expenses and conducting other typical landlord activities. Finally, within the proposed regulation released last August, those who had exchanged one parcel of real estate under Section 1031 for another parcel were unfairly denied deduction eligibility. However, NAR and multiple additional trade groups concerned with commercial real estate were vocal in highlighting this shortcoming. In a positive resolution to the situation, Treasury and the IRS recognized the initial ruling was misguided and corrected the policy in Friday’s final guidance. “NAR maintained consistent and coordinated communication with Treasury and the IRS throughout this rulemaking process. The finalized ruling, which represents a tremendous win for real estate professionals across the country, is a direct result of that engagement,” said Shannon McGahn, NAR Senior Vice President of Government Affairs. “We are thrilled to see our members emerge from this process so favorably, and we thank Treasury and the IRS for all of their hard work in ensuring consistency and clarity within these policies as America’s 1.3 million Realtors® begin filing their 2018 tax returns in the coming weeks.”


MBA – December new home purchase mortgage applications decreased 6.1%

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for December 2018 shows mortgage applications for new home purchases decreased 6.1% from a year ago. Compared to November 2018, applications decreased by 13%. This change does not include any adjustment for typical seasonal patterns. “New home sales declined for the second straight month in December, from 627,000 units to 552,000 units, as factors such as a volatile stock market and economic uncertainty, both here and abroad, likely kept some prospective buyers away,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “This pullback in activity was in spite of falling mortgage rates and a robust job market. Looking ahead, if mortgage rates remain low, housing inventory rises, and home-price growth continues to steady, we expect to see a rebound in purchase activity this spring.” MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 552,000 units in December, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. The seasonally adjusted estimate for December is a decrease of 12% from the November pace of 627,000 units. On an unadjusted basis, MBA estimates that there were 37,000 new home sales in December 2018, a decrease of 17.8% from 45,000 new home sales in November. By product type, conventional loans composed 69.5% of loan applications, FHA loans composed 17.3%, RHS/USDA loans composed 0.7% and VA loans composed 12.5%. The average loan size of new homes increased from $326,037 in November to $334,944 in December.

Oil climbs 1 pct as OPEC output drop eases glut concerns

Oil prices rose more than 1% on Friday after an OPEC report showed its production fell sharply last month, easing some concerns about prolonged oversupply. Brent crude was up 82 cents, or 1.3%, at $62 a barrel at 1200 GMT. Brent has risen more than 2% this week, its third straight week of gains. US West Texas Intermediate (WTI) crude futures were up 78 cents, or 1.5%, at $52.85 per barrel. The Organization of the Petroleum Exporting Countries along with other producers including Russia agreed last year to output cuts starting from Jan. 1 aimed at averting a glut. OPEC’s monthly report showed it had made a strong start in December even before the pact went into effect, implementing the biggest month-on-month production drop in almost two years. Expectations that the United States may grant waivers on sanctions it imposed on importing Iranian oil to fewer countries could also ease concerns about oversupply. “The combination of production cuts by OPEC+ (especially the Saudis) and tightening sanctions on Iranian oil exports have brought the market close to balance,” US investment bank Jefferies said.

NAHB – remodelers’ confidence holds relatively steady in fourth quarter

The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 57 in the fourth quarter of 2018, only one point lower than the previous quarter. The RMI has been consistently above 50—indicating that more remodelers report market activity is higher compared to the prior quarter than report it is lower—since the second quarter of 2013. The overall RMI averages current remodeling activity and future indicators. “The overall remodeling market remains strong, but there are signs of concern related to rising labor and input costs,” said NAHB Remodelers Chair Joanne Theunissen, CGP, CGR, a remodeler from Mt. Pleasant, Mich. “Remodelers are battling sticker shock with many home owners who expect lower bids.” Current market conditions fell one point from the previous quarter to 57. Among its three major components, major additions and alterations remained steady at 56, minor additions and alterations decreased one point to 56 and the home maintenance and repair component fell one point to 59. The future market indicators dropped three points from the previous quarter to 56. Calls for bids remained still at 57, the amount of work committed for the next three months decreased seven points to 52, the backlog of remodeling jobs fell three points to 59 and appointments for proposals decreased four points to 55. “Many of the fundamentals for the remodeling market, including demographics and economic and employment growth, remain favorable,” said NAHB Chief Economist Robert Dietz. “However, remodelers continue to face challenges in keeping their prices competitive while dealing with the increasing costs of labor and building materials.”

LA teachers’ strike has cost $97M, district estimates

A strike at the nation’s second-largest school district this week has cost nearly $100 million. Negotiations between the United Teachers Los Angeles (UTLA) and the Los Angeles Unified School District (LAUSD) resumed on Thursday after more than 30,000 educators walked off the job this week. While schools remained open, attendance has been low. On Wednesday, less than one-third of students attended classes, according to preliminary data from the district. Those numbers were expected to have fallen even further as the week carried on. Since state funding is doled out based on daily attendance, the school district has estimated that the strikes cost about $97 million through Thursday – averaging more than $20 million per day. There are more than 600,000 students across the 900 LAUSD schools. On Thursday, only about 84,000 of those children were estimated to have attended. The strike is the union’s first in three decades. Among the group’s demands are higher pay, smaller class sizes, more support staff members, as well as addressing the $600 million worth of resources allegedly drained away to prop up charter schools. The school district – which projects a budget deficit of about $500 million this year – has said the union’s demands could cause it to go bankrupt, according to The Los Angeles Times. The union is said to be seeking a 6.5% raise at the outset of a two-year contract. The Los Angeles teacher’s union has been emboldened by the success of similar movements in other states – including West Virginia, where schools closed for nine days as teachers fought for higher wages and better benefits. In March, they ultimately scored a 5% pay raise. Educators held more strikes in 2018 than at any other time in the past 25 years, according to The Wall Street Journal.

CoreLogic – 2018 is third consecutive year of above-average catastrophe activity

–  Annual natural hazard summary from CoreLogic details another above-average year for wildfire and flood events—

CoreLogic released its annual Natural Hazard Report, which addresses the recent wildfires in California and severe rainfall- and hurricane-induced flooding throughout the nation as the leading catastrophes in 2018. Much like 2017, last year was an above-average year for hurricanes, flooding, wildfires and severe winds. The annual report analyzes hazard activity in the US including events for Atlantic and Pacific hurricanes, flooding, wind, wildfire, earthquake and volcano, hail and tornado, as well as several international events including typhoons and cyclones in Japan, Oman, Hong Kong and the Philippines. “In 2018, the US continued to experience damaging weather and natural catastrophes in high exposure areas, and in some instances, in regions that had been impacted in less than a year prior,” said Howard Botts, chief scientist, CoreLogic. “Hazards will always pose a real threat to homes and businesses and knowing exactly what that risk entails is critical to helping ensure sufficient protection from the financial catastrophes that so often follow natural disasters.” Highlights from the analysis include:


–  In 2018, there were over 1,600 significant flood events that occurred in the US, 59% of which were flash flood-related.

–  Residential and commercial flood damage in North Carolina, South Carolina and Virginia from Hurricane Florence is estimated at $19 billion to $28.5 billion, of which roughly 85% of residential flood losses was in fact, uninsured.

–  Multiple states, including Texas, North and South Carolina, Maryland and Wisconsin experienced 1,000-year floods; several of 2018’s floods occurred less than two years after the same areas’ previous 1,000-year flood events.

–  Six% of properties nationwide are within Special Flood Hazard Areas (SFHA), and approximately one-third of those have flood insurance policies.

Flood Map

Atlantic Hurricanes

–  The 2018 Atlantic Hurricane season saw 15 named storms, eight of which were named hurricanes. Two of these, Hurricanes Florence (Category 1) and Michael (Category 4), made landfall along the US This made 2018 the third back-to-back season of above-average hurricane activity in the Atlantic.

–  Approximately 700,000 residential and commercial properties experienced catastrophic flooding and wind damage from Hurricane Florence, where it is estimated to have caused between $20 to $30 billion in insured and uninsured loss.

–  Michael is the strongest hurricane to make landfall in the Florida Panhandle since 1900 and the strongest hurricane to make landfall in the US since Hurricane Andrew in 1992. It is estimated to have caused $2.5 to $4 billion in residential and commercial insured loss from wind and storm surge.

Natural Hazard Report Table


–  The number of acres that burned in 2018 is the eighth highest in US history as reported through November 30, 2018.

–  A total of 11 western states had at least one wildfire that exceeded 50,000 burned acres; the leading states were California and Oregon, each with seven fires that burned more than 50,000 acres.

–  The November 2018 Camp Fire in Northern California destroyed nearly the entire city of Paradise and brought damage or destruction to 18,804 structures (NIFC, 2018).

–  The Woolsey wildfire in the coastal community of Malibu destroyed more than 1,600 structures (Los Angeles County Fire Dept, 2017).

–  CoreLogic estimates that the combined total insured and uninsured loss for these two wildfires is between $15 billion and $19 billion.

Americans, saddled with student debt, can’t afford a home

While many young Americans aim to own a home one day, most have one massive obstacle to overcome: student loan debt. According to online real estate site Zillow, Americans’ ability to afford a home is meaningfully diminished by student loan debt. A renter earning median income without student loan debt, for example, could afford a home that costs as much as $361,800 – for a renter with debt, the maximum affordable price is $269,400. That pushes nearly half of all homes currently listed for sale across the country out of reach. Outstanding student loan debt surpassed $1.5 trillion in 2018 – second only to mortgage debt – doubling over the past decade. In some metropolitan areas, affordability is much more challenging for young prospective buyers. In Las Vegas, student debt reduces renters’ options by nearly half – to 29.3% from 57%. In Los Angeles, slightly more than 6% of home listings are financially within reach for individuals with student debt, compared to 13.5% without. On the flip side, a renter with debt could afford more than 73% of listings in St. Louis. Earlier this week, researchers from the Federal Reserve found that the homeownership rate among young Americans fell nine percentage points between 2005 and 2014 — and rising student debt accounted for about one-fifth of the overall decline during that time period. If not for those increased student debt burdens, an additional 400,000 young Americans would have owned a home by 2014.

MBA – mortgage credit availability decreased in December

Mortgage credit availability decreased in December according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool. The MCAI decreased 7.3% to 175.0 in December. 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 decreased (14.5%) and the Government MCAI increased slightly (0.1%). Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 14.9%, while the Conforming MCAI decreased by 14.0%.  “The supply of credit dropped in December to its lowest since February 2017. The decline was driven by a sharp decrease in the conventional credit space, as we saw the expiration of the Home Affordable Refinance Program (HARP),” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Credit availability in government loans was stable over the month, ticking up slightly. We also saw a decline in high balance and super conforming programs, which drove the decline in the jumbo index.” The MCAI decreased 7.3% to 175.0 in December. The Conventional MCAI decreased (14.5%) and the Government MCAI increased slightly (0.1%). Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 14.9%, while the Conforming MCAI decreased by 14.0%.

Bernie Sanders to introduce bill to raise federal minimum wage to $15

Independent Vermont Sen. Bernie Sanders said he – along with other members of Congress – plans to introduce a bill in Congress this week that would raise the federal minimum wage to $15 per hour. “The federal minimum wage of $7.25 is a starvation wage. That is why I, along with many other members of Congress, will introduce legislation this week to raise that wage to $15 an hour. If you work 40 hours a week, you should not live in poverty.” The bill is expected to come as the government shutdown enters its fourth week – eclipsing the record for the longest lapse in federal funding over the weekend – as many federal employees go unpaid. Raising the minimum wage sparks a range of opinions on Capitol Hill – from whether it should be raised at all to whose job it should be to do so. Such a bill is unlikely to make significant headway because, even though Democrats took control of the House of Representatives during the 2018 midterm elections, Republicans maintain control in the Senate.

During an interview with FOX Business in November, White House economic adviser Larry Kudlow argued against having the federal government set the national minimum wage since conditions vary meaningfully among states. “The federal government shouldn’t have jurisdiction over the states anyway in a matter like this. The conditions are different in these states, the cost of living is different, the state of business is different,” Kudlow said. Twenty states raised their minimum wages at the outset of 2019, including California, New York and Washington. The White House adviser added that he has no problem with Americans taking home larger paychecks, especially if the raise comes from companies in the private sector – like Amazon. Sanders has been a staunch advocate for raising the minimum wage to $15 per hour. He introduced bills last year aimed at corporate America – including the Stop BEZOS Act Opens a New Window.  – pressuring America’s largest corporations to lift workers’ wages. In addition to Amazon, Sanders has publicly targeted McDonalds, Walmart and American Airlines.

NAR – homeownership part of “american dream”; housing costs deterrent for non-owners

Homeowners and non-homeowners both strongly consider homeownership part of the American Dream. That is according to new consumer survey data from the National Association of Realtors®, which revealed that among those polled, approximately 75% of non-homeowners believe homeownership is part of their American Dream, while nine in 10 current homeowners said the same. NAR’s Aspiring Home Buyers Profile analyzed 2018 quarterly consumer insights from its Housing Opportunities and Market Experience (HOME) survey1 to capture the housing expectations and sentiments of non-homeowners – both renters and those living with a family member. When non-homeowners were asked for the chief reason why they currently do not own a home, most respondents said it was because they were currently unable to afford a mortgage. Over the last quarter of 2018, 43% of non-owners said they did not own a home because they were not in a position to purchase, which was down from the third quarter of 2018, when 49% of non-homeowners answered the same. Also in the 4th quarter, 33% of non-homeowners said they do not own because current life circumstances are not suitable for ownership, while 16% said they need the flexibility of renting. In addition, the survey looked at the main reason why non-homeowners would buy a home in the future. Throughout 2018, 28 to 31% of non-owners each quarter said an improvement in their financial situation would be the top reason that would encourage them to buy a home in the future. In each quarter, 26 to 30% of non-owners said a change in lifestyle – such as getting married, starting a family or retiring – would be the primary reason they would make a future home purchase.

Lawrence Yun, NAR chief economist, says unaffordable housing has caused a number of potential buyers to hold off on purchasing a new home. “The lack of affordable and moderately priced homes has forced non-homeowners to delay achieving that part of the American Dream. However, as the survey confirms, significant lifestyle changes like marriage or starting a family often spur non-owners to pursue home-ownership.” For this year’s survey, homeowners and non-owners were also asked about adult family or friends moving into their homes, the span of time this individual(s) lived within the household, and if they thought about moving to a new home because of the change. According to the survey, 11% of homeowners had an adult child move into their residence, while 5% of non-owners had an adult move into their home. Of those who had someone move into their home, 44% said that the individual intended to live with them for over one year or to stay permanently. Forty-four% of non-owners reported that the individual planned on living with them for between six months to one year. Eighty-eight% of those surveyed who had someone move into their home reported that their living situation remained acceptable and therefore did not warrant consideration of moving into a different home. Twelve% said they did consider moving or ultimately did move due to their home situation changing. “While home sales were slightly down in 2018, there is still a sizable pent-up housing demand. Economic growth, interest rates, and the supply of moderately priced-homes will dictate how well the real estate industry will do this year,” said Yun.”

More Americans fleeing high-tax states

More and more Americans are fleeing high-tax states – from California to Hawaii to New Jersey to New York – and relocating elsewhere in the hopes of holding onto some more of their hard-earned cash. Problem is that’s pushing up the cost of living in the states they’re fleeing to, according to the country’s largest real estate trade group. They’re going to nearby secondary states that used to be “affordable” – states like Washington, Nevada, Colorado and Arizona, for example, says Lawrence Yun, chief economist of the National Association of REALTORS(r). And it isn’t just the working class looking to move to lower-tax states. Taxes are often a top consideration particularly when someone is relocating for work or looking to retire says tax expert Bob Meighan, a former executive with Intuit. The biggest tax you’re going to face, after the IRS, is the one your state presents. That’s why Florida is a big draw “particularly among northeast residents currently living in high property-tax states such as New York, New Jersey (the highest in the country), and Connecticut,” says Yun. “In Florida, you get both lower taxes and a warmer climate.” Last year, these were the ten highest income tax states, according to TurboTax (*These rates do not include local taxes.):

California 13.3%

Hawaii 11%

Oregon 9.9%

Minnesota 9.85%

Iowa 8.98%

New Jersey 8.97%

Vermont 8.95%

District of Columbia 8.95%

New York 8.82%

Wisconsin 7.65%

DSNews – is the housing market overheating?

The housing market might experience a downturn, but it won’t affect homeownership as much as the last housing crisis did, according to a study titled Where are We Now with Housing: A Report, by the Florida Atlantic University College of Business. The study investigated and compared the current status of US housing at the national level with that of housing at the peak of the last cycle in July 2006. It revealed that while national housing prices were slightly overheated, residential real estate markets were experiencing minimal downward pressure on the demand for homeownership. “Understanding where housing stands today relative to the last cycle’s peak creates more informed real estate consumers and perhaps a less bumpy ride this time around as the nation enters another housing cycle peak,” said Ken Johnson, the author of the study and co-author of the Beracha, Hardin & Johnson Buy vs. Rent Index (BH&J). To compare home prices and their impact on demand, the study investigated scores of the CoreLogic Case-Shiller Home Price Index and the BH&J. It found that housing prices were at 7.3% above their long-term pricing trend compared to 31% at the peak of the last housing cycle. In terms of downward pressure on housing demand, the study found that at the end of the last cycle the BH&J Index indicated an extreme downward pressure on homeownership with a score of 1.00. Comparatively, this time around, the index reflected a score of 0.039 suggesting only minimal pressure on homeownership demand. “It looks like we’re in for more of a very high tide, as opposed to a tsunami, as residential prices peak in this latest cycle,” Johnson said. “At a minimum, we can expect flatter housing price growth. At worst, we could experience price declines slightly below the long-term pricing trend.”

Oil prices jump on US-China trade hopes, supply cuts

Oil prices rose by more than 1.5% on Monday on hopes that talks in Beijing can resolve a trade war between the United States and China, while supply cuts by major producers also supported crude. Brent crude futures were at $58.04 per barrel at 0751 GMT, up 98 cents, or 1.7%, from their last close. US West Texas Intermediate (WTI) crude oil futures were at $48.85 per barrel, up 89 cents, or 1.9%. Financial markets were riding a relief rally on Monday on expectations that face-to-face trade negotiations between delegates from Washington and Beijing, starting on Monday, would lead to an easing in tensions between the two biggest economies in the world. The United States and Beijing have been locked in an escalating trade spat since early 2018, raising import tariffs on each other’s goods. The dispute has weighed on economic growth.

Goldman Sachs said in a note on Monday that it had downgraded its average Brent crude oil forecast for 2019 to $62.50 a barrel from $70 due to “the strongest macro headwinds since 2015.” French bank Societe Generale also lowered its oil price forecasts, cutting its 2019 average price expectation for Brent by $9 to $64 a barrel and reducing its WTI forecast to $57 a barrel, also a reduction of $9. The bank said it had revised its global oil demand growth forecast to 1.27 million barrels per day (bpd), down from 1.43 million bpd previously. In the latest signs of widespread economic slowdown that could also hit fuel demand, British new car sales in 2018 fell at their fastest rate since the global financial crisis a decade ago, preliminary industry data showed on Monday. Meanwhile, German industrial orders dropped in November, official data showed on Monday, as Germany’s exporters suffer from the trade dispute between China and the United States.

Government shutdown halts reverse mortgage endorsements

With the government shutdown approaching the two-week mark, reverse mortgage endorsements have ground to a halt. The Federal Housing Administration released a notice stating it will not be making insurance endorsements for HECM loans during the shutdown. The FHA also noted that assistance will not be provided for lenders with issues regarding the Collateral Risk Assessment related to the second-appraisal protocol. If the first appraisal was submitted under the interim protocol, a second appraisal must follow the interim processes, the FHA said. If the first appraisal was submitted on or after Nov. 30, 2018, when the process was fully automated, lenders must adhere to guidelines for the automated process. And, apparently, if questions arise, lenders are out of luck. The FHA also said condominium project approvals under HUD review will be unavailable during the shutdown.

But some activities will continue as normal, albeit with “limited staff assistance available and longer wait times for assistance,” the FHA said. HECM payments will continue to be made to borrowers, as well as refunds on mortgage insurance premiums. Submissions of upfront MIP payments for new endorsements are still required, with the FHA specifically noting that lenders are required to submit monthly MIPs during the shutdown. FHA Connection will still be available and will continue to assign case numbers. The Home Equity Reverse Mortgage Information Technology system and Electronic Appraisal Delivery portal will also be available for existing lenders only. “As a result of the Federal Government shutdown due to a lapse in appropriations, until further notice the Federal Housing Administration’s Office of Single Family Housing and its mortgage insurance program will be operating with limited service,” the FHA bulletin said. “Please note that across the board, the services that remain available during the shutdown will have significant impacts to customer service and/or limited functionality.”

Nucor to build $1.35B steel plant in Midwest

US steelmaker Nucor said Monday it will spend $1.35 billion to build a steel production facility in the Midwest, creating approximately 400 full-time jobs. The plate mill is expected to begin production in 2022 and be capable of producing 1.2 million tons of plate products per year, said Nucor, which operates plants in North Carolina, Alabama and Texas. The mill will produce cut-to-length, coiled, heat-treated and discrete plates ranging from 60 to 160 inches wide, and in various gauges. “Tax reform, continued improvements to our regulatory approach and strong trade enforcement are giving businesses like ours the confidence to make long-term capital investments here in the United States,” CEO John Ferriola said in a statement. Nucor said it expects to select a site early this year. “By building this state-of-the-art plate mill in the Midwest – the largest plate-consuming area in the United States – we will enhance our ability to serve our customers in the region while also furthering our goal of meeting all the steel needs of our customers around the country,” Leon Topalian, a Nucor executive vice president, said in a statement.

DSNews – in times of emergency

The current insurance system leaves too many homeowners vulnerable when disaster strikes even with private insurance policies playing a major role. According to a recent report by the Urban Institute, the number of flood insurance policies in force through the National Flood Insurance Program decreasing over the past decade further complicated the issue. In light of these factors, the recent stance by the Federal Emergency Management Agency (FEMA) on federal policies gained importance. Congress had passed legislation that extended the National Flood Insurance Program to May 31, 2019, before the partial shutdown on the December 21. However, on December 26, in a stance that was contrary to the ones it had taken during past shutdowns, FEMA, said that insurers would not be allowed to issue and renew federal policies during the shutdown. Apart from National Association of Realtors (NAR), organizations such as the Property Casualty Insurers Association of America and the Independent Insurance Agents & Brokers of America and the Congress expressed their concerns urging the agency to reevaluate its decision. FEMA was quick to address the concerns and reverse its policy disallowing new or renewal flood insurance policies during the shutdown and announced a reversal of the unexpected ruling the agency released earlier, on December 28.

NAR estimates that the FEMA ruling disallowing insurance could have affected home sales across America, as its research revealed the possibility of up to disruptions in 40,000 closings each month that the NFIP cannot issue flood insurance policies—making flood insurance imperative especially at a time when market disruption would be extremely hard-felt. A recent report by CoreLogic revealed that serious delinquencies have recorded an upward spike in disaster-affected areas. “Lenders, for example, will need to carefully consider whether or not it even makes sense to continue offering mortgage loans in frequently-hit by natural disaster areas, and which may or may not be covered by the battered and bruised Federal Flood Insurance Program. Servicers will need to look closely at their potential losses, particularly when managing loans insured by government agencies. Property insurers will certainly adjust premiums to address increased levels of risk,” Rick Sharga, EVP of Carrington Mortgage said.


NAR – pending home sales see 0.7% drop in November

Pending home sales overall slipped in November, but saw minor increases in the Northeast and the West, according to the National Association of Realtors®.The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 0.7% to 101.4 in November, down from 102.1 in October. However, year-over-year contract signings dropped 7.7%, making this the eleventh straight month of annual decreases. Lawrence Yun, NAR chief economist, said the current sales numbers don’t fully take into account other data. “The latest decline in contract signings implies more short-term pullback in the housing sector and does not yet capture the impact of recent favorable conditions of mortgage rates,” he said. Yun added that while pending contracts have reached their lowest mark since 2014, there is no reason to be overly concerned, and he predicts solid growth potential for the long-term. All four major regions sustained a drop when compared to one year ago, with the West taking the brunt of the decrease. “The West crawled back lightly, but is still experiencing the biggest annual decline among the regions because of unaffordable conditions,” Yun said. Yun suggests that affordability challenges in the West are part of the blame for the drop in sales. Home prices in the West region have risen too much, too fast, according to Yun. “Land cost is expensive, and zoning regulations are too stringent. Therefore, local officials should consider ways to boost local supply; if not, they risk seeing population migrating to neighboring states and away from the West Coast.”

Yun indicated the latest government shutdown will harm the housing market. “Unlike past government shutdowns, with this present closure, flood insurance is not available. That means that roughly 40,000 homes per month may go unsold because purchasing a home requires flood insurance in those affected areas,” Yun said. “The longer the shutdown means fewer homes sold and slower economic growth.” That said, Yun cited year-over-year increases in active listings from data at® to illustrate a potential rise in inventory. Denver-Aurora-Lakewood, Colo., Seattle-Tacoma-Bellevue, Wash., San Francisco-Oakland-Hayward, Calif., San Diego-Carlsbad, Calif., and Providence-Warwick, Rhode Island saw the largest increase in active listings in November compared to a year ago. Yun believes that there are good longer-term prospects for home sales. “Home sales in 2018 look to close out the year with 5.3 million home sales, which would be similar to that experienced in the year 2000. But given the 17 million more jobs now compared to the turn of the century, the home sales are clearly underperforming today. That also means there is steady longer-term growth potential.” The PHSI in the Northeast rose 2.7% to 95.1 in November, and is now 3.5% below a year ago. In the Midwest, the index fell 2.3% to 98.1 in November and is 7.0% lower than November 2017. Pending home sales in the South fell 2.7% to an index of 115.7 in November, which is 7.4% lower than a year ago. The index in the West increased 2.8% in November to 87.2 and fell 12.2% below a year ago.

Gold hits over 6-month high as investors flock to safety

Gold climbed to a more than six-month high on Friday, as concerns about slowing global economic growth and a partial government shutdown in the United States stoked safe-haven demand, although gains in equities capped the upside. Spot gold had risen by 0.5% to $1,281.08 per ounce as of 0713 GMT, and was set for a second straight weekly gain with no end in sight for China-US trade tensions and political uncertainty in the United States. The precious metal hit its highest level since June 19 at $1,281.39 earlier in the session. US gold futures inched up 0.2% to $1,283.2 per ounce on Friday. “People see gold as the only safe haven at this point of time,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore, referring to political and economic upheavals such as the Sino-US trade spat and the partial US government shutdown. The dollar index, a gauge of its value versus six major peers, edged lower, having lost 0.5% overnight, adding to gold’s appeal by making it cheaper for holders of other currencies. Financial markets are expecting US growth to slow next year as a result of rising interest rates. A measure of US consumer confidence posted its sharpest decline in more than three years in December, emphasizing the possibility. In a blow to worsening trade tensions between the world’s two biggest economies, US President Donald Trump is considering an executive order that would bar US companies from using telecommunications equipment made by China’s Huawei and ZTE. Gold is often used by investors as a hedge against political and financial uncertainty. Meanwhile, Asian stocks inched higher after Wall Street ended volatile trade in the green in the previous session, limiting gold’s advance.

Senior execs at Vanguard Funding sent to jail for embezzling $8.9 million

The former chief operating officer and chief financial officer of a New York-based mortgage lender will spend between 18 and 24 months in prison after admitting to embezzling more than $8.9 million from warehouse lines of credit that were meant to fund mortgages. According to the US Attorney’s Office for the Eastern District of New York, Edward Sypher, Jr. and Matthew Voss, who are senior executives at Vanguard Funding, pleaded guilty earlier this year to conspiring to commit wire and bank fraud in connection with the scheme. Voss, the COO of Vanguard, and Sypher, the company’s CFO, were charged last year for their participation in the fraud. Edward Bohm, who was the president of sales, was also charged for his alleged participation in the scheme. Vanguard was a 33-branch, mortgage lending operation licensed in California, Connecticut, Florida, Georgia, Maryland, Massachusetts, North Carolina, New Jersey, New York, Pennsylvania, and Washington. Court documents stated that between August 2015 and March 2017, Voss, Sypher and Bohm engaged in a scheme to obtain warehouse lines of credit from various lenders, including Santander Bank, Bankunited, and Northpointe Bank, which were supposed to be used to fund mortgages for Vanguard’s customers. But instead of using the money for the company’s customers, Voss, Sypher and Bohm allegedly used the money to pay personal expenses and compensation, and to pay off loans they had previously obtained with fraudulent loan submissions for improper purposes.

According to the criminal complaint, which was unsealed back in August, an agent from the Federal Bureau of Investigation stated that Bohm and Sypher were both recorded discussing their roles in the scheme. In one recording, Bohm allegedly said that the trio wouldn’t face charges because their scheme’s targets were lenders. “At the end of the day, the s— we did wasn’t to the public,” Bohm allegedly said in the recording. Sypher was also recorded during a meeting in Vanguard’s offices last year, allegedly claiming that his role in the company meant that he would be not be charged if the scheme became public. “I’m a W-2 employee. I don’t pull strings in this f—— thing,” Sypher allegedly said. During that same meeting, Sypher allegedly told a co-conspirator: “You and I never had any communication on any of this s—. Ever. Ever. Okay? Outside of the normal course of business. None. So, we’re not going to f—— jail.” But, jail is exactly where Sypher and Voss are now headed after pleading guilty for their involvement in the scheme. Each faced up to 20 years, but their actual sentences are much shorter. Last week, Sypher was sentenced to 18 months in prison, followed by three years of supervised release. Sypher was also ordered to pay $22,150.45 in forfeiture. Additionally, Sypher was ordered to pay restitution, the amount of which will be determined by a judge at a later date.

“When fraudsters treat investors like their own personal ATMs, using funds invested in good faith to line their own pockets, pay for personal expenses, and repay other fraudulent loans, confidence in the integrity of our financial systems suffers,” said William Sweeney, Jr., assistant director-in-charge of the FBI’s New York field office. “Thanks to the diligent work of the FBI and our partners, Sypher will be held accountable for his crimes.” And earlier this month, Voss was sentenced to 24 months in prison, followed by three years of supervised release. Voss was also ordered to pay restitution, the amount of which will be determined by a judge at a later date. “With today’s sentence, Matthew Voss has been held accountable for using his extensive knowledge of the mortgage industry to deceive banks that trusted and relied upon him as a business partner and divert money for his personal use,” United States Attorney Richard Donoghue said. “This Office, together with our law enforcement partners, will vigorously investigate and prosecute those who commit fraud to advance their own financial interests at the expense of businesses and residents of our community.”

Sears faces critical deadline, will it survive?

Today is a big day for former retail icon Sears, which could potentially be forced to liquidate if its former CEO, Eddie Lampert, does not submit an official buyout bid by the end of the day. Lampert, who is still the company’s chairman, proposed buying the struggling retailer in full for $4.6 billion through his hedge fund ESL Investments – including 500 Sears and Kmart stores, store inventory and other assets. As part of the deal, ESL would also forgive $1.8 billion of debt that the retailer owes the hedge fund. Unless the retailer receives the bid from Lampert – or a similar one from another firm – it could be broken up by liquidators next month. Spokespersons for both Sears and ESL declined to comment. If Lampert does submit a bid – which will be made public – it would be decided by next Friday whether he is a qualified bidder. Sears filed for bankruptcy in October and has since shuttered hundreds of stores as it attempts to restructure and return to profitability. As part of its bankruptcy deal, the once iconic retail chain said it would close more than 170 of its 700 stores by the end of the year.

MBA’s Broeksmit statement about FEMA decision on NFIP

Robert D. Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), issued the following statement today on the decision by the Federal Emergency Management Agency (FEMA) not to approve or renew flood insurance policies under the National Flood Insurance Program (NFIP) during the current government shutdown. “I respectfully ask officials at FEMA to reconsider their decision not to issue new NFIP policies or renew existing policies during the current shutdown.  We have heard concerns from some MBA members that the inability to secure the required flood insurance may jeopardize loan closings.  FEMA should reverse its decision. The longer this shutdown goes on, the more disruptive this decision will be.”

NAHB – builder confidence drops four points amid concerns over housing affordability

Builder confidence in the market for newly-built single-family homes fell four points to 56 in December on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) as concerns over housing affordability persist. Although this is the lowest HMI reading since May 2015, builder sentiment remains in positive territory. “We are hearing from builders that consumer demand exists, but that customers are hesitating to make a purchase because of rising home costs,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, recent declines in mortgage interest rates should help move the market forward in early 2019.” “The fact that builder confidence dropped significantly in areas of the country with high home prices shows how the growing housing affordability crisis is hurting the market,” said NAHB Chief Economist Robert Dietz. “This housing slowdown is an early indicator of economic softening, and it is important that builders manage supply-side costs to keep home prices competitive for buyers at different price points.” Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. All the HMI indices posted declines. The index measuring current sales conditions fell six points to 61, the component gauging expectations in the next six months dropped four points to 61, and the metric charting buyer traffic edged down two points to 43. Looking at the three-month moving averages for regional HMI scores, the Midwest dropped two points to 55; the West and South both fell three points to 68 and 65, respectively; and the Northeast registered an eight-point drop to 50.

Google to spend $1B on new campus in New York

Alphabet’s Google plans to invest more than $1 billion on a new campus in New York. That would be the second major technology company, after Amazon, to pick America’s financial capital to expand and create thousands of jobs. The 1.7 million square-foot campus will be called Google Hudson Square, according to a company blog post on Monday. Google hopes to start moving into the building by 2022. It’s the latest tech giant to announce that it would be building new campuses. Apple announced last week it would spend $1 billion to build a new campus in Austin, Texas. Last month, said it would open offices in New York and the Washington, D.C. area, creating more than 25,000 jobs. Mountain View, California-based Google’s move to invest in prime real estate on the Lower West Side of Manhattan also underscores the growing importance of New York as a hub for innovation and an incubator for technology companies. New York is quickly becoming a hub for technology as the city provides a better option to other places that would require more investment. The Wall Street Journal reported last month that Google was nearing a deal to buy or lease an office building in New York City that could add space for more than 12,000 new workers.

HUD Deputy Secretary Pam Patenaude resigns

This morning the Deputy Secretary of the Department of Housing and Urban Development, Pam Patenaude announced to Secretary Ben Carson her plans to step down in the New Year. “It has been my honor to serve President Trump and Secretary Carson and I am deeply grateful to both for this opportunity,” her resignation letter states. “Thank you to my HUD family and fellow “housers” for helping Americans access decent, safe and affordable housing.” Patenaude’s future is unclear. The letter simply adds she is grateful for an extensive, 35-year career in housing and that she looks forward to returning with her husband, Chuck, to their home in New Hampshire. “I will continue to promote the President’s agenda to make this nation stronger and more prosperous for every American,” the letter reads. Prior to her role at HUD, Patenaude served as the president of the J. Ronald Terwilliger Foundation for Housing America’s Families. Patenaude is also the former director of housing policy at the Bipartisan Policy Center. She was also honored with a HousingWire 2013 Women of Influence award. Patenaude served as HUD assistant secretary for Community, Planning and Development during the George W. Bush administration. She brings more than 25 years of experience in housing, community economic development, real estate, and public policy.

Oil prices pressured by oversupply, global economic concerns

Oil prices steadied on Monday after slipping by around 2% last week, but remained under pressure from oversupply and concern over the prospects for global economic growth and fuel demand. Brent crude oil was down 10 cents a barrel at $60.18 per barrel by 0945 GMT. US light crude was down 5 cents at $51.15. Both benchmarks fell more than 25% through October and November as a supply glut inflated global inventories but have stabilized over the last three weeks, trading within fairly narrow ranges as oil producers have promised to cut production. Many investors doubt planned supply cuts by the Organization of the Petroleum Exporting Countries and other producers such as Russia will be enough to rebalance markets. OPEC and its allies have agreed to reduce output by 1.2 million barrels per day (bpd) from January, in a move to be reviewed at a meeting in April. But US shale output is growing steadily, taking market share from the big Middle East oil producers in OPEC and making it harder for them to balance their budgets. “The dust has settled on the decision by OPEC/non-OPEC to slash production,” said Stephen Brennock, an analyst at London brokerage PVM Oil. “Yet the producer alliance has so far little to show for it.” “Far from breathing new life into the energy complex, oil prices are below the pre-OPEC meeting level. The truth of the matter is that fresh OPEC+ cuts will not go far enough to overturn the incumbent supply surplus,” he added.

Potential government shutdown looms over 2019 economic forecast

A recent Wall Street Journal poll revealed that most economists think the trade dispute between the US and China poses the greatest downside risk to the economic outlook in 2019, but economists at Capital Economics disagree. “We think the biggest downside risk next year is the possibility of a lengthy federal shutdown that could eventually develop into another debt ceiling crisis,” Capital Economics wrote in its weekly report issued Friday. President Donald Trump and Democrats on the Hill can’t seem to strike a deal on federal spending, which means the government may shut down as soon as Friday if lawmakers can’t come to an agreement. According to Capital Economics, a government shutdown is the darkest black cloud looming over the economic forecast in 2019. The report notes that markets are currently “fairly sanguine” about the possibility, despite President Trump’s recent remark that he would be “proud to shut down the government” if his request for $5 billion to fund a border wall is shot down. But the economists warn that a shutdown could be lengthy, weighing down the first half of the year. “Previous shutdowns have had only a modest impact,” they wrote, “but this one could go on for months, particularly if a critical Mueller report convinces the Democrats to impeach.”

ATTOM – US home flips down 12% in Q3 2018 to 3.5-year low

–  Average Home Flipping Returns Drop to 6.5-Year Low; Share of Flips Sold to FHA Buyers at a More Than 10-Year Low

–  Share of Home Flips Purchased with Financing Decreases From 10-Year High in Q2 2018

ATTOM Data Solutions, curator of the nation’s premier property database, today released its Q3 2018 US Home Flipping Report, which shows that a total of 45,901 US single family homes and condos were flipped in the third quarter of 2018, down 12% from a year ago to the lowest level since Q1 2015 — a 3.5-year low. Homes flipped in Q3 2018 represented 5.0% of all single family home and condo sales during the quarter — down from a 5.2% home flipping rate in Q2 2018 and down from a 5.1% home flipping rate in Q3 2017 to the lowest level since Q3 2016. “Home flipping acts as a canary in the coal mine for a cooling housing market because the high velocity of transactions provides home flippers with some of the best and most real-time data on how the market is trending,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “We’ve now seen three consecutive quarters with year-over-year decreases in home flips. The last time that happened was in 2014 following the mortgage rate jump in the second half of 2013, but it’s still far from the 11 consecutive quarters with year-over-year decreases in home flips extending from Q2 2006 through Q4 2008 and leading up to the last housing crash.” Homes flipped in Q3 2018 sold for an average of $63,000 more than what the home flipper purchased them for, down from an all-time high average gross flipping profit of $68,000 in the first quarter and down from an average gross flipping profit of $65,000 a year ago to the lowest level since Q2 2016.

The average gross flipping profit of $63,000 in Q3 2018 represented an average 42.6% gross flipping return on investment, down from an average 44.1% gross flipping ROI in the previous quarter and down from an average 48.1% gross flipping ROI in Q3 2017 to the lowest level since Q1 2012 — a 6.5-year low. The share of homes flipped that were sold by the home flipper between $100,000 to $200,000 made up 31.6% of all flipped sales, while those flip sales that occurred on homes sold for more than $5 million saw the highest gross flipping return on investment (ROI) of any price range.

Q3 2018

Sales Price Range   Share of Total Home Flips Gross ROI

Under $50K               6.3%                                                   20%

$50K – $100K           9.3%                                                   50%

$100K – $200K        31.6%                                                 55%

$200K – $300K        24.8%                                                 39%

$300K – $400K        12.1%                                                 31%

$400K – $500K        6.0%                                                   30%

$500K – $750K        6.2%                                                   27%

$750K – $1M             1.8%                                                   26%

$1M – $2M                1.6%                                                   28%

$2M – $5M                0.3%                                                   43%

Over $5M                   0.1%                                                   187%

States with the highest average gross flipping ROI in Q3 2018 were Pennsylvania (96.7%), Ohio (90.4%), Kentucky (84.7%), Louisiana (82.4%), and Michigan (78.6%). Among 133 metropolitan statistical areas with at least 50 flips in Q3 2018 and a population of at least 200,000, those with the highest average gross flipping ROI in Q3 2018 were Pittsburgh, Pennsylvania (136.7%); Cleveland, Ohio (120.2%); Atlantic City, New Jersey (110.3%); Scranton, Pennsylvania (109.0%); and Philadelphia, Pennsylvania (107.9%). Among 1,264 US zip codes analyzed in the report with at least 10 flips during the quarter, those with the highest average gross flipping ROI in Q3 2018 were 33993 in Cape Coral, Florida (881.0%); 41091 in Cincinnati, Ohio (631.0%); 40356 in Lexington, Kentucky (421.1%); and 21216 (410.4%) and 21218 (357.1%), both in Baltimore, Maryland. Arizona had the highest home flipping rate among all states in Q3 2018 (7.7%), followed by Tennessee (7.5%), Nevada (7.2%), Alabama (6.6%), and Maryland (6.0%). Among 133 metropolitan statistical areas with at least 50 flips in Q3 2018 and a population of at least 200,000, those with the highest home flipping rate for the quarter were Memphis, Tennessee (10.4%); Atlantic City, New Jersey (9.1%); Phoenix, Arizona (8.6%); Las Vegas, Nevada (7.8%) and Huntsville, Alabama (7.5%). Among 1,264 US zip codes analyzed in the report with at least 10 flips during the quarter, those with the highest home flipping rate were 38115 in Memphis, Tennessee (28.1%); 33142 in Miami, Florida (27.3%); 11717 in Brentwood, New York (27.1%); 75224 in Dallas, Texas (26.8%); and 11436 in the county of Queens, New York (25.6%).

Homes flipped in Q3 2018 that were originally purchased with financing by the home flipper represented 38.8% of all homes flipped during the quarter, down from 40.7% in the previous quarter and down from 39.2% a year ago. States where the% of flips that were purchased with financing in the third quarter of 2018 that were well above the national average of 38.8% included; the District of Columbia (67.2%), Colorado (55.7%), Minnesota (52.1%), New Hampshire (52.0%) and Rhode Island (49.2%). Among 133 metropolitan statistical areas with at least 50 flips in Q3 2018 and a population of at least 200,000, those with the highest% of home flip sales purchased with financing in Q3 2018 were Madison, Wisconsin (62.5%); Colorado Springs, Colorado (62.2%); Cedar Rapids, Iowa (60.4%) Manchester, New Hampshire (57.6%) and Greeley, Colorado (56.9%). Of the homes flipped in Q3 2018, 12.7% were sold to buyers using loans backed by the Federal Housing Administration (FHA) — likely first-time homebuyers — down from 16.1% in Q3 2017 to a 10-year low. Among 53 metro areas analyzed in the report with at least 1 million people, those with the smallest share of completed flips sold to FHA buyers in Q3 2018 were San Jose, California (1.5%); Raleigh, North Carolina (3.8%); Las Vegas, Nevada (5.1%); San Francisco, California (5.7%); and Memphis, Tennessee (5.8%). Among the 53 metro areas analyzed in the report with at least 1 million people, those with the highest share of completed flips sold to FHA buyers in Q3 2018 were Riverside, California (24.3%); Baltimore, Maryland (23.0%); Chicago, Illinois (21.1%); Philadelphia, Pennsylvania (20.5%); and San Antonio, Texas (20.2%).

–  The median year built of homes flipped in Q3 2018 was 1978, the third consecutive quarter for the oldest median year built as far back as data is available — Q1 2000.

–  The median square footage of homes flipped in Q3 2018 was 1,408, the smallest median square footage as far back as data is available — Q1 2000.

–  A total of 37,905 entities flipped properties in Q3 2018, a ratio of 1.21 flips per entity, the lowest ratio of flips per entity since Q4 2007 — a nearly 11-year low.

–  The average time to complete a home flip was 179 days, down from 185 days in the previous quarter, and down from 180 days in Q3 2017.

US employers added 155,000 jobs in November, missing expectations

US employers added 155,000 jobs in November, missing Wall Street’s expectations for an increase of 200,000 jobs, after an already rocky week for stocks exacerbated on Thursday by investor fears that a U.S-China trade deal could be reneged amid newly inflamed tensions. The unemployment rate remained steady at 3.7%, the lowest rate in 50 years, while the labor force participation rate also stayed the same at 62.9% during the month. Average hourly earnings meanwhile rose by 6 cents to $27.35. Over the year, average hourly earnings have increased by a total of 81 cents, or about 3.1%. Although it was a weaker-than-expected number, experts portrayed the data as another good report, particularly regarding wage growth. It’s the 98th-straight month of gains and indicates that despite a slight miss, the labor market remains robust and the economy strong. “Wage growth remains respectable with the 3.1% gain in average hourly earnings over the past year,” said Mark Hamrick, senior economic analyst for “That’s not a lottery jackpot, but it also doesn’t set off inflation alarm bells for financial markets or central bankers.

CoreLogic – homeowners with negative equity declines by only 81,000 in the third quarter of 2018

–  Smallest quarter-to-quarter decline in negative equity since economic recovery began in 2010

–  Homeowners had an average annual home equity gain of $12,400 in the third quarter of 2018, the smallest annual increase in eight quarters

–  The annual equity gain in the national CoreLogic Home Price Index slowed to 5.4% in September, compared with 6.2% in June, reflecting slowing price growth

CoreLogic released the Home Equity Report for the third quarter of 2018. The report shows that US homeowners with mortgages (which account for roughly 63% of all properties) have seen their equity increase by 9.4% year over year, representing a gain of nearly $775.2 billion since the third quarter of 2017. Additionally, the average homeowner gained $12,400 in home equity between the third quarter of 2017 and the third quarter of 2018. While home equity grew in almost every state in the nation, western states experienced the most significant increases. California homeowners gained an average of approximately $36,500 in home equity, and Nevada homeowners experienced an average increase of approximately $32,600 in home equity. From the second quarter of 2018 to the third quarter of 2018, the total number of mortgaged homes in negative equity decreased 4% to 2.2 million homes or 4.1% of all mortgaged properties. Year over year, the number of mortgaged properties in negative equity fell 16% from 2.6 million homes – or 5% of all mortgaged properties – in the third quarter of 2018. “On average, homeowners saw their home equity increase again this quarter but not nearly as much as in previous quarters,” said Dr. Frank Nothaft, chief economist for CoreLogic. “During the third quarter, homeowners gained an average of $12,400 compared to the second quarter when the average home equity wealth increase was more than $16,000. This lower year-over-year gain reflects the slowing in appreciation we’ve seen in the CoreLogic Home Price Index.”

Negative equity, often referred to as being underwater or upside down, applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in a home’s value, an increase in mortgage debt or both. Negative equity peaked at 26% of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009. The national aggregate value of negative equity was approximately $281.6 billion at the end of the third quarter of 2018. This is down quarter over quarter by approximately $1.1 billion, from $280.5 billion in the second quarter of 2018 and down year over year by approximately $2.7 billion, from $279 billion in the third quarter of 2017. “The number of homes in a negative equity position have remained around 2.2 million for two consecutive quarters this year,” said Frank Martell, president and CEO of CoreLogic. “Without equity, those homeowners are unable to sell their homes and are more likely to transition from delinquency to foreclosure if they face financial distress.”

Huawei CFO extradition order was an independent act by the DOJ

A top Huawei telecoms executive was arrested in Canada on Saturday at the request of the US, clouding a trade deal with China and forcing the stock market to claw back from its deep losses on Thursday. Huawei Technologies CFO Meng Wanzhou was arrested in Vancouver on Dec. 1 and faces extradition to the US White House trade adviser Peter Navarro told FOX Business the White House had no prior knowledge of the Huawei executive’s detainment, or of the Justice Department’s actions prior to President Trump’s dinner with Chinese President Xi Jinping at the G20 Summit in Argentina. “The Justice Department acts independently when it prosecutes felonies, and that’s the case that we have with this particular case,” he said during an interview on “Trish Regan Primetime” on Thursday. Wanzhou, 46, was arrested by Canadian authorities as part of an US investigation into an alleged scheme by Huawei to use a global banking institution to make illegal transactions involving Iran, Reuters reported. An overseer at HSBC Holdings flagged the suspicious transactions by the world’s largest telecom company. The arrest of the Huawei CFO fueled trade concerns with a Chinese state-run newspaper claiming its “declaration of war.” Navarro said the 90-day tariff truce between the world’s two largest economies remains strong. “Is China going to follow through on all the structural changes it needs to make in order for them to be a good member of the international trading society? It remains to be seen,” he said.

MBA – Broeksmit Statement on Kraninger confirmation

Robert D. Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), released the following statement regarding the confirmation of Kathleen Kraninger to be the next head of the Bureau of Consumer Financial Protection (BCFP). “Kathy Kraninger is an intelligent, experienced administrator who has worked on a broad range of complex, high-profile issues over the course of her career. We look forward to working with her and anticipate she will continue the Bureau’s efforts to protect consumers by providing financial institutions clear and understandable regulations accompanied by appropriate compliance and implementation requirements.”