RE/MAX Broker Questions Obama on Housing

A RE/MAX Broker/Owner from Illinois found herself mentioned in several national newspapers after a spirited  exchange with President Barack Obama at an Aug. 17 town hall meeting in her home state.LuAnn Lavine was  quoted in the New York Times, the Wall Street Journal, The Economist, the Chicago Sun-Times and several  other prominent news outlets (including CNN, NBC and MSNBC) after telling the president that problems in  Washington, D.C., have wiped out the housing momentum she was seeing in her local market: "I saw a  turnaround come May and June. My phone was ringing. I was busier than all get-out. I could see that the  country – yes, we are in rehab. People have made adjustments and I saw progress. Since the debt ceiling  fiasco in Washington, the phones have stopped. We have no consumer confidence after what has just  happened. Interest rates are a record low. I should be out working 14 hours a day, and I am not." Read what she says about the experience in an Aug. 29 Inman News article. The Broker/Owner of RE/MAX Hometown Advantage in Geneseo, Ill., challenged the president on housing  when she was picked to address him during the question-and-answer portion of the meeting. She was  especially direct when his initial answer focused on his administrations's efforts to keep people in their  homes, saying "the loan modification system has been a nightmare. Short sales are a nightmare." Afterward, Lavine was flooded by reporters looking for follow-up interviews – not to mention texts and  voicemails from colleagues expressing their pride and appreciation. Watch Lavine's exchange with the president on YouTube. Here is a transcript of the exchange. LUANNE LAVINE: My name is Luanne Levine, and I own a local real estate company here in Henry County,  over in Geneseo. So you know we're I'm headed: housing. Every week I sit around the kitchen table of families  that are here today and I listen to the stories of a lost job, upside down in their house. And they ask, Luanne,  how can you help? What programs are out there? I have to say I saw a turnaround come May and June. My phone was ringing. I was busier than all get-out.  I could see that the country -- yes, we are in rehab. People have made adjustments and I saw progress. Since the debt ceiling fiasco in Washington, the phones have stopped. We have no consumer confidence  after what has just happened. Interest rates are a record low. I should be out working 14 hours a day, and  I am not. What are your future plans in helping middle-class America -- Generation X and Y and middle-class  America will get the country out of where we are, and I want to know what are your contingent plans? THE PRESIDENT: Well, first of all, you're absolutely right that housing has been at the key – at the core of  a lot of the hardships we've been going through over the last two and a half years. And that's why we've  made it such a priority to try to help families stay in their homes the last two and a half years. And that's  why we've made it such a priority to try to help families stay in their homes if they can still afford the home.  There were some folks who couldn't -- who bought homes they couldn't afford, but there were a lot of folks  who just had a run of bad luck because somebody lost a job or lost a shift. And so what we've been trying  to do is push the banks, push the servicers to do loan modifications that will allow people to stay in their  homes and will try to buck up housing prices generally. LUANNE LAVINE: Can I -- Can I please say -- THE PRESIDENT: Sure, go ahead. LUANNE LAVINE: The loan modification system has been a nightmare. Short sales are a nightmare. And  the lenders are so tight and you have to be so perfect, and it's not a perfect world. THE PRESIDENT: Well, what we've been trying to do is make sure that -- we've probably had a couple of  million loan modifications that have been taking place. The problem is, is that the housing market is so big.  And so a lot of families have just had to work down their debts, and they've been successful -- and as you  said, we were starting to see things bottom out and confidence start picking up. Now, I can't excuse the self-inflicted wound that was that whole debt debate. It shouldn 't have happened the  way it did. We shouldn't have gotten that close to the brink. It was inexcusable. But moving forward, I think  a lot of this has to do with confidence, as you said. LUANNE LAVINE: A hundred percent. THE PRESIDENT: Companies have never been more profitable. They're seeing record profits; it's just they're  hoarding their cash, they're not investing it. A lot of banks have now recovered, but they're not lending the  way they used to. Now, they need to have slightly tighter lending criteria than they used to have, obviously,  because that was part of the reason that we had that housing bubble. But one of the things we've talked  about is, can we encourage banks now to take a look at customers who are good credit risks, but are being  unfairly punished as a consequence of what happened overall? There are some other ideas that we're looking at on the housing front. But I'll be honest with you, when you've  got many trillions of dollars' worth of housing stock out there, the federal government is not going to be able  to do this all by itself. It's going to require consumers and banks and the private sector working alongside  government to make sure that we can actually get the housing moving back again. And it will probably take  this year and next year for us to see a slow appreciation again in the housing market. What we can do is make sure we don't do any damage. And that's what happened in this last month. That's  why I was so frustrated by it, and I suspect that's why you were so frustrated by it as well.
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White House weighs mass refinancing plan The proposal would allow millions of homeowners with government-backed mortgages to refinance into lower interest rates.

WASHINGTON – Aug. 26, 2011 – The White House is considering a housing proposal that would allow millions of homeowners with government-backed mortgages to refinance into lower interest rates, The New York Times reports.
 
“A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere,” an article in The New York Times notes.
 
Many homeowners have been unable to take advantage of today’s low interest rates — which are averaging around 4 percent — because they don’t qualify for refinancing at the best rates since they owe more on their home than it is currently worth or because of poor credit. The refinancing plan is still under discussion of how it would work, The New York Times said.
 
“This is the best stimulus out there because it doesn’t increase the deficit, it accomplishes monetary policy, and it reduces defaults in housing,” Christopher J. Mayer, an economist at the Columbia Business School, told The New York Times.
 
The White House is also considering other options to try to stimulate the housing market or save homeowners from foreclosure. Such options include more changes to its refinancing programs so more homeowners can participate or a home rental program to that would rent out foreclosures instead of putting them for sale so foreclosures would stop weighing down overall home prices.
 
Source: “U.S. May Back Refinance Plan for Mortgages,” The New York Times (Aug. 24, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

More Americans at risk of foreclosure in Q2

WASHINGTON – Aug. 23, 2011 – The number of Americans at risk of foreclosure is rising, reflecting the U.S. economy’s continued struggles.

The Mortgage Bankers Association said Monday that 8.44 percent of homeowners missed at least one mortgage payment in the April-June quarter. That figure, which is adjusted for seasonal factors, rose 0.12 percentage point from the January-March period.

In a normal market, the percentage of delinquent borrowers is about 1.1 percent, according to the trade group.

Delinquent mortgages have plummeted from a record high of more than 10 percent of residential mortgages a year ago. But the decline is due partly to delays in foreclosure filings that are backlogged in several state courts, including Florida, New Jersey, Illinois and New York.

The end of a state and federal investigation into faulty foreclosure paperwork will likely lead to increased foreclosures later this year.

Analysts say the increase is especially worrisome because it’s due mainly to high unemployment, which tends to raise the number of missed payments and foreclosures over time. And once delayed foreclosures are re-started, the economy could suffer a hit.

“The current processing delays mean this will not happen quickly, underlining our view that both the housing market and the economy will remain weak for a few years,” said Paul Dales, senior U.S. economist at Capital Economics.

The quarterly survey covers nearly 88 percent of primary residential mortgages totaling nearly 44 million loans.
Copyright © 2011 The Associated Press, Derek Kravitz, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

RE/MAX All Star joins battle against Breast Cancer

RE/MAX All Star is sponsoring a Community Yard Sale to raise funds for the Susan G Komen 3 Day Race for the Cure.
The Yard Sale will take place on Saturday September 17th 2011 in the parking lot located at RE/MAX All Star, 15023 Gulf Blvd, Madeira Beach FL 33708. We are asking for donations of items that can be sold to raise money, and 100% of monies raised will go towards the Susan G Komen 3 Day.
If you would like to donate any items, please contact Janet Diamond on (727) 455 1319 or Linda Mann on (727) 422 0069.

Florida’s existing home, condo sales up in July

ORLANDO, Fla. – Aug. 18, 2011 – Florida’s existing home and existing condo sales rose in July, according to the latest housing data released by Florida Realtors®. Existing home sales increased 12 percent last month with a total of 15,517 homes sold statewide compared to 13,874 homes sold in July 2010, according to Florida Realtors. Statewide sales of existing condos last month also rose 12 percent compared to the year-ago sales figure.

“Realtors in markets across the state are reporting increased activity from potential homebuyers who are ready to advantage of historically low mortgage rates and current availability of affordable housing options,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart.

Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in July; 13 MSAs had higher existing condo sales.

The statewide median sales price for existing homes last month was $136,500; a year ago, it was $137,700 for only a 1 percent decrease. Analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in June 2011 was $184,600, up 0.6 percent from a year ago, according to NAR. In Massachusetts, the statewide median resales price was $325,850 in June; in California, it was $295,300; in Maryland, it was $247,100; and in New York, it was $221,595.

In Florida’s year-to-year comparison for condos, 6,619 units sold statewide last month compared to 5,904 units in July 2010 for an increase of 12 percent. The statewide existing condo median sales price last month was $90,900; in July 2010 it was $87,800 for a 4 percent increase. NAR notes the national median existing condo sales price was $182,300 in June 2011.

Economic uncertainty continued to impact the recovery of the housing sector, according to NAR’s latest industry outlook. NAR Chief Economist Lawrence Yun pointed to overly restrictive lending requirements, low appraisals and federal budget issues as factors affecting the pace of sales activity.

Economic and political worries also dampened the outlook for Florida’s real estate markets, according to the University of Florida’s Bergstrom Center for Real Estate Studies’ latest quarterly survey of real estate trends. The report surveys economists, industry executives, real estate scholars, researchers and other experts.

“Even though unemployment in Florida improved in many markets, the pace of change and the still-high levels are affecting the pace of improvements in the real estate markets,” said Center Director Tim Becker. “Consumers continue to be cautious and pessimistic about their own spending, which is also affecting the rate of fundamental improvement.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.55 percent in July, about the same level as the 4.56 percent average during the same month a year earlier. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

© 2011 Florida Realtors®

Shadow inventory falls, expected to continue

NEW YORK – Aug. 19, 2011 – Standard & Poor’s estimates that it would take nearly four years – or 47 months – for the housing market to work through its shadow inventory at the current rate. While that number is still high, it marks an improvement over S&P’s first quarter report that had estimated 52 months.

Shadow inventory represents homes that are in the foreclosure system but haven’t hit the market yet. S&P defines shadow inventory as foreclosure and REO properties in 90-day delinquency or worse.

“In conjunction with stable liquidation rates, we believe these are positive signs that the amount of time it will take to clear this ‘shadow inventory’ should continue to decline over the next year,” S&P analysts said.

Delays from mortgage servicers in processing foreclosures likely will cause more than 1 million foreclosures to be postponed until next year, RealtyTrac recently reported.

As such, “the shadow inventory will continue to jeopardize the housing market’s recovery until servicers are able to improve liquidation times,” S&P said. “However, if and when that happens, an influx of homes will likely enter the market, increasing supply and driving prices down further.”

Shadow inventories are largest in New York, where S&P estimates it will take 144 months – or 12 years – to work through foreclosure properties at the current rate. That is down slightly from 146 months in the first quarter.

Source: “Standard & Poor’s: Shadow Inventory Levels Begin to Improve,” HousingWire (Aug. 17, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

Thousands of Fla. mortgage brokers flee industry

TALLAHASSEE, Fla. (AP) – Aug. 15, 2011 – During the Florida real estate boom of the mid-2000s, one of the most lucrative ways to make a living – or commit fraud – was to be a mortgage broker.

More than 82,000 Floridians were licensed just four years ago, but the collapse of the housing market, stronger licensing requirements and background checks, and tougher loan requirements have cut that number by roughly 90 percent: the state currently licenses about 10,600 loan originators, as the profession is now called.

Most got out of the business or moved elsewhere. Some of the small percentage who committed crimes went to prison.

“Everybody wanted to be a mortgage broker or a Realtor, because it was just being an order taker,” said Mike Ferrie, a Tallahassee real estate agent and district vice president with Florida Realtors. “It was easy pickings. When the bottom hit, it got a lot more realistic.”

Mortgage brokers, renamed loan originators by new legislation, are responsible for verifying that loan applicants are financially qualified. They are paid a commission by the lender, typically between 0.5 and 1.25 percent of the loan or $500 to $1,250 per $100,000. They may also work for banks or even double as real estate agents.

In Florida, many were committing fraud. For the past two years, the state has led the nation by far in mortgage fraud and has been at or near the top in many prior years. Florida accounted for more than 27 percent of all home loans nationally that were investigated in 2010, the LexisNexis Mortgage Asset Research Institute reported in May.

In 2008, The Miami Herald found that the state had licensed 4,000 brokers who had criminal backgrounds, with members of that group committing $85 million in fraud. Many of them were setting up straw buyers to qualify for mortgages and then stole the money.

Cases like these led to more regulation.

A Florida law that took effect late last year ramped up requirements for brokers and lenders. They now must renew their licenses annually, and the cost of the application fee and collateral costs increased $50 to $332. The renewal cost is $254, an increase of $104. The new laws also require annual criminal background checks for license renewals and disqualify people from ever obtaining licenses if they’ve been convicted of any felony that includes fraud.

On the federal level, the Dodd-Frank Act passed last year put new restrictions on the types of mortgages that can be written and removed lender incentives for steering borrowers to high-cost loans. The feds in 2008 also passed the SAFE act, which requires each loan originator to complete 20 hours of pre-license education and an additional eight hours of continuing education each year.

Broker Linda Knowlton said the system has swung from one extreme to the other.

“There just weren’t any checks and balances in the system,” said Knowlton, vice president of Mortgage Group Services in Fort Myers. “There are now so many it’s sometimes difficult to do your job.”

But even with the tougher regulations, the crime continues. In late April, state law enforcement officials announced they had arrested five people in Tampa for their roles in a mortgage fraud scheme. Fifty fraudulent residential mortgage loan applications and associated documents allegedly were sent to lenders in several counties in west-central Florida.

Just a month earlier, state authorities and the Flagler County Sheriff’s Office arrested 11 people from the Miami area on racketeering charges after a two-year investigation. That case also allegedly involved mortgage brokers in Flagler, Volusia and Lake counties in east-central Florida. The investigation, named “Operation Fast Cash Kickback,” found falsified appraisals among several other schemes.

The penalties can be severe. Earlier this year, the former president of a New Jersey-based mortgage company was sentenced to 14 years in federal prison for orchestrating a $136 million fraud.

But even for honest brokers, it has been a tough business to stay with.

Kristi Endres earned some $250,000 annually for three straight years from 2004 to 2006 writing mortgages in the overheated Fort Myers market. The housing bust not only got her, but her husband, John, who had a profitable excavating business in southwest Florida.

“We pretty much lost everything,” said Endres, who is living this summer in Madison, Wis., where her husband has found work. “Before we lost every dime we ever had, we finally decided we had to pack it in.”

They sold their waterfront home for a third of the once-appraised $750,000 price and are buying a 40-foot motorhome so they can travel to places where they find work.

She has returned to school and earned a degree so she can work as a physicians’ assistant. “We all take our hard knocks and learn from it,” said Endres, who lived in Florida for 28 years and still returns for winters and maintains residency in the state.

“Our story is very similar to a lot of other people we know,” she said. “Most of my friends lost pretty much everything they had.”

Ferrie said even though the tightened rules have hurt some, overall they’ve been good for the industry.

“The qualified ones are still out there,” he said. “The lenders are still loaning money, but they’ve tightened their belts because of the guidelines. The leniency has gone away.”
 Copyright © 2011 The Associated Press, Brent Kallestad.

Fla. commercial markets turning around

ORLANDO, Fla. – Aug. 12, 2011 – The “2011 Florida Commercial Market Watch,” released by Florida Realtors, finds tempered optimism in the six cities tracked by NAR researchers, with job creation leading most markets.

“Job growth creates demand for commercial space, and the (national) economy should be adding between 1.5 million and 2 million jobs annually both this year and in 2012, with the unemployment rate falling to 8.0 percent by the end of next year,” says Lawrence Yun, NAR chief economist. “Given the minimal new supply in recent years, the rising demand means vacancy rates will be trending down in the commercial real estate sectors. Individual markets are now stabilizing and in some cases rising.”

In Florida, NAR forecasts employment growth in each of the major cities through 2012. Orlando tops the prediction with 62,000 new jobs expected in 2011 and 2012. Miami follows it with 43,000, Fort Lauderdale with 29,000, and Jacksonville with 24,000. Tampa and West Palm Beach tied at 23,000.

The Society of Industrial and Office Realtors, in its SIOR Commercial Real Estate Index, an attitudinal survey of more than 360 market experts, shows a firming up of market fundamentals. Although the SIOR index remains lower than a level of 100 that represents a balanced marketplace, it has had six consecutive quarterly improvements after almost three years of decline. The last time the index was at 100 was in the third quarter of 2007.

NAR, working with Real Capital Analytics, projects an increased amount of commercial investment in all Florida cities studied in 2011 when compared to 2010.

Jacksonville – 100% increase
Investor volume in 2011 is projected to hit $0.8 billion – double the $0.4 billion invested in 2010.

Miami – 75% increase
Investor volume in 2011 should total $2.8 billion compared to $1.6 billion in 2010.

Orlando – 29% increase
The $1.8 billion NAR projects investors will put into commercial real estate in 2011 surpasses the $1.4 billion invested in 2010.

West Palm Beach – 17%
Volume from investors in 2011 will be $1.4 billion, according to NAR, compared to $1.2 billion in 2010.

Fort Lauderdale – 10%
2011 investor volume should hit $2.1 billion, says NAR; in 2010, it was $1.9 billion

Tampa – 7%
The $1.5 billion in investment expected for 2011 surpasses the $1.4 billion spent in 2010.

To read the full report, visit floridarealtors.org’s research page.
© 2011 Florida Realtors®