Feb. 7, 2013: Mortgage jobs; stats and more stats on housing; reminder of Fannie change for affinity/co-op members
Today we have Part 2 of statistics and facts related to Black (African American) History Month. Just as I do for many other significant groups here in the United States, let’s take a look at the population and why it is important for loan officers and Realtors. There are 2.3 million black military veterans in the United States, 1.6 million (age 25 and older) who had an advanced college degree – in fact the group has seen a 74% increase in college enrollment since 2001. Approximately 43% of households, per the Census Bureau, have a householder who was black who lived in owner-occupied homes. And receipts for black-owned businesses totaled $136 billion in 2007, up 53% from 2002! For more information, visit http://www.infoplease.com/spot/bhmcensus1.html - it is a treasure trove of information.
Voted one the best places to work in Washington State, Peoples Bank is seeking an experienced Compliance Manager. This position is responsible for the Bank’s compliance program, functioning as an independent and objective body to review, evaluate, develop, implement, test and manage the compliance program and employees within the department. This person is the compliance expert for the bank and is the primary driver and resource for implementation of new or changed regulations. The successful applicant will have five year’s work experience in compliance management with a college degree or equivalent. Peoples Bank offers a rich benefits package and opportunity for advancement. Interested individuals should send a confidential resume to the Director of Human Resources at firstname.lastname@example.org.
And down the coast in California, an Inland Empire-based Mortgage Banker is looking for 2 key executives. This long term, well-positioned company is looking for a well-qualified Operations Manager to oversee the operations of the company and work in conjunction with the Chief Underwriting Manager. The candidate must have a good understanding of processing, docs, funding, shipping, and insuring. Additionally, the company is looking for a Retail Production Manager to manage its existing infrastructure of retail branches and complement the company's growth plans in CA, NV, AZ, NM, and TX. Both candidates will be domiciled in the company's corporate headquarters. Please send confidential inquiries/resumes to me at email@example.com.
Housing continues to roll along, but perhaps at a reasonable pace, and reminds me of the common refrain of the industry: “Not everyone should own a home.” The number of households owning homes rose to 75.2 million in the fourth quarter, up from 75.1 in the third but down from 75.3 a year ago, the Census Bureau reported. At the same time, the nation’s homeownership rate dipped to 65.4% in the fourth quarter from 65.5% in the third quarter. At 65.4% the homeownership rate is at its lowest level since the first quarter of 1997. The homeownership rate peaked at 69.2% in mid-2004. (The rate measures the proportion of households owning their primary residence, computed by dividing the number of household that are occupied by owners by the total number of occupied homes.) The Census Bureau also reported the homeowner vacancy rate remained at 1.9% in the fourth quarter, the lowest level since late 2005. (The homeowner vacancy rate is the proportion of the homeowner inventory that is vacant for sale.) And the rental vacancy rate in the fourth quarter stands at 8.7% - down from the 9.4% in late 2011.
Keeping on with big numbers, the Census Bureau reports that the number of housing units for sale in the fourth quarter was roughly 1.5 million, down from 1.8 million in late 2011. This would certainly confirm assertions by Realtors everywhere of weak inventories. Some communities seem to have run out of For Sale signs! But wait – the Census Bureau also reports that “the number of housing units held off the market in the fourth quarter was 7,299,000, up from 7,190,000 in third quarter and from 7,122,000 a year ago. The stagnant homeownership rate combined with a decline in the number of units held off the market suggests opportunities for home sales. At the same time, the profile of homeowners, by age, is changing.” The median asking sale price for a vacant home rose to $137,700 in the fourth quarter from $137,000 in the third and from $133,800 one year earlier.
The homeownership rate for folks 65 or older is around 81%, and for those under the age of 35 it is 37% - the highest level in a year. (But it is not as high as late 2006 when it was 43% - ah, those were the days!) The Midwest has the highest home ownership at 70%. In the West it is about 60%, the South 67%, and the Northeast is 64%.
Overall we have 133 million housing units. Of those 18 million were vacant, up from 132,839,000 in the third quarter, which is an increase of 122,000 from the quarter and 486,000 in the last year. According to the Census Bureau, 17,927,000 units were vacant, down from 18,145,000 in the third quarter and from 18,389,000 a year earlier.
CoreLogic has released its National Foreclosure Report, which provides data on completed U.S. foreclosures and the overall foreclosure inventory. According to CoreLogic, there were 56,000 completed foreclosures in the U.S. in December 2012, down from 71,000 in December 2011, a year-over-year decrease of 21 percent. On a month-over-month basis, completed foreclosures fell from 58,000 in November 2012 to the current 56,000, a decrease of 3 percent. As a basis of comparison, prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 4.1 million completed foreclosures across the country.
Approximately 1.2 million homes were in the national foreclosure inventory as of December 2012 compared to 1.5 million in December 2011, a 19.5 percent year-over-year decrease. The national foreclosure inventory as of December 2012 represented 3 percent of all homes with a mortgage. "This big improvement indicates we are working toward resolving the backlog of the most distressed assets in the shadow inventory." As you’d guess, much of the backlog has to do with judicial versus non-judicial foreclosure proceedings. It is the judicial states where the foreclosures levels still remain somewhat elevated.
And the December Mortgage Monitor report released by Lender Processing Services Inc. (LPS) and covering performance data for the full 2012 calendar year, found that while mortgage delinquency rates remained at elevated levels, they have shown steady improvement, ending the year 32% lower than the January 2010 peak. Additionally, following a year of regional improvement in foreclosure inventories (marked by stark contrasts between judicial and non-judicial foreclosure states), the national foreclosure inventory rate began to decline toward the end of 2012 from historic highs experienced during the crisis. Obviously the lending industry likes to hear that, especially with mortgage originations up 34% over 2011 – 2012’s levels were the strongest since 2007. LPS says about 8.6 million new loans were originated with 84% of them being government-backed (compared to just over 50 percent at the peak).
LPS is not done with its stats. We’re seeing appreciation: nearly four million loans that were below conforming loan-to-value (LTV) thresholds for refinancing last year would meet those standards today. An additional 3.4 million loans that are on the cusp of conforming loan-to-value thresholds stand to benefit, if the home price situation continues to improve.
And let’s not leave RealtyTrac out of the stats parade! It has released its 2012 Year-End Metropolitan Foreclosure Market Report, which shows 2012 foreclosure activity increased from 2011 in 120 (57 percent) out of the nation’s 212 metropolitan statistical areas with a population of 200,000 or more. Foreclosure activity during the year decreased from 2010 (the peak) in 85% of the 212 markets tracked. Foreclosure activity in 2012 decreased from 2011 in 12 out of the nation’s 20 largest metro areas, led by Phoenix (-37%), San Francisco (-30%), Detroit (-26%), Los Angeles (-24%), and San Diego (-24%). But 2012 foreclosure activity increased in eight of the 20 largest metros, led by Tampa (+80%), Miami (+36%), Baltimore (+34%), Chicago (+30%), and New York (+28%).
“Rob – did Fannie Mae recently release something dealing with cooperatives and other types of ‘affinity’ relationships?” Yes it did, in mid-January – sorry you missed it. Here is the verbiage from the release: Thank you for your participation in the Fannie Mae Affinity Agreement. This notice is to inform you that terms outlined in the Fannie Mae Affinity Benefit Election Certificate (BEC) are set to expire on March 31, 2013. These relationships and the tools we've developed to support the affinities and lenders like you, have continued to evolve, and Fannie Mae remains committed to supporting the affinities and their members in every way possible. This has included adding training, education and tools to help smaller lenders compete effectively against a backdrop of ever changing industry dynamics, including the requirements established for Fannie Mae while in conservatorship.”
Fannie’s announcement goes on. “Over the last 10 years, the housing finance industry landscape has changed dramatically, warranting changes to how Fannie Mae operates its business in today’s market. In conservatorship, Fannie Mae has been working towards increasing pricing parity among all lenders. Instead of pricing based on the volume received from any lender or group of lenders, Fannie Mae is focused on pricing based on loan level risk characteristics. Fannie Mae has effectively eliminated pricing advantages that once existed for different market segments, thereby providing smaller lenders with a level playing field for secondary market execution. While volume discounts and certain other pricing concessions might be appropriate in the private market, this strategy is not aligned with the Enterprise goals during conservatorship. Effective April 1, 2013, Fannie Mae will discontinue the Affinity Loan Level Price Adjustment credit (LLPA Credit). Concurrent with that change, Fannie Mae will adjust your loan asset price on eCommitting. As a result, the eCommitting price will be slightly higher and no LLPA credit will be reflected at time of purchase going forward. As you are aware, the expiration of your Benefit Election Certificate requires the transaction fee for Desktop Underwriter to reset to $35 for each casefile submitted to DU. However, at this time, Fannie Mae is able to continue to offer a reduced Affinity DU Transaction Fee of $30 for each mortgage loan casefile submitted to DU with a rebate of $5 for each loan delivered by you directly to Fannie Mae that is underwritten through DU.” Hope that helps.
Rates continue to idle. The Congressional Budget Office (CBO) said yesterday that growth in the US will slow due to large government spending cuts coupled with new tax increases in 2013. The Gross Domestic Product (GDP) is expected to rise by a meager 1.4% this year - clearly not enough to lower the Unemployment Rate, which is estimated to remain near 7.9% in 2013. The CBO went on to say that growth will likely rise in 2014, which would then lower the Unemployment Rate, but in turn see rising interest rates and inflation. So with QE Unlimited tied to this, we can all look for not a lot of changes to rates well through this year and into next year, right? Keep that in mind when we move up or down during the days.
There wasn’t much news yesterday, and the 10-yr closed at 1.97% (up about .375 in price). Prices on 30-year Fannie securities were better by about .250. Today’s news calendar also finally has a bit more going on than it has over the past three days. Economic releases include Initial Claims (2/2; +360k versus +368k previously) and the preliminary Q4 Productivity and Unit Labor Costs (-1.3 percent and +3.0 percent, respectively) at 8:30AM EST. In the early going the 10-yr is sitting around 1.99% and MBS prices are worse a tad.
A Baptist pastor was presenting a children's sermon. During the sermon, he asked the children if they knew what the resurrection was.
Now, asking questions during children's sermons is crucial, but at the same time, asking children questions in front of a congregation can also be very dangerous.
Having asked the children if they knew the meaning of the resurrection, a little boy raised his hand.
The pastor called on him and the little boy said, "I know that if you have a resurrection that lasts more than four hours you are supposed to call the doctor."
If you're interested, visit my twice-a-month blog at the STRATMOR Group web site located at www.stratmorgroup.com. The current blog discusses “A Primer on Asset Backed and Mortgage Backed Securities.” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what's going on out there from the other readers.
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