Category Archives: The Economy

CFPB Costing Consumers – Not Protecting Them

06 Wednesday Aug 2014

Posted by in CFPB, Housing Issues, Politics, real estate, RESPA, The Economy, Uncategorized

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Respa reform

Unfortunately, the Consumer Financial Protection Bureau (CFPB) has hurt consumers that want to obtain mortgages.  This has dampened the real estate market to a degree.  At a recent real estate conference I attended, I was on a panel with several colleagues, one of which is a lender.  He made it clear to the Realtors in the room that most, if not all, lenders today are not focusing on serving real estate agents or their clients, but are only focusing on compliance with the CFPB.  This is a real blow to the customer service people expect in a real estate transaction.  Here are some of the facts:

  • Since the inception of the CFPB, lenders’ costs have increased by 25% due to compliance requirements
  • In the first quarter of 2014, non-institutional lenders (mortgage brokers and bankers) lost $194 on every loan they made.

Obviously, this means that the consumer will be paying higher costs for mortgages.  I don’t believe this was the intent of the CFPB or the Dodd/Frank bill that created the Bureau, but it seems like Congress always acts before understanding the unintended consequences…

Also, if you are interested, I received this information from Ken Trepeta, Director – Real Estate Services at NAR.  I have included the link for you to sign up for the webinar on changes in the RESPA and the TILA. It sounds like an interesting and informative discussion.

RESPA LogoCFPB QM Rules

On Tuesday August 26, 2014 at 2:00 PM EDT the Consumer Financial Protection Bureau (CFPB) and Federal Reserve will be hosting a webinar on the implementation of changes to the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA).  In addition to major changes to the loan disclosure and closing forms themselves, the new rules will require that the settlement statement be completed three days prior to closing.  The new forms and rules go into effect less than one year from now and industry is working diligently to put together systems and train staff to deal with the new forms and rules as well as integrating the new rules with local customs and practices. This webinar is part of the process of answering questions and concerns relating to implementation.  All those with an interest in disclosures, the closing process, and RESPA/TILA should sign up and listen in. Signup page:  https://www.webcaster4.com/Webcast/Page/48/5305

As you can imagine, these new rules that go into effect in less than a year will probably add more costs to the closings on real estate transactions…I truly believe that the CFPB is hurting the consumer more than helping, when it comes to real estate.  What are your thoughts?

 

Housing Market and Economic Update

31 Thursday Jul 2014

Posted by in Housing Issues, real estate, The Economy

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GDP2

I recently attended the Inman Connect Conference in San Francisco, and was honored to be included in the invitation-only CEO Summit.  One of the best presenters there was Pat Stone.  Here are some of the tidbits of information he gave us regarding the housing market and the economic issues affecting it.

  • The key to a returning robust housing market is all about CONSUMER CONFIDENCE.  Right now that index is gauged at about 83 to 84 on a scale of 0-100.
  • In order for the Consumer Confidence level to rise to over 90, we need to see the GDP (Gross Domestic Product) at 3% or more for 3 or 4 consecutive quarters.
  • That will bring in the 1st-time home buyers that are on the fence right now.
  • Of the 100 Million people in the U.S. that are ages 18-35, 40% say they want to buy a house.  That’s 40 Million People!!!

The really good news that I read today is that July’s CONSUMER CONFIDENCE INDEX = 90.9, up from 86.4 in June.  This is the highest level it has been in seven years!  Here is a link to a recent column by Zoe Eisenberg in RISMedia:

http://rismedia.com/2014-07-29/consumer-confidence-soars-in-july/?utm_source=newsletter&utm_medium=email&utm_campaign=eNews

 

Confused by Obamacare? Check out REALTORS Health Insurance Marketplace

10 Tuesday Dec 2013

Posted by in Affordable Care Act, Health Insurance, Life Balance, Politics, real estate, real estate education, The Economy, Uncategorized

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Obamacare2As most U.S. real estate agents are independent contractors, many will be scrambling to find good health care coverage.  This has always been an issue for REALTORS, but is even more problematic with the whole Affordable Care Act in force soon…

Realtor InsuranceThe National Association of Realtors has created its own insurance marketplace for its members.  I encourage you to check it out.  You will need to sign into your account on Realtor.org in order to see the details.  Here is the link: http://www.realtor.org/insurancemarketplace?cid=RHIM-August-0008

I was pretty impressed with the choices in my area.  Don’t procrastinate!

In addition, the NAR is offering a webinar on December 12, 2013 at 11am Central Standard Time.  The link to register for this is:  https://realtors.webex.com/realtors/onstage/g.php?d=921130646&t=a

It is called:Health Insurance and the Affordable Care Act: What REALTORS Can Do Today

 

 

 

 

A New Song About The Changed Real Estate Market…

21 Friday Jun 2013

Posted by in Housing Issues, real estate, Real Estate "war stories", The Economy, Uncategorized

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Yesterday at a company event I sang a new song that I co-wrote with Greg Traynor, one of our Regional Developers.  It is called “Sales Dance”, with apologies to Van Morrison.

Three years ago at a company event, I sang my “Short-Sale Foreclosure Blues” which highlighted the issues in the market then.  Here is a link to that performance…

However, times have changed, and sellers and buyers are experiencing something totally different.  Everyone has read about it, Realtors try to explain it to their clients, but here is a little different way of expressing what is going on out there right now…

I hope you enjoy this…and remember, this is not my day job…just a fun way to let people know what the real estate market is up to…

Here are the lyrics to both songs:

Short-Sale Foreclosure Blues

Bought at the top in 2005, Life was great, beginning to thrive, Then, whoa, things took a major dive.  Got those short-sale, foreclosure, repo blues.

Behind on my payments, market done tanked. Prices have fallen, zilch in the bank.  Went to my lender and drew a blank.  Got those short-sale foreclosure blues.

If I could have I would have paid, If I could have I would have stayed.  I’ve been Fannie’d and Freddie’d and FHA’d, I’ve been Chased, Wells Fargo’d and B of A’d.  I got those underwater, upside-down, short-sale foreclosure blues…

Sales Dance

It’s a marvelous time for a sales dance, can’t wait for the meeting of minds.  I know now the time is just right for this crazy market to climb.  Sellers are wanting more money, because hundreds want to buy.  And they have no clue what they’re in for, when the offers start to fly.

Homes are back in demand, inventory is low, You’re gonna get multiple offers, and make some dough.  Can I just have one more sales dance with you, my friend? Can I just have one more sales dance with you?

The housing market has turned, and prices are on the mend.  It’s time to sharpen your pencils, or miss out in the end.  The sellers are excited, and the buyers are quite stressed.  It’s not time to complain, just give us your highest and best.

Homes are back in demand, inventory is low, You’re gonna get multiple offers, and make some dough.  Can I just have one more sales dance with you, my friend? Can I just have one more sales dance with you?

“Fiscal Cliff” Details for Real Estate Issues

03 Thursday Jan 2013

Posted by in Housing Issues, Politics, real estate, Short Sales, The Economy

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Some temporary relief, but with much more to resolve...

Some temporary relief, but with much more to resolve…

Ok, so we have some answers to some of the questions we were facing concerning real estate issues.  I am sure you probably have heard the major points, so I won’t go into all the details.  Here is the link to the official White House Summary of the bill:  http://www.whitehouse.gov/the-press-office/2013/01/01/fact-sheet-tax-agreement-victory-middle-class-families-and-economy

The main topics I want to point out are:

1. The income levels of $400,000 and $450,000 (for individuals and married couples filing jointly, respectively) refer to “taxable income” which means after expenses and deductions.

2. This also is for income received in 2013, so this does not affect people’s 2012 tax returns that are due April 15, 2013.  It will affect the returns due April 15th, 2014.

short sale

3. The Mortgage Debt Relief Act (see my earlier post from October 8, 2012 http://realestatebizexpert.com/2012/10/08/congress-needs-to-act-now-to-save-short-sales/) was extended for 1 year, until December 31, 2013.  This is terrific news for Realtors and sellers of short sale properties.

4. The Mortgage Interest Deduction was left untouched, at least for now.  I suspect that it will be a target when Congress resumes conversations about cutting expenses…

5.  The 3.8% Capital Gain tax that was buried in the Obamacare health bill remains, and will affect people starting this year.

6. Other Capital Gain taxes remain at 15%, except for those earning more than $400,000 (individual) or $450,000 (married filing jointly).

I am very happy to see the extension of the Mortgage Debt Relief Act for another year; this will help clear the decks of more shortsales faster!  As far as the other issues, I believe the Mortgage Interest Deduction is a huge target for the President and Congress, so I am not optimistic about its likely future.

Phoenix Metro Real Estate Update For Sellers – List It NOW!

30 Friday Nov 2012

Posted by in Housing Issues, real estate, Short Sales, The Economy

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Here is the latest from our Phoenix market:

Phoenix was one of the first markets to be hit hard by the economic downturn, and is now the first to be recovering. Phoenix used to rank #5 in the nation for mortgage delinquencies…today it is #39! The bottom of the market was September 2011, just over a year ago. Since then, prices have risen 28% overall, with some local cities hitting 40% increases.

Courtesy of Michael Orr/Cromford Report

These increases in prices mean it is a great time for people to sell. Many homeowners probably do not know that they have equity in their homes and could easily sell their homes today. Now is an excellent time for homeowners to contact their Realtors to get their current property values. Home pricing at this time is critical. Properties priced at the right price point can often expect multiple offers and possibly sell for more than the asking price. See below for an example of a recent sale in the Phoenix area.

Courtesy of Michael Orr and the Cromford Report

Short Sales have also become a good solution for many sellers. A Short Sale is when someone sells their home for a price lower than what is owed on the loan. This process has become more common and generally does not take as much time as it used to.  However, each situation is different, and it requires a seller to assemble a team of professionals to help.  Here are a couple of links to experts we know have done well for clients:

Irving Hymson – http://scottsdale-lawyer.com/irving-hymson/

Scott Drucker – http://www.mackdruckerwatson.com/scott-drucker-partner.php

To sum it up, REAL ESTATE IS GOOD IN PHOENIX! Inventory is low, prices are up and interest rates are low. Now is the ideal time for homeowners that have been waiting to put their homes on the market.

Mortgage Interest Deduction – Pro or Con?

28 Wednesday Nov 2012

Posted by in Housing Issues, Politics, real estate, The Economy, Uncategorized

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Are you in favor of eliminating or reducing the Mortgage Interest Deduction?

 

The battle lines have been drawn.  The National Association of Realtors (NAR)has taken a hard-line stance against any more changes or reductions to the Mortgage Interest Deduction, stating that doing so would damage one of the strongest incentives for purchasing homes.  According to NAR statistics, 68% of all homeowners have mortgages and benefit from this savings.  Others at the Urban-Brookings Tax Policy Center state that only about 30% of taxpayers itemize their expenses to take advantage of this savings.

This tax benefit for mortgage interest payers came into existence in 1913 when the federal tax code was created.  At that time, all interest was deductible.  In the 1986 overhaul of the tax code, the Mortgage Interest Deduction (MID) survived.

Today, the interest on mortgages of up to $1 Million and home equity loans up to $100,000 is deductible.  This applies to primary residences as well as additional homes someone may own.  It used to be that there was no limit on the loan amounts.

Homeowners’ taxes will increase if the MID is eliminated or changed.

It appears that there is significant momentum in Congress right now to modify the MID as suggested by the Simpson-Bowles report.  That bi-partisan panel proposed: reduce the limit on the deduction to $500,000 instead of $1 Million, eliminate the deduction for home equity loans, and prohibit people from deducting interest on homes other than their primary residence.

I believe that messing with the MID right now is a big mistake; housing will pull the economy out of the doldrums if the recovery we are feeling right now is allowed to flourish.  Toying with the MID, in addition to the uncertainties about lending availability (due to the Dodd-Frank Bill) and the expiration of the Mortgage Debt Relief Act will bring the housing recovery to a stand-still!

I know there are many differing opinions on this subject.  How do you feel about it?  Is the MID only a benefit to the “rich?”  Will housing prices drop dramatically if the MID is eliminated?  Talk to me…

 

NAR Convention Update

13 Tuesday Nov 2012

Posted by in Housing Issues, Politics, Presidential Election, real estate, Short Sales, The Economy, Uncategorized

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I am flying back to Phoenix to our World Headquarters from Orlando after attending the National Association of Realtors convention.  (Pretty cool to have wi-fi on the plane.)  The only real new information I gained has to do with the possible extension of the 2007 Mortgage Debt Relief Act.  All indications are that it will get lumped in with a bunch of other tax extension actions and will most-likely not be approved until well into the first quarter of 2013.  It will most-likely be made retroactive for those sales that occur between January 1st and the passing of the bill.  Not the best scenario, but good news none the less.

See my post below from Monday October 8th for more details about this topic.

Obama Had Better Get Congress On Track…Or Housing Will Stall The Economy AGAIN!

07 Wednesday Nov 2012

Posted by in Housing Issues, Politics, Presidential Election, real estate, Short Sales, The Economy, Uncategorized

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Obama does not get it. He needs to get Congress to repeal Dodd-Frank.

I am depressed about the election results because Obama does not understand how the Dodd-Frank Bill will stifle the economy further.  He had better start being a lame-duck, consensus-builder to kill this horrible legislation immediately.  If not, housing will become his albatross.

If the Mortgage Debt Relief Act is not extended, foreclosures will increase dramatically.

In addition, the Mortgage Debt Relief Act MUST be extended, or short sales will die and foreclosures will again flood the markets.

And, if he messes with the Mortgage Interest Deduction, the nail in housing and real estate’s coffin will be driven.

This president does not get it.  He needs to become a quick study on housing issues, or his legacy of killing the housing recovery will be written in the history books.

Sad night for the real estate industry.