We've got grey clouds, but don't forget about the beauty nature brings. Stop during your busy day and just soak it in...
"If you put off everything till you're sure of it, you'll never get anything done."
- Norman Vincent Peale: Was a minister and author of inspirational books
NEWS & HEADLINES
Auditing has become so bad that many large companies set aside a room, or block of them, for revolving teams of auditors from investors, Fannie, Freddie, the OTS, OTC, the FDIC, FRB, AA. Last week the servicing biz was in the headlines, with the first official "enforcement." But in addition to those 14 servicing companies, LPS and MERS were both cited for "significant compliance failures" and "unsafe and unsound business practices" related to foreclosures. Regulators are requiring both companies to hire independent consultants, take remedial steps to address past failures and hire additional staff. LPS "faces the possibility of having to reimburse servicers and borrowers if an independent review finds anyone was financially harmed by its failure to properly execute mortgage documents" per an article by Kate Berry of American Banker. MERS said it is "already implementing changes to tighten corporate governance, improve internal controls and address quality-assurance issues identified by federal regulators."
A few months ago MERS, with its 31 million residential mortgages on its system, told members not to foreclose in its name since borrowers have filed so many suits claiming the company has no standing to foreclose even though MERS has been listed as the lienholder in many foreclosure filings. MERS has 30 days to hire a third party to analyze and assess its directors, officers, management and staffing needs, and 90 days to create a plan to establish adequate internal control, risk management, audit and reporting requirements. But regulators never questioned the underlying business model of MERS, or attempt to answer the question, "Does MERS have the legal right to foreclose on a borrower?" This has led industry watchers to suggest that MERS has, in effect, had its procedures and processes validated.
For the 14 servicers, the implementation of the steps necessary to comply with the consent orders will further weigh in on timelines and increase servicing costs. Companies already have to reallocate resources away from production and into developing and implementing the plans. The order contained more than 25 action items and detailed over 50 sets of new policies, processes, and measures that need to be developed and implemented over the next 120 days. The biggest change will be the establishment of a single point of contact for borrowers. In addition, servicers will need to hire and train additional staff. Longer term, the additional staff should help to work through the backlog of foreclosures in the pipeline. And the state attorneys general are still negotiating with servicers over a potentially more far reaching agreement. The consent orders may give servicers some leverage in their negotiations. However, until an agreement with the AGs is completed, a cloud is expected to remain over the foreclosure process.
These thoughts all went through the market yesterday, as interest rates actually dropped. The Treasury's10-yr closed better by about .250 and at a yield of 3.37%, and agency MBS prices improved by about .250. Stocks dropped, but Moody's reaffirmed its positive outlook on the United States. Today, as mentioned, we had Housing Starts at 549k, up from a revised 512k, and Building Permits for March went from a revised 534k to 594k, both higher as expected. And we already had Goldman Sachs' earnings, stronger than expected pretty much all the way around. The 10-yr is slightly worse at 3.39% and MBS prices are roughly unchanged.
WHAT DO HOMEOWNERS SAY ABOUT HOMEOWNERSHIP?
There is no shortage of experts that want to let us know how Americans feel about owning a home after the collapse of the residential market in the last five years. They MUST be devastated. They MUST feel trapped like prisoners in their own homes. They MUST be sorry they ever bought the house. These assumptions seem logical at times and can occasionally be supported by anecdotal evidence.
However, we want to go to the only people who truly understand how homeowners feel - the homeowners themselves. There have been three major surveys done this year that can shed light on the issue:
This survey conducted by Fannie Mae showed:
96% of all homeowners said homeownership has been a positive experience.
64% consider buying a home as a safe investment. Buying a home was considered safer than buying stocks by over three times the number of people (64% vs 17%).
The top four reasons to buy:
- It means having a good place to raise children and provide a good education
- You have a physical structure where you and your family feel safe
- It allows you to have more space for your family
- It gives you control over what you do with your living space (renovations & updates)
American Attitudes About Home Ownership
According to this survey conducted by Harris Interactive for the National Association of Realtors, home owners believe that home ownership benefits individuals and families and strengthens our communities.
The vast majority of home owners say that owning a home is a smart decision over the long term. Even in today's challenging economy, 95% of owners believe that over a period of several years, it makes more sense to own a home.
Home owners are much more likely to be satisfied with the quality of their family and community life than renters. While more than half of owners (56%) are "very" or "extremely" satisfied with the overall quality of their family life, only about one-third (36%) of renters report the same levels of satisfaction. Also, 43% of home owners are "very" or "extremely" satisfied with their community life, compared with 30% of renters.
An overwhelming majority of home owners are happy with their decision to own a home. A full 93% of owners surveyed would buy again.
This recent survey titled "Home Sweet Home. Still" delves into homeowners' current belief in homeownership as a long term investment:
Homeowners whose home value has fallen only a little are equally enthusiastic about housing as a long-term investment: 85% say buying a home is the best long-term investment a person can make. Among those who say their home has maintained it value or increased in value, 88% agree...
Even those who have seen their home values plummet are still committed to the idea that buying a home is a solid, long-term investment. Among those who say their home has lost a lot of its value, 80% agree that buying a home is the best long-term investment (36% strongly agree, 44% agree somewhat).
Bottom Line
There have been families that have been devastated by the current economy. However, through it all, homeowners have not wavered in their belief in homeownership as the best long-term investment.
HUD OFFERS GRANTS TO REMOVE HOME HAZARDS
The U.S. Department of Housing and Urban Development announced it will offer several grants to help remove housing-related health hazards - such as lead-based paint removal - from low-income homes.
"These grants are critical for states, counties, and cities who are on the front lines of protecting our children from lead hazards and other residential hazards," says Jon Gant, director of the Office of Healthy Homes and Lead Hazard Control. "We look forward to communities applying for these grants so that they can help make older housing safer and healthier for children."
The grants available include:
Lead-Based Paint Hazard Control (LHC) and the Lead Hazard Reduction (LHRD) grant programs: These grants will help identify and control lead-based paint hazards in privately owned housing for rental or owner-occupants.
Healthy Homes Production: A grant program that aims to help public and private entities address several housing-related hazards at the same time.
Asthma Interventions in Public and Assisted Multifamily Housing Grant: Grants that will help to evaluate programs for the control of asthma among residents of federally assisted multifamily housing.
HUD is making the grants available through its Lead-Based Paint Hazard Control, Lead Hazard Reduction Demonstration, Healthy Homes Production, and Asthma Interventions in Public and Assisted Multifamily Housing Grant Programs.
The application deadline for all of the grants above is June 9, 2011. For more information, visit www.grants.gov or www.hud.gov.
NAR ANNOUNCES INSURANCE BENEFIT FOR MEMBERS
REALTORS® now have access to an errors and omissions insurance program from the National Association of REALTORS® newest REALTOR Benefits® Partner, Victor O. Schinnerer & Company Inc.
"REALTORS® help consumers invest in their future through home ownership," said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. "E&O insurance helps REALTORS® protect their own business investment while they're helping buyers, sellers and investors achieve their real estate goals."
Coverage is available to members in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands through Continental Casualty (CNA), a top-rated insurance carrier. Rates vary based on the type of coverage needed, area of specialty, and previous claims history.
The program offers a wide range of deductibles and claim limits as well as several premium credits, as allowed by state law. This includes a credit for being a REALTOR®, holding select NAR designations, continuing education, use of standard contracts, use of home warranties, and risk management programs. Schinnerer's program also supports a broad range of real estate specialties including residential and commercial, property management, appraisal, and more.
Coverage was recently updated to include use of the Internet, such as Web sites, social networking, video hosting, and blogging. In addition, educational pieces and risk management services are available to policyholders. Schinnerer has developed a toolbox that includes a risk management newsletter, blog updates, webinars, and a toll-free hotline to discuss potential claims with a real estate claims specialist.
To sign up for the program and get more information, visit www.realtor.org/realtor_benefits/benefits_partners/eoinsurance.
9 ITEMS HOMEBUYERS DESIRE IN 2011
Today's homebuyers want it all. Some items on the shopping list: a home in great condition with rooms that can do double duty. Areas that mingle indoor and outdoor living -- patios, porches, decks and outdoor rooms -- are always a plus. And so are those features that offer a little luxury, like garden tubs, first-rate appliances and high-dollar countertops.
They're also going back to basics: searching for solid, well-maintained properties that will give them their money's worth. "I think this year they're buying properties that are in good mechanical condition that have inherent value," says Ron Phipps, president of the National Association of Realtors. But more than anything, buyers want to drive a hard bargain. They want "great deals," says Patricia Szot, president of the MetroTex Association of Realtors. "And no matter where a seller prices their property, they're looking to negotiate."
Here are nine items popular with buyers this year:
Homes in Good Condition
Buyers demand homes that are well maintained, Phipps says. "There's not a lot of flexibility in that." The attitude is: "I'd rather spend the money getting into the house" and not have to spend more money later, he says. Buyers don't want an unknown expense hanging over their heads.
Rock-Bottom Bargains
Buyers "are more focused on negotiating, drawing limits in their mind and focusing on the strategy," says Justin Knoll, president of the Denver Board of Realtors.
Some of it is a point of pride, he says. "They want to tell their friends and family that they really got a smokin' deal."
They "want value," says Alice Walker, president of the Greater Nashville Association of Realtors. "They are very picky. They're just a lot more critical. They are not going to settle because they know they don't have to."
Her advice to sellers: Repair, update, clean and stage. "You have got to remove every obstacle possible for the buyers," Walker says.
Outdoor Living Areas
"The thing that we've seen over the past couple of years is more outdoor living areas," says Laurie Knudsen, president of the Charlotte Regional Realtor Association. Some popular features: Screen porches, outdoor kitchens, two-way fireplaces.
IncentivesCall it "Rock-bottom deals, part two."
Along with pricing, "it's all about incentives," says Mabel Guzman, president of the Chicago Association of Realtors. To pique buyer interest, sellers offer everything from gift cards for new furniture and paint to financial assistance at closing.
Practical Green Features
Call it "Yankee frugality," says Phipps. But what he sees on buyer shopping lists is a home that is easy on the planet because it's easy on the wallet.
Buyers are looking for things like triple-glazed windows, high-efficiency boilers and energy-efficient appliances. "The buyer of today wants to make sure that the ongoing operating costs of the house are as controlled and economical as possible," he says.
Open Kitchens
"The wall between the kitchen and the family room is evaporating," Phipps says.
"The kitchen is becoming part of the gathering space," he says. "And it's ironic -- it's the way it was 300 years ago. We've come full circle."
Repurposed Materials
Buyers like a material that looks or feels natural, even if it's not the genuine article, Phipps says. For example, "granite (for counters) is still popular, but it doesn't have to be granite," he says. "It can be stone, another natural material or something that looks like stone."
Smaller, Less-Formal Homes
Buyers are buying smaller homes, but they want to be able to use and reuse every inch of space, Phipps says. "They are being much more strategic and efficient with how they use it."
Formal spaces that might only be used three or four times per year are disappearing. "The slipcover rooms are gone," says Phipps.
That's "led to a repurposing of space," he says. Formal living rooms have been added to great rooms or converted into home offices or entertainment rooms.
Touches of Luxury
Buyers like luxury. And sometimes the amenities that convey that feeling of living large are relatively simple or inexpensive.
One example: coffee bars in the master bedroom. "It's like a butler's pantry in your bedroom," Pratt says. "An area for your coffee pot and accoutrements and a little fridge."
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