TEAM EMPOWERMENT MORTGAGE CHATTER: May 11; News & Headlines; Homeownership: Building Family Wealth; Listing Data Not From MLS Has More Errors; 1 in 4 Homes Underwater; Realtors & Techonology; Special Fund Would Help Homeowners Stay In Homes

Mortgage and Lending with RPM Mortgage, Inc.

"To be successful, all you have to do is give up everything you know." - Asara Lovejoy: Human potential author and coach A quick note for anyone interested in FHA lending's pitfalls, the recent filed lawsuit against Deutsche Bank, and the enforcement tools regulators are using - there is a webinar today on those subjects. The webinar's discussion will review the charges in the case and potential implications for FHA lending, and participants will be able to submit questions to be answered during the hour-long session from 3-4 EST, 12-1 PST. Webinar Presented by BuckleySandler LLP: "The False Claims Act and FHA Lending: What Does U.S. v. Deutsche Bank Mean for You?" Webinar topics include a summary and analysis of legal theory and corresponding charges in U.S. v. Deutsche Bank AG, et al., pitfalls in FHA Lending, avoiding False Claims Act liability, and beyond, how and when are False Claims Act violations triggered, what other enforcement tools are regulators using, what you can do now to position and protect your company, and insights on where the government and private plaintiff's bar will go from here. Clickheretoregister. After registering you will receive a confirmation email containing information about joining the webinar.



Lawsuits seem to be omnipresent in mortgage lending and banking. Here is the latest list of "Professional Liability Lawsuits' from the FDIC - another list you probably don't want you or your company on: FDICSuits.

Yesterday the commentary mentioned one attribute of Fannie's portfolio (a large number of Countrywide loans) which contributed to the difference in earnings between Fannie & Freddie. I received some notes, summed up by one Secondary exec in New York. "Fannie's grappling with Countrywide loans, but remember that Freddie also has a glut of Taylor Bean Whitaker loans. And although both FNMA & FHLMC purchased mortgages down the credit curve several years ago, including subprime mortgages, it was primarily because HUD mandated that they do so. And regarding your Cato Institute quote about abolishing those agencies, readers should know that some people at Cato also support an end to HUD."

"Freddie's portfolio isn't quite as awful as Fannie's, according to Anthony Sanders, Mercatus Center scholar and a real estate finance professor at George Mason University. He says that Fannie had a larger share of subprime mortgage-backed securities and Alt-A mortgages. Consequently, its losses were more severe last quarter than Freddie's losses."

Yesterday's fixed-income markets saw some volatility yesterday, but unfortunately for lenders the direction was toward lower MBS prices and higher rates. The news primarily consisted of a higher-than-expected print on import prices, the IMF's preparations for another bailout to Greece (to replace the last one), and the Treasury's $32 billion 3-yr note auction. Current coupon MBS prices worsened between .125-.250 on average volume while the 10-yr Note dropped nearly .5 and closed at a yield of 3.20%. Traders are definitely seeing the MBS production mix shift from 4.5's and 5's down to primarily 4's (which include 4.25%-4.625% conventional mortgages) although origination is extremely light (barely making $1 billion per day over the past few weeks).

Today we've already had mortgage applications for last week, which the MBA said increased 8.2%. The refi number was +9%, hitting its highest level since mid-March, and purchases were up nearly 7%. The 4-week moving average is up nearly 3%, and refi's account for over 63% of all applications. We also had the March Trade Deficit clock in at $48.18 billion, up from $45.44 billion in February. At 11AM MST the Treasury auctions $24 billion in 10-year notes, which currently is sitting around 3.22% and MBS prices are worse by about .125.

HOMEOWNERSHIP: BUILDING FAMILY WEALTHThe question facing many families making a move today is whether it makes more sense to rent or buy. We have been very upfront in discussing our unwavering belief in homeownership. It is for that reason that today we want to quote from a study issued by an institution with no ties to the real estate business or mortgaging.


The Joint Center for Housing Studies at Harvard University just released a study, America's Rental Housing: Meeting Challenges, Building on Opportunities. The study discusses the need for a greater supply of quality rental units in America. We agree. However, there were a few nuggets of information found in the study we want everyone to know.

American's Belief in Homeownership Has NOT Fundamentally Changed


There seems to be some feeling that homeownership has lost it's luster and perhaps is no longer a component of the American Dream. Harvard explains:

To date, attitudes about owning have become only slightly more negative while attitudes about whether now is a good time to buy are little different than before the housing boom. In the latest Fannie Mae housing survey from October - December 2010, the vast majority of respondents - including renters - continued to believe that homeownership makes more financial sense than renting. In addition, nearly two-thirds of all renters surveyed reported their intention to buy homes in the future.

Homeownership Creates Wealth


Because prices have fallen dramatically in many parts of the country in the last five years, some are too easily dismissing homeownership's role in building family wealth over the last century. The study explains:

In addition, renters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600 - about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.

The recent fall in prices can't wipe out the 100 year history housing has as a good long-term investment.

Bottom Line


The study was promoting the need for the construction of more rental housing for the average American family. However, when it came to a discussion on building wealth, Harvard offered:

"And for individuals as well as businesses, owning rental properties is an avenue for wealth creation."

And how do these individuals and businesses create that wealth. Owning the real estate and collecting rent from their tenants to offset the mortgage payments. Build your family"s wealth - not your landlord'Ms. We believe OWNERSHIP almost always makes the most sense.

LISTING DATA NOT FROM MLS HAS MORE ERRORSListing data that doesn't come directly from a multiple listing service data is more likely to have inaccurate price and status information, according to research by Trulia.


Trulia found that third-party syndicators of listing data that did not come from an MLS posted a 21.3 percent error rate regarding the listing's price or status. Trulia says the problem is that real estate professionals submit the data to these syndication sites but often fail to return to the site to update the listing when information changes, which causes a - significant increase of disparate data sources resulting in less accurate data online," according to Trulia.

Meanwhile, third-party re-syndicators of MLS data had a 10.2 percent error rate, direct feeds from brokers posted a 5.6 percent error rate, and direct feeds from franchises had a 3.9 percent error rate, according to Trulia's research.

Trulia's white paper was based on an analysis more than 430,000 listings between Feb. 15 and April 15 to uncover discrepancies in listing data.


The number of home owners who owe more on their mortgage than their house is worth continues to increase. About 28 percent of homes with mortgages are now underwater, according to'Ms latest Home Value Index. That is up from 27 percent reported during the last three months of 2010.

A flood of foreclosures continues to weigh on many markets and is putting downward pressure on home prices.

Zillow's latest index, which covers 132 markets, showed that 97 percent of home owners saw a decrease in home values.

However, three real estate market bright spots were uncovered: Fort Myers, Fla., Champaign-Urbana, Ill., and Honolulu, which all posted quarterly increases. Home values in those cities increased 2.4 percent, 0.8 percent, and 0.3 percent, respectively.

REALTORS® and Technology

Technology has changed dramatically over the last 10 years and had a strong impact on the REALTOR® business. New forms of technology have enhanced mobility and improved efficiency, but they have also eliminated a level of control from the average real estate agent.

Consumers and TechnologyConsumers have fully embraced the internet. According to the Bureau of the Census, in 1997 only 18.0 percent of Americans had internet at home; by 2009, that figure had jumped to 68.7 percent. The internet is no longer just a source of information and e-commerce, but a means of creating and expanding relationships, both personal and professional. Friendster gave way to MySpace, which gave way to the social media giant Facebook. The number of active members on Facebook jumped from just one million users in December of 2004 to more than 500 million by the end of 2010. Today blogs are common and for those for whom the speed and frequency of interaction on these sites are not enough, registered users on Twitter now total 175 million with an average of 95 million tweets per day.


According to NAR's 2010 Profile of Home Buyers and Sellers, the share of buyers who searched "frequently" on the internet for their home rose from 71 percent in 2003 to 89 percent in 2010. The share of homebuyers who found their home on the internet jumped from 8 percent in 2001 to 37 percent in 2010. Among buyers who used the internet, the features most often used were photos and detailed information about the property. Buyers were less interested in information on “days on market and comparables. This pattern suggests that consumers use online information about listings to better educate themselves for the purchase decision, but they are less interested in information that would help them with pricing or strategies of the purchase process. Consumers want to better understand the particulars of the property and leave the process to their REALTOR®.

REALTORS® and Technology


The march of technology has also left an imprint on REALTORS®. REALTORS® were quick to adopt both e-mail and mobile phones. As early as 2002, 96.6 percent of REALTORS® had a mobile phone. At that same time, use of other wireless devices, particularly those withe-mail or internet capabilities, was low at only 17.4 percent, and less than a third (31.7%) of REALTORS® used a pager. Desktop computers were used by almost 73 percent of REALTORS® at their place of business and 84 percent had a desktop computer at home.

By 2010, the technology used by REALTORS® was different. Pagers disappeared and only 16 percent of REALTORS® planned to buy a desktop PC - a trend that reflects the demise of the brick-and-mortar office. Technology enhanced mobility and REALTORS® took advantage of that, with 34 percent planning to buy a laptop, 21 percent selecting an iPad and 42 percent opting for a smart phone.

The internet allows REALTORS® to market listings to a much broader audience than before. In 2010, the site most frequently used by REALTORS® to list their properties was, followed by their broker site, and their personal site. Magazines, national franchises, and local newspapers, traditional sources of listings, had all fallen below a 40 percent share.



Technology has had a substantial impact on the lives of both consumers and REALTORS® over the last decade. Consumers have embraced the internet as a search tool, but also as a social outlet. REALTORS® embraced the internet as well, and property listings now flourish on line. REALTORS® are also increasing their use of social media as a means of expanding their sphere of influence and lead generation. Gadgets have also had an impact, untethering REALTORS® from their offices and enabling them to communicate much easier. But, while technology has been broadly adopted by the REALTOR® community, social media remains the avenue of younger REALTORS®. Real estate is a fast and fluid business and REALTORS® will continue to seek out and adopt those technological that augment their business. The next 10 years are likely to bring dramatic changes in the ways REALTORS® use those technologies.


State attorneys general are proposing a special fund, that could be as large as $20 billion, to help troubled borrowers stay in their homes.

State attorneys general are meeting this week in Washington, D.C., to continue negotiations with federal regulators and the country's largest mortgage servicers. The settlement negotiations are expected to include talks about the special fund as state attorneys general continue to seek fines and other punishment of mortgage servicers for bad foreclosure practices.

Proposals from state attorneys general being discussed include using some of the money in the fund to write down the principal balance for some troubled home owners, The Washington Post reports. Banks have strongly argued against such a move, questioning the fairness for other home owners in doing that. Another option state attorneys general may propose is to use the funds to support state-run aid programs, mediation services, and foreclosure hotlines to help struggling home owners.

The ongoing negotiations are one of many taking place among government agencies to reach settlements with banks regarding shoddy foreclosure practices.

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