Category Archives: Servicing

Fannie Mae: Lender pessimism grows as mortgage demand falls

Amid declining loan demand and intensified lender competition, mortgage lender sentiment fell to an all-time-low, according to Fannie Mae’s Q4 2018 Mortgage Lender Sentiment Survey.

Mortgage lenders reported a net negative profit margin outlook for the ninth consecutive quarter, falling across all loan types, including GSE-eligible, non-GSE-eligible and government, according to the report.

Fannie Mae Senior Vice President and Chief Economist Doug Duncan said stressful conditions continue to hang over the mortgage industry.

“Lenders are reporting the lowest purchase mortgage demand expectations across all loans types and the worst refinance demand expectations for GSE-eligible loans in the survey’s five-year history,” he said.

For the eighth consecutive quarter, Fannie’s survey indicates that stiff competition among lenders was the primary reason for lower purchase mortgage demand. In Q4, demand came in at the lowest reading for any fourth quarter in the survey’s history.

Notably, consumer demand was named the second most important factor in the decrease, marking another survey high.

When it came to refinance mortgages, the survey revealed that lenders reported demand growth declined during the previous three months, falling to the second lowest reading in survey history for GSE-eligible loans. Furthermore, demand growth for non-GSE-eligible loans also fell to the lowest level in survey history.

Optimism for the next three months didn’t fare well either, as Fannie Mae reports growth expectations for the net share of GSE-eligible loans reached a new survey low.

“Rising mortgage rates and lean inventory amid solid home price appreciation have discouraged both first-time and trade-up homebuyers,” Duncan continued. “However, mortgage rates have shown signs of stabilization, and annual home price gains have slowed from the red-hot pace seen earlier this year.”

Fannie Mae indicates that throughout 2018, lenders continued to ease lending standards at a modest pace, but it has been significantly lower than the pace seen a year ago at this time. Nevertheless, lenders report the net easing expectations over the next three months for all three loan types remained relatively stable from the previous quarter and last year.

“While 2018 is likely to end up a disappointing year for the housing and mortgage industries, continued strength in demographics and the labor market offers hope that conditions should stabilize and may even improve next year,” Duncan said. 

Article source: https://www.housingwire.com/articles/47687-fannie-mae-lender-pessimism-grows-as-mortgage-demand-falls

Fannie Mae: Lender pessimism grows as mortgage demand falls

Amid declining loan demand and intensified lender competition, mortgage lender sentiment fell to an all-time-low, according to Fannie Mae’s Q4 2018 Mortgage Lender Sentiment Survey.

Mortgage lenders reported a net negative profit margin outlook for the ninth consecutive quarter, falling across all loan types, including GSE-eligible, non-GSE-eligible and government, according to the report.

Fannie Mae Senior Vice President and Chief Economist Doug Duncan said stressful conditions continue to hang over the mortgage industry.

“Lenders are reporting the lowest purchase mortgage demand expectations across all loans types and the worst refinance demand expectations for GSE-eligible loans in the survey’s five-year history,” he said.

For the eighth consecutive quarter, Fannie’s survey indicates that stiff competition among lenders was the primary reason for lower purchase mortgage demand. In Q4, demand came in at the lowest reading for any fourth quarter in the survey’s history.

Notably, consumer demand was named the second most important factor in the decrease, marking another survey high.

When it came to refinance mortgages, the survey revealed that lenders reported demand growth declined during the previous three months, falling to the second lowest reading in survey history for GSE-eligible loans. Furthermore, demand growth for non-GSE-eligible loans also fell to the lowest level in survey history.

Optimism for the next three months didn’t fare well either, as Fannie Mae reports growth expectations for the net share of GSE-eligible loans reached a new survey low.

“Rising mortgage rates and lean inventory amid solid home price appreciation have discouraged both first-time and trade-up homebuyers,” Duncan continued. “However, mortgage rates have shown signs of stabilization, and annual home price gains have slowed from the red-hot pace seen earlier this year.”

Fannie Mae indicates that throughout 2018, lenders continued to ease lending standards at a modest pace, but it has been significantly lower than the pace seen a year ago at this time. Nevertheless, lenders report the net easing expectations over the next three months for all three loan types remained relatively stable from the previous quarter and last year.

“While 2018 is likely to end up a disappointing year for the housing and mortgage industries, continued strength in demographics and the labor market offers hope that conditions should stabilize and may even improve next year,” Duncan said. 

Article source: https://www.housingwire.com/articles/47687-fannie-mae-lender-pessimism-grows-as-mortgage-demand-falls

CoreLogic: Here’s what will be making economic news in 2019

CoreLogic released its predictions for 2019, outlining several factors that will be making economic news in the new year.

CoreLogic Chief Economist Frank Nothaft explained that economic growth only needs to last seven more months in order to set the record for the longest economic expansion in U.S. history, based on business cycle dates going back more than 160 years.

And Nothaft believes growth will do just that, as the nation’s gross domestic product comes in at 2.4% in 2019. While this would be slower than the forecasted 3.1% for 2018, it would still be enough to push unemployment to 3.4% – a 50-year low.

Nothaft also predicts that interest rates will continue to rise as the Federal Reserve continues to normalize the level of interest rates.

“We expect long-term yields to rise as well, nudging 30-year fixed mortgage rates up to an average of about 5.25% by next December, the highest in a decade,” Nothaft said in a video for CoreLogic’s economic outlook for December 2018.

And of course, these higher rates will affect housing market activity.

“At the margin, homeowners who currently have low-rate mortgages will be incented to stay in their home rather than sell, keeping the new-listings flow relatively low,” Nothaft said. “The larger monthly payments that come with higher mortgage rates will likely soften buyer demand, leading to less pressure on home prices.”

CoreLogic forecasts home price growth will slow by one percentage point over the next 12 months.

Other experts are also predicting a slowdown in housing. For example, realtor.com recently forecasted that buying and selling a home will become more difficult in 2019.

Here is the full video of Nothaft’s predictions for 2019:

Article source: https://www.housingwire.com/articles/47677-corelogic-heres-what-will-be-making-economic-news-in-2019

Airbnb settles with Aimco after being accused of allowing illegal short-term rentals

The legal battle between Airbnb and the Apartment Investment and Management Company over Aimco’s claims that Airbnb was encouraging residents to violate their leases by renting out their apartments on the short-term rental platform is now over.

And everyone appears to be pleased.

Aimco and Airbnb jointly announced Tuesday that they reached a settlement that covers “all their disputes” and ends all of the litigation between the two parties.

Aimco sued Airbnb last year in Florida and California, claiming that the site was actively promoting deliberate breaches of tenants’ leases.

The two sides battled in court for most of this year after a California court ruled last year against an Aimco apartment community’s claim that Airbnb helped facilitate lease violations after residents complained that Airbnb users were negatively affecting quality of life at the property.

Aimco planned to take the case to Ninth Circuit Court of Appeals, while simultaneously fighting Airbnb’s contention that the California court’s ruling necessitated tossing the Florida lawsuit as well.

Additionally, Aimco had two massive multifamily trade organizations in its corner, as the National Apartment Association and National Multifamily Housing Council filed an amicus brief supporting Aimco’s claims against Airbnb saying that though open to the prospect of short-term rental activity in multifamily properties, the practice must be better regulated.

But now, after more than 18 months of fighting, the two sides reached a settlement. Terms of the settlement were not disclosed, but the companies issued a joint statement on the matter.

“The parties believe the settlement is in both sides’ best interests,” the companies said. “Aimco believes that the parties’ agreement provides Aimco with the ability to control short-term rental activity consistent with its contract and property rights. As part of the settlement, Aimco and Airbnb have agreed to meet to discuss opportunities in the multifamily housing industry.”

Additionally, Airbnb spokesperson Christopher Nulty said that the company is ready and willing to work with landlords like Aimco to facilitate short-term renting.

“Airbnb is committed to building mutually beneficial partnerships with building owners and landlords through initiatives like our Friendly Building program,” Nulty said in a statement provided to HousingWire. “We believe that by working together, home sharing can bring economic benefits to both landlords and tenants.”

Article source: https://www.housingwire.com/articles/47678-airbnb-settles-with-aimco-after-being-accused-of-allowing-illegal-short-term-rentals

What would Mark Calabria as FHFA director mean for the future of Fannie and Freddie?

Reports began to surface this week that the Trump administration is considering naming Mark Calabria to be the next director of the Federal Housing Finance Agency when Mel Watt’s term is up early next year.

But what would Calabria bring to the FHFA and what might that mean for the future of Fannie Mae and Freddie Mac? Those in the know are not quite so sure yet.

Calabria, a long-time housing reform advocate, already serves in the administration. Calabria is currently Vice President Mike Pence’s chief economist, taking that role nearly two years ago.

Calabria previously served as the director of financial regulation studies at the Cato Institute, a think tank that is “dedicated to the principles of individual liberty, limited government, free markets and peace.”

Before joining the Cato Institute in 2009, Calabria worked on Capitol Hill as a member of the senior professional staff of the Senate Committee on Banking, Housing, and Urban Affairs.

Earlier in his career, Calabria also served as deputy assistant secretary for regulatory affairs at the Department of Housing and Urban Development and held positions at Harvard University’s Joint Center for Housing Studies, the National Association of Home Builders, and the National Association of Realtors.

So, Calabria has the housing experience and has long been outspoken about housing issues. In one example, the same week that he was named to Pence’s staff, Calabria posted a blog, found here, where he addresses the Mortgage Bankers Association’s plans for the future of Fannie Mae and Freddie Mac.

In his role in the administration, Calabria has also spoken about the administration’s desire to end the conservatorship of Fannie and Freddie.

Analysts at Keefe, Bruyette, Woods, writing about Calabria as potential FHFA director, say that Calabria has a “libertarian bent” and call Calabria an “outspoken critic” of Fannie and Freddie, but they caution that Calabria’s personal views on the government-sponsored enterprises may end up being subservient to the Trump administration’s views.

“The knee-jerk reaction to the news might be to expect that Dr. Calabria will make policy changes that hurt the housing and mortgage markets, but we think he will implement the administration’s agenda rather than his own personal one, so his impact might be more limited than expected,” KBW analysts Brian Gardner, Bose George, Jade Rahmani, and Michael Michaud write this week.

Despite that, the KBW analysts say they expect the administration to end the conservatorship of the GSEs one way or another, something the Trump administration has previously proposed.

One way that the administration may do this is without the aid of Congress, which may not be as supportive of the administration’s plans considering that one of the chambers is soon to be under Democrats’ control.

“We think it is possible the administration does not wait for Congress to act (on ending the GSE conservatorship) and instead decides to act on its own to end the conservatorship by recapitalizing and releasing the GSEs,” the KBW analysts write. “The fact that Dr. Calabria has said that amending the conservatorship was illegal suggests that he would end the profit sweep and allow the GSEs to start rebuilding capital. We think this view has support within the administration.”

But, again, they caution that Calabria (if named and confirmed) may not have as much of an impact as you might think.

“Calabria has been a critic of the GSE model so his nomination might be seen as a negative for the housing and mortgage markets on the belief that he would try to reduce the GSEs’ footprint but legal and political considerations lead us to believe that some fears about Dr. Calabria’s impact might be overdone,” the KBW analysts write.

“For example, FHFA lacks the legal authority to lower the GSEs conforming loan limits, which is one limit on the director’s ability to shrink the GSEs,” they continue. “Also, as we get closer to the 2020 presidential election, we doubt the administration will take steps that may disrupt the housing market, which could, in turn, hurt the president’s re-election chances.”

KBW also suggests that Calabria’s potential impact on the GSEs’ multifamily business could be limited, even citing Jared Kushner’s influence in the administration and his family’s real estate business as reasons that the Trump administration may not upset the multifamily apple cart.

Regardless, even if Calabria is nominated, KBW believes that a vote on his nomination may take some time, with Senate Majority Leader Mitch McConnell, R-Kentucky, likely prioritizing other legislative issues over Calabria’s presumed nomination.

“We think it is possible the administration nominates Dr. Calabria but also replaces Director Watt in January with a temporary director, possibly Comptroller of the Currency Joseph Otting, while it waits for the Senate to confirm Dr. Calabria,” the analysts conclude.

FTN Financial Group analyst Jim Vogel, on the other hand, posits that Calabria’s views could play more of an impact than those at KBW think.

“At a minimum, agency debt and mortgage investors will wonder how hard he will press his conservative principles to accelerate change in housing finance,” Vogel wrote Tuesday in a note to clients.” At an extreme, he could require Fannie and Freddie to raise guarantee fees sufficiently to further reduce credit to residential real estate. The 2008 law that created FHFA gives the director that kind of power.”

According to Vogel, housing industry lobbyists have pushed for someone other than Calabria to be the next FHFA director, given Calabria’s divisive views on the GSEs.

“Even though housing is an election issue – see the defeat of Republican house candidates in high-tax states partly due to elimination of that deduction last year – it’s quite possible the Administration sees housing finance in the black/white terms it applies to trade negotiations,” Vogel wrote. “In other words, don’t go for incremental change when the system needs a complete reboot.”

But, the problem with a “complete reboot” of the country’s housing finance system, other than it perhaps being wholly unnecessary, is that it would be incredibly complicated.

“The problem with complete reboots – of course – is the risk of systemic cracks during the transition to the new system. That’s certainly appears to be the case for trade right now. Housing finance is equally delicate and equally important to the U.S. economy,” Vogel wrote.

“It is important to remember, of course, that large scale change takes time,” Vogel continued. “U.S. support for Fannie and Freddie’s outstanding liabilities was designed to carry over after housing finance reform.”

And while the KBW analysts suggest that Calabria may take a more rational view on GSE reform if he’s confirmed, Vogel writes that we only need to look at recent history to see that just the opposite may take place.

“Some argue Calabria would take a more pragmatic view of GSE reform once he’s one of the most powerful people in housing,” Vogel concluded. “To date that is not how this Administration has worked, where principle and loyalty command the highest respect. Rest assured that if Calabria does moderate his tone, the other side of the aisle will amplify his previous opinions to stoke additional controversy.”

Article source: https://www.housingwire.com/articles/47672-what-would-mark-calabria-as-fhfa-director-mean-for-the-future-of-fannie-and-freddie

CFPB moves to further ease enforcement on financial services industry

In the last few days of his leadership at the Consumer Financial Protection Bureau, Mick Mulvaney moved to further ease the bureau’s enforcement of the industries that it oversees.

In a proposal set to be introduced into the Federal Register soon, the CFPB is proposing new rules surrounding “no-action letters,” a bureau enforcement measure introduced under former CFPB Director Richard Cordray that’s designed to aid innovation in the financial markets.

The no-action letter is an assurance from the bureau that it won’t take action against a financial services provider for trying a new product or service as long as the company provides certain information to the bureau and complies with a series of rules.

Under the program, the CFPB issued only one no-action letter. Last year, the CFPB sent its only no-action letter to Upstart Network, a company that uses alternative data in making credit and pricing decisions, in order gain more information on alternative credit.

The no-action letters were part of an effort called “Project Catalyst,” which was a CFPB initiative designed to encourage consumer-friendly developments in the consumer financial marketplace.

Under Mulvaney, Project Catalyst was reorganized this summer and renamed the “Office of Innovation.”

And now, just before he was replaced by the now-permanent director of the CFPB, Kathy Kraninger, Mulvaney moved to make it easier for companies to obtain a no-action letter as part of an effort to facilitate more innovation in the financial industry.

HousingWire obtained a copy of the proposal, which states that the bureau believes that the process required to obtain a no-action letter has not provided companies with “sufficient incentives.”

The proposal would streamline the application process, streamline the bureau’s processing of applications, expand on the types of “statutory and/or regulatory relief available,” and other measures.

Under the proposal, companies would be required to share less data with the bureau, a requirement the bureau now finds to be “unduly burdensome” for companies.

Additionally, the CFPB proposal would create a “Product Sandbox,” which would allow and encourage companies to create and test new products and services under safe harbor provisions from the bureau itself.

Put simply, the sandboxes would allow certain companies under certain circumstances to innovate without fear of a CFPB enforcement action, as long as they play by the CFPB’s rules.

The concept is similar to the “regulatory sandboxes” that were proposed earlier this year by the Department of the Treasury.” In the regulatory sandbox proposal, regulators would work directly with the companies they regulate to help firms innovate new products and services.

The proposal drew the ire of Rep. Maxine Waters, D-Calif., who is set to lead the powerful House Financial Services Committee when the new congressional session begins next year.

“I am very concerned by the Consumer Bureau proposal, issued in the last days of Mick Mulvaney’s leadership, to significantly loosen its “no-action letter” policy in a way that could let bad actors that abuse consumers off the hook entirely from enforcement action by the agency. This is yet another step to weaken the Consumer Bureau and curtail its enforcement tools,” Waters said in a statement.

 “While it is important for our financial regulators to encourage responsible innovation, this is a deeply irresponsible overreach that instead encourages and abets consumer abuses by putting certain financial institutions in an enforcement-free-zone,” Waters continued.

“[Donald] Trump and his appointees have done everything in their power to undermine the Consumer Bureau. Mick Mulvaney, who Trump installed to serve as Acting Director of the agency, dropped lawsuits and investigations into abusive payday lenders, took away the Office of Fair Lending and Equal Opportunity’s enforcement powers, fired the members of the agency’s Consumer Advisory Board, scaled back enforcement actions against bad actors, sought to slash the agency’s budget, and apparently made it his mission to help out bad actors,” Waters continued.

Waters noted that she recently introduced legislation that would repeal many of the changes made at the CFPB by the Trump administration, and said that she has no plans to discontinue her defense of the bureau.

“I am committed to holding the Trump Administration accountable and ensuring that the Consumer Bureau can resume its important work protecting American consumers,” Waters concluded.

Article source: https://www.housingwire.com/articles/47673-cfpb-moves-to-further-ease-enforcement-on-financial-services-industry

Fannie, Freddie to suspend evictions for the holidays

Fannie Mae and Freddie Mac announced Monday that they will not be evicting any families during this holiday season.

As struggling families fight through the stress of the holidays, the GSEs determined that losing their home will not be a challenge they will have to face during this season.

Fannie Mae announced its suspension of eviction lockouts will apply to single-family and 2-4 unit properties from December 17, 2018 to January 2, 2019.

“We believe it is important to extend the timeline of help for struggling borrowers during the holidays,” said Jacob Williamson, Fannie Mae vice president of single-family real estate. “We encourage homeowners who may be struggling with their mortgage or facing possible foreclosure to reach out to Fannie Mae or your servicer to get help. We want to help pursue those options whenever possible.”

Freddie Mac’s suspension runs through the same dates, and applies to all foreclosed, occupied homes owned by Freddie Mac.

“As we have done in past years, we are suspending evictions from Freddie Mac-owned homes to help provide families with a greater measure of certainty during the upcoming holiday season,” said Yvette Gilmore, Freddie Mac vice president of single-family servicer performance management.

This is not the first time the GSEs have suspended evictions for the holidays. In fact, Fannie and Freddie have suspended evictions in several previous years.

But while the GSEs are suspending evictions during the holiday season, the suspension will not affect other pre- or post-foreclosure activities. Companies managing local evictions for the GSEs can continue to file documentation and legal and administrative proceedings will continue during the suspension period.

Article source: https://www.housingwire.com/articles/47657-fannie-freddie-to-suspend-evictions-for-the-holidays

HUD Inspector General: Department has serious management challenges

The Department of Housing and Urban Development is facing serious management challenges that are causing longstanding performance and accountability issues.

An annual report released by the HUD Office of Inspector General outlines the top six management challenges facing the agency in 2019, and the details aren’t pretty.

In 1994, the Government Accountability Office placed HUD on its high-risk list because of management deficiencies, an issue the OIG said persists more than 20 years later.

At the heart of the problem: repeated staff turnover. In the past 10 years, HUD lost 18.5% of its full-time staff, more than any other cabinet-level department.

“Constant turnover and extended vacancies in many of HUD’s most important political and career executive positions have created leadership gaps, which have led to poor management decisions and questionable execution of internal business functions,” the report states. “HUD could not fill essential positions with officials who stayed long enough to implement a vision and effect sustained positive changes.”

The OIG said its report highlights the agency’s greatest vulnerabilities, exposing it to waste, fraud, mismanagement and abuse.

Here are the details on its list of the six greatest management challenges facing HUD in 2019:

Challenge: Ensuring the availability of affordable housing that is decent, safe, sanitary and in good repair

HUD is challenged by the need to provide affordable and safe housing, according the OIG, and it has not established an effective inspections process to monitor properties.

The supply of affordable rentals for low-income renters is inadequate, according to the report, and as the renter population grows, increased competition is exacerbating the problem.

HUD is also struggling to provide sufficient oversight to ensure that properties have a safe water supply, creating an ongoing concern the agency has said it intends to address in 2019.

Aggravating matters is the fact that HUD does not have effective property inspection controls in place.

“We have found instances in which inspection scores rated the physical condition of a property better than it was and as a result, qualified it for less frequent inspections, decreasing oversight,” the report states.

Challenge: Protecting the Federal Housing Administration’s mortgage insurance funds

Although HUD insures approximately 25% of all mortgages originated in the U.S. through the Federal Housing Administration, the OIG found four risks threatening the agency’s ability to properly protect the insurance fund.

For one, the OIG says HUD lacks sufficient safeguards to prevent loan servicers that fail to meet foreclosure and conveyance deadlines from incurring holding costs, which are then transferred to HUD. This practice cost HUD approximately $2.23 billion in “unreasonable and unnecessary” holding costs over a five-year period, according to the OIG.

Secondly, the reverse mortgage program is causing large losses to FHA’s Mutual Mortgage Insurance Fund.

“The reverse mortgage program is complicated and ripe for a host of fraud schemes due to the program intricacies and implementation,” the report states. “Updating its rules and policies would help reduce some of the inherent issues.”

The report calls out over-the-phone counseling as potentially problematic, and says inflated appraisals have spurred losses.

It also says lenders and servicers have delayed reporting claims, which contributes to the drain on the fund.

“We have seen that delayed claim reporting by the servicers or financial institutions adds many additional costs to the HECM claim, which the MMI Fund ultimately must pay,” the report states. “These costs could be mitigated by closer oversight of claims and lenders’ compliance with self-curtailment rules.”

Third, the report lists an increase in Ginnie Mae nonbank issuers as problematic, claiming Ginnie Mae is unprepared to deal with risks specific to these entities.

Finally, it notes that a shift toward the digital mortgage presents a risk to the agency as it has long suffered technology troubles, creating problems related to information security, data transfers and system integration.

Challenge: Providing adequate monitoring and oversight of its operations and program participants

HUD’s inability to institute effective oversight prevents the essential monitoring of its operations and program participants, according the report, which notes that $1.3 billion in “questioned costs” might have been avoided were the proper controls in place.

“HUD’s lack of sufficient monitoring limits its ability to prevent and detect fraud, waste, and mismanagement,” it states.

Challenge: Administering disaster recovery assistance

HUD is tasked with providing disaster recovery assistance, and often receives more funding than any other federal entity to assist in this effort. Through its Community Development Block Grant Disaster Recovery program, HUD disperses grants to state and local government agencies for disaster relief.

But the report says the agency’s inefficiencies prevent it from effectively administering these funds.

Specifically, the OIG says HUD has failed to codify its CDBG-DR Program; ensure that the disaster relief expenses it pays are eligible through the program; certify that grantees are compliant with regulations; address concerns from citizens seeking assistance post disaster; and prevent fraud.

Challenge: Modernizing technology and the management and oversight of information technology

HUD faces significant challenges when it comes to advancing its technology infrastructure.

In the last five years, the agency spent between 70% and 95% of its $280 million annual IT budget on operations and maintenance, according to the report. And, every year since 2012, the agency has spent less money on modernizing and enhancing its tech, instead channeling more funds toward the maintenance of its dated systems.

The out-of-date IT infrastructure leaves the agency vulnerable to data breaches, the report says.

“We are specifically concerned about the current state of FHA’s IT systems and the lack of systems capabilities and automation to respond to changes in business processes and the IT operating environment,” it notes.

Challenge: Instituting sound financial management governance, internal controls and systems

HUD’s financial management is “inadequate and “basic” thanks in part to the fact that it hasn’t had a confirmed CFO for a number of years and because its dated systems and manual processes prevent reliable and timely financial reporting.

“The lack of strong, consistent leadership over an extended period has allowed HUD’s internal control environment and framework to weaken, which let deficiencies occur without being detected or prevented and precluded HUD from resolving financial integrity issues in a timely manner,” the report states.

For its part, HUD’s management acknowledged the report and the challenges outlined.

“We are focused on improving HUD’s infrastructure related to human capital practices, critical internal processes, and our information technologies to further enhance the Secretary’s strategic priorities of protecting taxpayer funds and streamlining operations,” HUD said.

“We will continue to identify and implement solutions, consistent with our available resources, that will remediate weaknesses, which prevent HUD from obtaining a clean audit opinion,” it concluded.

Article source: https://www.housingwire.com/articles/47663-hud-inspector-general-department-has-serious-management-challenges

TCI, Southern Properties Capital, Macquarie partnering to build significant multifamily portfolio

There’s about to be a new big player in the multifamily market in the Southwestern part of the U.S.

Southern Properties Capital, a subsidiary of real estate investment company Transcontinental Realty Investors that operates primarily in Texas and specializes in Class A multifamily, is forming a joint venture with a subsidiary of Macquarie Group, the global finance giant.

According to the companies, the joint venture will focus on creating a “business platform that will allow dramatic expansion in the multifamily arena.”

The joint venture, which is called Victory Abode Apartments and will do business as Abode Properties Services, already holds 10,133 units in 11 states with three more multifamily assets currently under construction.

TCI and Southern Properties Capital contributed the portfolio of more than 50 multifamily assets, while Macquarie made a “substantial equity investment.”

The companies say that the venture will seek to increase the overall size of the portfolio over the next several years, through “strategic buildout of its robust development pipeline alongside opportunistic acquisitions.”

According to the companies, Victory Abode Apartments is already one of the “largest multifamily operating companies in the country.”

The companies say that the venture will focus its investments on Class A properties, acquiring existing complexes and building new ones in “focused secondary and tertiary markets.”

“This transaction falls right in line with our strategic vision,” said Daniel Moos, CEO and president of Transcontinental Realty Investors/Southern Properties Capital, and CEO of Victory Abode Apartments. “This new collaboration with Macquarie, in addition to our Series A and B Bond Raisings on the Tel Aviv Stock Exchange, creates additional financial strength to an already thriving organization.”

Jackie Hamilton, senior managing director at Macquarie Principal Finance, added that the company is “excited” to partner with TCI and Southern Properties to build the multifamily venture.

Article source: https://www.housingwire.com/articles/47661-tci-southern-properties-capital-macquarie-partnering-to-build-significant-multifamily-portfolio

Redfin: Number of sight-unseen home offers retreat

As inventory increases and home price growth slows down, homebuyer competition has begun to ease, according to the latest data from Redfin.

According to the company, 20% of recent homebuyers said they made an offer sight-unseen. This means that one in five homebuyers made an offer on a home without even stepping foot on the property.

This data was gathered from a survey Redfin conducted back in May, consisting of 1,463 homebuyers across 14 major markets, who had purchased a home within the last year.

Redfin notes this number was down 35% from a similar survey it conducted in November, when the share of sight-unseen offers had been growing consistently for at least a year and a half.

“Now that most homes are staying on the market for longer than a week, there just isn’t as much pressure for buyers to make offers so hastily,” Redfin Agent Jessie Culbert said. “That’s a big change from earlier this year when sellers set offer review deadlines, and they were strict! This meant that whether or not you had time to physically step inside the home, you had to get your offer in on time in order to be considered. Otherwise you would miss out entirely on the opportunity to compete for it.”

Redfin notes that for many prospective homebuyers, this strategy proved to be advantageous last year. However, the housing market has shifted towards a buyers’ market, which is attributed to rising inventory and slow price growth.

“In July, we first reported that the market was beginning to shift toward buyers’ favor, with rising inventory and slowing price growth. Buyers had become more choosy about what homes to move on and were behaving less hasty in making offers. And now, buyers are facing fewer multiple-offer situations, which allows buyers even more time to visit homes in person before making an offer,” Redfin’s analysis stated.

According to Redfin, this trend indicates a change in the market, which they plan to watch closely for the remainder of the year.

NOTE:  This survey was conducted between May 1 and 18, 2018, utilizing SurveyGizmo. Redfin surveyed 4,264 people who indicated they had bought or sold a home in the past year, tried to buy or sell a home in the past year, or plan to do so this year. 

Article source: https://www.housingwire.com/articles/47662-redfin-number-of-sight-unseen-home-offers-retreat

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