Fannie Mae comments on repairs to home set for demolition

Why would anyone spend money to fix a home that the city is going to demolish?

It just doesn’t make sense and News10NBC has been working to get answers for you on this story. Thursday, Berkeley Brean was finally able to get a response from the bank that owns the home.

Why did Fannie Mae make repairs to the home? First of all, News10NBC learned they didn’t know the house they owned was on the city’s demolition list. They found out by watching our reports, but Fannie Mae still ordered repair work after we figured it out. We wanted to know why.

After years of neglect, 22 Denver Street was run down and the neighbors wanted it gone.

“We believe a house like this should absolutely come down,” says Kyle Crandall of Beechwood Neighborhood Association.

And the city agreed. In the summer, it ordered 22 Denver to be demolished. But, as we’ve reported to you, in December — when Fannie Mae got the house in foreclosure — work crews started repairing the home. We reached Fannie Mae’s spokesman by phone in Washington D.C.

Berkeley Brean: “Why would Fannie Mae put money into a house that’s going to be torn down, at all?”

Andrew Wilson, Fannie Mae: “Any time a property comes into our inventory there are issues we have to take care of.”

That includes adding a railing. After we exposed the workmanship, the crews were back to make another one.

Brean: “I wonder why you guys didn’t know it was on the demolition list. Why didn’t anyone make a call about that?”

Wilson: “We didn’t know about it. We didn’t get the notification.”

Wilson adds, “So we’re working on trying to figure out why we weren’t aware of that.”

Brean: “You found out it was on the demolition list from the stories we reported right?”

Wilson: “Uh, I believe that was part of it. I don’t know if there were other notifications but we only recently found out about the demolition list issue and we’ll work to do what we can to address it.”

We reminded Fannie Mae that the neighbors and the city wants the house gone.

Brean: “Should Fannie Mae listen to the wishes of the neighbors and the city and say, okay, that house should come down?”

Wilson: “We’re going to work very closely with the city so we’re working to do that now, to try to understand what their position is and what their timelines are and what their goals are. So, we’ll absolutely work closely with the city.”

More information on homes to be demolished is available here.

Goldman Sachs Subsidiary Wins Two Fannie Mae NPL Pools

Fannie Mae has released the list of winners from its fourth nonperforming loan sale, which included a Goldman Sachs subsidiary.

MTGLQ Investors LP, the Goldman subsidiary, submitted the winning bids for the third and fourth pools in the four-pool sale. The third pool contains 1,176 loans with an aggregate unpaid principal balance of more than $233 million and an average loan size of $198,712. The fourth pool comprises 892 loans with an aggregate UPB of nearly $185 million and an average loan size of $207,217.

The first pool, with 3,127 loans carrying an aggregate UPB of $637,451,715 and an average loan size of $203,891, was won by Canyon Partners subsidiary Carlsbad Funding Mortgage Loan Acquisition LP.

Pretium Mortgage Credit Partners I Loan Acquisition LP scored the second pool, which consisted of 1,345 loans with an aggregate unpaid principal balance of $266,947,532 and an average loan size $199,151.

The loan sale was performed in collaboration with Bank of America Merrill Lynch and First Financial Network. Marketing to potential bidders began Jan. 12.

Fannie Mae is currently fielding bids for the second Community Impact Pool sale, which closes Feb. 18.

Freddie Mac: Mortgage rates drop six weeks straight

The downward trend in mortgage rates continued for the sixth consecutive week amid ongoing market volatility, the latest results of Freddie Mac’s Primary Mortgage Market Survey found.  

The 30-year fixed-rate mortgage dipped to 3.65% for the week ending Feb. 11, 2016, down from last week when it averaged 3.72%. A year ago, the 30-year FRM averaged 3.69%.  The average 30-year fixed is now hovering just above its 2015 low of 3.59%.

Also dropping, the 15-year FRM this week averaged 2.95%, down from 3.01% last week. In 2015, the 15-year FRM averaged 2.99%. 

The 5-year Treasury-indexed hybrid adjustable-rate mortgage fell to 2.83% this week, a decline from last week’s 2.85%. A year ago, the 5-year ARM averaged 2.97%.

“In a falling rate environment, mortgage rates often adjust more slowly than capital market rates, and the early-2016 flight-to-quality has run true to form,” said Sean Becketti, chief economist with Freddie Mac.

“The 30-year mortgage rate has dropped 36 basis points since the start of the year, while the yield on the 10-year Treasury has dropped 59 basis points over the same period.  If Treasury yields were to hold at current levels, mortgage rates might well sink a little further before stabilizing,” he said.

Click to enlarge

(Source: Freddie Mac)

Cain is Greenwich’s Realtor of the Year 2015

George-Cain-FIGeorge Cain

George Cain

The Greenwich Association of Realtors (GAR) announced that George Cain of Charles Paternina Properties is GAR’s Realtor of the Year for 2015.

Cain has served as a director of the Greenwich Association of Realtors and the Greenwich Multiple Listing Service from 2014. Cain served as Chair of the Realtor Political Action Committee for the past 3 years and has made a significant improvement in performance and participation. Cain also serves on the Board of Directors for the Connecticut Association of Realtors and was recently appointed as Vice Chair of Grassroots Efforts.

Cain is a strong contributor to the education and mentoring of real estate professionals and those in the Greenwich community especially related to being politically and civically engaged. Cain has represented GAR in Washington DC meeting with Congressmen and Senators from Connecticut and has been instrumental in gathering agents to visit Hartford to meet with the Greenwich delegation.

Cain has been licensed and a Realtor for 10 years. His tenure has included time with the former Prudential real estate office. Cain’s colleagues credit him for always taking action on issues, educating members on issues that affect real estate and inspiring them to get involved.

Cain was presented the Realtor of the Year award by Bryan Tunney, the Treasurer of GAR and 2013’s Realtor of the Year recipient.

The Realtor of the Year Award is the highest honor presented to a member and is based upon leadership and contributions made to the Greenwich Association of Realtors, the Connecticut Association of Realtors, National Association of Realtors, and the Greenwich community.

“George is most deserving of this recognition,” said GAR 2016 President Joann Erb. “George is an outstanding leader representing the rights of homeowners and the betterment of the Greenwich community. With George’s talent, wit and compelling positive persistence he has increased our member’s engagement in our efforts to promote private property rights. I am very pleased that George’s colleagues have selected him to be the recipient of this distinguished award.”

In Real-Estate, ‘Love’ Hurts and ‘Sexy’ Sells


ENLARGE

In luxury real estate, love is cheap and sex sells.

An analysis of roughly 1.6 million home listings found that lower-priced homes were most likely to have the word “love” in property descriptions, while homes priced in the millions of dollars were most likely to have “sexy” and “seductive” in the descriptions.

“Love is basic,” said Javier Vivas, an economic researcher for Realtor.com, which analyzed the data. “It’s a pre-canned pitch to generically describe something beautiful.”


Realtor.com looked at homes for sale as of Feb. 1 to look for terms of endearment used by real-estate agents when listing the properties. Then it calculated the median asking price of homes described with mushy words. Listings with the word “romance” had a median asking price of $820,000. “Seductive” homes listed for a median $640,000, and “sexy” properties had a $620,000 median price.

“When you talk about extreme wealth, you’ll see terms like ‘sexy’ bandied about,” regardless of the product, said Adam Alter, an associate professor of marketing at the New York University Stern School of Business. Luxury products strive for uniqueness, he says, and it makes sense that sales people use impassioned language to set their brand apart.

Love and its variations appeared in 1 out of 10 of all listings, but the words were most common at the low-end of pricing. Homes with “lovely” and “love” listed for $264,000 and $250,000, respectively. At the bottom were homes with “loving” descriptions, with a $195,000 median asking price. The median price of all U.S. listings was $229,000, according to Realtor.com. (News Corp, which owns The Wall Street Journal, also owns Realtor.com, the listing website of the National Association of Realtors.)


In North Bethany, Del., a waterfront home listed for $2.5 million describes “a modern romance” with “luscious views and seductive spaces.”

“The type of verbiage definitely changes a little bit once you get to that price point,” said marketing manager Chelsea Brown, with the Debbie Reed team at Re/Max Realty, which listed the home. Conversely, she said she would put words like “love” in the same category as “charming” and “quaint”—terms reserved for more modest homes.

There also may be regional differences in how agents pitch homes. Listings in the West were most likely to use terms like “romantic” and “seductive;” the Midwest was the least likely to use any terms of affection, including “love.” This is likely a function of coastal markets having the most expensive homes, said Mr. Vivas, but could also reflect vernacular differences.


ENLARGE

“We focus on the emotions of the house,” said Rebecca Riskin of Riskin Partners, who is co-listing an $18.8 million Italian villa in Montecito, Calif. The word “romantic” appears three times in the 1,330-word brochure for the roughly 10,000-square-foot estate. Ms. Riskin says she tries to evoke a feeling and a sense of place. And at least one reader was affected: “It made the owner cry when she read it,” she said.

Write to Stefanos Chen at stefanos.chen@wsj.com

In Real-Estate, ‘Love’ Hurts and ‘Sexy’ Sells


ENLARGE

In luxury real estate, love is cheap and sex sells.

An analysis of roughly 1.6 million home listings found that lower-priced homes were most likely to have the word “love” in property descriptions, while homes priced in the millions of dollars were most likely to have “sexy” and “seductive” in the descriptions.

“Love is basic,” said Javier Vivas, an economic researcher for Realtor.com, which analyzed the data. “It’s a pre-canned pitch to generically describe something beautiful.”


Realtor.com looked at homes for sale as of Feb. 1 to look for terms of endearment used by real-estate agents when listing the properties. Then it calculated the median asking price of homes described with mushy words. Listings with the word “romance” had a median asking price of $820,000. “Seductive” homes listed for a median $640,000, and “sexy” properties had a $620,000 median price.

“When you talk about extreme wealth, you’ll see terms like ‘sexy’ bandied about,” regardless of the product, said Adam Alter, an associate professor of marketing at the New York University Stern School of Business. Luxury products strive for uniqueness, he says, and it makes sense that sales people use impassioned language to set their brand apart.

Love and its variations appeared in 1 out of 10 of all listings, but the words were most common at the low-end of pricing. Homes with “lovely” and “love” listed for $264,000 and $250,000, respectively. At the bottom were homes with “loving” descriptions, with a $195,000 median asking price. The median price of all U.S. listings was $229,000, according to Realtor.com. (News Corp, which owns The Wall Street Journal, also owns Realtor.com, the listing website of the National Association of Realtors.)


In North Bethany, Del., a waterfront home listed for $2.5 million describes “a modern romance” with “luscious views and seductive spaces.”

“The type of verbiage definitely changes a little bit once you get to that price point,” said marketing manager Chelsea Brown, with the Debbie Reed team at Re/Max Realty, which listed the home. Conversely, she said she would put words like “love” in the same category as “charming” and “quaint”—terms reserved for more modest homes.

There also may be regional differences in how agents pitch homes. Listings in the West were most likely to use terms like “romantic” and “seductive;” the Midwest was the least likely to use any terms of affection, including “love.” This is likely a function of coastal markets having the most expensive homes, said Mr. Vivas, but could also reflect vernacular differences.


ENLARGE

“We focus on the emotions of the house,” said Rebecca Riskin of Riskin Partners, who is co-listing an $18.8 million Italian villa in Montecito, Calif. The word “romantic” appears three times in the 1,330-word brochure for the roughly 10,000-square-foot estate. Ms. Riskin says she tries to evoke a feeling and a sense of place. And at least one reader was affected: “It made the owner cry when she read it,” she said.

Write to Stefanos Chen at stefanos.chen@wsj.com

This is why Chattanooga home prices are rising faster than all other Mid-South markets

Document: Rising home values


See a graphic showing median home prices in the nation, Chattanooga and area cities.

Home prices in Chattanooga grew nearly twice as fast as the nationwide average in the past year, buoyed by both an improving local economy and a shrinking inventory of homes that encouraged buyers to bid up prices.

The National Association of Realtors said Wednesday the median price of homes sold by Realtors in the Chattanooga area rose over the past year by 11.3 percent — or $16,000 for the typical home — to a median sales price of $157,200. The price gains in Chattanooga outpaced all other Mid-South cities.

Nathan Walldorf, a broker for Herman Walldorf Real Estate who is the 2015 president of the Greater Chattanooga Association of Realtors, said the higher median price reflects both the price appreciation of existing homes and the buying preference for higher-priced homes compared with a year ago.

“We had a lot fewer first-time homebuyers in the market compared with the growth in existing homeowners moving up or new people coming into the market, often from cities with higher average home prices,” Walldorf said. “The price ranges being paid are definitely higher and we’re seeing more demand now for higher-priced properties than we have seen in a long time.”

Chattanooga home prices still averaged nearly 30 percent below the U.S. median at the end of last year even with the faster price appreciation during 2015, however.

Nathan Brown, a team leader for the Keller Williams office downtown, said homebuyers who move to Chattanooga from many other markets are often pleasantly surprised by the relatively lower prices of homes in the Scenic City. As more such buyers move to Chattanooga as retirees or relocating managers and workers, “more buyers are willing to pay higher prices and the luxury and higher-end markets are gaining more sales,” Brown said.

“Right now with interest rates staying really low and the economy improving, you are having more people able to purchase higher-priced homes than what we saw in the past,” he said.

The higher demand spurred by last year’s record sales volume in Chattanooga forced more buyers to pay prices near or at the initial asking price of listed homes.

Last year, the number of homes that were listed by Realtors grew by 9.9 percent but Realtor-assisted sales jumped 11.4 percent to their highest level on record in Chattanooga. As a result, the typical home sold last year for 94.2 percent of its initial asking price, up from 92.7 percent the previous year, according to the multiple listing service owned by the Greater Chattanooga Association of Realtors.

“There were often more buyers than sellers in some markets so we saw buyers more times than not having to pay the full asking price,” Walldorf said.

Chattanooga Realtors last year sold the typical home in 80 days, or 29 days quicker than in 2014.

Nationwide, the National Association of Realtors said single-family home prices rose in 81 percent of the 179 markets included in the NAR survey last year. Chattanooga’s median price gains ranked among the top 10 percent of all cities, behind only nine Florida cities and eight other cities elsewhere in the country.

Lawrence Yun, NAR chief economist, said faster price growth reawakened in the final months of 2015 despite the pace of sales slowing from earlier in the year.

“Even with slightly cooling demand, the unshakable trend of inadequate supply in relation to the overall pool of prospective buyers inflicted upward pressure on home prices in several metro areas,” he said.

The national median existing single-family home price in the fourth quarter was $222,700, up 6.9 percent from the fourth quarter of 2014.

“Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead,” Yun said.

The most expensive housing markets in the fourth quarter were, in order, San Jose, Calif., where the median existing single-family price was $940,000; San Francisco, $781,600; Honolulu, $716,600; Anaheim-Santa Ana, Calif., $708,700; and San Diego, $546,800.

The five lowest-cost metro areas in the fourth quarter were Youngstown-Warren-Boardman, Ohio, $81,200; Cumberland, Md., $86,100; Rockford, Ill., $87,600; Decatur, Ill., $90,000; and Wichita Falls, Texas, $101,900.

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.

Goldman Sachs subsidiary buys massive NPL portfolio from Fannie Mae

Fannie Mae announced Wednesday that it selected the winning bidders in its latest sale of non-performing loans, with a subsidiary of one of Wall Street’s biggest names among the winning bidders.

The total sale included four pools of loans that total $1.32 billion in unpaid principal balance spread across 6,540 loans.

The winning bidder for two of those pools, representing 2,068 loans that carry an unpaid principal balance of $418,414,683, was MTGLQ Investors, L.P., a “significant subsidiary” of Goldman Sachs.

According to the Securities and Exchange Commission, Goldman Sachs owns, directly or indirectly, at least 99% of the voting securities of MTGLQ Investors, L.P.

Fannie Mae announced Thursday that MTGLQ Investors was the winning bidder for pools #3 and #4 in the sale.

Pool #3 has 1,176 loans with an aggregate unpaid principal balance of $233,559,463. The average loan size of the pool is $198,712; and the loans carry a weighted average interest rate of 5.59%. The loans in Pool #3 also weighted average broker’s price opinion loan-to-value ratio of 79%.

The loans in Pool #3 carry an average delinquency of 59 months.

Pool #4 has 892 loans with an aggregate unpaid principal balance of $184,855,220. The average loan size of the pool is $207,217; and the loans carry a weighted average interest rate of 5.65%. The loans in Pool #4 also weighted average broker’s price opinion loan-to-value ratio of 86%.

The loans in Pool #4 also carry an average delinquency of 59 months.

Fannie Mae’s sale of loans to a Goldman Sachs affiliate may touch a nerve with some prominent figures in the federal government, including Sen. Elizabeth Warren, D-Mass., and Rep. Mike Capuano, D-Mass, who recently loudly criticized the government’s practice of selling non-performing loans to private investors.

But they may not the only ones who don’t like Fannie Mae’s latest sale. Last week, a partnership of “local elected officials and community groups” held events throughout the country to call on Fannie and Freddie to stop the sale of delinquent mortgages to “Wall Street investors.”

Fannie Mae, for its part, said that it is committed to responsibly reducing its loan holdings.

“We are committed to reducing Fannie Mae’s holdings of non-performing loans in a responsible way,” said Joy Cianci, senior vice president of credit portfolio management at Fannie Mae.

“We continue to work with struggling homeowners to prevent foreclosures whenever we can,” Cianci added. “This sale of seriously delinquent loans can create additional opportunities for borrowers to avoid foreclosure while reducing the impact of these loans for Fannie Mae and the taxpayers.”

According to Fannie Mae, the largest of the four pools, Pool #1, was purchased by Canyon Partners (Carlsbad Funding Mortgage Loan Acquisition, LP).

Pool #1 has 3,127 loans with an aggregate unpaid principal balance of $637,451,715. The average loan size of the pool is $203,891; and the loans carry a weighted average interest rate of 5.7%. The loans in Pool #1 also weighted average broker’s price opinion loan-to-value ratio of 79%.

The loans in Pool #1 also carry an average delinquency of 59 months.

And the buyer for Pool #2 is a frequent purchaser of non-performing loan pools from the government-sponsored enterprises.

The buyer for Pool #2 is Pretium Mortgage Credit Partners I Loan Acquisition, LP, which also recently bought three pools of non-performing loans that carried an unpaid balance of $657.8 million from Freddie Mac.

In October, Pretium was the winning bidder for one pool in a similar NPL sale. That pool carried a total unpaid principal balance of $209.4 million on 1,180 loans.

And in September, Pretium was the winning bidder for another NPL pool, which carried an unpaid principal balance of $158.1 million on 700 loans.

Pretium’s latest purchase, Pool #2 of the Fannie Mae sale, has 1,345 loans that carry an aggregate unpaid principal balance of $266,947,532.

The average loan size of the pool is $199,151; and the loans carry a weighted average interest rate of 5.58%. The loans in Pool #2 also weighted average broker’s price opinion loan-to-value ratio of 74%.

The loans in Pool #2 carry an average delinquency of 58 months.

According to Fannie Mae, the weighted average sale price of the combined pools was in the “mid-70’s” as a percentage of the loans’ unpaid principal balance.

When Fannie Mae announced this sale in January, it said that it was also offering a separate smaller pool of loans, which is designated as a Community Impact Pool.

The Community Impact Pool sales are smaller pools of loans that are geographically focused, with high occupancy and are marketed to encourage participation by smaller investors.

This Community Impact Pool consists of approximately 60 loans, focused in the Miami area, and totaling $14.5 million in unpaid principal balance.

Fannie said Wednesday that that sale is still open, with bids on the Community Impact Pool due on Feb. 18.

Freddie Mac Predicts Multifamily Momentum to Carry into 2016

The multifamily housing market will remain strong despite facing economic headwinds this year, according to the new Freddie Mac Multifamily Outlook.

The sector is coming off a year in which rental housing demand kept pace with a big wave of new units that was delivered in 2015. Approximately 306,000 multifamily units entered the market—the most in a single year since 1989—and the level of new supply is expected to remain elevated over the next few years.

David Brickman
David Brickman

That’s creating concern that the market is taking on too much supply, but renter demand is expected to absorb the new units being built. Much of the demand is fueled by favorable demographic trends and reduced affordability of owning a home.

A look at the recent multifamily origination volumes shows the market continuing to grow, says David Brickman, Freddie Mac’s executive vice president of multifamily.

“This is clearly due to the overall trend we see in multifamily in terms of the movement to renting and growth in rental housing,” he says. Independent of that shift in housing preference, there’s also growth coming from household formation, new jobs, and favorable demographics.

Even with all this momentum behind the sector, changes in the financial markets could create pressure on price appreciation and potentially slow economic growth, according to Freddie Mac.

“Cautious optimism is the view we’re expressing,” Brickman says. “We think 2016, while it will have its challenges, will continue to be a good year, not a great year, but a good year for multifamily.”

In its outlook, Freddie Mac examines several key metrics, including vacancies and revenue growth.

Despite the large number of rental units being built, vacancy rates barely moved last year although they ticked up at the end of the year to about 4.4%. Freddie Mac projects vacancy rates to inch up to 4.8% by 2017, which is still below the long-run average of 5.3%, says Steve Guggenmos, Freddie Mac Multifamily vice president of research and modeling.

The lowest vacancy rates will be seen in the West, led by Sacramento, Calif. , with a rate of 2.7%, according to Freddie Mac.

At the same time, revenue will grow at a rate of 3.9% and 4.3% in the coming years, according to Guggenmos.

Freddie Mac officials anticipate that the 2016 industry origination volume will reach between $250 billion and $260 billion due to increasing property prices, new completions, and favorable investment opportunities. That’s in line with a slight increase from 2015 levels.

“We expect our purchases to be slightly greater this year than last year in part due to the expectation that the market will be slightly greater, so we expect to grow proportionately with the market,” Brickman says. That will put Freddie Mac at approximately $50 billion compared with $47.3 billion in loan purchase and bond guarantee volume last year.

Finally, cap rate spreads are expected to tighter, but for the overall multifamily market Freddie Mac projects cap rates will remain in the low 6% range this year.

Association Launches Campaign Highlighting Value of Realtors

SPONSORED CONTENT FROM
AND
What’s this?


By / Feb 9, 2016
(Handout photo)

Millennials may prefer to shop for a new home online, but photos on a website don’t always tell the full story. To encourage consumers to enlist the services of a Realtor, the National Association of Realtors released a new ad campaign.

To encourage millennials and hyperconnected consumers to step away from their laptops and tablets when buying or selling a home and instead enlist the help of a Realtor , the National Association of Realtors launched a new $35 million multiyear advertising campaign this week.

Dubbed “Get Realtor,” the digital-first campaign was directed by NAR’s Consumer Communication Committee, made up of staff and members, who wanted to contemporize the value of a Realtor, NAR’s Senior Vice President of Communications Stephanie Singer told Associations Now.

According to a phone survey of 1,000 millennials and 1,000 nonmillennials conducted by ad agency Arnold Worldwide on behalf of NAR, contacting a Realtor was a point of high anxiety for a lot of people during their home-buying journey. Arnold coined the term “FORO”–fear of reaching out—to describe the trend.

“People can get so much information online,” Singer said, which creates this feeling of self-sufficiency. But people don’t know what they don’t know. For example, Singer said online sites may have nice pictures, but interested buyers are unable to hear the constant noise from airplanes flying over or cars and trains passing by. Photos can also be misleading. What looks to be an in-ground pool may actually be an above-ground pool, according to Singer.

GetRealtor-Misleading-Photo

As part of NAR’s new campaign, ads with sound and deceptive photos will be used on social media platforms to highlight how a Realtor can help a customer see the full picture. Singer said common “realtorisms” like escrow, which some may confuse with the French cuisine escargot, will be highlighted in ads as well to show that working with a Realtor gives buyers and sellers a competitive advantage.

In addition to the digital pieces, NAR also developed customizable print ads for its local and state associations that they can place in regional real estate publications. Both the digital and print components guide consumers to Realtor.com where they can search for an agent in their area.

While the first ads launched on February 8 target younger consumers, Singer said the campaign is long-term, multiyear effort. Additional components, like media partnerships, will be rolled out throughout the first half of the year, and different demographics and audiences (e.g., residential and commercial real-estate customers) will be incorporated. It “can cross over various years of leadership in the association and help deliver a consistent message across target audiences,” she said.

Preliminary research on the campaign has found that, among millennials, 55 percent said they very likely to share the ad materials. And Singer said a higher number reported they would consider contacting a Realtor.

In addition to research, NAR will also measure click-through rates, ad shares, ad engagement, and website visitors to determine the campaign’s effectiveness. “We’re all excited,” she said. “We look forward to seeing the results.”