Fannie Mae: Housing Market Attitudes Improve Despite Increased Concern …

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  • Fannie Mae Sale of Florida Foreclosures Gets 96% of Value

    Fannie Mae’s first auction of
    foreclosed homes to be managed as rentals sold for $78.1
    million, or 96 percent of the properties’ estimated value, the
    Federal Housing Finance Agency said.

    The purchase, of 699 homes in Florida, was the first to be
    completed in Fannie Mae’s auction of almost 2,500 repossessed
    properties in six states. The buyer was San Diego, California-
    based Pacifica Companies LLC, the FHFA said in a statement
    today. The homes had a total value of $81.5 million, including
    joint-venture financing from Fannie Mae, according to a
    transaction summary.

    Investors are pouring money into single-family homes,
    seeking to capitalize on rising demand for rentals and real
    estate prices that have more than 30 percent from their July
    2006 peak. Firms including Blackstone Group LP, Colony Capital
    LLC and Oaktree Capital Group LLC plan to spend about $8 billion
    buying foreclosed properties to rent, according to company
    statements and interviews.

    “Seeing it traded at that high value means we’re probably
    going to see more pool sales coming,” Jim Warren, senior vice
    president of Tenant Access, a single-family rental management
    company based in Austin, Texas, said in a telephone interview.
    “Institutional money can aggregate a lot quicker. It’s easier
    to evaluate an entire pool than one property at a time.”

    Deepak Israni, president of Pacifica, a property investment
    and management company that operates hotels and multifamily
    housing, didn’t immediately return a call seeking comment.

    Winning Bidders

    Fannie Mae, the government-sponsored mortgage company that
    owned 109,000 foreclosed properties as of June 30, offered the
    homes for auction in February. The other properties are in
    Georgia, Illinois, Arizona, California and Nevada.

    The FHFA will announce the winning bidders of homes in
    other areas in the coming weeks after the transactions are
    completed, according to the statement. The 541 properties in
    Atlanta weren’t sold, the Washington-based agency said.

    Colony, a Santa Monica, California-based investment fund
    headed by Tom Barrack, and Cogsville Group LLC, a New York-based
    company led by Don Cogsville, were the top bidders for other
    Fannie Mae portfolios, four people with knowledge of the
    transactions said in July.

    Pacifica, which will manage the Florida properties, paid
    $12.3 million for its share in a joint-venture with Fannie Mae,
    which will get 90 percent of cash flow until it receives $49.3
    million, according to the transaction summary. After that,
    Fannie Mae’s share will drop to 50 percent of cash flow.
    Pacifica will also receive 20 percent of gross rental income as
    a management fee. The deal restricts the value of the properties
    that can be sold to third parties for three years.

    “The transaction is designed to promote home price
    stability, improve quality of housing stock and enhance rental
    inventory of markets by utilizing a rent-and-hold strategy,”
    according to the summary.

    To contact the reporter on this story:
    John Gittelsohn in Los Angeles at
    johngitt@bloomberg.net

    To contact the editor responsible for this story:
    Kara Wetzel at
    kwetzel@bloomberg.net

    Fannie’s Big Foreclosure Sale: Maybe Not So Big After All



    Agence France-Presse/Getty Images

    Fannie Mae will sell nearly 700 foreclosures in Florida to a real-estate investment firm, but appears unlikely to expand this strategy beyond properties already rented out to tenants.

    San Diego-based Pacifica Companies reached an agreement last week to purchase the 699 properties, most of which already have tenants, in three Florida markets, Fannie Mae and the company’s federal regulator said Monday.

    The estimated sales price of $78.1 million is a slight discount off the properties’ market value of $81.5 million. About two thirds of the units in the properties are occupied by tenants, with the remainder vacant.

    The deal with Pacifica is structured as a joint-venture arrangement, similar to deals structured by the Federal Deposit Insurance Corp. Under the deal, Fannie Mae will receive an up-front payment of $12.3 million from Pacifica, which collects a fee worth 20% of all rental income. Any profits beyond that will be split between the two partners, with 90% going to Fannie until it collects $49.3 million. After that, profits will be split on a 50-50 basis.

    A representative of Pacifica couldn’t be reached for comment.

    The deal is the first of more than 2,000 of Fannie Mae’s foreclosures that are being sold under a bulk sales initiative encouraged by the Obama administration.

    Similar sales are expected to be announced for Las Vegas, Los Angeles, Phoenix and Chicago in the coming weeks. Fannie had planned to sell more than 540 properties in Atlanta, but wasn’t able to reach an economically viable deal to sell them, people familiar with the deal said.

    However, the strategy’s impact is likely to be smaller than investors had hoped last year. One key reason is the housing market’s gradual return to health.

    As a result of rising home prices, Fannie has been able to recover more money through foreclosures, which the company sells off one by one. In the second quarter of this year, the company recovered 59% of outstanding mortgage balances, on average, through foreclosure sales, compared with 54% a year earlier.

    Now that home prices have started to rise, Fannie’s ability to recover money through selling off foreclosures will likely increase.

    This trend could dissuade Fannie from offering up for sale foreclosures that don’t already have tenants, according to a person familiar with the company’s strategy.

    Earlier this year, Fannie offered 2,490 properties – 70% of which were single-family homes — for sale to investors and nonprofit groups. The effort was designed to take advantage of strong rental demand amid a soft housing market. Of the nearly 110,000 foreclosures owned by Fannie, about 8% of those are currently rental properties.

    If Fannie does not expand the foreclosure sale program, it will be a relief to real-estate agents. Realtors, particularly in California, have been upset by the prospect that Fannie could circumvent them and sell thousands more properties directly to real-estate investors.

    Follow Alan at @AlanZibel

    Senate Democrats try again to push housing refinance plan

    Reuters

    3:17 p.m. CDT, September 10, 2012

    Zawatski earns seniors real estate specialist designation

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    Zawatski earns seniors real estate specialist designation

    The Seniors Real Estate Specialist Council of the National Association of Realtors awarded Eileen Zawatski the Seniors Real Estate Specialist (SRES) designation. Ms. Zawatski, a licensed Realtor since 2004 a licensed now working with William Raveis Real Estate in Old Greenwich, was required to successfully complete a comprehensive course in understanding the needs, considerations and goals of real estate buyers and sellers age 55 and older.

    The SRES Council, founded in 2007, is the world’s largest association of real estate professionals focusing specifically on representing senior clients in real estate transactions.

    Ms. Zawatski is a member of the Greenwich Association of Realtors, the Connecticut Association of Realtors and the National Association of Realtors. She is also a member of the Greater Fairfield County Consolidated Multiple Listing Service and the Greenwich Multiple Listing Service. And when not working in real estate, Ms. Zawatski is a member of the Glenville Volunteer Fire Company’s Fire Police and is a member of The Woman’s Club of Greenwich. She may be reached at 203-536-8129 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

     


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    NAR’s Investments Yield Rewards for REALTORS®

    The National Association of REALTORS® (NAR) is committed to providing its members with the tools and talents to help them succeed. Technology is advancing our industry at a record-breaking pace and REALTORS® who are embracing technology are reaping the benefits.

    NAR strives to be at the forefront of technology evolution to help REALTORS® find the best products that can generate success. NAR is making investments in top-tier technology companies that develop products that are revolutionizing the real estate industry. By taking a financial stake in these growth-oriented market leaders, either directly or through its Second Century Ventures fund, NAR nurtures innovations that specifically benefit members. Each company is chosen for investment because of its contribution to improving the agent-customer relationship, its innovation and its potential for growth, and refers to them as the NAR Family of Strategic Investments.

    “NAR’s Family of Strategic Investments represents the power of cooperation within the real estate industry and, more importantly, reinforces the value brokers and their agents receive from NAR,” says Bob Goldberg, senior vice president of Sales Marketing, Business Development Strategic Investment, Commercial Services, Professional Development, Conventions.

    A Wide-Ranging Family of Solutions

    NAR has carefully selected complementary investment companies that cover all parts of the transaction lifecycle. Used together, these tools ensure that members will be equipped to offer clients the highest degree of efficiency and professional services. The close connection between Strategic Investment companies and NAR also ensures that REALTORS® have priority and sometimes exclusive access to the latest and best tools to build their businesses.

    • REALTOR.com®: The official real estate listing site of NAR, REALTOR.com® offers the industry’s most accurate set of online properties. Help your agents learn how to engage with interested REALTOR.com® buyers, collect recommendations and update their profile with free support and training.

    • RPR: Realtors Property Resource® (RPR) provides REALTORS® with detailed and timely access to property and market information on more than 147 million parcels of property nationwide. RPR is designed to save REALTORS® time and provide trusted datasets that can be searched, refined and printed for use with clients.

    • Xceligent: Commercial practitioners have a new national marketplace for searching and listing available spaces through NAR’s newest strategic investment with Xceligent.

    • Ifbyphone: Ifbyphone delivers instant ad tracking and lead response. Easily accessed from a laptop or iPad, all leads are displayed in a dashboard with real-time reporting.

    NAR’s Family of Strategic Investments also offers a wide range of tools to help REALTORS® move the transaction forward.

    • SentriLock: Agents can show your properties more easily and securely when you use a SentriLock lockbox, thanks to the industry’s most advanced electronic lockbox technology.

    • ZipLogix: Brokers and agents alike will find paperwork less time consuming with zipForm 6, the real estate industry standard forms software created by zipLogix.

    • DocuSign: The ability to sign required paperwork just got faster with eSignature provider DocuSign®, the global standard for signing any required real estate document electronically.

    An Investment in Your Future

    Ultimately, the goal of NAR’s investments is simple: to find and nurture innovation for the benefit of its members. By taking an active role in the direction of these elite companies and helping to guide new product development through its wide industry knowledge, NAR ensures that REALTORS® will have the quality tools to remain leaders in the real estate profession—today and tomorrow.

    Note that a select few of these companies are also part of NAR’s REALTOR Benefits® Program, where value-added offers and significant savings have been created uniquely for members. Visit the Program page to learn about the REALTOR Benefits® offers from these partners and for a complete list of all participants in the Program.

    For more information, visit www.REALTOR.org/UniqueAlliances and www.REALTOR.org/investments.

     

    Americans' Outlook on Housing Continues to Inch Forward Despite Dip in Overall Economic Confidence

    WASHINGTON, Sept. 10, 2012 /PRNewswire/ — Consumer sentiment regarding the housing market continues its modestly positive trend, according to results from Fannie Mae’s August 2012 National Housing Survey. Supported by the expectation that home prices will rise in the next year and more saying it is a good time to sell, Americans have maintained a cautious but improving view of the housing market and homeownership. However, their stalling household financial expectations and declining economic optimism will likely mean the rate at which the housing market recovers will remain tempered.

    “Consumer attitudes toward the housing market remain modestly positive, despite signs of increased concern over the direction of the economy,” said Doug Duncan, senior vice president and chief economist of Fannie Mae. “While the latest results showed a pickup in the share of consumers expecting mortgage rates to rise, reflecting the uptrend of long-term interest rates since mid-July, that may soon change. Friday’s disappointing jobs report underpins the gradual nature of this year’s housing recovery and supports our view that the muted economic recovery is still subject to downside risk and that additional Fed easing will soon be forthcoming.”

    Survey respondents expect home prices to increase 1.6 percent in the next year, on average, down slightly from the high of 2.0 percent seen in the June results. The number of respondents who say home prices will decline totaled 11 percent, the lowest level since the survey began in June 2010. Eighteen percent say now is a good time to sell, marking the highest level since the survey’s inception. Regarding to mortgage rates, 40 percent of those surveyed expect a rise in the next 12 months, an increase of 4 percentage points over July.

    Meanwhile, the survey showed increasing consumer pessimism about the direction of the overall economy. The number of respondents who believe the economy is headed in the wrong direction ticked up 2 percentage points to 60 percent, the third consecutive rise to the highest reading since January. Those who expect their financial situation to worsen dipped to 13 percent while those expecting their situation to remain the same increased modestly to 41 percent.

    SURVEY HIGHLIGHTS

    Homeownership and Renting

    • Average home price change expectation is 1.6 percent, largely consistent with last month and down from a June high of 2.0 percent.
    • Eleven percent of those surveyed say home prices will go down in the next year, holding steady at the lowest level since the survey’s inception in June 2010.
    • At 40 percent, the percentage of respondents who say mortgage rates will go up in the next 12 months has increased by 4 percentage points since July.
    • Eighteen percent of respondents say it is a good time to sell, the highest level since the survey’s inception.
    • The percentage of respondents who say it is a good time to buy has remained steady at 73 percent.
    • Forty-four percent of those surveyed say home rental prices will go up in the next year, a decrease of 3 percentage points, while 5 percent expect them to go down.
    • The average rental price change expectation decreased 0.7 percent from last month to 3.2 percent, the lowest level since January 2012.
    • The percentage of respondents who say they would buy if they were going to move increased slightly to 67 percent, while 28 percent would rent.

    The Economy and Household Finances

    • Consumer optimism continues to wane, with 33 percent saying the economy is on the right track, a slight decrease from last month and 5 percentage points lower than the May 2012 peak.
    • The percentage of respondents who expect their personal financial situation to get worse fell slightly to 13 percent, while those expecting their personal financial situation to stay the same increased slightly to 41 percent.
    • The share of respondents who say their household income is significantly higher than it was 12 months ago remained steady at 20 percent, while those who say it is significantly lower increased slightly to 16 percent.
    • Fifty-six percent of those surveyed say their household expenses are about the same as they were a year ago, a slight decrease over July.

    The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,002 Americans via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence.  Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010).  Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.

    For detailed findings from the August 2012 survey, as well as a podcast providing an audio synopsis of the survey results and technical notes on survey methodology and questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey site.  Also available on the site are quarterly survey results, which provide a detailed assessment of combined data results from three monthly studies. The August 2012 Fannie Mae National Housing Survey was conducted between August 4, 2012 and August 25, 2012.  Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

    Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.

    Follow us on Twitter: http://twitter.com/FannieMae.

    Freddie Mac sells $3.0 bln bills at mixed rates


    Sept 10 |
    Mon Sep 10, 2012 7:34pm IST

    Sept 10 (Reuters) – Freddie Mac, the No. 2 U.S.
    home funding company, said on Monday it sold $3.0 billion of
    reference bills at mixed rates and stronger demand compared with
    last week’s sale of similar maturities.

    Freddie Mac said it sold $1.5 billion of three-month bills
    due Dec. 10, 2012 at a 0.134 percent stop-out rate, up from the
    0.124 percent rate for its $1.5 billion three-month bills sold
    Sept. 4.

    The company also sold $1.5 billion of six-month bills due
    March 11, 2013 at a 0.155 percent rate, at an unchanged rate
    from its sale of $1.5 billion bills a week ago.

    Demand for the three-month bills was higher, with the
    bid-to-cover ratio at 4.11 versus 4.08 for bills sold Sept. 4,
    and demand for the six-month bills was also higher, at 4.08 vs
    3.65 for its bills sold a week earlier.

    A bid-to-cover ratio reflects the amount of bids compared
    with the amount offered. A higher ratio indicates stronger
    demand.

    Settlement is Sept 11.

    Fannie Mae regulator to clarify when it won’t sue


    By Ronald D. Orol, MarketWatch

    WASHINGTON (MarketWatch) — The regulator for government-seized mortgage giants Fannie Mae and Freddie Mac said the agency plans Tuesday to provide clarity about when they won’t sue banks for bad mortgages that the two firms buy.


    ECONOMY AND POLITICS



    Consumer credit drops

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    “The objective of the new framework is to clarify lenders’ repurchase exposure and liability on future deliveries,” said Federal Housing Finance Agency acting director Ed DeMarco to the American Mortgage Conference in Raleigh, N.C. “Under this framework, lenders will be relieved of certain repurchase obligations for loans that meet specific payment requirements.”

    The new framework will be implemented for loans sold or delivered on or after Jan. 1, 2013. It replaces the existing Fannie


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      and Freddie


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     system that relied on monitoring at the back-end of the process after a mortgage defaulted or the borrower missed payments.

    DeMarco said that financial institutions will receive “certain” relief from violations of representations and warranties on mortgages sold to the institutions for loans with 36-months of consecutive, on-time payments.

    He added that lenders participating in streamlined refinancing programs, including an Obama administration program known as the Home Affordable Refinance Program, will be eligible for relief from repurchase or litigation risk after an “acceptable payment history” of only 12 months after they acquired the loan.

    DeMarco’s comments come after Bank of America Corp.


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     agreed to a $2.8 billion deal with Freddie Mac and Fannie Mae in 2011 that settles legal spats over losses on hundreds of billions of dollars in home loans that the lender sold to the government-owned mortgage giants. A separate settlement was reached with Ally Financial Inc. in December 2010.

    The FHFA sued more than a dozen major banks in September 2011 for billions of dollars in losses on over $200 billion in mortgage securities bought by Fannie Mae and Freddie Mac during the housing bubble.

    FHFA argues the banks misrepresented the quality of mortgage securities they put together and sold. The FHFA argues that, when it came to mortgage securities purchased by Fannie and Freddie during the years leading up to the financial crisis, the banks failed to meet their due-diligence duties under securities law.

    Banks have pulled back dramatically from the housing market. New mortgage activity in the second quarter was down about 30% from where it stood five years ago, according to data compiled by the New York Fed.

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    Ronald D. Orol is a MarketWatch reporter, based in Washington.

    Cash Rains Into Real Estate Transfer Tax Measure

    Real estate groups are continuing to pour big bucks into a November ballot measure that would amend Oregon’s constitution to include a provision prohibiting real estate transfer taxes.

    State filings show that the National Association of Realtors recently contributed $939,000 and the Oregon Association of Realtors contributed $700,000 to the “Yes on 79” committee.

    The committee has raised $2.5 million this year and now has $1.47 million on hand.

    As WW reported earlier, the measure is something of a solution in search of a problem.

    Real estate transfer fees—essentially a sales tax on property transactions—are already illegal under state law (except in Washington County, whose tax preceded the 1989 legislation outlawing such taxes in Oregon). Putting the prohibition in the Constitution would take away lawmakers ability to change current law but it would also eliminate a tool used in 30 other states and one of the few options available to Oregon’s cash-starved timber counties.