Banks back in black!

Mortgage Bank Profits Back in Black

Jann Swanson | Mortgage News Daily | Aug 26 2014 | link

Mortgage banks substantially improved their bottom line numbers in the second quarter after posting a loss on every loan written during the first quarter of the year.  The Mortgage Bankers Association (MBA) said Independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of $954 on each loan they originated in the second quarter, up from a reported loss of $194 per loan the quarter before.

“The gains seen in the second quarter come after first quarter losses that were likely triggered by a variety of  factors including the implementation of new Dodd-Frank regulations and extremely low origination volumes,” said Marina Walsh, MBA’s Vice President of Industry Analysis.  “Some loan closings may have been pushed into the second quarter, resulting in an increase in profitability as per-loan production costs declined.”

Those total loan production expenses – commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – decreased to $6,932 per loan in the second quarter of 2014, from $8,025 in the first quarter.  The $1,093 reduction was the largest in any single quarter since the inception of the MBA’s Quarterly Mortgage Bankers Performance Report in the first quarter of 2008.

The current Performance Report says that the average production profit was 45.70 basis points in compared to an average net production loss of 8.31 basis points (bps) in the first quarter of the year. Despite the increase the second quarter, net production income is well below the average of 54.33 bps and the median of 52.05 bps published by the MBA’s report across its publication history.

Production volume averaged $378 million per company in Q2 compared to $274 million in Q1, an increase of 38 percent.  The average volume by count rose to 1,676 loans from 1,238.

Purchase mortgages represented 74 percent of the dollar volume of all mortgages originated in the quarter compared to 68 percent the previous period.  MBA estimates that the purchase share for the mortgage industry as a whole was 59 percent in the second quarter, up from 51 percent in the first.

The jumbo share of total first mortgage originations continued to increase, rising to 7 percent in the second quarter, the highest level in the Report’s history.  MBA’S Weekly Mortgage Applications Survey and its monthly credit availability data confirm a strong growth in jumbo origination volume. 

Secondary marketing income was 270 basis points in the second quarter, 7 bps lower than in the first quarter.

Personnel expenses averaged $4,423 per loan in the second quarter of 2014, down from $5,048 per loan in the first quarter.  This was primarily driven by a reduction in per loan fulfillment, support and benefit expenses.  Productivity was 2.30 loans originated per production employee per month in the second quarter of 2014, up from 1.70 in the first quarter.

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What’s Google got to do with it? (Housing, that is…)

What’s Google have to do with mortgages?

How a recent study of digital expectations relates to lending

Matt Corcoran | Housing Wire | August 22, 2014 | link

Our East Bay hills are a pretty big deal…

Hillside Dream Home Embedding Dramatic Panoramas Into Casual Californian Lifestyle

Holmby Hills Residence by Quinn Architects  Hillside Dream Home Embedding Dramatic Panoramas Into Casual Californian Lifestyle

Beautifully isolated to shape a luxurious environment, the Holmby Hills Residence rests on a 57,250 square feet site in Holmby Hills, Bel Air, Los Angeles, so you can see where it gets its name from. The location inspired not only its name, but its openness towards panoramic views of the Hollywood Hills beyond. Designed by London-based Quinn Architects, the luxury Californian home itself spreads over 15,250 square feet of perfectly manicured spaces. The luxurious villa built for for international property developer Estate Four as a speculative residential development can be easily seen as a hillside dream home.

Holmby Hills Residence by Quinn Architects 1  Hillside Dream Home Embedding Dramatic Panoramas Into Casual Californian Lifestyle

The design and architecture team worked from the ground up to create a masterfully elegant home design: “A detailed soil survey was commissioned to understand the below ground condition of the hillside, which then became a catalyst for both the architectural, civil and structural design. “The Holmby Hills Residence is surrounded by luscious vegetation and showcases a basement and first floor terrace emerging from the landscape. “The entrance sequence from the street to the house itself was designed to be dramatic, with a significant motor court and powerful 20 ft high canopy above the main entrance. A descending staircase followed by an over-sized entrance door heightens the sense of arrival to the residence.The expansive first floor level gives 7,000 sq ft of living accommodation that is set around 6,500 sq ft of terrace space, that in turn hugs the edge of the 60 ft long infinity-edged pool and Jacuzzi. The terrace gives access to over 30,000 sq ft of landscaped gardens and tennis court, via a sunken gym that is surrounded by rich vegetation. A 75 ft long gallery links the primary living spaces with a private guest suite and is designed to exhibit a significant art collection.”

Designed for an art-lover, the elegantly proportioned luxury villa has plenty of display places and natural light coming from a collection of skylights, clerestory windows and full height sliding panels. Secluded and private, the beautiful residence blends the inside with the outdoors in a successful attempt to wash away any worries.


Tips to keep your costs down in this market…

15 Costliest Mistakes in Homebuying and Selling

worried businessman at table...

When it comes to buying or selling your home, what you don’t know can cost you — literally. Whether it’s not doing your research or getting too emotionally involved, making the wrong choices can wind up costing you tens of thousands of dollars.

To avoid this fate, check this list of 15 of the biggest real estate mistakes made by both buyers and sellers — and make sure you don’t commit any of them.

On the Buying Side

Not Researching the Neighborhood: Is this some place you really want to live? What amenities are nearby? How is the school district? What does the traffic and street activity look like when you drive by it at different times of day, like Sunday morning and Monday evening rush hour?

Not Getting an Inspection: This is one of the biggest investments you’ll ever make, and you’ll be living with it for years to come. Don’t pinch pennies — shell out $400 for an inspection. Make sure you know exactly what you’re signing up for.

Buying (or Not Buying) Based on the Decor: Paint color can be changed. Tiles and cabinets can be changed. What you want to look at are the bones of the house. Will it meet your needs? Does it flow well? Does it have enough space?

Buying the Priciest Home on the Block: Hate to break it to you, but the most expensive home on the block isn’t a good deal. It will only depreciate over time, and you could have trouble selling it when buyers can see plenty of more reasonably priced options in the same neighborhood.

Being Unrealistic with Your Budget: Just because you qualify for a $250,000 mortgage, that doesn’t mean you can afford it, especially when you factor in the other costs that come with homeownership. Be real and only look at houses you can realistically afford.


Are you ready to see something really stellar in Sausalito?

‘Temple of Light’ Afloat in Sausalito

Emily Heffte | Zillow Blog | August 20, 2014 | link

Seana McGee named her floating home the Temple of Light after she walked in the first time and saw how the light streams in the windows, like a sanctuary.

“The light comes flooding through,” she said. “When I walked in there, I said, ‘this is a temple.’”

McGee and her husband lived in Southeast Asia for a decade before moving to Sausalito, CA, and they decorated the floating home with furniture and keepsakes from their travel, adding to the sense that the sun-filled home is both a living and meditation space.

Like many of the 450 floating homes in the area, 20 Gate 6 1/2 Rd has bohemian beginnings in the 1960s, as a 1-room A-frame balanced on pontoons. In the 1980s, a previous owner raised up the original house and put it on a 100,000-pound concrete barge.

That owner then added a second story and a dormer for the kitchen, squeezing 3 bedrooms and 2 bathrooms into the 1,748-square-foot home. The neighbors on the long pier jokingly call their neighborhood “the suburbs” because the dock is so spacious, with open water on both sides and more privacy than in some communities.

Read more…

These realities of mortgage underwriting really will surprise you…

The truth about mortgage underwriting

Some mortgages shouldn’t be denied


Lisa Marquis Jackson | Housing Wire | August 15, 2014 | link


The world is awash in inaccurate sound bites related to mortgage credit. We spoke with numerous industry executives and identified three truths that need to be clarified:

1. Low income buyers actually have it easy. Buyers with poor credit and low income are finding it quite easy to buy a home below the FHA limit.

2. Many affluent buyers find it very difficult. Automated underwriting prevents many highly qualified borrowers, especially affluent retirees, self-employed, or commissioned salespeople from getting a mortgage because their income situation does not fit squarely in the credit box.

3. Industry executives are unintentionally preventing a recovery. Mortgage industry executives lobbying for the good old days where FHA limits were higher, fees were lower, and documentation was easier need to stop whining because they look very unreasonable to regulators and politicians who are not sympathetic.

Our purpose here is to shed some light on what is actually happening—- because if there were clarity around this, we would have:

1. More entry-level home buyers. Many qualified people are not even shopping for a home because they presume they cannot get a mortgage. We provide several examples of easy qualification below.

2. More affluent home buyers. More good loans to very qualified buyers would be made if underwriters were allowed to use good business sense rather than fill in automated forms. As we did our research, we heard many stories of buyers reluctantly paying cash or deciding not to move at all and telling their friends who then also elect not to move. These include business owners, retirees, and commissioned salespeople.

3. More relocating home buyers. Many relocating employees are renting simply because they cannot provide historical pay stubs at their new employer. Given their track record of steady employment and desirability to multiple employers, does that make any sense?

Read more…

When your neighbors are more than just nosy…

What to Do When Nightmare Neighbors Complicate Your Home Sale


Overgrown grassYour crazy neighbors have been bugging you for months. They don’t maintain their yard. They’re loud and stay up too late. Their dog barks any time you go near and leaves smelly “presents” too close to your fence.

It is one thing for you to put up with this. But now that you’re getting ready to sell your house, you are concerned that their bad behavior may sabotage the sale. What can you do?

Play nice, at first

“It is much better to solve a problem with a neighbor without initiating a lawsuit,” recommends New York lawyer David Reischer. Although his advice might go against his professional interests, he believes resolving neighborly issues without filing a lawsuit or involving a lawyer is the best way to go.

“Bringing a lawsuit against a neighbor for sloppy upkeep, loud pets or general bad attitude is the last resort. A court will never provide you the remedy you are looking for in a timely manner,” Reischer said.

If there are actual damages involved, Washington, DC, lawyer Thomas J. Simeone says lawsuits can be filed in an attempt to recover financial damages caused by unruly neighbors, such as those related to broken windows or fences. The court also could be asked to issue an order prohibiting similar conduct in the future.

However, Simeone notes, “If you seek damages for a lost sale, that would be hard to prove. After you prove the neighbor violated the law, you would need the potential buyer to testify that they would have bought the property at a certain price, but for the neighbor. Even then, judges may be reluctant to force the neighbor to pay for the loss of a sale, but instead may limit damages to financial losses you incurred in repairing your property.”

Instead of going to court, both Reischer and Simeone suggest trying to work out a solution with the neighbors in a friendly manner.

Simeone recommends taking a series of steps, beginning with the least confrontational option first. “Start informally and move toward more assertive means of seeking redress. Start with a conversation, then a letter, then notify the county/police, then have a lawyer send a letter, then file suit,” he suggests.

Offer your services – it’s good for your bottom line

Chad Dannecker of San Diego real estate firm Dannecker & Associates proposes simply offering to clean up the neighbor’s messy yard. “Because a poorly kept yard next door can lower your house’s sale price, it’s important to take care of the problem quickly,” he said. “Your best bet is to go ahead and pay for the cleanup yourself or offer to do it because it saves you money and a headache in the long run.”

For loud or unruly neighbors, Dannecker suggests asking them to quiet down or putting in landscaping that softens noise levels.

Read more…

What to focus on for a flip…

How to Buy a Flipped House

For saleBuyers often assume a flipped home is like new — move-in ready and free from hassles. The newly renovated home gets top dollar, and the buyer assumes it is perfect.

Most buyers, however, don’t realize that some contractors or property “flippers” are anxious to move on to the next job, and their work may be rushed and subpar as a result.

If you’re buying a flipped house, consider taking the following steps to ensure you don’t get any unpleasant surprises after closing.

Be vigilant

As tempting as it can be, try not to get caught up in the excitement of new appliances, marble baths and other fancy bells and whistles. By looking closely at the details, you can learn a lot about the quality of work done on the property.

Be on the lookout for telltale signs of rushed worked such as:

  • Light switch plates that aren’t flush with the wall or are at an angle.
  • Crown molding that isn’t completely matched at the corner.
  • Gaps between the countertops and the wall.
  • Gaps in bathroom tile.
  • Doors or cabinets that don’t close tight.

Cosmetic mistakes could be an indicator of larger issues that can’t be seen with the naked eye. If the flipper was sloppy on the small details, pay extra attention to other areas such as the electric panel, the water heater’s gas line and plumbing connectors.

Get an inspection

Most buyers assume that a newly renovated house is, well, new.  And, because of that, they don’t need to have it inspected. That is not a great approach. An inspector can check the contractor’s work. Were renovations done to code?  Did the contractor cut corners or do the bare minimum in places because of a tight time frame? Sure, the town/city likely would have had to sign off on the renovations, but city officials are only looking at health and safety issues. The home inspector can check the house from top to bottom. It’s worth paying for an inspection to ensure the home is perfect.

Read more…

What you really need to know about your dirt…

Before You Break Ground on a New Home, Dig Deep

Falon Mihalic | Houzz | Aug 11th 2014 | link

There are many things to consider when embarking on the construction of a new home. Landscapes are complex, and it’s useful to consider terrain, water, soils and existing plants as living systems when building a new home.

Beach Style Exterior by Atlanta Architects & Building Designers,
Frederick + Frederick Architects

Setbacks. When siting a new home, you and your design team must first research the building codes that apply for your property. Most municipalities and villages have strict setback requirements for roadways, fences and more. An experienced local building architect will be well versed in the regulations and codes and will design your home accordingly.

The design drawings — signed and sealed by a licensed professional — are submitted when the permit is applied for. The requirements vary by locality, but the permit application will specify the requirements for drawings that must be created by a landscape architect versus a building architect.

In addition to building setbacks, there are federal and state setback requirements for wetlands, streams and water bodies. The good news is that water on your site has many aesthetic possibilities and creates a peaceful mood for the property. Oh, the sound of a running stream or a view of the sunset over a wetland!

We’re on track to grow until 2019!

5 awesome facts impacting California’s housing future

Brena Swanson | Housing Wire | August 7, 2014 | link

san fran houses

Next year is projected to be the best year yet for the economy since the start of the recovery, with California’s state economy lining up to do better than the nation. And this positive trend is expected to continue for the next two years, a new report from Beacon Economics said.

But HousingWire isn’t happy to stop with just that. Click the next page to see five awesome facts on the future of California’s housing.

First, here are the results of the Beacon report:

California’s economy will continue to steadily improve throughout the life of the state forecast in 2019. Employment growth is expected to settle in at 2.5% by 2016, and the state’s unemployment rate is forecast to drop below 6% by mid 2017 – about half of what it was at its peak in October 2010 (12.4%).

“Every metropolitan area in California has now returned to job growth,” says Jordan Levine, Beacon Economics’ director of economics. “Although the jobs and broader economic recovery has been more robust in some areas of the state than in others, the overall numbers are indicative of real, sustained improvement statewide.”

Read more…

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