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- Tech Tumult & International Avoidance
Tech Tumult & International Avoidance
By Jeff Walton & Kelly Guest
Kelly Guest
July 22, 2024
July 22, 2024
GLITCHY, GLITCHY, YA-YA, DA-DA: Neither HUD’s FHA Connection Portal nor ICE’s Encompass LOS were safe from the global IT outage that grounded flights, and disrupted banks, media outlets and other companies. HUD didn’t confirm the connection to the CrowdStrike-related issue, but the timing was highly coincidental.
FOREIGNERS FLEEING: NAR says international buyers are backing away from U.S. real estate. The trade group says foreign buyers purchased 36% fewer homes y-o-y between April ’23 and March ’24, marking the lowest sales to foreign buyers since NAR first began tracking such data in 2009. That’s probably not the best news for Waltz, who just secured $12.5M in Series A funding to expand their efforts to help international buyers get digital financing for stateside purchases.
CHATTER
ROCKET TO HUD: AIM ELSEWHERE!
HUD announced charges against multiple entities for housing discrimination for issuing a biased appraisal and then denying a refinance loan application in Denver. The charges stem from claims that a black loan applicant’s appraisal was low due to bias and her refi was denied on the basis of a racially prejudiced valuation. Rocket says “it’s a misplaced target,” denies discrimination, and refers to the requirement that lenders are distanced from appraisers.
SHRINKING THE CIRCLE
Radian Group filed notice that it intends to lay off 70 workers, effective September. The company also notified its Sr. Executive VP and Chief Franchise Officer, Brien J. McMahon, that his position was being eliminated and that his employment would be involuntarily terminated without cause in September as well.
AMICABLE SPLIT: NORCOM SHEDS RETAIL TO FOCUS ON TPO
CEO Phil DeFronzo sold Norcom’s 25 retail branches to CMG Financial, who announced the purchase as “expanding their presence in New England.”
RENT CONTROL OPPOSITION INCREASES
NAR joined MBA and Housing Solutions Coalition (HSC) in opposition to the Biden Administration and Campaign’s nationwide rent control proposal.
BIG Q FOR BofA: $5.7B in first mortgages in Q2, a 66% increase from Q1.
KEYED UP: Key Bank (KeyCorp)reported second-quarter net income totaling $237 million, up 30% from Q1.
HEFTY HELP: HUD AWARDS $325M TO REHAB DISTRESSED PROPERTIES
The $325 million was awarded to 15 cities and housing authorities as part of the Choice Neighborhoods Implementation Grant program.
INTROS & INNOVATIONS
HELs YEAH! Rocket Pro TPO waives $795 origination fee for Home Equity Loans (HELs) through 8-18.
ROBO RELATIONSHIPS?
As real estate agents face an empirical threat to their ability to get paid for representing buyers, AI arrives on the scene offering to automate those "awkward cold calls." Atllas rolled out Cold Call AI, which allows agents to use their scripts or load their own to "talk" to prospects. Is automating the first impression a good idea at a time when agents are struggling to prove their value?
MOVING & SHAKING
NEW PRES FOR NEW DIV: Dominion Financial Services names Dustin Wells President of its new wholesale division.
SAGENT C-SUITE SHIFT: Servicing software company welcomes Mr. Cooper and First Horizon Bank alum Jamie Gowas their new CFO.
FORMER FANNIE CEO JOINS BIPARTISAN POLICY CENTER BOD
“BPC welcomes four strategic thinkers who understand the importance of bipartisanship and policy innovation,” said BPC Board Chair Henry Cisneros about the new member group that includes Hugh Frater.
MARKET/INDUSTRY
A SECOND SECONDARY?
The Center for Public Enterprise Floats Proposal for a construction loan secondary market. The Smoothing the Housing Investment Cycle report suggests creation of a national secondary market for construction financing could allow lenders like state housing finance agencies and banks to provide the investment capital needed to produce multi-family housing.
STARTS & FINISHES
The Census Bureau says June housing starts were up 3% month-over-month, but down 4.4% year-over year. Completions, however, were up 10.1% m-o-m and 15.5% y-o-y.
BUILDERS ARE BUMMING (A BIT)
With housing starts slow y-o-y, it’s not surprising that builder confidence dropped a tad. The July NAHB/Wells Fargo Housing Market Index (HMI) found that All three HMI components in July remain below the key threshold of 50:
Present sales conditions fell one point to 47.
Expected sales in the next six months increased one point to 48.
Traffic of prospective buyers declined one point to 27.
The July survey also revealed that builders are increasingly cutting prices to bolster home sales: 31% of builders did so in July compared to 29% in June and 25% in May. However, the average price reduction in July held steady at 6% for the 13th straight month.
SLOWER, BUT STILL GROWING: Fannie's Q224 HPI
Single-family home prices increased 6.9% from Q2 2023 to Q2 2024, down from the previous quarter's upwardly revised annual growth rate of 7.3%.
Quarterly, home prices rose a seasonally adjusted 1.3% in Q2 2024, down from the revised 2% growth in Q1 2024.
On a non-seasonally adjusted basis, home prices increased by 3% in Q2 2024.
INTERNATIONAL INTEREST: States With Most Foreign Home Buyers
The National Association of REALTORS®’ new report, 2024 International Transactions in U.S. Residential Real Estateshows FL, TX, CA, AZ, GA, NJ, NY, NC, IL, and MI got the most foreign investment – in that order.
INVENTORY JUMPS IN TEXAS, PRICES DON’T: Listings are up 40.8% y-o-y, but median home prices were nearly flat, rising only .6% during the same timeframe. Having the 7th highest property taxes in the nation could play a role.
FIRST-LOOK FHA: HUD Proposes New Rule for Sale of FHA Notes
The proposed rule would turn tested methods into permanent practice. HUD is seeking public comment on the rule governing the sale of seriously delinquent single family mortgage loans insured by FHA to give “first-look” opportunities to owner-occupants, nonprofit organizations, and government entities when properties associated with the purchased notes are sold.
SUPER (HOUSING) MARKETS? ATTOM Data published a delicious assessment of which grocery stores are better for home buyers and investors. The clever analysis found an interesting contradiction between the average purchase prices of homes near Aldi, Trader Joe’s and Whole Foods stores and eventual price appreciation and ROI growth. While purchase prices were significantly higher near the other two stores, homes near Aldi stores outperformed in price growth and seller and investor ROI.
QUANDARIES
HOLY HANNA, WILL THIS HOLD WATER?
The company that bills itself “the #1 privately-owned real estate company in the country,” Howard Hanna, introduced the “Buy & Borrow Bundle,” which purports to save home buyers up to $10K on their closing costs if they sign an exclusive buyer’s agency agreement with a Howard Hanna agent and go through the firm’s in-house mortgage company. Howard Hanna bills this as “streamlining” the process, though others may call it double-dipping, unethical, or in some states, illegal. FHA has restrictions on serving as both the lender and real estate agent, but this concept is gaining traction in the murky waters surrounding the future of buyer representation, in spite of pesky RESPA questions. This HousingWire article from March ponders the NAR settlement and the lender-buyer’s agent combo concept.