Editor’s note: The following is a collection of news briefs that were published by Inman News from Monday, Sept. 8, to Friday, Sept. 12.
Friday, Sept. 12, 2008
New U.K. property search planned
The U.K.’s National Association of Estate Agents plans to launch a home-search portal later this month at http://www.propertylive.co.uk that will initially focus on the U.K. market but will expand to international markets early next year.
Only agents and developers that are members of the NAEA or other overseas agency associations that they have agreements with will be allowed to list property at the site.
In a recent survey of nearly 300 international estate agents conducted by search marketing company Globaledge.co.uk, some 31.5 percent — the largest share — said they used PrimeLocation.com to list property, followed by FindaProperty.com at 27 percent, EuropeanProperty.com at 23.6 percent, TheMoveChannel.com at 22.5 percent, and Rightmove.co.uk at 21.3 percent.
Not in my best interest to buy?
Editor’s note: The following is a reader comment in response to the Sept. 4 Inman News story, "Realtors not immune to foreclosure."
"I highly doubt that a lot of consumers feel that Realtors are to blame for the present situation in real estate. Real estate has been and will continue to be cyclical. The trick is to be able to find the middle ground between feast or famine.
"The foreclosure crisis hits all nationalities, income levels, educational levels. No one is immune!
"My house is worth less than when I bought it, but what can I do? I will keep plugging away, keep exceeding my clients’ expectations, and try to service my clients the best way I can.
"I know many a Realtor who bought too much house without regard to ‘later on down the road.’
"I wonder how many agents, Realtors, brokers, etc., have told a client that it was not in their best interest to buy at a certain time? We as brokers, agents and Realtors should have some grasp of our clients’ financial situation when they are searching for a home. You may not get THAT deal at THAT time but to be able save a client the emotional, physically draining and financial collapse a foreclosure can cause is huge! CLIENT SERVICE! CLIENT SERVICE! CLIENT SERVICE!" — Michael Espiritu
Information compiled by Daniel Rothamel, Inman Community manager.
Lehman CEO talks sale
Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld, worried that the U.S. government won’t provide the funding that enabled Bear Stearns Cos. to sell itself and avoid bankruptcy, is seeking buyers for the investment bank, Bloomberg news reported today.
According to the report, Fuld, "who built Lehman into the biggest U.S. underwriter of mortgage securities during his four decades at the firm, was pushed toward a forced sale after talks about a cash infusion from Korea Development Bank ended, sparking a drop of as much as 74 percent in the firm’s market value during the past four days."
The New York-based investment bank is reeling from $5.6 billion in third-quarter write-downs on devalued commercial and residential real estate assets after reporting a preliminary net loss of approximately $3.9 billion in the third quarter (ending Aug. 31, 2008) — the largest loss in its 158-year history, Bloomberg reported.
According to the report, Bank of America by itself or in a partnership with Barclays Plc and private equity firms would be the most likely purchaser.
Thursday, Sept. 11, 2008
Bloggers digest Fannie-Freddie takeover
The recent government takeover of Fannie Mae and Freddie Mac has dominated the news recently. Everyone has their opinions as to how the real estate and mortgage industries will be affected. Phoenix-area real estate broker/blogger Jay Thompson posted an excellent compendium of links to the opinions about the Fannie/Freddie situation across the blogosphere. There is certainly no shortage of analysis and interesting insights out there.
CondoDomain.com enters Dallas
CondoDomain.com, where buyers can browse new condos for sale, on Wednesday announced the launch of its Web-based, flat-fee real estate brokerage in the Dallas, Texas, marketplace.
The company, which also operates in Boston, also allows site users to search foreclosure listings, for-sale-by-owner properties and upcoming auctions.
CondoDomain.com offers a 100 percent satisfaction guarantee to all of its clients, and is planning expansion into more than 30 U.S. markets.
Wednesday, Sept. 10, 2008
Inside look at ‘divorcing commissions’
Compensation models are one of the more popular topics up for discussion around the real estate industry at any given time. Percentages, flat-fee, a la carte, the list goes on. One topic sometimes overlooked, however, is the origin of compensation — namely, that the seller pays both the buyer’s broker and the seller’s broker. Many have argued that this issue needs to be addressed before any other. One such person emphasizing the idea of "divorcing commissions" is blogger and Phoenix real estate broker Greg Swann. Swann recently released an e-book on the topic. The book covers the current compensation structure, its origins, and what could be done to change it — an interesting read, to be sure.
Study: Many Canadian housing markets overvalued
A new study by a University of British Columbia professor shows homes in most Canadian urban centers except Toronto and Edmonton are priced up to 25 percent higher than they should be to balance with rents.
The study, titled "Are Canadian Housing Markets Overpriced?" was authored by professor Tsur Somerville at UBC’s Sauder School of Business, who said that the "decade-long boom in the nation’s real estate markets is over, and homeowners should brace for anything from a rapid price drop to a long, flat market," according to a report from the Canadian Broadcasting Centre.
To analyze what a balanced market price should be, researchers looked at the "relationship between house prices, rents and the cost of investing in housing in each market."
According to Somerville, Toronto is the only major market where prices are in balance with rents. "In Halifax, Montreal, Ottawa, Regina and Winnipeg, prices would need to drop by at least 20 percent to be in balance, while Calgary and Vancouver would require a 7 to 11 percent drop in prices to reach the study’s equilibrium level. But the study found in Edmonton prices are actually below equilibrium, by 8 percent."
Today’s broker-owners ‘missing the trend’?
Editor’s note: The following is a user-comment on Kris Berg’s recent column, "Real estate quakes and aftershocks."
"So, where are all the broker-owners these days getting their information and how can they be missing this trend? I realize it is difficult to accept that our industry is changing when it has been insulated for as long as it has, but if someone in real estate has been looking for their cheese, it was moved at least four years ago. One would think that would be enough to wake some people up to the reality of the direction of our business. It’s as if hope is trumping courage." — Valasie August
Discounting can affect real estate brand
For as long as people have been selling things, they have been discounting them. Real estate is by no means immune to this practice. Agents and brokers often offer discounts, either temporarily or permanently, for all kinds of services. Rob Hahn explores what effects discounting can have on both your business and your brand.
Refis fuel jump in mortgage apps
Applications for mortgage loans were up a seasonally adjusted 9.5 percent for the week ending Sept. 5, driven by a 15.4 percent jump in applications for refinancings, according to a weekly survey by the Mortgage Bankers Association.
Results of the MBA’s Weekly Mortgage Applications Survey, adjusted to account for the Labor Day holiday, showed a 6.4 percent increase in purchase loans from the week ending Aug. 29. A 14.4 percent increase in applications for conventional purchase loans was offset by an 8.7 percent drop in applications for government purchase loans, which are largely FHA-backed loans.
Premiums and minimum down-payment requirements for Federal Housing Administration loan guarantees are going up on Oct. 1, and seller-funded down-payment assistance will no longer be accepted by FHA unless Congress rescinds an impending ban (see Inman News story). The government purchase index jumped 19.9 percent during the week ending Aug. 29 — possibly reflecting borrowers’ attempts to obtain loans before the changes take effect.
The refinance share of mortgage activity last week increased to 36.3 percent of total applications from 34 percent the week before. The adjustable-rate mortgage (ARM) share of activity decreased from 6.6 percent to 6.4 percent.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.06 percent, from 6.39 percent, with points including the origination fee increasing to 1.02 from 1 for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.73 percent from 5.96 percent, with points including the origination fee decreasing to 0.98 from 1.03 for 80 percent LTV loans.
The average contract interest rate for one-year ARMs decreased to 7 percent from 7.11 percent, with points including the origination fee decreasing to 0.3 from 0.35 for 80 percent LTV loans.
Tuesday, Sept. 9, 2008
August foreclosures top 100,000
Nearly 102,000 homeowners lost their properties to foreclosure in August, up nearly 6 percent from July and more than 80 percent higher than in August 2007, according to data released Monday by Foreclosures.com, a provider of foreclosure information.
So far this year, lenders have repossessed a record 656,545 properties nationwide — or 8.6 of every 1,000 households in the United States — and remain on track to repossess more than 1 million nationwide by year-end, Foreclosures.com reported.
Year-to-date, 1.45 million homeowners (19.6 of every 1,000 households) faced pre-foreclosure actions by lenders, almost double the number a year ago. Foreclosures.com’s analysis of pre-foreclosure and foreclosure proceedings nationwide is based on the number of formal notices filed against a property during the foreclosure process. That can include notice of default, notice of foreclosure auction, and/or notice of REO (lender-owned real estate that occurs after a foreclosed property fails to sell at auction and reverts back to the lender). All pre-foreclosure filings do not end up in foreclosure.
There is some good news: Pre-foreclosure actions by lenders slowed slightly from July and more than half of the pre-foreclosure as well as REO activities can be attributed to three states: Arizona, California and Florida, said Alexis McGee, president of Foreclosures.com.
WaMu has new CEO, regulatory scrutiny
Washington Mutual Inc. is entering the latest phase in its struggle to survive the housing downturn and credit crunch with a new chief executive officer and is under scrutiny by federal banking regulators.
After nearly 20 years as Washington Mutual Inc.’s chief executive officer, Kerry Killinger has joined the ranks of more than 6,000 other WaMu employees who have lost their jobs in the downturn, company officials announced Monday. Former Sovereign Bank President Alan Fishman will replace Killinger in the top management spot at WaMu, which lost $3.33 billion in the second quarter.
WaMu also announced that it had entered into a memorandum of understanding with the Office of Thrift Supervision, which concerns aspects of the bank’s operations including risk management and compliance. WaMu said the agreement commits it to submitting a multiyear business plan and earnings forecast, but does not require the company to raise capital.
WaMu has estimated its mortgage-related losses could total $12 billion to $19 billion this year, and the company obtained $7 billion in capital from a private equity firm, TPG, in April. Citing unnamed sources, the Wall Street Journal reported that some investors may be open to a merger or sale of the bank next year if its share price does not improve. WaMu shares closed at $4.12 Monday, down nearly 90 percent from a 52-week high of $39.52.
WaMu announced in April that it was laying off 3,000 employees, closing its remaining 186 freestanding home loan centers, and halting funding of loans through mortgage brokers (see Inman News story). The layoffs followed an announcement of 3,150 layoffs in December, including 2,600 employees in home loans.
In its most recent quarterly earnings report, WaMu said it employed 43,198 workers at the end of June, or 6,791 less than the same time a year ago. The company said its downsizing moves would initially cost $450 million but result in $1 billion a year in savings.
The Journal said Fishman will receive a $10 million signing bonus and that Killinger could walk away with $23.6 million in deferred compensation, stock and pension benefits.
Bear Stearns, mortgage unit settle FTC charges
The Bear Stearns Co. LLC and subsidiary EMC Mortgage Corp. will pay $28 million to settle federal allegations that the companies "misrepresented the amounts borrowers owed, charged unauthorized fees, such as late fees, property inspection fees and loan modification fees, and engaged in unlawful and abusive collection practices" in servicing consumers’ home mortgage loans, according to a U.S. Federal Trade Commission announcement today.
JPMorgan Chase & Co. acquired Bear Stearns earlier this year — a deal that the Federal Reserve assisted through a $30 billion credit. Bear Stearns and EMC did not admit wrongdoing in the settlement. The FTC complaint had charged that the companies violated the FTC Act, the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and a regulation of the Truth in Lending Act.
Pending Home Sales Index falls in July
A National Association of Realtors index that gauges pending sales of resale homes dropped 6.8 percent in July compared to the same period last year.
The Pending Home Sales Index, which is based on contracts signed in July, dropped 3.2 percent compared to June 2008, to 86.5. A score of 100 is equal to the average level of contract activity in 2001, which was the first year examined for the index.
Regionally, the index fell 13.4 percent in the South, 13.2 percent in the Northeast and 2.4 percent in the Midwest while rising 6.5 percent in the West in July 2008 compared to July 2007, the association reported.
Monday, Sept. 8, 2008
Deadline for ‘Most Influential’ picks is Friday
Friday, Sept. 12, is the last day to submit your nominations for the annual Inman News 100 Most Influential Real Estate Leaders and 25 Most Influential Real Estate Bloggers lists.
The annual list of most influential people in the industry recognizes those who embrace leadership, innovation, ingenuity, power and persistence — they are the industry’s best and brightest and also include those outside figures whose actions influence the business of buying and selling homes.
And the annual list of most influential real estate bloggers recognizes those bloggers who are well-known, well-read, and have a knack for stirring up discussion and debate on important, timely and relevant topics for the industry.
An online nomination form is available here: https://www.inman.com/most-influential.
The 2008 list of 100 Most Influential Real Estate Leaders will be published on Thursday, Sept. 25, and the 2008 list of 25 Most Influential Real Estate Bloggers will be published on Thursday, Oct. 30, 2008.
A perspective on foreign real estate markets
We hear a lot about the nature of the real estate market here in the United States, but information about foreign markets is often hard to come by, especially from agents and brokers on the ground. Alistair Helm shares some facts about the current state of the real estate market in New Zealand. Helm analyzes the number of sales so far this year, the average price, and includes statistics about the number of agents and brokers in New Zealand. A global perspective is something that all agents can benefit from, and his post offers exactly that: http://www.realestate.co.nz/blog/what-are-the-facts-in-real-estate.html.
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