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IN THIS ISSUE:
- A Message From Jason Kane
- FSBO Marketing
- No Change in Loan Limits
- Future Homebuyers Determine Trends
Dear
Friends,
I hope
all is well with you and your business. I would like to thank
our clients for their continued loyalty and faith in our service.
We remain committed to providing all of our clients with the
highest level of customer service.
This means returning all of your phone calls, performing closings
that are convenient for you and your client, and most importantly,
treating you with the highest level of professionalism and
respect.
As always, please don't hesitate to contact me if I can assist you
in any manner.
Very Truly Yours,
Jason S. Kane, Esq.
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As
interest rates rise, competition for purchase loans also rises.
Fewer borrowers want to refinance while rates are high so many
Loan Officers look to the oft neglected purchase business to
sustain their production level. Referrals from Real Estate Agents
are what most Loan Officers want, but few know how to get them.
The
hardest part about building and maintaining a professional
relationship with a producing Real Estate Agent is getting one’s
foot in the door. Once you have an in, you can show the Agent you
are good at what you do and you will take care of their buyers.
However, with a thousand other Loan Officers knocking down the
Agent’s door, how are you supposed to differentiate yourself
from the crowd?
For
Sale By Owner (FSBO) marketing is the key that unlocks the
Agent’s door. What makes FSBO marketing so great is that it
gives you a chance to get to know buyers and sellers on your own,
who will often decide they want to work with an Agent. When that
time comes, you can make the referral to the Agent you are trying
to impress. Nothing says “I mean business” more than business
itself.
Real
Estate Agents are marketers, just like Loan Officers, and if you
present a plan that will increase their bottom line they are more
apt to listen than if you want to bring doughnuts or bagels over
and simply increase their bottom in size. If a thousand others are
preaching “great rates” and “best service” while you
preach “more commissions” in addition, who do you think the
Agent is most likely to open their door to? That’s right - to
you.
Take
advantage of the power inherent in FSBO marketing to get your foot
in the door with new Real Estate Agents, and earn your own
purchase leads and Agent referrals.
Source:
Erik Baty, President FSBO3k
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The
conforming loan limit, perhaps the most intently watched number in
the mortgage business, will remain unchanged next year at
$417,000.
The
limit is the legislatively set ceiling on the size of loans that
can be purchased or guaranteed by Fannie Mae and Freddie Mac, the
two government-sponsored financial institutions which keep local
lenders awash with cash for home loans.
Because
the enterprises bring a certain amount of standardization to the
market, and because investors throughout the world believe the
GSEs' securities are backed by the full faith and credit of Uncle
Sam, rates charged on loans at or below the limit are often
0.25-0.5 percent less expensive that so-called "jumbo"
loans that are above the ceiling.
In
addition, "subprime" borrowers who don't measure up to
Fannie Mae and Freddie Mac's strict underwriting standards also
pay higher rates, no matter how much they are borrowing.
Normally,
the Fannie-Freddie limit is determined by the percentage change in
the average price of both new and existing housing from one
October to the next as measured by the Federal Housing Finance
Board.
The
board said yesterday that the average in October 2006 fell $501,
from $306,759 a year earlier to $306,258. The slight 0.16 percent
decline was the index's first October-to-October dip since
1992-1993.
The
decline would have resulted in a $667 drop in the limit to
$416,333. But Director James Lockhart of the Office of Federal
Housing Enterprise Oversight said he would not order a lower limit
next year "so as not to disrupt the end-of-year
pipeline."
OFHEO,
the GSEs' safety and soundness regulator, took over responsibility
for calculating the maximum in 2004 when it discovered the two
companies adjusted the ceiling for that year somewhat higher than
it should have been.
Lockhart
also said this year's decline would be deferred until next
November, when the conforming loan limit will be reset for 2008.
Because limits on government-insured
loans are based on the conforming loan limit, it is likely the
ceiling on FHA mortgages in high-cost areas will remain at
$362,790 next year and $200,160 in most other markets.
The
Department of Housing and Urban Development will make that
determination prior to Jan. 1. It also is likely that HUD will
adjust the FHA ceiling in some places, either up or down,
depending on the most current average home prices.
Prior
to this year's small decline in the FHFB index, the average
increase in the October-to-October price of houses over the
previous five years was 8.8 percent. Last year's limit was 15.9
percent above the $359,650 ceiling in 2005.
Source: Realty Times
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The
most significant factors impacting housing over the coming years
are whether aging baby boomers decide to grow old where they are
and where young immigrants decide to settle, according to a new
study released today by the Mortgage Bankers Association.
The
study, "America's Regional Demographics in the '00s Decade:
The Role of Seniors, Boomers and New Minorities," conducted
by William H. Frey of the Brookings Institution and sponsored by
the MBA's Research Institute for Housing America (RIHA), analyzes
two components driving the changes that will transform the U.S.
population over the next several decades -- aging boomers, and
immigration of Hispanics and Asians.
It
finds that the overall U.S. population will experience a rapid
aging as boomers grow older, while absorbing large numbers of
young recent immigrants. Different regions of the country will
have different demands for housing driven by the relative impacts
of aging in place versus migration within the country and
immigration from abroad. For example, suburban areas will gray
faster than urban areas due to the boomers aging in place.
"It
has been said that demographics are the future that has already
happened and demographic changes are one of the most powerful
forces impacting the residential and commercial real estate and
real estate finance markets," said Doug Duncan, MBA's chief
economist and senior vice president of research and business
development. "We expect that this study will help our members
develop business plans to meet the ever changing American
marketplace."
Key
findings from the study include:
Regional
Differences in Aging Patterns
-
Senior
populations can increase through in-migration or through aging
in place. However, aging in place is the dominant force that
will shape demographic changes in the years ahead.
-
Even
in Arizona, which shows the highest rates of net in-migration,
the migration effect is dwarfed by the effect of the existing
population simply getting older and not moving.
-
The
most dramatic impact of aging in place will be in parts of the
country that are not now associated with aging populations,
like Nevada, Colorado and Georgia. These states that will
exhibit the fastest senior growth are not necessarily the ones
that have the highest percentage of seniors. States with high
senior shares have typically experienced one or more decades
of sustained declines in their younger populations. This
leaves behind seniors who are far less likely to move than
people in their 20s and 30s.
-
Suburbs
will be the fastest graying part of our national landscape. In
projections of Philadelphia and Chicago, for example, suburbs
will begin to age faster than cities, even though both cities
start out having older populations than their suburbs.
-
While
close to 30 percent of young households move each year to a
new residence, that percentage slides down to the 4-5 percent
range for people in older age groups. Therefore, household
mobility, which has been a major driver of home sales, will
fall off as boomers age.
-
Less
than 2 percent of residents aged 55-64 move across state lines
in any one year, and the percentage is even less for those
over 65. The aggregate number of interstate moves among those
aged 55 and over is dwarfed by the number of moves undertaken
by the younger population, meaning fewer moves as a larger
portion of the population is over 55.
-
Well-off
young senior populations will emerge in areas like Las Vegas,
Denver, Dallas and Atlanta.
Greater
Dispersion of Minorities
-
While
it is popular to think of the United States as a melting pot,
Hispanic, Asian and other minority groups are
disproportionately clustered in selected areas.
-
What
has changed is the "hold" that the traditional
immigrant gateways have on the Hispanic population. In 1990,
the top 10 metropolitan areas were home to fully 55 percent of
all U.S. Hispanics, and the top two, Los Angeles and New York,
housed nearly three in 10 Hispanics nationwide. In 2005,
however, less than half of all Hispanics live in the top 10
areas, and Los Angeles and New York are home to only 22
percent. When one examines the far reaches of Hispanic
dispersion nearly one third of all counties in the United
States have at least 5 percent of their populations that are
Hispanic, compared with one out of 6 in 1990.
-
The
vast majority of Hispanics and Asians speak English at home,
and those who do not can communicate in English very well.
-
These
new minorities are also relatively young compared with the
rest of the population, suggesting that racial generation gaps
are emerging in areas where they live in large numbers. That
is, young adults up to age 40 in these areas show a strong
representation of new Hispanic and Asian households, whereas
the "over 40" crowd is still dominated heavily by
white and black baby boomers.
-
Minorities
tend to be younger and as such are highly mobile. Four out of
10 young Hispanics or blacks changed residence over the
2004-05 period. Nearly one out of 10 Hispanics, and more than
one out of seven Asian movers, came directly from abroad.
-
Overall,
15 of the nation's 88 large metropolitan areas have majority
minority populations.
New
Regions Defined by Demographic Changes
-
"New
Minority States" where Asians and Hispanics currently
account for about one-third of the population: New York, New
Jersey, Florida, Illinois, Texas, New Mexico, Arizona, Nevada
and California.
-
"Faster
Growing States" contain many suburban communities and
attract migration from the rest of the country as well as from
recent immigrants. This group of states will have the highest
rate of growth for the 55-and-over population: New Hampshire,
Maryland, Virginia, North Carolina, South Carolina, Georgia,
Tennessee, Colorado, Utah, Idaho, Oregon and Washington.
-
"White-Black
Slower Growing States" and "Mostly White Slower
Growing States" will have the lowest rate of overall
population growth, but will gray rapidly through aging in
place, and will have the highest shares of seniors: Ohio,
Michigan, Alabama, Mississippi, Louisiana, Arkansas, Missouri,
Washington, D.C., Maine, Vermont, Massachusetts, Connecticut,
Rhode Island, Pennsylvania, West Virginia, Kentucky, Indiana,
Minnesota, Wisconsin, Iowa, North Dakota, South Dakota,
Nebraska, Oklahoma, Kansas, Wyoming and Montana.
Source: Inman News
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