Spouse of Quicken Loans executive sues AIME’s Anthony Casa for defamation

Theresa Niemiec, wife of Quicken Loans Executive Vice President Austin Niemiec, has filed a defamation lawsuit against Anthony Casa, CEO of the Association of Independent Mortgage Experts, for comments he made about her in a video message that he filmed and sent to her husband and others in the mortgage industry.

The civil complaint, seen by HousingWire, alleges: “On July 2, 2020, while at a social gathering with many people in the vicinity, Casa filmed and then widely distributed and published per se defamatory video clips and drafted and sent per se defamatory text messages directed to Mr. Niemiec wherein Casa disparaged and demeaned Mrs. Niemiec.”

Specifically, the lawsuit alleges that Casa mentioned sexual acts supposedly performed by Mrs. Niemiec and portrays her as “promiscuous and having a lack of chastity and faithfulness.”

The complaint alleges that Casa sent the defamatory video clips and text messages to a number of people in addition to Austin Niemiec. One source told HousingWire that the video was uploaded to YouTube at some point then removed, although HousingWire was not able to see the video on YouTube.

The lawsuit also states that Theresa Niemiec asked for a retraction of the inflammatory statements on July 6, and instead Casa sent an “antagonistic, threatening, mocking and sarcastic” text message to Austin Niemiec on July 7, as well as demeaning follow-up messages. 

In the lawsuit, Theresa Niemiec seeks the following reparations:

  • The immediate publication of a full retraction by Casa to each of the recipients of the defamatory statements by Casa personally publishing a video to each of the recipients wherein he personally makes clear that the each of the defamatory statements was false, untrue and fabricated and issuing a full apology to Theresa Niemiec and her husband without sarcasm or ridicule;
  • Immediately furnishing a list identifying the name and contact information of each recipient of the defamatory statements;
  • An order of judgment in favor of Theresa Niemiec and against Casa as follows:
    • A. Special Damages in an amount in excess of $25,000
    • B. Exemplary damages in an amount in excess of $25,000;
    • C. Interest, costs and attorney fees; and
    • D. Such other and further relief as is appropriate.

Theresa Niemiec’s attorney, Jeffrey Morganroth, told HousingWire: “Mrs. Niemiec filed the lawsuit against Mr. Casa because the conduct spelled out in the complaint is outrageous, disturbing and disgusting. Under no circumstances should the tortuous and unlawful behavior described in the complaint be accepted. To make and circulate malicious, demeaning, misogynistic and wholly untrue statements by videos and text messages about the wife of a leader in your marketplace when you are supposed to be the head of a trade association is inexcusable. 

“Further, when that behavior is pointed out, and demanded to be retracted, to double down with even more hostile, threatening, demeaning and disparaging statements, as described in the complaint, shows a serious lack of character and judgment,” Morganroth said.

When contacted by HousingWire, Casa issued this statement:

“Two and a half years ago, when we created this association, we did it to combat the unfair practices of big banks and to give a voice to the small brokers across the United States. Those brokers have been bullied for years and they needed someone to stand strong and be their voice. It is not news to anyone that I have taken a very combative approach and I did that because we needed to bring attention to what was going on against banks that have a lot more money and resources than we do.

“However, during a heated conversation via text message, I sent some private communications that I understand were inappropriate and hurtful to select parties who previously engaged with me in an equally unprofessional manner.

“I do regret sending these messages and apologize to those hurt by my actions,” Casa continued. “I will own that I let my emotions get the best of me. One of the toughest challenges of leadership is admitting mistakes but more importantly learning and growing from them. What makes me sad is that what I said does not reflect my values and I will address that directly with my team and ensure that all of our members know that my statements do not reflect the values of this association.”

The post Spouse of Quicken Loans executive sues AIME’s Anthony Casa for defamation appeared first on HousingWire.

July 11: Supply & demand on bananas, hard seltzer, and… wood prices!? Saturday Spotlight: PrimeLending

“History is not there for you to like or dislike. It is there for you to learn from it. And if it offends you, even better. Because then you are less likely to repeat it. It is not yours to erase. It belongs to all of us.” Contrast that versus, “We should not teach history. You hear the stories of the victors from their own point of view and then you want to start your own violence and wars to do your own good part. We don’t learn how to avoid wars, but how good they are.” And given that our business touches and helps millions of lives every day, our industry, and the people in it, are smack dab in the middle of it.

Dixie flags, tearing down statues, politics, and renaming things aside, everyone should remember that we are living in historic times right now. It certainly isn’t glamorous to eat Grape Nuts five days in a row, and only wash your every-day sweatpants once every two weeks, but scientists, political scientists, sociologists, and psychologists will be studying us for centuries. Every lender is busy being waist deep in volume, but some will argue that the mortgage industry hasn’t considered the long-term economic consequences from COVID. What will mortgages look like post COVID? It’s all reactionary at the moment. But this time next year is going to be challenging, as not only will most borrowers have 30-year rates at 3 percent or lower, but the impact of forbearance will be truly seen. As well as the job market, as some economists see the unemployment rate continuing to rise based on recent re-openings closing back up. Lots more below on some of the non-mortgage economic signals the nation is giving us.

Saturday Company Spotlight

This week we highlight PrimeLending’s focus on the founding, growth, employee mentoring in a work from home environment, entrepreneurship and charity work.

In 3-5 sentences, describe PrimeLending (when was it founded and why, what it does, where, recent growth, and plans for near-term future growth). A perennial powerhouse in the industry for more than 30 years, PrimeLending’s sole focus is delivering the ultimate mortgage experience for both borrowers and business partners alike. That’s why we introduced the Modern Originator, our forward-looking initiative to empower and equip our loan officers to deliver an extraordinary customer experience. As a company, we are committed to providing every member of our team with the tools, technology and training needed to originate more loans and grow their business in today’s digital marketplace. For example, this spring we successfully completed two huge technology implementations: Blue Sage, our state-of-the-art LOS, and Total Expert, the industry-leading digital marketing platform. With the addition of both Blue Sage and Total Expert, we’ve never been better positioned to not only compete, but win in the marketplace.


Tell us about company culture and what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why. Simply stated, our Core Purpose is to make a profound and positive impact on the lives of all we serve. That’s why PrimeLending recently allotted $250,000 for our branches to make charitable donations to local charities. We’ve been able to assist food banks, medical centers, community response funds, youth programs, educational scholarships, and other nonprofits all across the country. Our employees’ efforts aren’t limited to financial contributions. We’ve also seen an outstanding response through volunteer work, feeding essential workers, hosting drives, and providing frontline assistance.


What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop?


PrimeLending success has been built around one simple belief: investing in our talented, dedicated employees. It’s the secret to PrimeLending’s longevity and success, and the reason so many home buyers trust us to guide them through the mortgage process. Our award-winning onboarding and training programs not only prepare new team members to begin originating loans on day one, but continually provide valuable resources and learning opportunities to help loan officers build their business and achieve their goals. Each year, we host Sales Rally, a world-class, can’t-miss experience that brings together loan officers from across the country to discover best practices from top producers, learn new tools to grow their business and get inspired by company leaders and top-rated industry speakers.


Tell us how your company maintains its culture in the office, or in a work-from-home environment if applicable. Putting people first defines the PrimeLending culture, and we see it every day in the way our team works together and supports each other. We know having a passionate, motivated team that cares about our customers, business partners and each other is our greatest asset.

As other businesses found themselves grappling with appropriate responses to the COVID-19 pandemic, PrimeLending swiftly acted to ensure our highest priority remains the safety and the well-being of our co-workers, customers, and communities. While most of our team is working from home during these unprecedented times, we’ve increased the number of communications from our leadership team, added eCulture activities and provided manager tips, all in an effort to maintain team unity. It’s thanks to our team-oriented culture and resilient employees that we were able to adjust so quickly, and without skipping a beat. (We’re actively hiring builders, doers, visionaries, and entrepreneurs. If you’re a mortgage superstar and you’re interested in being a part of our award-winning organization, contact Nic Hartke.)

(For more information on having your firm featured, contact Chrisman LLC’s Anjelica Nixt.)

Mortgage banking touches many areas

I received this email. “We may be in for some tough times as the economic fallout will last long after COVID. My concern is the rate at which people are not making their credit card payments. It’s the first thing people stop making payments on. It’s unsecured debt, and there is little recourse credit card companies have to collect. There is going to be a lot of ‘dinked up’ credit this time next year. How will the mortgage industry accommodate this when they come in to apply for a home loan? Also, I’m already seeing people with loans in forbearance trying to refi out of it. Very few will be able to pay the balloon payment at the end and if they can’t refi out of it then you will see the loan mods rolling in. This has a direct impact on the mortgage industry and the economy. People who can’t obtain credit don’t spend money on items that are considered economic drivers, such as cars, housing, travel, etc.”

So what you will about them through the history of the United States, immigrants have made a huge contribution to our society. The Federal Reserve Bank of Dallas recently published a paper about the effect of immigration on business dynamics and unemployment. The study combined U.S. data on immigrant inflows from the Current Population Survey with data on business formation and survival and job creation and destruction from the National Establishment Time Series (NETS) database for the period 1997 to 2013. The hypothesis was that immigration, as a positive labor supply shock, should increase the return to capital and spur business investment, particularly in areas that receive large immigrant inflows. The results indicated that immigration increases the business growth rate by boosting business survival and raises employment by reducing job destruction, largely driven by less-educated immigrants. As a result of lower labor and search costs, this spurs to capital investment and economic growth in the medium to long term.

Lenders and vendors are grappling with office space, and office space needs, if and when they bring people back to working together. WFH versus WTF: know the difference! Millions around the nation are now working from home (WFH) according to an MIT report, 34 percent or more of Americans who had previously commuted to work said that they were working from home. According to a University of Chicago estimate that 34 percent of people have the capacity to work from home based on the nature of their occupation, that means we’re pretty much at the point where everyone who can, is. Previously, only about 4 percent of the U.S. workforce worked from home half the time or more. Even as early April the smart money is saying that this will get a lot of the people trying it out to come out and say that they want to do this more, and there may be a significant shift ahead for how companies handle their office environments. The consulting firm Global Workplace Analytics projects 30 percent of people will work from home multiple days per week within a few years, and that this unexpected situation is releasing some pretty pent-up demand for such flexibility.

Prices for lumber and plywood are skyrocketing thanks to a boom time in improvised expanded outdoor seating in restaurants, as well as a surge in do-it-yourself projects. On July 8, the spot price per thousand board feet of lumber was $469.40, up from the lows seen in early April when the same amount of lumber was going for a low of $264.10. That 80 percent increase is above the pre-pandemic high of $463.00, a price hit during a hot home-building market. With restaurants building outdoor decks on the fly around the world, orders are up 40 percent at a Pittsburgh company that makes the chemicals to treat wood for decks.

Of course sports are in shambles. The Ivy League cancelled its football programs for the autumn. The XFL was a start-up football league that played all of five games in its most recent first season, but was forced to fold because of widespread shutdowns and also a curse on the concept of the XFL. The company outlined plans to sell the league, using a $3.5 million loan offered by founder and WWE Chairman Vince McMahon to sell the IP by July 15. If you’re in the market, it’s not often that a sports league goes up for sale; the XFL’s name, trademarks, slogan, and eight teams (all owned by the league directly, including their merch, equipment and individual IP rights) are up for grabs. The XFL had roughly $5.6 million cash on hand, and may need to burn some of that before hitting up Vince for a loan. XFL season tickets, costing $100 to $600 each, need to be refunded, but one can only assume they knew the risks of buying season tickets to the XFL, essentially the sporting equivalent of buying the stud rights to a mayfly.

Remember mortgage conferences, and hotel breakfasts, where there would be bananas? The Philippines produced about 20 percent of the world’s banana shipments in 2019, and in Asia the country accounts for 90 percent of banana export volumes. The problem? The main island, Luzon, has been locked down since mid-March, and bananas need to be harvested every day or else they’ll spoil on the tree. Right now, projections are that exports will be down 40 percent this year, down to 2.5 million tons of bananas from 4 million last year. Know that banana bread has trounced its competitors as comfort food during quarantining.

In 2015, U.S. sales of hard seltzer were roughly $6 million. By 2019, those wrapped at nearly $1.7 billion, having cemented their place in the beverage landscape by appealing to young people who wanted to drink, but not drink a ton of calories. Overall, they’re still maintaining a 215 percent growth, and part of that is the various beer colossi roaming the countryside that see their market share diminishing and desire some of the action: Bud Light Seltzer joined the market, as has Pabst Blue Ribbon’s Stronger Seltzer. As far back as April reporters saw the developments starting.

And plenty of people in our residential lending business play golf. It turns out that there are fewer every year, and many of those in business have temporarily closed. Dartmouth closed their golf programs yesterday. According to an industry survey, early in the pandemic a majority of golf courses in the United States remained open for business. Indeed, online bookings of tee times in the first quarter were up 10 percent from last year, and only a few states in the Midwest, Northeast and Pacific coast have statewide enforced closures. As of April 10, just 45.2 percent of 5,350 U.S. courses surveyed by GolfNow had closed up shop, and as recently as late March that was in the mid-20s percent.

His request approved, the CNN News photographer quickly used a cell phone to call the local airport to charter a flight.

He was told a twin-engine plane would be waiting for him at the airport.

Arriving at the airfield, he spotted a plane warming up outside a hanger.

He jumped in with his bag, slammed the door shut, and shouted, “Let’s go!”

The pilot taxied out, swung the plane into the wind and took off.

Once in the air, the photographer instructed the pilot, “Fly over the valley and make low passes so I can take pictures of the fires on the hillsides.”

“Why?” asked the pilot.

“Because I’m a photographer for CNN,” he responded, “and I need to get some close-up shots.”

The pilot was strangely silent for a moment.

Finally he stammered, “So, what you’re telling me, is…You’re NOT my flight instructor?”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Mortgage Outlook: What if it is Cloudy?”, focused on the current political climate. If you have the inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.


(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2020 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)


FHA employs “waterfall method” to expand home retention measures

The Federal Housing Administration announced on Wednesday an expanded menu of its loss mitigation options in succession with the U.S Department of Housing and Urban Development’s eviction prevention and stability toolkit in an effort to help homeowners avoid foreclosure. The FHA’s loss mitigation options employ a “waterfall method” to assess a homeowner’s eligibility if they do not qualify for its COVID-19 National Emergency Standalone Partial Claim.

FHA compared the waterfall method to that of a filter, meaning when homeowners fail to meet the qualifications of servicing interventions they are moved down the waterfall of options as servicers attempt to get the borrower into a sustainable mortgage payment.

“Due to the fact that servicers are facing an unprecedented number of loss mitigation actions on the backside of this, we want to make it as easy for them as possible to get borrowers in a feasible situation on the other side of forbearance,” said HUD official Joe Gormley.

FHA’s COVID-19 home retention waterfall for homeowners who occupy their FHA-insured single-family residences now requires servicers to assess homeowners for the following at or before the end of their forbearance period:

  • The COVID-19 National Emergency Standalone Partial Claim takes all past due mortgage amounts and puts them in a separate, junior lien of up to 30% of the mortgage’s unpaid principal balance. This junior lien is only repayable when the mortgage ends.
  • If a homeowner does not qualify for the COVID-19 Standalone Partial Claim they are directed to the COVID-19 Owner-Occupant Loan Modification. This modifies the rate and term of the existing mortgage.
  • If a homeowner is not eligible for either of the first two solutions, they may be eligible for the COVID-19 Combination Partial Claim and Loan Modification. It allows for the use of a partial claim up to 30% of the unpaid principal balance – any other amounts owed are handled through a mortgage modification.
  • Finally, the COVID-19 FHA HAMP Combination Loan Modification and Partial Claim is for homeowners who are not eligible for any other home retention solution. It reduces the amount of documentation needed to obtain a COVID-19 FHA HAMP Combination Loan Modification and Partial Claim.

As of right now, these options are available for homeowners whose mortgages were current or less than 30 days past due as of March 1, 2020.

Subsequently, the HUD released an eviction prevention and stability toolkit to encourage Public Housing Authorities and House Choice Voucher landlords to prepare and implement strategies that will mitigate economic hardships due to COVID-19 while keeping families in their homes.

“The toolkit is composed of a PHA best practices guide, tenant brochure with tips to avoid eviction, HCV landlord flyer to encourage engagement with tenants before the moratorium expires, and repayment agreement guidance in addition to sample documents to provide increased clarity for landlords and renters utilizing the resources,” Gormley said.

In June, the FHA extended its foreclosure and eviction moratorium through August 31, 2020, and enacted a policy shift aimed at borrowers who met all FHA requirements for a mortgage at the time of closing but were impacted by the pandemic before receiving the FHA’s endorsement for insurance on the loan. 

“As I am sure you’ve read these last couple of weeks, the eviction narrative continues to gain steam. These resources are a means to quell ‘fears’ and show homeowners, renters, landlords and lenders the myriad of options and flexibilities that are available to them,” said HUD official Kasey Lovett.

The post FHA employs “waterfall method” to expand home retention measures appeared first on HousingWire.

HousingStack Phase 2: Transaction Management

HousingStack HW+

HousingStack is a real estate technology landscape that provides a dynamic visual that reflects the rapid changes in the sector. The HousingStack is exclusively for HW+ members. To join the HW+ community, go here.

While leads flow from various sources and opportunities come into focus, things get real as they move to the transaction stage. This is where forms are filled in, agreements get signed, offers turn into contracts and lots and lots of paperwork flies through people’s hands. For any one sale, there could easily be 25 to 40 documents to manage (contracts, disclosures, inspection reports, HOA forms, more disclosures). As such, it’s no surprise that there would be a lot of action around the transaction. 

Scott Petronis
HW+ Columnist

This segment of the HousingStack includes companies that are primarily focused on moving transactions through the process including Digital Forms, Digital Disclosures, eSignatures and Digital Transactions, which generally include Compliance. What’s interesting here is that, although this is where the rubber meets the road in terms of actually generating the commissions that pay for everything, this area has far fewer players than the segments focused on generating all of the leads. Given that tens of millions of leads turn into between 5 million and 6 million transactions every year, it probably makes sense.

Another interesting aspect of this segment is that many MLSs provide solutions here (via vendor partnerships) to offer digital transaction management as a member benefit. Even beyond that, two specific Realtor associations even jumped into the mix with their own solutions. You don’t get deals across the finish line (confidently, securely and within local and state rules and regulations) without a well-managed process and the technology to support it. 

Digital forms

It all starts with local and state forms. It used to all start with paper, then carbon paper. Today the process is a bit more sophisticated. The forms are digital, but they’re still forms. Any brokerage that wants to transact business needs to do so on the approved forms. However, there are very few companies that can provide easy and comprehensive access to those forms digitally due to copyright laws and licensing requirements. While a number of Digital Transaction systems (or transaction management systems) do provide integrated forms access, brokerages rely on a very small handful of companies for forms. 

zipLogix has provided zipForm (or a derivation of it) for about 30 years and truly capitalized on its early relationship with NAR. One of its most formidable competitors was TransactionDesk from Instanet Solutions. Both are now part of LoneWolf Technologies. Another option on this front, Form Simplicity, offers similar services throughout Florida and the U.S. 

While not the sexiest technology, as I mentioned, it all starts with forms. And options here are limited. 

Digital disclosures

With all of the d*** disclosures required in a real estate transaction, you’d think this space would be more crowded. In some states (in particular in one that rhymes with malifornia), the disclosures seem to be more voluminous than the actual contracts. 

Two companies have started to make a dent here, and it’s no surprise that they’re both in California. Disclosures.io, which got its start in 2016, and Glide, which was founded in 2018. Both have a focus on the disclosure side of things but Disclosures.io also provides offer management and activity tracking to provide a level of visibility into the process. 

Neither company covers the entire U.S. as it’s got to be a painstaking process. However, there’s clearly a need to better manage this part of the process and I imagine others will start jumping into this, along with forms in general. 


Even with digital forms, it wasn’t until passage of the Digital Signature Act of 1999 that digital signatures were widely recognized as legal and binding. This paved the way to transforming the process to entirely digital so that documents could be shared, reviewed, commented on, edited, then signed without ever having to go to print. 

Numerous digital signature providers exist today, some wholly focused on the real estate space, but none come to mind more immediately than DocuSign. Started in 2003, the company was already well-positioned to make a massive dent in the eSignature space early on. A $5 million investment by NAR’s Second Century Ventures in 2009 solidified DocuSign’s fate as the dominant player in real estate. It also made NAR about $20 million, based on the sale of stock after DocuSign filed its IPO in 2018. 

Other popular players in this segment include ZorroSign, GoPaperless and HelloSign, which all provide broader eSignature solutions for real estate and beyond. Authentisign, another product of LoneWolf Technologies, is offered exclusively for real estate. 

Digital Transactions

With 22 companies vying for business in this segment, it’s clearly the focal point for technology providers. So it’s no surprise that this is where the action is considering that productive brokerages and agents spend a significant portion of their energy marshaling deals through to close. 

Some transaction management systems provide more functionality than others; for example, some incorporate digital forms, some add in things like agent onboarding and commission management and most include eSignature capabilities. But the main capabilities include an ability to start from a digital form, checklists to manage processes, a way to collaborate and communicate, the ability to manage folders and documents during and after the transaction and some form of compliance and file completion. Each has its own unique way of fulfilling these requirements and some have integrations with other systems making it easier to move data around.

A handful of players dominate this segment with products like TransactionDesk and zipTMS (both owned by Lone Wolf Technologies) being distributed widely by many MLSs. Others like SkySlope (owned by Fidelity National Financial), dotLoop (owned by Zillow) and Brokermint round out the top five players. There are an additional 18 products available including some developed by big names. They include DocuSign Rooms from DocuSign, BackAgent (now owned by PropertyBase) and Paperless Pipeline. Many players have highly localized businesses in specific regions and even states, and the two most recent entrants, Transactly and Offer to Close, also offer transaction coordinators along with technology. In fairness, several others do as well.

Wrapping Up

While there’s been a lot of investment in this area over the years, the most significant moves have been on the acquisition front rather than piles of money flowing into startups. The biggest moves include Lone Wolf Real Estate Technologies (powered by Vista Equity Partners) acquiring both Instanet and zipLogix, Fidelity National Financial buying SkySlope and Zillow picking up dotLoop. And with Docusign making investments here as well, there’s bound to be more news on that front. 

Even with all of the options and the fact that many MLSs offer solutions as a member benefit, there are still tens of thousands of agents not using a digital system for transactions…or at least there were before this COVID-19 pandemic. Perhaps that’s all changed now and it’s no longer a nice-to-have but a need-to-have. One’s thing’s certain, if you’re doing any significant volume and you’re not using digital tools, you need to evaluate your options.

The post HousingStack Phase 2: Transaction Management appeared first on HousingWire.

These housing markets are most vulnerable to pandemic impacts

In a second-quarter report from ATTOM Data Solutions, it was revealed that housing markets most at risk due to the economic impact of COVID-19 are located on the East Coast.

More specifically, 11 suburban counties around New York City, five around Washington, D.C. and four around Baltimore are more at risk, ATTOM said.

Other states stretching from Connecticut to Florida and Illinois were home to 43 of the 50 counties most vulnerable to the economic impact of the pandemic.

“Home sales data from around the country is starting to show that eight years of price gains may be coming to an end amid the economic damage flowing from the virus pandemic,” said Todd Teta, chief product officer at ATTOM, in the report. “It’s still too early to make any definitive calls, but the latest numbers show storm clouds gathering over the market.”

West coast states had fewer counties at risk, ATTOM said.

There are four western counties in California, with none in other West Coast or southwestern states, that are considered at risk.

The only western counties among the top 50 most at risk, according to ATTOM, were Humboldt County, California; Madera County, California; Riverside County, California; and Shasta County, California.

“With this second special report on the potential impact of the pandemic, we see pockets around the country that appear more or less poised to withstand downward pressure on prices and other market conditions,” Teta continued. “Over the next few months, enough data should come in to tell us how things will most likely pan out.”

This new information doesn’t stray too far away from ATTOM’s report in April, explaining that the virus had made 14 of New Jersey’s 21 counties the most vulnerable in the U.S. at the time.

The top 50 most vulnerable markets at the time also included four in New York, three in Connecticut, 10 from Florida, only one in California, zero in other West Coast states and only one in the Southwest.

Although there are more at risk markets, 26 of the 50 least vulnerable counties from among the 406 included in the report in Q2 were in Colorado, Oregon, Texas and Wisconsin.

The largest included Harris County, Texas, where Houston is; Dallas, Tarrant and Collin counties, all located in the Dallas-Fort Worth metro area, and Travis County, Texas, where Austin is.

The post These housing markets are most vulnerable to pandemic impacts appeared first on HousingWire.

What would it take to trigger a housing downturn in the second half of 2020?

At its beginning, the COVID-19 crisis had many consumers and housing professionals alike bracing for a housing crash. And with good reason: We were, and are, facing the biggest health and economic shock in recent modern-day history.  

But what many didn’t account for was that the U.S. housing market was somewhat inoculated against the economic turmoil of the COVID-19 crisis by having great demographics for housing along with long-standing low mortgage rates.

Logan Mohtashami
Logan Mohtashami

U.S. demographics in the years 2008-2019 were too young and too old to generate strong demand for home purchases, and this was one of the reasons we had the weakest housing recovery ever recorded in history, even with low mortgage rates. In fact, MBA purchase applications, adjusted to population, were lowest in 2014, five years into the last expansion with mortgage rates under 5% for most of the cycle.

Today, the rate of growth in purchase applications is faster on a year-over-year basis than before the COVID-19 crisis, and at a higher level than in 2018 and 2019.  For the last four weeks, the rate of growth in purchase applications was +21%, +18%, +15% and +33%, compared to the same weeks last year. This high, double-digit rate of growth is so impressive that it is unlikely to be sustained in the second half of 2020.

HW purchase

As shown by the purchase application data, the housing market had a “V-shaped” recovery.  The housing bears, though, are saying this V-Shape will turn into a W, meaning there will be another significant downturn. Just because the housing bears have been wrong for the last seven to eight years doesn’t mean that they will be wrong this time as well.  

To that point, I thought it would be useful to outline what would need to happen in 2020 in order for there to be a steep downturn in the housing market.

1. Fear of the virus spirals out of control

In the early months of this year when the virus first took hold, many would-be buyers and sellers decided to postpone any housing transaction activities like listing homes and open houses until after virus transmission rates were under control. Some buyers and sellers even canceled their transactions. 

If a resurgence of infections results in a paralyzed market once again, more Americans will skip the home buying or selling process until a vaccine is in play. Keep in mind that purchase application data is about to run into its seasonality time frame where the total volumes will fall. However, as long as we stay flat to positive for the rest of the year we will be ok in 2020. 

2. Desperation selling with no demand to pick up the inventory through 2020

Since the year is more than half over and we have not seen any desperation selling despite the huge shifts in employment, I don’t believe this is likely. Homeowners today are in a much better position to avoid desperate selling. We didn’t have a credit consumer bubble going into this crisis. Homeowners have much more nested equity and better financial profiles. Additionally, forbearance programs are available for homeowners who have lost employment due to the COVID-19 crisis. 

By 2021, we will be able to determine if these forbearance programs have prevented distress, income loss or equity needed selling. Because a lot of homeowners from 2010-2017 have good nested equity and U.S demographics are solid for housing, I do not expect demand to drop dramatically and supply to increase as we experienced during the bubble bust years of 2006 to 2011. 

Due to high unemployment, we will see more foreclosures and short sales then we had before the COVID-19 crisis but because this will be balanced with a decent demand due to better demographics, I don’t expect a nationwide home price crash like many have talked about over the years. 

3. Government tightens lending

The third thing that would need to happen in order for the V-shaped recovery in housing to take a downturn would be for the U.S. government to tighten lending. 

Today, credit is tighter then it was before the COVID-19 crisis, but standards are still liberal for well-qualified buyers. 

In a few interviews this year, I talked about credit getting tighter after the mortgage meltdown in March but this only affected 4.5% to 6.2% of all loans that could have closed before March 9. The Twitter housing bears overplayed the tight credit thesis in an effort to foment fear of a housing collapse, saying that a lot of loans would be affected instead of 6%. 

The housing bears need infection rates to skyrocket, desperate sellers and tighter government standards for lending in order for the U.S. housing market to snatch defeat from the jaws of victory in 2020.

Because homebuying is a process of many steps, the COVID-19 crisis will have an impact on housing for years to come. This is a given.  

It is also a given, however, that we still have over 138,000,000 employed workers – and this is only the non-farm payroll data that represent the majority but not all working Americans. Yes, we have suffered tremendous job losses, but we still have a large working population. We want to get back to having over 160,000,000 people working as we did in February 2020. 

Just remember the existing home sales market needs only 4 million mortgage buyers per year to keep demand stable. As long as purchase application data stay flat to positive on a year-over-year basis, housing should be okay for the second half of the year. In 2021, we will have a new set of variables to deal with.

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Is a foreclosure wave on the horizon?

As COVID-19 swept across the U.S., shutting down businesses and forcing many into unemployment, fear of a foreclosure wave has been rising.

As borrowers came close to defaulting on their loans, rules were set in place that forced servicers to offer forbearance options for all borrowers, even without them having to show evidence of need. And what’s more, Fannie Mae and Freddie Mac each issued a statement Monday, reiterating that borrowers are not required to repay their missed payments all at once when their forbearance period ends.

But as the forbearance periods draw closer to ending in 2021, that has many servicers wondering what to expect from the defaulting borrowers. Is a foreclosure tsunami at hand? One expert argues that it’s not.

CJ Patrick Founder Rick Sharga explains in an upcoming HousingWire Magazine article this economic downturn looks significantly different than what one would expect to see if a foreclosure crisis were looming.

Historically, there’s been a reliable pattern that starts with an economic downturn, followed by rising unemployment, delinquent mortgage payments, defaulted loans and, finally, foreclosures. But COVID-19 disrupted that pattern, stopping a strong economy in its tracks. Unemployment rates went from 50-year lows to record highs virtually overnight, not because of weakness in the economy, but because the government essentially shut the economy down in an effort to limit the spread of the coronavirus.

The unusual nature of this pandemic-induced unemployment is one of the reasons that the normal pattern may not apply this time. Why? Unemployment hit certain industries much harder than others – travel and tourism, hospitality, retail, restaurants and personal services. These are all industries made up of relatively low-earning, hourly wage employees who tend to be renters, not homeowners. According to the U.S. Census Bureau, the homeownership rate for households making less than the median income is about 50%; for households making more than the median income, the homeownership rate is about 80%. Homeownership rates are also lower for young adults, and adults without a college education, both fairly typical traits of employees within the most impacted industries.

In the article, Sharga also talks about why forbearance does not equal foreclosure, why recent and distant history favor a recovery and what could go wrong from here. The full article will be released in the August issue of HW Magazine. Sign up here to get your copy.  

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Mortgage forbearances drop to a two-month low

There are 4.14 million mortgages in forbearance this week, a two-month low, Black Knight said in a report on Friday.

The number dropped by 435,000 from last week – the largest decline of the pandemic, according to the report.

Measured as a share of all mortgages, the forbearance rate fell to 7.8% from 8.6% in the prior week, the report said.

The decline comes as the number of COVID-19 infections spikes to record levels in several of the nation’s largest states, including Texas and California, which could fuel layoffs. Also looming is the July 31 expiration date of the CARES Act’s beefed-up unemployment benefit that could lead to an increase in forbearance requests.

“Recent spikes in COVID-19 around much of the country and the scheduled expiration of expanded unemployment benefits both represent significant uncertainty for the weeks ahead,” said Andy Walden, an economist and director of market research for Black Knight.

About 6% of mortgages backed by Fannie Mae and Freddie Mac are now in forbearance, down from 6.8% last week, the report said. That’s about 1.7 million mortgages with an unpaid principal balance of $354 billion.

About 11.6% of home loans back by the Federal Housing Administration and the Veterans Administration have suspended payments, down from 12.3% last week, Black Knight said. That’s about 1.4 million home loans with an unpaid principal balance of $240 billion, according to the report.

In addition, there are 1.1 million private-market mortgages in forbearance, representing an 8.2% share, down from 9.3% last week, Black Knight said. Private-market mortgages aren’t backed by a government agency or a GSE. They could be jumbo mortgages held by banks or home loans packaged into private-label bonds. The unpaid principal balance for those mortgages is $304 billion.

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