2019 has been a year of tremendous audience and product growth for HousingWire and we couldn’t be prouder.
We launched the Housing News podcast, our OpenHouse newsletter for real estate agents, and the all-new www.housingwire.com, which is firing on all cylinders.
We grew our audience by 70% to an expected 8 million readers, a truly record-breaking figure that we’re humbled by.
We hired our first Real Estate editor, KK Howley, and significantly expanded our real estate coverage.
We’ve added quite a few great team members in each department of our company.
We’ve grown each of our newsletter subscriber lists.
And we’ve continued to deliver news nowhere else to our loyal and growing audience.
But we’re not ready to rest on our laurels. Far from it. In fact, 2020 promises to be an even bigger year for HousingWire.
We’re planning to become the largest publisher of news and analysis for housing professionals across the real estate life cycle.
To do that, we’re planning a significant expansion in our news department that will allow us to deliver even more of the news that we’ve always provided to you.
We’re also planning to augment our already award-winning content with much more deep insights and analysis that provide the why behind our daily news coverage.
We’re adding a second engage summit, engage.talent, focused on talent recruitment and retention.
To help us achieve our 2020 goals, we’re hiring!
We’re looking for talented people to fill roles in our editorial, marketing, client success, and sales teams. If you’re interested in joining Team HousingWire, please review our job descriptions at www.housingwire.com/jobs.
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Selling to an iBuyer means homeowners can forego the uncertainties of listing a property and never have to worry about prepping for an open house.
But are they leaving money on the table? Mike DelPrete, a real estate tech advisor and strategist known as the “iBuyer whisperer” because of his focus on the sector, says they are. But, not much.
The average “discount to market value,” meaning the difference between what an iBuyer pays and what the home could get on the open market, is 1.3%, DelPrete said in an interview on Friday with HousingWire.
That’s based on his analysis of more than 20,000 transactions made by Opendoor and Zillow, the two biggest iBuyers, in 2018 and 2019. Together, the two companies accounted for 86% of iBuyer transactions, meaning a property that was purchased and resold, during the period.
“A lot of people think they’re going to get ripped off by these big iBuyers, but the data shows they’re not,” DelPrete said.
On a $300,000 home sale, that’s a discount of $3,900. DelPrete said some sellers would find that a good trade-off if it gets them to a transaction without open houses and uncertainty.
“That’s the choice for consumers: are you willing to trade a little bit of money for certainty,” DelPrete said. “It’s going to be a difference of several thousand dollars, but it’s not going to be $20,000 or $30,000.”
While sellers don’t have to prep for an open house, they’re still going to get charged for some repairs, DelPrete said.
“If there’s a hole in your roof, you’re still going to be paying for that, in the form of a reduction in the offer an iBuyer will make,” DelPrete said, “but you were going to have to pay for that, anyway, by getting it fixed before listing a home the traditional way.”
Another consideration is fees, DelPrete said. Homeowners who sell to an iBuyer typically will pay a fee that might be a percentage point higher than using a real estate agent, he said.
A traditional real estate agent might charge a commission equal to 5% or 6% of the home’s selling price, depending on what’s negotiated in the listing contract.
The fee iBuyers typically charge is equal to about 7% of the negotiated price, DelPrete said.
“When you take everything into consideration, the difference between an iBuyer and traditional sales is probably going to be a couple of percentage points,” DelPrete said. “Can you get that money on the open market? Maybe. Will it take you three months to sell? Maybe.”
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The mortgage broker channel has seen a great deal of growth over the last year, with independent mortgage brokers now accounting for more than 16% market share. This momentum – which doesn’t show signs of stopping anytime soon – presents a great opportunity for real estate professionals to join forces with independent mortgage brokers to ensure your homebuyers are getting the best experience possible.
As the mortgage broker network grows, there are more options for you to choose from when looking for a partner. One of the perks of partnering with an independent mortgage broker is that you’re able to work with someone local, embedded in your buyer’s community of choice. Rather than working with a big bank who may only see your buyer as a number, a local, independent mortgage broker can provide personalized, face-to-face mortgage expertise.
And because independent mortgage brokers work with a wide variety of lenders, they are experts at matching your clients with the right loan products. Mortgage brokers are skilled at helping self-employed borrowers and those with second jobs in the gig economy, as well as first time homebuyers or those with less than stellar credit histories. Finding the right loan match can transform a renter into a buyer, and nets you a grateful client ready to refer more business.
In addition, independent mortgage brokers are agile and willing to work with you and your buyers to meet your timelines. Unlike some traditional lenders who keep bankers’ hours or work through a call center, mortgage brokers place a premium on being available when you need them. That means that your clients don’t waste time waiting for approvals — and potentially lose out on their dream home.
There are many reasons to work with an independent mortgage broker, and now it’s easier than ever to connect with one in your area. VisitFindAMortgageBroker.com to learn more about the advantages of working with a mortgage broker and how you can partner with one today.
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Tech-enabled renovation company Curbio has been busy this year.
The company announced this week it is expanding to Boston, adding to its already lengthy list of metros it serves.
In October, the company promised it would expand into Boston as well as Minneapolis, Las Vegas, Portland, Seattle, San Francisco, Los Angeles, and Charlotte within the following months.
Curbio already serves Philadelphia, Baltimore, Washington D.C., Northern Virginia, Atlanta, Houston, Dallas, Chicago, Phoenix and the Florida metro areas of Orlando, Tampa, Miami and Fort Lauderdale.
The company refers to itself as a renovation partner in the remodeling mix. By using software to essentially flip a house, Curbio ensures the renovation process is quick and cost-effective. Clients don’t have to pay the service until the sale on their house closes.
Curbio provides project management, material selection and renovation choices designed to maximize profits for the seller. The company also keeps homeowners informed throughout the process with updates, photos and videos.
Curbio claims they can help customers complete housing projects 60% faster.
Earlier this year, Curbio raised $7 million in funding and partnered with Door.com, both to fuel its expansion. Door.com is similar to Curbio in the sense that customers have 24/7 access to their online portal to view listing performance, buyer feedback, their agent’s analysis and offer details on the website.
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How many of these posts do we see on social media from our fellow agents and lenders every day? Like, a bazillion! Probably more like six bazillion, if we’re being accurate. Certainly every time a loan limit is increased or interest rates make a big move.
It’s not necessarily the topic that is the issue, it’s the delivery of the topic that’s the problem.
Do you know what was missing from 5.999 bazillion of those posts? An explanation of what in the world a conforming loan even is! An explanation of how a major move in rates actually affects consumers’ purchasing power. Nothing tangible, just generic, unhelpful nonsense.
I can count on one hand how many times I saw a lender saying something tangible and actually helpful. Something like “this interest rate bump means the monthly payment on a $300,000 loan went up x-amount.”
Nope. Instead, just the same old crap that consumers “love” like, “Rates are going up! Better buy now! It’s never been a better time than right now!”
If you can’t educate consumers, you can’t help consumers. And if you can’t help them, then what the hell do they need us for?
After all, there’s an app for that now, isn’t there?
Do we realize who we’re actually talking to? You know, those people who aren’t in the real estate or mortgage industry. As in, the exact people we want to hire us. The people we spend ungodly amounts of money on each month just to get a chance to talk to.
Then we get our chance, and we pepper them with meaningless industry jargon! Smooth move, bro. Maybe the next $300 Zillow lead will be “the one.”
It’s truly stunning how little thought agents and loan officers put into crafting the messages they’re putting out there. They just copy a HousingWire headline, which is full of industry jargon (you know, because it’s written for the industry) and then turn around and use that exact terminology to tell consumers about it.
This topic has been a bug up my butt for years. It always makes me cringe when I see consumers talked over and confused rather than being educated or informed.
These last couple weeks especially, I’ve really been screaming about this on my podcast, my Alexa flash briefing, on social media, and anywhere else I can get agents and lenders to hear me. We’re only causing more confusion and noise, and adding to the perception that Realtors and lenders aren’t approachable or relatable. I yearn for the day that we stop proving that to be true.
So why do so many Realtors and loan officers talk over the heads of consumers, with no explanation or education included in the message? Is it arrogance? Is it laziness? Is it a simple lack of thinking through who we’re talking to and the language they actually speak? Unfortunately, I think it’s a combination of it all.
Do we realize that most agents, let alone consumers, don’t know what a conforming loan is? Many consumers don’t really know what an FHA loan is or what “comps” are.
Sure, they may have heard the terms before, but that’s it. They don’t understand the nuances of an FHA loan versus Conventional. A staggering number of consumers still believe that you must have 20% down to buy a home!
Again, they are not industry insiders. You are.
Don’t ever assume that consumers know what industry-specific terms mean or what the differences between loan programs are. Not everyone knows what an FHA loan is, or how it differs from Conventional or VA financing, and what that means to them. Don’t ever assume that an increase in loan limits means anything to anyone. Because it doesn’t. Again, most agents don’t even know themselves.
We have to explain these concepts. We have to educate and advise; teach and simplify. But more than just explaining, defining, and pontificating, we have to relate this stuff to the consumer.
What does an increase in conforming loan limits mean for them? How does that affect their ability to buy a home? Explain to your sellers that loan limit increases are good because the pool of potential buyers for their home just got bigger.
Don’t just tell consumers that interest rates went up or down. Show them how that affects their purchasing power. Does the change in rates mean the difference between a budget of $300,000 versus $330,000? Tell them that!
If rates are going up, don’t just give consumers that tired old line of “Now is the best time to buy or refinance because rates may go up even more!” Show them how it’s not the end of the world. Have them Google “Jimmy Carter mortgage rates” and magically, 10 seconds later, the jump in rates doesn’t seem as big of a deal anymore.
Be a guide, a reliable, trusted resource to help consumers cut through the noise from all of our competitors who do nothing more than litter the internet with meaningless industry jargon. Anticipate the questions they may have and answer them up front. Many times they don’t even know what questions to ask. (Remember: They’re not actually agents or lenders!)
In this age of (too much) information, consumers are completely overwhelmed. They’re begging for clarity. They’re craving it.
If we don’t get their attention and gain their trust by being truly helpful, then some app will. Some Silicon Valley company with $1+ billion in funding and a huge marketing budget will come in and set the narrative.
None of us stand a chance against that if all we’re doing is confusing consumers and driving them into the hands of that fancy new app.
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Fannie Mae and Freddie Mac announced Thursday the appointment of Anthony Renzi as the new CEO of Common Securitization Solutions, the joint venture between the two companies that developed and implemented the single security.
In this new role, Renzi will assume responsibility for the platform that supports the administration of the new Uniform Mortgage-Backed Security and define CSS’s future role in housing finance.
The new role became effective as of Dec. 2, 2019. Renzi succeeds David Applegate, who announced earlier this year that he would be stepping down as CSS CEO by year-end.
The initiative for a single securitization infrastructure between the two entities has been around for quite some time.
In 2013, the companies established CSS to design and implement the single GSE bond through the Common Securitization Platform. Applegate was appointed CEO at the jointly owned company’s launch. But in June, Fannie and Freddie announced that Applegate would be stepping down.
“CSS has been a remarkable success story. It now administers, on behalf of Fannie Mae and Freddie Mac, nearly 1 million securities, backed by loans with $4.8 trillion in unpaid principal balance,” said Jerry Weiss, Freddie Mac executive vice president and chairman of the CSS Board of Managers. “The appointment of Tony Renzi signals our commitment to a seamless transition in leadership that will pave the way for continued progress at CSS.”
The appointment of Renzi is the result of a nationwide search for qualified candidates to lead the joint venture, which has been instrumental in building and running the technology platform that supports the new Uniform Mortgage-Backed Security, the companies said.
“We are fortunate to have found an individual with deep industry experience in leading large, complex organizations,” said David Benson, Fannie Mae president and CSS board member. “We’re delighted to welcome Tony to the CSS organization and look forward to working with him to strengthen and grow the services provided by CSS.”
Previously, Renzi was the CEO of Walter Investment Management Corp., which later changed its name to Ditech Holding Corp. Renzi later became the president and chief operating officer of Cenlar FSB, one of the nation’s largest mortgage subservicers.
Walter Investment (now Ditech) announced that Renzi would be stepping down as the nonbank’s CEO just as the company was set to emerge from bankruptcy. Renzi took over at Walter in September 2016, becoming the company’s fourth CEO in just under a year.
Renzi came to Walter from Citigroup, where he served as the chief operating officer, managing director and head of operations for Citi’s North America retail bank, commercial bank and CitiMortgage.
Earlier in his career, Renzi was executive vice president of the single-family business, operations and technology at Freddie Mac, chief operating officer of GMAC Residential Capital and served as president of GMAC Mortgage from 2001 to 2010.
“I’m excited to be with an organization that enabled the launch of the UMBS,” Renzi said. “We have the opportunity to continue to support Fannie Mae and Freddie Mac and further define the future of CSS and how it will support the housing finance industry.”
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Despite recent data that younger generations are beginning to buy houses, on the whole, those same generations are waiting far longer than their parents did to buy their first house.
There are various reasons for that delay, including a dramatic increase in student loan debt and a general shifting of attitudes towards the traditional homebuyer cycle. Put simply, people are waiting longer to marry, have kids, and buy houses.
But just how much longer are people waiting to a buy house than they used to? Quite a long time, as it turns out.
As more members of the younger generation are postponing homeownership and homes are becoming multi-generational, the median age of U.S. homebuyers is now 47.
That figure has gone up eight years in just the last decade.
According to Realtor.com, the median age has increased by eight years since the financial crisis. But the trend goes back further than that.
A new report from Deutsche Bank Research shows that the median age of homebuyers in 1981 was 31. Since then, it’s gone up 16 years and now sits at 47.
In metros and cities that attract young homebuyers the most, prices of homes have skyrocketed, and inventory has also gone down in record numbers this year.
Now, Generation Z seems to be the next wave of homebuyers, but there aren’t enough homes for them to buy, even if they’re ready and willing.
That’s thanks to Baby Boomers who are aging in place, leaving fewer homes on the market.
But according to TransUnion, at least 8.3 million first-time home buyers will enter the mortgage market between 2020 and 2022, due to low unemployment, record-low mortgage rates and rising wages.
In the wake of the affordability crisis, the average annual income of homebuyers has also increased to over $93,000, well above the national median income of $61,937.
Realtor.com suggests that younger adults struggle with student debt, making it harder to take out a mortgage.
Citing the National Association of Realtors, 83% of non-honmeowners said they think having student debt has delayed the ability to buy a home.
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If there’s one thing that Mike Cagney specializes in, it’s quickly building billion-dollar companies. He did at SoFi, before leaving the company in 2017 after reports emerged about the alleged toxic culture at the online lender.
And now he’s done it again with Figure Technologies, the blockchain lending startup Cagney helped found just last year.
Thanks to a new round of funding, Figure is now worth more than a $1 billion and has now reached unicorn status, a term for privately held startups that are valued at more than $1 billion, in less than two years.
Reports emerged earlier this week that Figure was looking to raise more than $100 million, and that’s just what the company has done.
Figure announced this week that it raised $103 million in in Series C round of funding, bringing the company’s total capital raised to more than $225 million since last year.
The latest funding round also values Figure at $1.2 billion, firmly in the unicorn category.
According to the company, the funding round was led by Morgan Creek Digital and joined by MUFG Innovation Partners and other new and existing investors.
It’s the company’s second capital raise of 2019. Earlier this year, the company raised $65 million in its Series B equity funding.
Other Figure investors include DCM, Digital Currency Group, HCM Capital, Ribbit Capital, RPM Ventures, The Partners at DST Global, and others.
Cagney helped found Figure in 2018 after leaving SoFi in 2017.
Under Cagney’s leadership, investors also took a liking to SoFI, including separate capital raises of $500 million and $1 billion.
But the shine wore off quickly after allegations of how SoFi actually operated came to light, including claims that the company fired a former employee for reporting sexual harassment allegations to his superiors.
Cagney resigned shortly thereafter, moving on to Figure, which provides different lending options via blockchain.
The company entered the home equity lending market first, rolling out its signature product, Figure Home Equity, which is a hybrid between a traditional home equity loan and a HELOC that allows homeowners to borrow from their home equity.
Then the company expanded into a different form of equity, unveiling a program that it called an alternative to reverse mortgages. The program, called Figure Home Advantage, sees the company buy a property outright from a homeowner, who then rents the house back from Figure for as long as they want to.
According to details from Figure, the company now also provides mortgage and student loan refinances in addition to its other offerings.
In a release, the company states it has originated more than $700 million in loans thus far.
The company’s lending platform is operated on Provenance.io, a blockchain platform developed by Figure last year that is used to originate, finance and sell HELOCs to banks, asset managers and credit funds.
“The team at Figure has accomplished so much in under two years, and this funding is a testament to that work,” Cagney, who serves as Figure’s CEO, said in a release. “This investment is going to give us the resources we need to further fuel our mission of leveraging blockchain to reinvent lending, borrowing and investing for consumers and the financial industry, both in the U.S. and abroad.”
As part of the funding, Anthony Pompliano, co-founder and Partner at Morgan Creek Digital, will join the company’s board.
“One of our core investment theses is that every stock, bond, currency, and commodity will eventually be digitized. Figure is leading that transition from the front and is bringing radical change to finance and lending markets,” Pompliano said.
Leveraging blockchain technology to drive speed, efficiency, and cost savings to lending, Figure is focused on driving out waste and dead time inherent to the lending process,” Pompliano added. “It is not often that you get the opportunity to partner with an entrepreneur like Mike Cagney and a world class team like Figure. We are excited to have a front row seat to the transformation of finance.”
According to Figure, the company also recently added several executives to its ranks: C.D. Davies as head of lending, Tony Morosini as vice president of banking and payments, and Tina McNulty as chief communications officer.
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The affordability crisis is going strong and only continues to worsen as the housing stock is unable to keep up with the rising demand.
The U.S. Department of Housing and Urban Development announced it will invest $10 million to develop 538 affordable homes.
HUD announced that in an effort to help more working families become homeowners, it will award $10 million in grants to four non-profit housing organizations, which will create at least 538 affordable homes for low-income families and individuals.
HUD’s Self-Help Homeownership Opportunity Program, these grants, along with the labor contributions from homebuyers and volunteers, will significantly lower the cost of construction, thus making homeownership a reality for families who otherwise would not be able to afford to buy a home.
“These non-profits receiving grants are making a positive impact in communities across the country through the strong partnerships they have formed between the public and private sector,” said David Woll, HUD principal deputy assistant secretary for community planning and development. “These grants, in conjunction with volunteer work and private donations, will help make the dream of homeownership a reality for more families.”
Here are the four places the grants will be awarded to, how much each one will receive and more on the project each non-profit will be working on:
Habitat for Humanity International, Inc. will receive a Self-Help Homeownership Opportunity Program grant award in the amount of $5,421,011. HFHI is a private, non-profit, ecumenical Christian organization that has assisted Habitat affiliates in building and rehabilitating more than 100,000 self-help homeownership housing units in partnership with low-income people in the U.S. since 1976. Habitat’s mission is carried out locally by approximately 1,251 subordinate self-help homeownership housing organizations within a specific geographic service area. This grant award will be used to complete a minimum of 289 SHOP units. Completed units will be sold to low-income homebuyers who have contributed a significant amount of sweat equity toward the construction of their homes.
Housing Assistance Council will receive a Self-Help Homeownership Opportunity Program grant award in the amount of $1,307,014. HAC is a national non-profit self-help housing organization that will use its SHOP funds in primarily rural areas to facilitate and encourage innovative homeownership opportunities through the provision of self-help housing. Local affiliates will compete for SHOP funding from HAC. Each affiliate has the flexibility to design a program that meets the needs of its community. SHOP funds will be used to purchase land and make necessary infrastructure improvements that support the new construction of SHOP housing units. Completed units will be sold to low-income homebuyers who have contributed a significant amount of sweat equity toward the construction of their homes. The grant award will be used to complete a minimum of 70 SHOP housing units.
Community Frameworks will receive a Self-Help Homeownership Opportunity Program grant award in the amount of $1,121,868. CF is a regional non-profit self-help housing organization that serves the states of Idaho, Montana, Oregon and Washington. CF will make SHOP funds available to 16 affiliates to purchase land and make necessary infrastructure improvements that support new construction and rehabilitation of the SHOP units. Each affiliate has the flexibility to design a program that meets the needs of its community. Grant award funds will be used to complete a minimum of 60 SHOP housing units.
Tierra del Sol Housing Corporation will receive a Self-Help Homeownership Opportunity Program grant award in the amount of $2,150,107. TDS is a regional housing community development corporation with the purpose of improving the quality of life and economic conditions of low-income persons residing in distressed and underserved communities, by providing affordable housing and community development through construction activities, lending, training and employment opportunities. The grant award will be used to complete a minimum of 119 SHOP units.
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The U.S. unemployment rate fell to another 50-year low, coming in at 3.5% in November as the economy added 266,000 jobs after October’s upwardly revised 156,000 jobs, according to the Bureau of Labor Statistics.
The number of unemployed persons changed little, with 5.8 million out of work, according to the report.
Comparing demographic segments, the jobless rates showed little or no change over the month, coming in for both women and men at 3.2%, whites at 3.2%, Hispanics at 4.2%, teenagers at 12%, Asians at 2.6% and blacks at 5.5%.
The average hourly earnings for all employees on private non-farm payrolls rose 3.1% from a year ago, up 7 cents to $23.83, the report said.
The change in total non-farm payroll employment in September was revised upward to 193,000 jobs from 180,000. With the revisions to the prior two months, employment gains in September and October combined were 41,000 more than previously reported.
The majority of job gains in November can be attributed to in healthcare and professional and technical services. Manufacturing employment also increased, reflecting a return of workers from a GE strike.
The average workweek for all employees on private non-farm payrolls remained unchanged at 34.4 hours in November.
Here are some of the areas that showed notable changes in October:
Employment in healthcare increased by 45,000 jobs
Employment in professional and technical services increased by 31,000 jobs
Employment in leisure and hospitality increased by 45,000 jobs
Employment in transportation and warehousing increased by 16,000 jobs
Employment in financial activitiesincreased by 13,000 jobs
Employment in mining decreased by 7,000 jobs
The final jobs report of the year outpaced expectations and supports the argument that the economy isn’t facing imminent recession, said Odeta Kushi, First American’s deputy chief economist.
“Today’s numbers point to a more competitive housing market next year,” Kushi said. “Job growth is steady, the unemployment rate fell to 3.5%, a 50-year low, and wages are rising modestly, which bolsters Americans’ spending power.”
That translates into more demand for homes, Kishi said.
“Housing is the most durable consumer good we’ll ever buy,” he said, “and surging house-buying power fuels greater potential demand in a supply-constrained market. There’s no evidence that these dynamics will change in 2020.”
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