Rent Increase Estimates; Fannie, Freddie, and Ginnie Updates from Elaine Golden-Gealer

micro-livingLet’s talk about the $26 billion in equity gain in Colorado in 2014 – Rocky Mountain High! What are not gaining are the stock prices of non-bank servicers. At one point yesterday Ocwen was down 26%, Nationstar was down 8%, and Walters was down 7%. I hope employees have diversified 401(k) plans.

Estimates for 2015 are flying. Zillow predicts that growth in rents will outpace home values in 2015 due to skyrocketing rental demand. The combination of young adults renting longer and families continuing to rent after losing their home to foreclosure has increased the rental market. The millennial generation (23-34 years old) will be the largest home buying age group and current millennial renters are more optimistic than other generations that they will be able to eventually afford a home. As rent prices increase, more of these young adults will turn to the purchase market and given their lifestyle preferences, home purchases could lean more towards condominiums or townhouses. Home builders are also beginning to cater to the millennial home buyer, as they are beginning to build more inexpensive homes. This is good news for buyers, as they will have more negotiating power in 2015 and buying will begin to look more attractive to current renters that can afford a down payment on a desired home.

Zelman & Associates Land Development Survey indicates development activity remains strong. The November land development index equaled 62.5, down from 63.3 a month earlier, but is still indicative of an above average development activity. A negative impact on home-building demand due to decreased oil prices has yet to be felt in Texas as development is still robust in the Texas market but may decline over the next year. Finished lot demand is down for the eighth consecutive month but finished lot value is up 13% YoY. Acquisition demand also fell for the eighth consecutive month and raw land demand is also down but remains above the normal level. Development costs are up 6.9% YoY and land appetite ranking are down for builders and investors in November.

Fee increases and private sources of mortgage financing are expected to significantly cut new-loan business by Fannie Mae and Freddie Mac in the next decade, congressional analysts said recently. The share is expected to fall to about 40% by 2024, compared with 60% from 2008 to 2013.

And many believe that Fannie Mae and Freddie Mac share prices could drop as the U.S. mortgage giants face lawsuits over the taking of profits. A federal court in September dismissed lawsuits brought by Perry Capital and Fairholme Funds over the government taking profits, and Pershing Square Capital Management sought dismissal of its own lawsuit. Government lawyers have asked the court to reject the Pershing request and instead rule that the previous dismissal includes the third suit.

Fannie Mae is talking technology and asking are you ready for Collateral UnderwriterTM (CUTM)? View the recently posted training Understanding CU’s Risk Score, Flags and Messages, the updated FAQs, and other resources on the CU page.

As a reminder, Fannie Mae and Freddie Mac both announced enhancements to the life-of-loan representations and warranties under the selling representation and warranty framework.  The enhancements are detailed on each website and provide more specific guidelines, Freddie Mac bulletin or Fannie Mae announcement.

Ginnie Mae has added “Consolidation of Disclosure Pages on its website, choose the link to view the bulletin. Ginnie Mae also added periodic information in its November 17th notes and news.

Freddie Mac’s Servicer Success Scorecard has been reissued to correct certain calculation descriptions in Attachment A. Additionally a preview of your 2015 Scorecard was available in your Servicer Performance Profile Friday, December 5. Simply click on the Servicer Success Scorecard link in your Servicer Performance Profile.

Lenders are posting and announcing information regarding Fannie Mae’s scheduled implementation as of December 13, 2014 of DU Version 9.2. Information from FNMA regarding cut-off date for loans originated under DU Version 9.1; has not yet been announced. The new release includes expanded LTV, CLTV, and HCLTV ratios for purchase and limited cash out refinances. To view Fannie’s last announcement regarding these changes follow the attached link December 8th Announcement.

Fannie Mae servicing guide updates include changes to loss drafts processing, changes and clarifications to Mortgage Release borrower incentive payments. Updated information can be viewed in SVC 2014-21 Announcement. Additionally, an updated Evaluation Notices Exhibit has also been published.

DRE #00598428
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed

“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”