Chicago Real Estate News

 

Oct. 28, 2020

Mortgage rate forecast for 2021

At its Annual event Wednesday, Mortgage Bankers Association Chief Economist Mike Fratantoni forecast that mortgage rates could rise in the year to come, but that they will remain near all-time lows.

Forecast

Fratantoni pointed out that the job losses seen in 2020 have been unprecedented, even when compared to the Great Recession.

“Yes, it’s come down to 10 million, but look at how that compares again to the peak in 2009 of 6.6 million,” he said. “This has just been a tremendous negative shock for the economy as a whole.”

However, due to the narrow industry focus of the job losses, this downturn has proved much different than what the economy saw in 2009. And the recovery will likely depend on how long the pandemic lasts.

“This distress is not going away soon,” Fratantoni said. “Many of these folks who thought they were on a temporary furlough are now reporting they have a permanent job loss. Many of the employers they thought they were returning to have gone bankrupt, and the longer this crisis lasts, the longer the restrictions are in place, and again, the public health demands that some of these restrictions remain in place, but the economic cost is real.

“And because you have so many people who are going to be displaced from what was the job they had chosen, that search for a new job in a new sector of the economy, even if it’s going to eventually be successful, is going to take more time, so we think the recovery from here is going to be a little slower than that what we have seen thus far in 2020,” he continued.

Earlier this year, the Federal Reserve ended its June two-day policy meeting  leaving rates unchanged and gave a strong indication that it will not raise interest rates for a long time. Fratantoni brought up this point, saying that short-term rates will stay at 0% at least until 2022 and said that we will see a very cautious Fed when it comes to raising rates from here.

However, he forecasted that mortgage rates will steadily rise over the next year. The chart below shows interest rates for the 30-year fixed-rate mortgage will end this year at about 3% and could hit around 3.3% in 2021.

interest-rates

Housing inventory and prices

Given the low interest rates that are driving demand, housing inventory has become a rising concern. MBA Associate Vice President of Industry Analysis Joel Kan explained that current inventory rests at just a three-month supply. He said as builders work to replenish the supply with new homes, the most recent census data shows a 1.1 million annualized pace for new construction — the highest level since 2007.

But while inventory is increasing, it is not happening fast enough, putting upward pressure on home prices. Kan explained estimates show an annual increase of about 4% to 5%, a trend that will continue in the year ahead.

Profitability

Before this year, 2003 was the last time a record was set for profitability on the origination side, and 2012 was the last record year for refinances. However, MBA Vice President of Industry Analysis Marina Walsh predicted 2020 could possibly set new records for profits for independent mortgage bankers.

MBA forecasts mortgage originations to total $3.18 trillion in 2020 – the closest we’ve gotten to 2003’s high of $3.81 trillion. In 2021, mortgage originations are expected to fall to around $2.49 trillion, which would still be the second-highest total in the past 15 years. At $1.54 trillion, next year’s purchase originations would eclipse the previous all-time high of $1.51 trillion in 2005.

IMB-profits

“What’s interesting too, is look at that orange line, that’s the average production volume,” Walsh said. “Usually in our quarterly performance report, you would think that that’s an annualized number three, for 350 IMB at 1 billion. But 1 billion is the average for that particular quarter. So exceptionally high volume and exceptionally high profits as well.”

Servicing

On the servicing side of the business, elevated borrower delinquency rates – particularly for FHA borrowers – remain a concern. Top of mind for servicers will be pursuing the most appropriate loss mitigation strategies for post-forbearance borrowers and investors.

“Servicers will remain busy in 2021 helping borrowers exit mortgage forbearance and into longer-term solutions,” Walsh said. “This will likely result in the operational need for additional loss mitigation personnel and increased servicing costs.”

And while delinquencies hit all-time highs over 2020, Walsh explained the forbearance options kept foreclosures low and could continue to help borrowers into 2021.

Walsh said that as more loans fall into the seriously delinquent bucket, servicer costs could rise.

servicing-costs

“Based on the data that we have now, productivity is actually continuing to increase, but that’s only for through the first half of 2020,” she said. “Same thing happened for those of you that were around in 2009, whereby we had very high delinquencies and our costs hadn’t quite caught up yet and as loans get more delinquent and are seriously delinquent, that’s when the real costs start to really come into play.

“We do expect in 2021 that as these loans are in the seriously delinquent stage, especially for servicers with large FHA pool — FHA loans as a percentage of their overall volume — we would expect to see the servicing costs go up and productivity drop and continued hiring of loss mitigation specialists,” Walsh said.

The pandemic effect

However, the MBA’s 2021 forecast assumes an effective vaccine will bring the COVID-19 pandemic under control, leading to a gradual economic recovery that is aided by further fiscal stimulus.

“The economy, labor market, and housing market have all seen meaningful rebounds since the onset of the pandemic, but there is still profound uncertainty,” Fratantoni said. “Additional waves of the virus could lead to further lockdowns and more job market instability.

“On the other hand, another pandemic-related stimulus package would result in faster economic growth and additional support for the housing market, albeit with slightly more upward pressure on mortgage rates,” Fratantoni added. “2021, particularly the second half, should be a year of continued purchase growth and slowing refinance activity.

“As long as the spread of the pandemic is brought under control, the economy should expand around 3% next year, allowing the job market to improve, incomes to rise, and home sales to meaningfully increase,” Fratantoni said.

 

By: HW - Kelsey Ramirez 

Oct. 21, 2020

Consumer confidence hits pandemic high

 

The September Jobs Report issued by the Bureau of Labor Statistics reported that the unemployment rate dropped to 7.9%. Though that percentage is well below what experts projected earlier this year, it still means millions of people are without work. There’s no way to minimize the tremendous impact this pandemic-induced recession continues to have on many Americans.

However, the latest Home Purchase Sentiment Index from Fannie Mae shows how more and more Americans believe the worst is behind us, and their personal employment situation is good. The index revealed:

“The percentage of respondents who say they are not concerned about losing their job in the next 12 months increased from 78% to 83%, while the percentage who say they are concerned decreased from 22% to 16%. As a result, the net share of Americans who say they are not concerned about losing their job increased 11 percentage points.”

Americans Are Game-Changers Too

Americans are naturally optimistic and have always responded to challenges with both resiliency and resourcefulness. Today is no different. As an example, the Wall Street Journal (WSJ) just reported:

“Americans are starting new businesses at the fastest rate in more than a decade, according to government data, seizing on pent-up demand and new opportunities after the pandemic shut down and reshaped the economy.”

Why would someone start a business in the middle of an economic crisis? The WSJ explains:

“The jump may be one sign that the pandemic is speeding up ‘creative destruction,’ the concept…to describe how new, innovative businesses often displace older, less-efficient ones, buoying long-term prosperity.”

The WSJ also notes that these new businesses will have a positive impact on the overall employment situation, as new businesses “are a critical engine of job creation. Startups have historically accounted for around one-fifth of job creation.”

Bottom Line

For the millions of Americans still unemployed, we hope for a quick return to the workforce. We should, however, realize that over 90% of people are still employed, and some are venturing into new business start-ups. Perhaps the next big game-changing company is right around the corner.

Article by: KCM

Oct. 13, 2020

Home sales are up

       

 

Home sales are up, and so are the prices.

Median home sale prices have made the largest increase on record, jumping 15% year over year for the week ending Oct. 4. The previous largest increase was 14.5% seen in September 2005, according to Redfin analysis of the Case-Shiller national home price index and analysis of MLS data.

As of last week, the median home sale price in America was $320,625, compared to $279,090 a year ago.

“Large, expensive, luxury homes are taking up a bigger share of the homes that are selling, which is driving a high growth rate for the median sale price,” said Redfin chief economist Daryl Fairweather. “Remote work is increasing demand from affluent people, while middle-income people are more often expected to do their jobs in-person, and many have been affected by furloughs and shutdowns.”

At HousingWire Annual on Thursday, Fannie Mae SVP and Chief Economist Doug Duncan said to expect home prices to keep on rising.

Also setting records this month is the average sale-to-list price ratio, which measures how close homes are selling to their asking prices. That index rose to 99.4%, 1.2 percentage points higher than a year earlier.

The number of active listings for sale at any point during the period also sank to a new all-time low of 28% year over year, Redfin said.

By: Julia Falcon

Oct. 7, 2020

How does the market compare to last year's success

Back in March, as the nation’s economy was shut down because of the coronavirus, many were predicting the real estate market would face a major collapse. Some forecasts called for a 15-20% decline in transactions. However, six months later, it seems as though the housing market has fully recovered.

Mark Fleming, Chief Economist at First American, announced last week:

“Since hitting a low point during the initial stages of the pandemic, the only major industry to display immunity to the economic impacts of the coronavirus is the housing market. Housing has experienced a strong V-shaped recovery and is now exceeding pre-pandemic levels.”

The Economic & Strategic Research Group at Fannie Mae upgraded its forecast for home sales last week:

“Housing data over the past month continued to show a strong V-shape rebound, helping drive the broader economy. Existing home sales jumped to a pace not seen since 2006…We have substantially upgraded our forecasts for both new and existing home sales. For 2020, total home sales are now expected to be 1.3% higher than in 2019.”

The National Association of Realtors (NAR) agrees. In their last Pending Sales Report, NAR shared projections from Chief Economist Lawrence Yun:

“Yun forecasts existing-home sales to ramp up to 5.8 million in the second half. That expected rebound would bring the full-year level of existing-home sales to 5.4 million, a 1.1% gain compared to 2019.”

Yun’s forecast for 2021 was even more optimistic, stating, “Home sales will ramp up again next year, increasing between 8% – 12%.”

Bottom Line

The housing market has come roaring back and looks as though it may even surpass last year’s success.

Frank Martell, President and CEO of CoreLogic, hit the nail on the head when he said, “On an aggregated level, the housing economy remains rock solid despite the shock and awe of the pandemic.”

 

 

Sept. 30, 2020

Is the recovery beating projections?

 

Earlier this year, many economists and market analysts were predicting an apocalyptic financial downturn that would potentially rattle the U.S. economy for years to come. They immediately started to compare it to the Great Depression of a century ago. Six months later, the economy is still trying to stabilize, but it is evident that the country will not face the total devastation projected by some. As we continue to battle the pandemic, forecasts are now being revised upward. The Wall Street Journal (WSJ) just reported:

“The U.S. economy and labor market are recovering from the coronavirus-related downturn more quickly than previously expected, economists said in a monthly survey.

Business and academic economists polled by The Wall Street Journal expect gross domestic product to increase at an annualized rate of 23.9% in the third quarter. That is up sharply from an expectation of an 18.3% growth rate in the previous survey.”

What Shape Will the Recovery Take?

Economists have historically cast economic recoveries in the form of one of four letters – V, U, W, or L.

V-shaped recovery is all about the speed of the recovery. This quick recovery is treated as the best-case scenario for any economy that enters a recession. NOTE: Economists are now also using a new term for this type of recovery called the “Nike Swoosh.” It is a form of the V-shape that may take several months to recover, thus resembling the Nike Swoosh logo.

U-shaped recovery is when the economy experiences a sharp fall into a recession, like the V-shaped scenario. In this case, however, the economy remains depressed for a longer period of time, possibly several years, before growth starts to pick back up again.

W-shaped recovery can look like an economy is undergoing a V-shaped recovery until it plunges into a second, often smaller, contraction before fully recovering to pre-recession levels.

An L-shaped recovery is seen as the worst-case scenario. Although the economy returns to growth, it is at a much lower base than pre-recession levels, which means it takes significantly longer to fully recover.

Many experts predicted that this would be a dreaded L-shaped recovery, like the 2008 recession that followed the housing market collapse. Fortunately, that does not seem to be the case.

The same WSJ survey mentioned above asked the economists which letter this recovery will most resemble. Here are the results:Is the Economic Recovery Beating All Projections? | Keeping Current Matters

What About the Unemployment Numbers?

It’s difficult to speak positively about a jobs report that shows millions of Americans are still out of work. However, when we compare it to many forecasts from earlier this year, the numbers are much better than most experts expected. There was talk of numbers that would rival the Great Depression when the nation suffered through four consecutive years of unemployment over 20%.

The first report after the 2020 shutdown did show a 14.7% unemployment rate, but much to the surprise of many analysts, the rate has decreased each of the last three months and is now in the single digits (8.4%).

Economist Jason Furman, Professor at Harvard University‘s John F. Kennedy School of Government and the Chair of the Council of Economic Advisers during the previous administration, recently put it into context:

“An unemployment rate of 8.4% is much lower than most anyone would have thought it a few months ago. It is still a bad recession but not a historically unprecedented event or one we need to go back to the Great Depression for comparison.”

The economists surveyed by the WSJ also forecasted unemployment rates going forward:

  • 2021: 6.3%
  • 2022: 5.2%
  • 2023: 4.9%

The following table shows how the current employment situation compares to other major disruptions in our economy:Is the Economic Recovery Beating All Projections? | Keeping Current Matters

Bottom Line

The economic recovery still has a long way to go. So far, we are doing much better than most thought would be possible.

 

Written by: KCM

Sept. 23, 2020

How to Get Your Autumn Fix This Fall

Fall is right around the corner, and as you start swapping your shorts and t-shirts for pants and sweaters, you may be wondering how you can make the most of the season this year. Fortunately, we’ve done our research, and there are plenty of ways to safely experience fall 2020 throughout Chicagoland as well as Michigan, Indiana, and Wisconsin.

 

Pick Your Own Apples and Pumpkins

The Midwest is home to plenty of pumpkin patches and apple orchards. Boasting lush apple trees across a gorgeous landscape, Apple Barn Orchard & Winery in Elkhorn, Wisconsin, features 13 varieties of apples. Less than two hours from Chicago, the orchard has a versatile collection during prime picking season in October with apples that are great on their own, coated in caramel, or baked into pies.

Meanwhile, County Line Orchard in Hobart, Indiana, invites visitors to its 40 acres with 25 apple varieties. Masks are mandatory for the U-Pick experience, which also includes pumpkins. The U-Pick fun doesn’t stop there. 45 minutes east of Hobart, Dinges’ Farm in Three Oaks, Michigan, has 20 varieties of pumpkins, 25 varieties of gourds, and 15 varieties of squash for you to pick, as well as Concord and Niagara grapes.

With over 200 acres of fresh veggies and favorite fall items, Goebbert’s Farm & Garden Center in South Barrington is one of the best spots in Illinois to pick pumpkins. Round out your visit to the farm with a taste of delicious apple cider donuts, seasonal fruit pies, and harvest cookies. Pumpkin pickers should also make their way to Lincolnshire, where Pumpkinfest at Didier Farms runs all season long until October 31. Visitors can pick pumpkins and gourds of all shapes and sizes to craft into their perfect jack-o-lantern.

Catch a Drive-In Movie

Drive-in movies have become a summertime staple amid social distancing, and luckily they are carrying into fall. Starting October 1stMusic Box of Horrors will feature 31 nights of Halloween films at Chi-Town Movies Drive-In in Pilsen, with weekend showings aptly themed Grindhouse Fridays, Rip-Off Saturdays, and Sequel Sundays. The 31-day movie experience will showcase audience favorites as well as obscure titles. Visitors must purchase tickets ahead of time!

Get Lost in a Corn Maze

Test your sense of direction and visit one of Chicagoland’s best corn mazes. Adults and kids can roam freely through winding fields of corn stalks at All Seasons Apple Orchard in Woodstock, Illinois, which has both easy and difficult paths with varying stalk heights. You can make a day of your adventure at the orchard by visiting the petting zoo and pumpkin patch, or enjoying any of the other available activities. For those looking for a bit more of a challenge, head to Richardson Adventure Farm’s corn maze in Spring Grove, Illinois. Spanning 9 to 10 miles, Richardson Corn Maze is considered one of the longest and most intricate corn mazes in the world and it has a new theme every year! This year celebrates the 50th anniversary of Earth Day.

Photo by Southwestern Michigan Tourist Council

See the Fall Colors

Take advantage of fall’s gorgeous weather and watch as the foliage transitions from green to red, orange, and gold. Chicagoland is home to some of the most incredible natural expanses, where you can hike, bike, or relax among the changing scenery. If you’re in the city, stroll through Lincoln Park along the Nature Boardwalk or through Lincoln Park Conservatory’s manicured gardens. Some of our other favorite spots include the Morton Arboretum, Lurie Garden, and Maple Grove Forest Preserve, to name a few.

On the North Shore, the Chicago Botanic Garden boasts over 20 gardens and several natural areas. The garden’s iconic Night of 1,000 Pumpkins is still on this year, and has been adapted based on COVID-19 safety precautions.

If you find yourself in southwest Michigan, drive down winding backroads or hike your way through Warren Woods State Park in Three Oaks or Galien River County Park in New Buffalo.

Decorate Your Home

Whether you live in an apartment, condo, or house, you can get into the fall spirit by sprucing up your living space with seasonal decor. Bring in classic fall colors using throw pillows or blankets, and add scented or colored candles to create a warm and inviting ambiance. Brighten up your porch with your freshly picked pumpkins and gourds, or give your front door the fall treatment with a festive wreath.

Enjoy a Taste of Fall

What better way to enjoy fall than by supporting a local business? Chicagoland is full of locally and/or family owned businesses that have been perfecting the taste of fall for years. Looking for the area’s best apple treat? Head to Julius Meinl in Lakeview for a cup of warm apple cider or make your way to the western suburbs, where you’ll find one of the best caramel apples at Graham’s Fine Chocolates & Ice Cream in Geneva. Craving a pumpkin-flavored drink? Try Sol Café in Rogers Park or Caffee Streets in Wicker Park. And for the best pies? Check out our rundown of favorite pie shops throughout Chicago.

Keep an eye out for seasonal menu announcements, and be sure to follow each establishment’s COVID-19 safety precautions!

Photo by Graham’s Fine Chocolates & Ice Cream

Written by @properties Arianna Frederick
Sept. 16, 2020

Why is the housing market thriving in a pandemic?

 

 

The deadliest pandemic in more than a century has failed to derail the housing market because of the lowest mortgage rates ever recorded coupled with a shift in how people use their homes.

“The buyers are coming in because of the low interest rates – that’s the No. 1 reason,” said Lawrence Yun, chief economist of the National Association of Realtors said in an interview with HousingWire. “The secondary demand is coming from the work-at-home phenomenon that has people looking for bigger homes and caring less about commuting time.”

People now see their home not only as a place to live, but as a shelter during a national health crisis, Yun said. It’s also an office and, for families with children, often a part-time school.

Mortgage rates began tumbling in mid-March after the Federal Reserve announced it would buy mortgage bonds and Treasuries to keep credit flowing amid the pandemic. It was similar to a fixed-asset program it created during the financial crisis a dozen years ago.

The average U.S. rate for a 30-year fixed mortgage has been under 3% since late July, as measured weekly by Freddie Mac. When Fed Chairman Jerome Powell announced in March the Fed would purchase bonds, it was 3.65%.

Existing-home sales jumped 25% to a seasonally adjusted annual pace of 5.86 million in July, NAR said in an Aug. 21 report. It was the highest sales level since 2006 and the biggest monthly increase on record. The prior record for a monthly gain was the 21% jump seen in June, according to NAR data.

The supply of homes on the market was the lowest for any July since NAR started tracking the data about five decades ago, Yun said.

In the first months of the pandemic, Yun projected home sales in 2020 would see a 15% decline. After the Fed’s actions began driving down mortgage rates, he changed the estimate to a 7% decline.

Last week, Yun issued his latest monthly forecast that said existing home sales in 2020 likely will total 5.4 million, a gain of 1.1% from last year. Sales of new houses probably will rise 17% to 800,000, Yun said.

“We missed the spring buying season because of the pandemic, but the second half of the year looks quite dazzling,” Yun said.

 

Sept. 9, 2020

Forbearance Market Crash

Back in April, when the COVID-19 data and unemployment numbers were at their worst, the housing bubble boys had a halfway legitimate 2020 housing market crash thesis. If unemployment rates had stayed between 20%-30%, the economic damage down to homeowners would have been epic. This could have led to a rapid increase in inventory on the market, which would have crashed home prices as demand collapsed.

That didn’t happen, of course.

Instead, the U.S. housing market has been the best-performing economic sector in the world during the pandemic. This alone should make you question those ridiculous bubble boy websites, the trolling Facebook friends, and those Youtube videos of the same ilk. (Those YouTube videos are especially egregious).

It is easy to go on Facebook, Twitter, or YouTube and say the current housing market is like 2008 all over again – but if you dig just a little bit deeper into the numbers, that thesis quickly falls apart.

Before we go into the data I believe it’s time to move the Housing Bubble Boys over to their new name: the Forbearance Housing Market Crash Bros.

There is one problem the forbearance housing market crash bros have now: jobs are coming back.

Unemployment during COVID

Only during the Great Depression of the 1930s was the employment rate more heartbreakingly bleak then it is now during the COVID-19 recession. Although methods of measurement may not have been as sophisticated then as they are now, the unemployment rate was estimated to have reached as high as 25%, with 15 million Americans unemployed in 1933.

In April of 2020, the unemployment rate reached 14.7%. Currently, the total unemployment rate stands at 8.4%. 

At peak unemployment in April, women 20 years and older suffered higher unemployment (15.5%) then men 20 years and older (13.0%) – and this is due to the over-representation of women in the hospitality and service sectors, the hardest hit by the crisis and stay-at-home mandates. Today we have seen improvement in both, as the unemployment rates for men over the age of 20 is 8% and women over the age of 20 is 8.4%. 

The unemployment rate has also been inversely proportional to education level. Those with more education and in higher-paid positions have been less affected by job losses. The unemployment rate among those with less than a high school diploma is 12.6%, for those with a high school diploma it is 9.8%, for those with some college or an Associate’s degree it’s 8%, and for those with a Bachelor’s degree or higher, the rate stands at 5.3%.  From this, it is both intuitive and factual that the burden of job losses was shouldered more by workers with lower incomes.

Because the unemployment crisis has been significantly worse for those with lower incomes, the economic consequences, too, have been considerably worse for renters compared to homeowners. Also, fiscal and monetary disaster relief along with forbearance are factors for why we should not expect a glut of foreclosures due to the high unemployment rate.

Remember, even with the high unemployment rate (which is back to single digits); we will have over 140 million Americans working and the existing home sales market needs 4 million new mortgage buyers a year to be stable.

Forbearance

To be sure, homeowners with mortgages did suffer job losses due to COVID-19. But we are still early in the job recovery process. As more Americans return to work, they are more likely to get off forbearance plans, though this may lag job gains by a few months. As long as job growth is positive and the U.S. government continues to financially and monetarily support the economy with disaster relief, it is doubtful the housing market will crash in 2021, even if the forbearance plans end, which is still a questionable outcome. Whoever wins the presidential race in 2020 might not want to see the forbearance plans expire if we are still far below the peak job numbers we had in February of 2020. 

Since the peak, roughly 10.6 million jobs have been recovered. A healthy proportion of these job gains have been due to rehires for jobs that were lost, rather than newly created jobs – so this is the easier portion of the recovered employment. The more challenging work for the country is the creation of new jobs after we recover the remaining 11.5 million jobs needed to get back to the employment levels of February of 2020. Some of the jobs lost are not coming back so easily, as permanent job losses have increased to 3.4 million.

While we have had four months of job gains, the rate of growth is slowing. It’s impossible to have the U.S. economy and the world economies run like they did before COVID-19 while the virus is still active. Certain industries will be at a disadvantage versus the virus for many months to come while others do benefit from this crisis.

Sooner than later, we will earn the right to have more labor in the marketplace. Once the virus is under control of an effective vaccine, more labor will be needed as people can walk the earth freely again.

However, the most critical point I want to make here is that one of the biggest factors for the housing market crash thesis in 2020 was high unemployment and that is starting to fade. I urge my forbearance crash bros to be patient and wait until December of 2020. Then I can give you an actual model on how likely your 30%, 40% or 50% home-price crash thesis for 2021 will be. 

September 2020, by Logan Mohtashami

Sept. 2, 2020

Tips for Surviving an Unconventional Return to (Home) School

 

As the days grow shorter and we creep toward autumn, parents eagerly look forward to the time-honored tradition of sending their kids back to school. With kids finally out of the house and accounted for, maybe there’s even a little bit more time to linger over that last cup of coffee in the morning. Unless you’re in the midst of a global pandemic. In which case the longest commute your child will most likely have this fall is downstairs to the breakfast table. Yes, parents, students, and educators find themselves in the midst of remote learning once again. It’s Zoom calls galore, at-home work sheets, projects and three-square meals a day all in the confines of your home. So, in an effort to mitigate some of the stress this scenario will undoubtedly bring, we’ve put together a list of things to make your house more conducive to at-home learning.

Get Organized

Before even determining the space you or your kids will use, make sure everyone has a clear idea of their daily schedules and routines. Everyone should get up and get ready as if they were leaving the house and know what each hour will bring. Something as inexpensive as a dry erase wall calendar from Target can do the trick. Additionally, desk organizers or files can go a long way in keeping students motivated and on task.

Create Usable Space

Your pre-pandemic home improvement punch list probably looked a bit different than it does today. Perhaps you dreamt of a bathroom rehab or kitchen facelift. But with everyone tripping over each other, functional space is at a premium. Fixing up lower levels, spare bedrooms and sunrooms has become essential. And while rehabbing an unfinished attic or basement might be a little more costly and time consuming, it can ultimately provide more sharable space while adding long-term resale value to your home. If you’re not up for a major overhaul, small enhancements can do the trick. Bookshelves can offer more space for storage while also dividing up a room. Wayfair offers several affordable options.

Let There Be Light!

Are you adequately using the natural light in your home for yourself and your newly minted e-scholars? Are bedroom desks placed near windows? Are shades lifted during daylight hours? Maybe you have some heavy drapes that are blocking natural rays and confining space. Smith and Noble can offer a quick fix for custom window treatments, allowing you to spruce up your space while getting a little more vitamin D as the days grow shorter and kids are outside less.

Call The Help Desk

The one thing you’ll be most dependent on in your new role as proctor is, without a doubt, technology. Make sure your router is up to date and you’re getting the best service and deal from your internet provider. There are a bevy of plans and packages, so do your research. If you have internet dead spots in your home, look into internet boosters that plug in to electrical outlets and improve signal strength. Also consider noise cancelling headphones for Zoom calls or to block out ambient noise (Might we suggest getting yourself a pair as well?).

This may seem basic, but you’ll probably find the need to stock your fridge and pantry a little more generously than you would during a ‘normal’ school year. Keep healthy snacks that are easy to reach at eye level – string cheese, yogurt, individually packaged Goldfish. A lovely bowl of fresh fruit is a welcome addition to any kitchen countertop and allows kids to easily choose a healthy pick-me-up.

Although the 2020-2021 school year is shaping up to be rather unconventional, the kids are alright. Patience and humor can go a long way to maintaining your sanity. And once those classroom doors do open back up and your schoolhouse is vacated, pour that extra cup of coffee, put on the noise cancelling headphones, close those window treatments and dance like no one is watching. Because finally, they won’t be.

By: @properties

Aug. 26, 2020

REFI now or face REFI penalty

 

This story has been updated with reaction from industry trade groups.

The Federal Housing Finance Agency announced Tuesday it is postponing the date it will begin implementing its adverse market refinance fee to Dec. 1.

The FHFA directed Fannie Mae and Freddie Mac to delay the implementation date of their adverse market refinance fee after it was previously scheduled to take effect Sept. 1, 2020.

FHFA is also announcing that the enterprises will exempt refinance loans with loan balances below $125,000, nearly half of which are comprised of lower-income borrowers at or below 80% of area median income. Affordable refinance products Home Ready and Home Possible, are also exempt.

After Fannie Mae and Freddie Mac announced an added 50 basis point fee to all refinances, the housing industry was quick to react. In fact, the industry quickly turned against Fannie and Freddie’s added fee.

The Mortgage Bankers Association was one of the strongest voices in opposition to the new fee, saying, in part, “The additional 0.5% fee on Fannie Mae and Freddie Mac refinance mortgages will raise costs for families trying to make ends meet in these challenging times. In addition, the September 1 effective date means that thousands of borrowers who did not lock in their rates could face unanticipated cost increases just days from closing.”

It also criticized the increase, saying that it would be particularly harmful to low- and moderate-income homeowners.

But talk surfaced, beginning with reporting from the Wall Street Journal, over the weekend that the FHFA was considering delaying the fee.

When it announced the delay, the FHFA also gave a breakdown of the need to implement the fee, saying pandemic-related losses could total at least $6 billion for the GSEs.

“The actions taken by the enterprises during the pandemic to protect renters and borrowers are conservatively projected to cost the enterprises at least $6 billion and could be higher depending on the path of the economic recovery,” the FHFA said in a statement.

Those expenses are expected to at least include:

  • $4 billion in loan losses due to projected forbearance defaults
  • $1 billion in foreclosure moratorium losses
  • $1 billion in servicer compensation and other forbearance expenses

“FHFA has a statutory responsibility to ensure safety and soundness at the Enterprises through prudential regulation,” the FHFA continued. “The enterprises’ congressional charters require expenses to be recovered via income, allowing the enterprises to continue helping those most in need during the pandemic.”

In light of the announced changes, the MBA changed its tune on the refinance fee.

“We welcome today’s announcement from the FHFA amending the recently announced adverse market refinance fee from Fannie Mae and Freddie Mac,” MBA CEO Bob Broeksmit said. “Extending the effective date will permit lenders to close refinance loans that are in their pipelines and honor the rate lock commitments they made to their borrowers, ensuring that economic relief in the form of record low interest rates will continue to flow to consumers.

“We understand that the pandemic and the associated borrower assistance measures the GSEs have instituted impose significant costs on the GSEs and on mortgage servicers, and we are gratified that the revised guidelines also reflect the need to lessen the impact on borrowers with modest incomes or low loan amounts,” Broeksmit continued. “Likewise, we support the previously announced exemption of all home purchase loans.”

The National Association of Mortgage Brokers, which urged people to contact their local congressman through its petition form when the fee was announced — and got almost 17,000 supporters — applauded the change. Roy DeLoach, NAMB’s lobbyist said, “All mortgage broker owners and loan originators deserve a thank you for joining our sister real estate organizations in Washington D.C. to push back this tax on homeowners. All organizations are on high alert to work together in the future to collectively engage on any future similar actions.”

The Community Home Lenders Association also voiced its support for the changes.

“The Community Home Lenders Association strongly commends FHFA Director Calabria for his announcement today that Fannie Mae and Freddie Mac will be moving back to December 1st the effective date on their new half point adverse market fee on refinance mortgage loans – as well as exempting certain affordable loans from the fee,”  CHLA Executive Director Scott Olson said.

“CHLA fully appreciates Director Calabria’s comments that COVID-19 is creating billions of dollars of GSE losses that necessitates repricing of risk on certain GSE products and loans,” he added.

The National Association of Federally Insured Credit Unions said it was grateful for the delay, but still stood against the fee as a form of loss mitigation.

“NAFCU appreciates the FHFA’s delay of the GSEs’ new policy charging higher mortgage refinance fees and exemption of certain loans,” NAFCU President and CEO Dan Berger said. “While this delay will temporarily limit unnecessary financial strains placed on credit unions and their members, the policy, once implemented, will still force credit unions to absorb new financial costs amid a recession and global pandemic. We understand the GSEs are facing financial concerns of their own, but these concerns would be better mitigated through wholesale housing finance reform as opposed to preventing credit unions from helping more members.”

 

Written by: Kelsey Ramirez