Richard Nacht's The Daily Mortgage

U.S. News & World Report article

Lots of U.S. News & World Report real estate and mortgage articles on USNews.com today:

Here, here, here, here and here.

Toll Brothers head speaks with Time

Time - Monday, December 6, 2004

Home prices have shown signs of sluggishness in Las Vegas and a handful of other markets, fueling the debate over whether we are in a dangerous housing bubble.  Time senior writer Daniel Kadlec talked with Bob Toll, CEO of Tolls Bros., one of the nation’s largest luxury-home builders, who insists that any talk of a slowdown is premature.

Time:  Let’s start with the question you must be sick of: Is it a bubble?

Bob Toll:  You’re right.  I am sick of it.  No, we’re not in a bubble.  Prices have gone up because there has been a tremendous constriction in supply along with tremendous immigration and increases in income for baby boomers.  We’re on track to see the cost of housing as a percentage of income come to the same place as it is in the U.K. and much of Europe, where they pay up to 45% of income for housing.

More

Pundit says party is over

Dr. Irwin Kellner, CBS Marketwatch says “say goodbye to low bond market rates.  They are heading up again - this time to stay.”

It was only a matter of time before the long end of the market caught up with the rest of the world.  Long-term rates actually declined earlier this year even as the Federal Reserve was doubling short-term interest rates while hinting that more hikes are in store.

And while the underlying rate of inflation remains low, the markets are now concerned about other factors that are expected to weight heavily on bond prices.

Read more.

Supreme Court limits TIL damages on personal property loans

Reuters - The U.S. Supreme Court on Tuesday ruled the federal truth in lending law caps damages at $1,000 for violations of its requirements for consumer loans secured by personal property such as a motor vehicle.

Congress had amended the law in 1995 to raise the amount of damages for violations related only to home acquisition mortgage loans.  By an 8-1 vote, the high court ruled the amendment did not also raise the amount of damages that could be recovered for violations involving personal property, like auto loans.

”There is scant indication that by raising the minimum and maximum recoveries for mainly home acquisition mortgage loans, Congress meant thereby to repeal the dollar limitations on all other loans,” Justine Ruth Bader Ginsburg said for the majority.

New conforming loan limit

The conforming loan limit in 2005 will be $359,650.  This is up from $333,700.  The limit is based on housing prices from October 2003 to October 2004.  The average home price in October 2004 was $264,540 up from $243,756.  Freddie Mac said that 340,000 borrowers will benefit from the higher number next year.  The new number was set for the first time by the Office of Federal Housing Authority, the soundness regulator of Fannie and Freddie.

Volunteers push to get family into new home

Morning Sentinel online, by Gary Remal, Staff Writer

Thanksgiving brought special meaning to the parents of 2 year old Jacob Matthew Bell this year: they have a new house.

A multitude of volunteers had pitched in to ready their home over the past seven months — an overwhelming effort that most importantly gave them more, precious time with their little boy, who is suffering from a rare form of cancer.

Organizers of an effort to help the Bells move into their new home, led by members of the Kennebec Sheriff’s Department, hoped to have the house ready for the family to move in on their return from the Portland Hospital.  Contributions and volunteer efforts - including favorable mortgage rates from a local bank - allowed the couple to afford their dream house sooner than they thought.  “They’ve made us very happy and allowed us to spend more time with (Jacob).  And you can’t put a price on that,” Shawn Bell said.

Receiving particular thanks were Trooper Mike Richardson and Robin Veilleux of Guerrette Properties who acted as the general contractor.

So ask yourself, when was the last time you or your business were a hero to someone that needed more than just your regular level of service.  And when will the next time be?

Housing experts say cash in now

The Modesto Bee, Modesta, CA

National real estate experts have advice for California homeowners: sell now.  California home prices have soared 123 percent the past five years, so it’s time to cash in, advised Anthony Downs, a real estate economics expert for the Brookings Institution, a nonprofit research organization.  “Sell whatever you don’t want to keep forever.  No one knows where the market peak is, but this must be close to it,” said Downs.  “Too much investment money is looking for property” right now, which makes it a seller’s market said Downs.

Other experts at the 27th annual Real Estate & Economics Symposium in San Francisco agreed.  Ken Rosen, chairman of the University of California at Berkeley’s Fisher Center for Real Estate and Urban Economics noted, “Home prices have moved up too far, too fast.  We always get price corrections after (bug run-ups) because homeowners cash out and move out of state.”  Rosen said abnormally low interest rates have convinced many buyers in California and nationwide, to jump into the housing market sooner than they typically would.  He said new home sales particularly have increased because of lower mortgage costs.

”There’s more risk out there.  When rates rise, there may be a deflation (of home values),” said Rosen.  Rising adjustable mortgage rates also may cause problems for homeowners.  “There is a chance for a price correction and defaults and delinquencies.”

Quicken Loans Nation’s Largest Online Lender

BusinessWire:

Quicken Loans, which offers residential mortgages and home equity loans in all 50 states through its award winning Quickenloans.com website, has become the nation’s largest online retail mortgage lender according to National Mortgage News, the publication which compiles quarterly rankings for the mortgage industry.

Quicken Loans achieved this #1 ranking for the third quarter 2004, which covers the months of July, August and September.  During that quarter Quicken Loans closed nearly $2 billion in residential mortgage loans on the Internet.  Quicken Loans closed a total of $2.52 billion in mortgage loans (on and offline) during the same time frame.

”Although our market share continues to increase quarter after quarter, we believe our biggest increases in market share and technological solutions are ahead of us,” said Quicken Loans founder and Chairman Dan Gilbert.  “The Internet has changed the mortgage industry for the better, making the process easier and far more convenient.  Every day our 2,250 smart, hard-working team members find new ways to make the mortgage process simple and painless, which translates to innovative mortgage programs and an unparalleled level of service for our clients.”

Gilbert founded the company as Rock Financial in 1985 and it quickly became one of the country’s fastest growing mortgage companies.  He took the company public in 1998 and began offering home loans via the internet in early 1999.  In December 1999 Gilbert sold the company to Intuit, Inc., maker of Quicken and TurboTax software, at which time the name was changed to Quicken Loans Inc.  Gilbert led a small group of private investors in purchasing the company back from Intuit in 2002.  The company is now 100 percent privately held and maintains the Quicken Loan brand name.

Investor conference to highlight Mortgage REIT Review

CBS. Marketwatch:

Friedman, Billings, Ramsey Group has today announced that on Wednesday, December 1st, at its 11th Annual Investor Conference in NY, Eric F. Billings, Co-Chairman and Co-CEO, Richard J. Hendrix, President and COO, and J. Rock Tonkel, President & Head of Investment Banking will be presenting “Mortgage REIT Review” a discussion of today’s Mortgage REIT environment.  The presentation will be webcast and can be viewed at FBR’s website.

Fannie Mae to Back Tougher Regulator

The Washington Post today reports that Fannie Mae, which has fought legislative efforts to restrict its activities, will now support a bill to create a stronger regulator of its activities.  The move is expected to allow Fannie to negotiate crucial details of how its business would be regulated.  For example, it wants to avoid limits on its opportunities to develop new products. 

The Post notes that the chief reason for Fannie’s change in tune is the recent highly critical study of its accounting and management practices.  Fannie believes that a stronger regulator would “give investors confidence that any such problems have been dealt with.”

The Post observes that this approach is an almost identical one from that taken by Fannie 12 years ago when Congress created its current regulator, the Office of Federal Housing Enterprise Oversight.

Initially Fannie opposed an oversight agency.  But when some of its lucrative ties to government were placed in jeopardy for largely ideological reasons, the company reversed itself and was able to use its place at the negotiating table to limit the regulators’ powers.

Once again, Fannie’s Franklin Raines is proving himself an adept political operator, always working the Hill to the benefit of Fannie.

”Outside the National Rifle Association, they’re probably the strongest lobbying presence on Capital Hill,” said W. Michael House, executive director of FM Policy Focus, a group that included financial services companies that compete with Fannie Mae.”