Richard Nacht's The Daily Mortgage

Online MLS sites expanding

Research company Research and Markets has released its “2004 Analysis Online Real Estate Advertising Comes of Age” report.

While newspaper real estate advertising is declining (on a per sold home basis) internet media advertising is increasing.  The report reveals that the internet is now the number two medium for reaching homebuyers (just behind yard signs).  MLS listing databases were previously little threat to media advertising as they were closed systems.

However NAR’s two year old Internet Data Exchange (IDX) now lets consumers access MLS databases online that are more comprehensive than newspaper and magazine listings.  The report notes the IDX policy is changing how agents and brokers are reaching consumers.  According to the report nine of the twenty most visited real estate websites are operated by traditional brokerage firms which include extensive MLS data.

We previously reported on the increase in online local mortgage advertising.

House GSE oversight bill

The House Financial Services Committee has approved a bill that would establish a new independent regulator to oversee Fannie, Freddie and the Federal Home Loan Banks.

Features include an increase in conforming limits in high cost markets, required contributions to an affordable housing fund, a lack of authority by the regulator to reduce the size of Fannie and Freddie’s portfolios and no restrictions on their AU systems.

And we thought the GSEs had lost some capital hill mojo with the absences of Raines and Brendsel.

Subprime still on fire?

It would appear subprime continues to drive the market.  National Mortgage News will be reporting in Monday’s edition that the first quarter saw a second best ever $169 billion in subprime closings.  While second best in dollars, it was a new record in terms of market share.  Look for subprime lender rankings in Monday’s edition.

PBS Newshour on the Real Estate Boom

Link to a video regarding real estate speculation from PBS.  Watch here.

Thanks again to Alex.  I love his comment, “Better watch this if you are thinking about becoming a real estate investor of the “Buy, flip-for-profit, repeat until rich” variety.  If after watching it you are not reconsidering this idea, watch it again, but this time, pretend it is 2000, and mentally replace “Real Estate Investor” with “Day Trader.”

Hope for buyers with no credit history

At a recent House Financial Services subcommittee hearing, Representative Michael Castle, R-Del., estimated that there may be as many as 50 million young adults, minorities, immigrants and members of ethnic groups who have not used the traditional banking system and may, therefore, not have established a satisfactory credit reporting history.  These consumers end up paying higher costs and rates when buying a house, but may in fact pay their bills on time as well as the strongest of credit scored individuals.  The purpose of the hearing was to help identify alternative data, not collected by credit bureaus, that might help gauge creditworthiness.

Michael Turner, president of the Information Policy Institute, a New York based nonprofit research group active in credit issues, noted prime data forms such as utility payments, telephone and cable bills are good indicators of credit worthiness.  And “since the utility sector is highly concentrated, relatively few potential data furnishers would have to be convinced of the merits of reporting”, said Turner.

But, there is a roadblock to use of this data - most state utility regulations restrict or prohibit dissemination of consumer payment records, so state regulatory changes would be necessary.

There are other existing “thin” credit data sources that could be used by lenders (although none are currently acceptable as alternative sources by Fannie or Freddie).  They include First American Corp.’s Anthem system, Fair Isaac’s Expansion Score and PRBC’s (Pay Rent, Build Credit) Bill Payment Scorecard.

Fannie and Freddie will have to step up to the plate to include such data sources in their AU’s to make a dent in this problem.

What bubble?

The question of whether there is a real estate bubble will finally be decided when this home creates a bidding war: