Topic:  Newsletter Articles

Stop us if you've heard it: The mortgage boom is almost over. Yes, it's been almost over since about November, 2002, but who's counting anymore? Home sales are in record territory, Freddie Mac's benchmark 30-year fixed mortgage rate hit a five month low last week, and August, though down from July, saw an amazing 1.379 million transactions pass through our Mercury servers, a leading indicator that there continues to be a robust mortgage pipeline.   Read more...

Nowadays, e-mail users are successfully navigating their way through the waves of spam and viruses that fill up their inboxes daily. However, the need for better management of e-mail-based collaboration and content remains a top challenge, according to IDC, an advisory firm in the information technology and telecommunications industries. E-mail has become one of the most important marketing and communications tools for real estate agents, allowing them to contact potential clients, build relationships with customers, and keep those customers up to date on their transaction. In fact, more than 77 percent of REALTORS® use e-mail for business purposes, according to the National Association of REALTORS®.   Read more...

The Office of Federal Housing Enterprise Oversight (OFHEO) released its quarterly House Price Index last week and said the 9.36 percent jump in property values from second quarter 2003 to second quarter 2004 was the largest one-year increase ever. For the quarter, prices were up 2.21 percent, an annualized rate of 8.83 percent.   Read more...

Appraiser offices have grown from one or two person shops to five or six or more during the recent boom. And rarely are all of those people in the same room. Making being spread out, in the field, in the office, en route to the next inspection or at the county building, an opportunity for efficiency rather than a contributor to inefficiency is the goal of a la mode's new Mobility Product Manager, Alonso Portillo.   Read more...

Agents take notice: Buying a home in California just got a little easier for first-time buyers. New price caps, being implemented in 56 of the state's 58 counties by the California Housing Finance Agency (CalHFA) are the highest allowable price caps under federal law, agency officials said. The most significant increases were in the counties of Alpine, Calaveras and Tuolumne. Real estate agents are wise to advise their potential customers that the additional financial wiggle room from the CalHFA gives them a leg up in one of the most expensive real estate markets in the U.S. The median price of an existing, single-family detached home in California during July 2004 was $463,540, a 21.4 percent increase over the revised $381,940 median for July 2003, according to the California Association of REALTORS®. There are four price points under the revised sales price limits, including one for new housing in areas the agency labels targeted and one for new housing in nontargeted areas. Similarly, there are targeted and nontargeted areas for resale properties. The targeted areas are considered economically distressed. For example, the price limit for new housing in Los Angeles County is $482,912, up from $448,259, in nontargeted areas, while it is $590,226 in targeted areas, up from $547,873. For resale housing, the nontargeted limit is $416,106, up from $371,153, and the targeted limit is $508,754, up from $452,409. "We're thrilled to be able to increase the advantages for many first-time homebuyers in our state with our revised sales limits," says CalHFA Executive Director Theresa A. Parker. "Homeownership continues to be one of the most solid and durable investments a California family can make. And, our recent revisions give even more strength and versatility to our homeownership programs." A good investment, indeed, but the soaring home prices in California - especially the southern parts of the state - have made buying a home seem like a pipe dream for many people. Statewide, the 10 cities and communities with the greatest median home price increases in July 2004 compared to the same period a year ago were: Seaside, 82.8 percent; Laguna Beach, 65.7 percent; Loma Linda, 63.9 percent; Montebello, 63 percent; Santa Paula, 56.2 percent; California City, 55 percent; Adelanto, 54.8 percent; Rancho Santa Margarita, 51.1 percent; Yucca Valley, 50 percent; Oceanside, 48.4 percent. Instead of opting for interest-only loans or other types of risky financing, the CALFHA aims to provide affordable housing opportunities by offering below-market interest rate mortgage loans to very low-to-moderate income first-time homebuyers. As a completely self-supporting state agency, bonds are repaid by revenues generated through mortgage loans, not appropriated taxpayer dollars.   Read more...

Houses that begin as "For Sale By Owner" (FSBO) may not stay that way for long if the owner has a hard time selling it. And even if that homeowner is determined to sell it himself doesn't mean he won't come across your site when he does his research, making it crucial that you position your website as the one-stop neighborhood expert in the real estate business. Here are a few quick tips on bringing FSBOs to your website. Give advice. Provide a tips section on how homeowners can prepare to sell their home – or even an entire section on FSBO. Chances are they're doing research on the web, so give them all the information they need up front. Agent XSite users already have information like this available to them in their pre-written content pages, including information putting together marketing plans, setting the sale price, negotiating and a sale preparation checklist (Step 7 in your XSites Wizard). Be sure to edit the information to make it specific to your selling area. While a section called "Preparing to sell your home" may be helpful to FSBOs, a section labeled "Preparing to sell your home in Atlanta" may result in more local leads when those homeowners eventually give up and call in an expert to sell their home. Be their directory. Post local service provider information on your website for both the seller and the potential buyer such as mortgage providers, title companies, home inspectors, attorneys, appraisers, pest inspection and even the contact information for your local newspaper's classified ad section. They're going to need this information anyway, and you're saving them the hunt in the Yellow Pages and increasing the likelihood they'll return to your website.   Read more...

National Mortgage News published results of the publication's exclusive survey showing that subprime lending — loans made to consumers who wouldn't normally qualify for a mortgage loan based on their credit history, employment history, debt-to-asset ratio or other economic factor — set a record for production in the second quarter. $157 billion in mortgages were originated on behalf of subprime borrowers, more than 19 percent of all loans funded. The figure was nearly double 2003's 9.9 percent.   Read more...

Appraisers are going to become more important and vital to the national economy in the next few years, not less, as Americans become both less creditworthy and more encumbered by debt — two factors that influence whether an underwriter or investor is interested in an accurate valuation of its collateral. The AVM lobby's reaction to our publicizing the April Fitch Ratings report that said the ratings agency would devalue mortgage backed securities on properties valued with less than a full appraisal was swift. Click here for our initial report, and here for the response of the Collateral Assessment & Technologies Committee (CATC) of the Real Estate Information Professionals Association two weeks later. More recently, six executives from six mortgage technology companies who wished to remain anonymous told National Mortgage News that Fannie Mae was beginning to accept AVMs on "vanilla" purchase loans — described by the publication as "loans with relatively low risk, meaning good loan-to-value and Fair Isaac & Co. [FICO] credit score data." (The CATC has ten mortgage technology company members.) It's indeed news if Fannie is warming up to the idea of accepting AVMs in lieu of appraisals. But is it as big as it might seem? Hardly. In the recent refi boom, half of all refis were no-appraisal or even no-doc loans. Because of sheer volume, originators and underwriters had to compromise certainty for speed. Where the loan-to-value ratio was low and credit was good, they found the higher risk of an inaccurate valuation was outweighed by the lower risk of borrower default. And with a low loan-to-value loan, of course, there's more margin for error if you have to go repossess the house tomorrow. If the valuation was off by 75 percent, you're probably still in good shape if it was a 70 percent LTV refi. (And if it was a 70 percent LTV loan, chances are the borrowers have a lot of cash and good credit, etc. etc. — it's a self-feeding cycle.) The same is true of purchase loans — except for the fact that fewer and fewer low LTV purchase loans are being made than ever. In 1996 — in the old days, when you had to save up the money to buy a house — the average downpayment on a home was 19.5 percent. It's under 10 percent today, and more and more low downpayment, finance-the-closing-costs loans are being originated than ever before. A lot of the minutiae that goes into a discussion like this misses the point, though. It's a fact of underwriting (and mortgage funding) life that the value of the collateral pledged for a mortgage loan is irrelevant unless there is a default. That is, all parties to a $150,000 loan made on a property with a market value of $100,000 will happily write and collect monthly checks until the loan is paid off. So whether a mortgage investor, like Fannie Mae, or a mortgage underwriter is willing to compromise the confidence it has in the true market value of its collateral depends on whether the borrower is likely to stop writing those monthly checks, by necessity or design. Mortgage lenders, and secondary market investors, gauge two things about each prospective borrower: their willingness to repay, as reflected in their credit score, and their ability to repay, as reflected in their debt-to-income ratio. Americans are getting less willing and less able to commit to repayment, recent news shows. The Federal Reserve reported last month that American homeowners' Financial Obligations Ratio (FOR) — encompassing mortgage debt, homeowners' insurance, property taxes, consumer credit and automobile payments — was 15.54 percent in the first quarter. It was 14.36 percent in the first quarter of 1994, and 13.63 in 1Q84. That includes homeowners with paid-off mortgages or substantial home equity with low payments on a refinanced balance. On the extreme end of the scale, the Census Bureau reported last week that more than 22 percent of homeowners contributed at least 35 percent of their income to housing last year, compared with 19 percent in 2000. Homeowners, like all Americans, are becoming increasingly encumbered by debt. The raw numbers of consumer debt are staggering. The Fed also reported this month that total consumer credit outstanding averaged $2.038 trillion, up more than a third from $1.520 trillion just five years ago in 1999. Meanwhile, last week the Administrative Office of the U.S. Courts, which reports bankruptcy filings, said total bankruptcies filed for the year ended June 30, 2004 were 1.636 million, up 17.5 percent from the year ended June 30, 1999. Factors such as the economy, bankruptcy laws and an easing of the stigma associated with bankruptcy influence this kind of spike, as the Fed points out. But it also says, "The sharp rise in personal bankruptcies since the mid-1980s partly reflects changes in laws and attitudes, [but] nonetheless suggests that credit histories for a growing segment of the population are deteriorating." And while Americans continue to encumber themselves with debt and become less willing or able to pay it off, mortgages are historically easy to obtain. Home Mortgage Disclosure Act (HMDA) data for 2003, released last month, showed that the denial rate for conventional home purchase loans fell drastically to 14 percent in both 2002 and 2003, from 29 percent as recently as 1998. Fully half the people who wouldn't have qualified for a mortgage just six years ago are approved today. It couldn't be clearer: Even if Fannie is accepting AVMs for its best credit risk borrowers, least encumbered by debt — and that's a big "if" because nobody from Fannie or willing to identify themselves will say — AVMs aren't exactly getting in on the ground floor of a growing opportunity. Borrowers, and loans, are getting less "vanilla," not more. The reality of the economy, society and the lending climate is that accurate, professional, human appraisals are becoming more important, not less. Media Contacts Send an e-mail to pr@alamode.com. Our team of industry experts would be happy to help with your next story. Latest a la mode news DataMaster now fully integrated with TOTAL June 09, 2015 Serent Capital Acquires Mercury Network from a la mode, inc. May 07, 2015 a la mode launches exclusive new integration with National Data Collective February 02, 2015 a la mode welcomes Dynamo MC to the TOTAL Store January 26, 2015 Mercury Network and Platinum Data Solutions Announce Integration Agreement January 14, 2015 Mercury Network wins Mortgage Technology’s Harnessing Mobile award December 02, 2014 a la mode and National Data Collective partner to offer real estate data services to appraisers November 10, 2014   Read more...

The Department of Labor’s final rules governing overtime pay and eligibility for mortgage brokers and other white-collar workers went into effect last week. It's the first major overhaul of the Fair Labor Standards Act’s Overtime Security Rule in four decades — one that the mortgage industry is welcoming with open arms.   Read more...

Do you want your website to help you elevate your business? "Sure," you say, that's why you created one, right? Of course you've advertised your Web address on every piece of literature and marketing item that goes out-brochures, business cards, local newspaper ads - and it's mentioned on your outgoing voicemail message. But those tactics won't help you capture potential customers surfing the Web.   Read more...