A report from KCRA in California. “California is at the epicenter of a housing crisis. Thousands of people are fleeing the state, and many of them say they can no longer afford to live here. But today there’s help, and hope, for people wanting to buy that very first home. The help comes from a nonprofit housing group that’s been around for 35 years. That group is called NACA, of the Neighborhood Assistance Corporation of America.”
“The one-stop mortgage operation is sponsored by NACA, and the nonprofit has partnered with Bank of America. The bank has committed $10 billion to the NACA mortgage program, which does not require private mortgage insurance, or PMI. ‘No down payment, no closing costs, no points or fees,’ said Shawn Cunningham, a regional director for NACA. ‘We don’t even consider your credit score — and a below-market fixed interest rate,’ he added.”
From China Daily. “Over the past 10 months, Bei Qin, a realtor in Silicon Valley, California, has not had any clients from China, a market that used to be her major source of business. ‘We had the best business in 2016 and 2017. Every day, we had inquiries from Chinese buyers and every week our WeChat account had more than 10 new subscribers,’ said Qin, president of ACEQ Investment Group in Cupertino. ‘Now those days are gone.’”
“After a decade of increasing investment by wealthy Chinese in residential property purchases in the United States－the biggest proportion of international buyers for seven consecutive years－purchases plunged by 56 percent in the 12 months to March, according to a report by the National Association of Realtors.”
“Coco Tan, a broker in San Jose, California, said a key reason for the drop in home sales is the increasing difficulty in moving money out of China. Tan said that in the past, many Chinese buyers targeted ‘luxury homes’－those worth $5 million to $10 million. ‘Now, such houses sell very slowly,’ she said.”
“Keith Lo, a realtor in Los Angeles with more than 30 years’ experience, said people are still finding ways to get their money out of China and into the US－for example, through relatives and friends－but only $300,000 to $500,000 a year at most, to maintain their properties. ‘But I doubt they can continue to do that for long. It’s impossible to move a large amount to invest in a new property,’ he said.”
From The Cooperator in New York. “BloombergQuint reports that another blow may be heading toward the high-end real estate market, in the form of a revived effort by state lawmakers to impose a tax on second-home purchases of $5 million or more. Perhaps not surprisingly, high-end developers and clients — as well as their lawyers, appraisers, and brokers — oppose the idea on the grounds that there is already a glut of luxury condos with no buyers, with thousands more in the development pipeline.”
“To Donna Olshan, president of luxury brokerage Olshan Realty Inc., wealthy clients like hers aren’t going to invest in a depreciating asset. As she tells Bloomberg, ‘The notion that they’re just going to spend money because they want something and not consider the consequences or the risk is ridiculous.’”
From MSN Money. “Just 21% of Americans say now is a good time to buy a home, a drop from 28% in September, according to Fannie Mae. There was also a drop in the share of people who think now is a good time to sell a home, from 44% to 41%. The problem is price. ‘The net share of consumers expecting home prices to increase over the next 12 months has fallen to its lowest reading in seven years,’ wrote Doug Duncan, Fannie Mae’s chief economist.”
“‘It’s not just the overall supply of new construction that’s gone down, but the supply of starter homes, so it’s the affordability challenge at the entry level that’s been a particular challenge,’ said Rob Dietz, chief economist at the National Association of Home Builders. ‘Right now only about 10% of newly-built home sales are priced under $200,000. Five years ago that share was 1 in 5, and 10 years ago it was 40% of new home sales priced under $200,000.’”
“One component of the survey portends weaker sentiment ahead: Fewer people said their household income was slightly higher than it was a year ago. Just 16% said it was, down from 21% in September. That could be the one factor that will tame prices going forward. ‘I think what’s going to hold them back from over-heating is that prices have risen so fast relative to incomes,’ said Daryl Fairweather, chief economist at Redfin. ‘Any time prices get too high, there’s going to be this reaction where there just aren’t enough homebuyers to purchase those homes.’”
From DS News. “Freddie Mac recently announced it sold via auction 2,243 non-performing residential first lien loans (NPLs) from its mortgage-related investments portfolio. The loans, with a balance of approximately $369 million, are expected to settle in January 2020. The sale is part of Freddie Mac’s Standard Pool Offerings.”
“The NPLs sold by Fannie and Freddie as of December 31 had an average delinquency of 1.4 to 6.2 years and an average loan-to-value ratio of 92%. Nearly half of the loans sold (45%) are from New Jersey, New York and Florida. The FHFA states that prior to the start of NPL program sales in 2015, these three states accounted for 47% of the GSE’s loans that were one year or more delinquent.”
“Given the delinquency status of the loans, the borrowers have likely been evaluated previously for or are already in various stages of loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously modified and subsequently became delinquent comprise approximately 63% of the aggregate pool balance. Additionally, purchasers are required to solicit distressed borrowers for additional assistance except in limited cases and ensure all pending loss mitigation actions are completed.”