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Real Estate - Part 4

Real Estate Archives

Americans continue to be pessimistic about home prices, the economy, and personal finances, according to results from Fannie Mae’s October National Housing Survey.  Findings show that consumers have experienced stagnant incomes over the past year and do not expect their personal financial situations to improve over the next twelve months.

“The October survey showed that consumers’ outlook for the housing market has remained downbeat, as they expect home prices to decline over the next year, extending the streak of negative outlooks to five consecutive months,” said Doug Duncan, vice president and chief economist of Fannie Mae. “More positive economic headlines over the past month failed to lift consumers’ moods.  While their views regarding their personal finances and the direction of the economy have not deteriorated further, it is discouraging to see the lack of appreciable improvement after overall sentiment took a hit during the debt ceiling debate in August.”

“The fact that sentiment appears to be in a holding pattern at depressed levels is a cause for concern for the development of the housing market and for the economy as a whole, as there will be no meaningful economic recovery without a housing recovery,” Duncan stated.

SURVEY HIGHLIGHTS

The Economy and Household Finances

  • An all-time high of 46 percent of consumers expect their personal financial situation to stay the same over the next 12 months.
  • An all-time high of 65 percent of consumers say their income is about the same as it was 12 months ago.
  • Seventy-seven percent say the economy is off on the wrong track (unchanged since September), while just 16 percent think the economy is on the right track, also unchanged since September and tying the all-time low number.
  • Thirty-six percent report significantly higher expenses compared to 12 months ago, (down 7 percentage points since last month).

Homeownership and Renting

  • For the fifth month in a row, Americans expect home prices to decline over the next 12 months. On average, respondents expect home prices to decline by 0.3 percent.
  • Just 19 percent of respondents expect home prices to increase over the next 12 months (up 1 percentage point since last month), while 23 percent say they expect home prices to decline (down by 2 percentage points since last month). Fifty-five percent say prices will stay the same, tying the all-time high number set last month.
  • Thirty-six percent of Americans say that mortgage rates will go up over the next 12 months (up 3 percentage points since last month).
  • While 69 percent of respondents say it is a good time to buy a home (up by 1 percentage point since last month), just 10 percent say it is a good time to sell (unchanged since last month).
  • On average, Americans expect home rental prices to increase by 3.3 percent over the next 12 months, unchanged since last month.
  • Thirty-one percent of Americans say they would rent their next home, while 66 percent say they would buy, (up by 3 percentage points since last month).

The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,002 Americans via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.For detailed findings from the October 2011 survey, as well as technical notes on survey methodology and the questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey site.  Also available on the site are quarterly survey results, which provide a detailed assessment of combined data results from three monthly studies. The October 2011 Fannie Mae National Housing Survey was conducted between October 3, 2011 and October 26, 2011. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.

Follow us on Twitter: http://twitter.com/FannieMae .

CONTACT: Pete Bakel, +1-202-752-2034

Web Site: http://www.fanniemae.com

Google Enters the Mortgage Loan Business

Google Enters the Mortgage Loan Business

Google Enters the Mortgage Loan Business-Image by James Marvin Phelps via Flickr

LoanSifter, Inc. (www.LoanSifter.com), provider of the mortgage industry’s most complete and intuitive product and real-time pricing platform, announced today a strategic relationship with Google Inc. that gives consumers access to mortgage loan products and real-time pricing based on LoanSifter’s technology, including side-by-side comparisons of mortgage loan products from multiple lenders through Google’s Comparison Ads.

Google’s Comparison Ads help consumers shop for mortgages online by retrieving quotes based on the borrower’s specific loan criteria.  Through a strategic relationship between both companies, Google will leverage LoanSifter’s industry-leading technology – which automates pricing for lenders using the largest real-time database of investor pricing and eligibility content available in the mortgage industry — to provide Google users with information on mortgage products and pricing from the lenders using LoanSifter.  When Google users get these rates, LoanSifter’s lenders will receive qualified online leads.

Greg Ulrich, production manager at Fairway Independent Mortgage Corporation in Colleyville, Texas, believes that Google’s popularity provides a great opportunity as another channel for borrowers to reach the company, without substantial investment costs.  “This saves us money, allowing us to pass a greater savings to the consumer,” Ulrich said.

“We chose LoanSifter for our Google auto-quoting because it enables us to customize our pricing more accurately and effectively,” Ulrich added.  “Other vendors require manual supervision, which would have been problematic in keeping up with market shifts.”

Consumers who search for popular mortgage-related terms or phrases on Google are drawn to Google’s proprietary mortgage Comparison Ads, where they can anonymously provide details such as their desired loan amounts and credit scores.  Google will then retrieve multiple reliable offers from dependable lenders, placed side-by-side so the borrower can compare them.  After investigating different scenarios and choosing a lender, the borrower is then able to contact the lender by phone or e-mail.  Borrowers do not have to fill out lengthy forms or click through walls of advertisements in order to access up-to-the-minute loan products and rates, and the leads generated to lenders are anonymous, so that borrowers can protect their private information until they are ready to move forward in the mortgage process.

“Our relationship with Google will be of tremendous benefit to both lenders and consumers,” LoanSifter President Bruce Backer said.  “A growing number of borrowers are using the Internet to find the best possible mortgage deals, and Google’s immense popularity makes it a first stop for many.  Borrowers benefit from the side-by-side comparison in an open marketplace, while lenders benefit from LoanSifter’s ability to accurately price mortgage scenarios on their behalf.”

About LoanSifter

LoanSifter, Inc. provides the banking industry’s most comprehensive tools for mortgage bankers, loan officers and secondary departments to price, market and manage loans. The company’s flagship technology solution is an accurate, web-based product and pricing solution providing bankers with advanced tools to improve their service levels and increase profits. LoanSifter boasts the most comprehensive investor database in the industry with over 160 correspondent and wholesale investors. LoanSifter is also the leader in delivering point-of-sale (POS) and marketing tools to lenders and loan officers, including its eOriginations suite solution, offering highly customizable website utilities (automated consumer-facing pricing search), automated email campaigns, automated quoting for Zillow and LendingTree, scenario-specific rate monitoring alerts, and automated marketing materials. Founded in 2004, LoanSifter is headquartered in Appleton, Wisconsin.  For more information about LoanSifter, call 920.268.4770 or visit www.LoanSifter.com.

PRESS CONTACT:  
Warren Lutz
Strategic Vantage Marketing & Public Relations
(925) 270-3941
PR@StrategicVantage.com

Web Site: http://www.loansifter.com

Home Loan Originations Increase 22%

Home Loan Originations Increase 22%

Home Loan Originations Increase 22%-Image by Getty Images via @daylife

Strong refinance activity helped residential lenders lift third-quarter loan production, and the elevated originations have continued into the current quarter.

U.S. lenders originated around $354 billion in home loans during the third quarter based on an analysis by MortgageDaily.com. Business jumped roughly 22 percent from the second quarter’s revised $289 billion.

Behind the stellar performance was an increase in refinance volume as the 30-year mortgage fell from an average of 4.740 percent at the end of May to 4.351 percent at the end of August based on the U.S. Mortgage Market Index report from Mortech Inc. and MortgageDaily.com.

Driven by the Greek sovereign debt crisis and the Federal Reserve’s disclosure in September that it plans to extend the maturities of its Treasury investments and reinvest principal payments from agency debt and mortgage-backed securities investments into more agency MBS, mortgage rates have fallen even further. The improvement has kept refinance activity elevated and potentially could have fourth-quarter production even higher.

The Federal Housing Administration endorsed $49.7 billion in mortgages during the third quarter, leaving it with a market share of around 14 percent. FHA market share fell from a revised 18 percent in the second quarter.

Wells Fargo & Co. retained its No. 1 title during the third quarter. But Bank of America Corp. slipped to third place behind JPMorgan Chase & Co., and Ally Financial Inc. also moved down a notch.

Originations

Rank Q3 2011 Q2 2011 Q3 2010
1 Wells Wells Wells
2 Chase BofA BofA
3 BofA Chase Chase
4 Citi Ally Ally
5 Ally Citi Citi

 

Nearly half of all residential production was generated by the top four lenders.

Citigroup Inc., Quicken Loans Inc. and Flagstar Bancorp Inc. each increased volume by at least half compared to the second quarter. But BofA saw new business tumble 18 percent — the worst performance of the biggest lenders.

Compared to the third-quarter 2010, MetLife Home Loans turned in the strongest performance with an increase of 16 percent.

Mortgage Lender Ranking at:
http://www.MortgageDaily.com/MortgageLenderRanking.asp?spcode=pr

Mortgage origination news at:
http://www.mortgagedaily.com/Fundings.asp?spcode=pr

Quarterly mortgage production by the top lenders at:
http://www.mortgagedaily.com/FundingsConforming.asp?spcode=pr

About MortgageDaily.com
Founded in 1998, MortgageDaily.com is a dominant online source of mortgage news, statistics and analysis for the mortgage industry. Visit us online at www.MortgageDaily.com.

CONTACT:
Holly Himelright
NewsAlert@MortgageDaily.com
3811-700 Turtle Creek Blvd.
Dallas, TX 75219

Major Real Estate Investor Sets Sights on Texas

Major Real Estate Investor Sets Sights on Texas

Memphis Invest, GP has grown into the largest seller of private property, single family homes in West Tennessee and now has their sights on becoming a major player in the Dallas/Ft. Worth investment real estate market.

“We lived in the Dallas metro-plex for almost 30 years and still have major business and family ties to the area,” stated Kent Clothier when announcing the company’s decision to expand to a second market. Dallas was chosen due to the Clothier family’s familiarity with the area and the ability to quickly place the needed employees and partners into the market.

Memphis Invest has built a reputation as a national leader in providing passive real estate investors with the needed expertise and service to be comfortable investing in out-of-area markets. Having developed into the largest seller of single-family homes in West Tennessee, the Clothier family knew it was time to help their clients expand and diversify their portfolios.

“We have been looking at other markets for the last couple of years, but never really felt like the timing was right or the market was ready and now we know that Dallas is exactly where we need to expand,” said Brett Clothier, who along with Kent Clothier, Sr. will make the final call on all properties purchased. “We are sticking with a price point that provides ease of entry for both domestic and foreign buyers, but also provides a stable and consistent return to protect their investment.”

Memphis Invest plans to use their expertise and knowledge of the investment real estate market to help guide their existing leadership team as they develop the Dallas market and the new partnerships they have put in place. With one eye toward developing a second market and the other toward continuing to provide the outstanding service their clients have come to expect, the Clothiers are planning for a very good 2012 for them and their clients.

“We are not going into anything blind or quickly. We have been very deliberate in developing a plan for our clients. They have asked us many times to diversify into other markets and this is the first step in doing that for them,” stated Kent. “We have other plans we will announce soon and have plans to continue to grow beyond the 300 investment properties sold this year in Memphis. But we will always keep tight control over the quality of the investments and the customer service our clients receive. I think the real estate investors who trust us with their portfolios would expect nothing less.”

Memphis Invest, GP is the largest privately owned home seller in Memphis, Tennessee and provides real estate investors with a passive alternative to investing. For more information please visit the MemphisInvest.com website at http://www.memphisinvest.com or you can reach them at 1-877-773-9998.

CONTACT: Chris Clothier, +1-901-751-7191, chris@memphisinvest.com

Web Site: http://www.memphisinvest.com

Premiere Estates will auction the largest ICF green build estate in Monterey County on November 19, 12 PM on site at 7820 Monterra Oaks Road via phone and online. The green technology Carmel Mission-style villa, known as Casa de Robles, sits atop over 2 acres and spans 13,000 square feet with full ocean views.  The auction includes a membership to Clint Eastwood’s exclusive golf club, Tehama, located next to the property.

Monterey Ocean Front Luxury Home Starts at 45% Off at Auction

Monterey Ocean Front Luxury Home Starts at 45% Off at Auction-Image via Wikipedia

Originally listed at $7.1 million, opening bids start at $3.9 million, 45% of list price.  Todd Wohl, managing partner at Premiere Estates Auction said “This is truly a rare opportunity to buy a property like this at auction in one of the most exclusive areas in all of Carmel, Pebble Beach and Monterey County.”

Casa Robles is located a few miles from the galleries, boutiques and restaurants of Carmel-By-the-Sea, adjacent to Monterey Jetport and less than an hour’s drive from the Silicon Valley.  Listing agent Danielle Tomassini said the property “has the most advanced technology, is completely energy efficient and built with the finest attention to detail.”  She adds that the property’s rebuild value alone is over $7 million and is very unique in the way it is built.

About Premiere Estates Auctions: Premiere Estates is a leading luxury estate auction company in the US and is generating tremendous interest after the recent auction of a “Billionaire Beach” estate in Malibu doors down from Oracle’s Larry Ellison and the newest upcoming auction of Britney Spear’s former home. These, and other sales, mark a rising trend in the wealthy seeking auction facilitators when it comes time to sell their estates.

For complete auction information, please visit http://bitly.com/uqJtdy, contact Premiere Estates at (800) 290-3290 x777, or contact Danielle Tomassini at (650) 543-7757 or dtomassini@interorealestate.com.

For media enquiries, please contact Carissa Ashman at Carissa@C-StarPR.com.

CONTACT: Carissa Ashman, +1-650-387-7387, Carissa@C-StarPR.com

Web Site: http://premiereestates.com/hgtv.php

Large Las Vegas Land Site Up for Bankruptcy Auction

Large Las Vegas Land Site Up for Bankruptcy Auction

Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm, today announced that the company has been engaged by a group of five banks to promote the auction of 1,340 acres of undeveloped land known as Park Highlands in North Las Vegas.  Together, the banks hold a 48 percent interest in the $178.9 million defaulted loan on the property, which is being sold under Bankruptcy Section 363.

Curt Allsop, senior associate, Investment Services, Land Group, will lead the assignment in conjunction with Doug Schuster, senior vice president, Investment Services, Multi Housing Group, and Vittal Ram, associate, Investment Services.  The listing was a referral from Andrew Phillips, senior associate, Financial Services Asset Management.  The team will promote the auction on behalf of Bryan Cave LLP, a leading global business and litigation firm representing the five banks.

With no initial bids permitted, the live absolute auction will be held Dec. 12.  The land sale is expected to be one of the largest in Nevada since the property was first sold in 2005.

“This undeveloped property is the only parcel of land of its size available for purchase in Greater Las Vegas and the outcome of this auction will have a significant impact on the future growth of the region,” said Allsop.

The land is zoned for residential, retail, resort, business and office use.  Land sales in Greater Las Vegas during the past 12 months for parcels 30 acres and larger have sold for a median price of $98,000 per acre and a high of $167,000 per acre.  Statistics show the largest sale was 141 acres, which closed in June.

About Grubb & Ellis Company

Grubb & Ellis Company (NYSE: GBE) is one of the largest and most respected commercial real estate services and investment companies in the world. Our 5,200 professionals in more than 100 company-owned and affiliate offices draw from a unique platform of real estate services, practice groups and investment products to deliver comprehensive, integrated solutions to real estate owners, tenants and investors. The firm’s transaction, management, consulting and investment services are supported by highly regarded proprietary market research and extensive local expertise. Through its investment management business, the company is a leading sponsor of real estate investment programs.   For more information, visit www.grubb-ellis.com.

CONTACT: Julia McCartney, +1-714-975-2230, julia.mccartney@grubb-ellis.com, or Damon Elder, +1-714-975-2659, damon.elder@grubb-ellis.com

Web Site: http://www.grubb-ellis.com

Foreclosed Self Storage Facility Goes for $10.5 Million

Foreclosed Self Storage Facility Goes for $10.5 Million

Bancap Self Storage Group, Inc., the “#1 Self Storage Broker in California,” recently announced that the firm has successfully brokered the sale of the Casino Self Storage property located in the city of  Moorpark in Ventura County, California.  Dean Keller, the firm’s president, was the exclusive listing agent and sole broker in the transaction.  The sale was facilitated by special servicing company LNR Partners, LLC on behalf of a CMBS fund that had foreclosed on the property earlier this year.  The buyer was Public Storage, a publicly traded REIT, which will re-brand the property with its name.

“This is a classic example of a very desirable first class property that was just over-leveraged in a very difficult economic climate,” Keller said “It is the nicest storage facility in the city and it should perform very well in the long run.”

The property sold for $10.5 million on an “all cash” basis. This was much less that the property’s outstanding debt at the time of foreclosure.  Although physical occupancy was over 85%, economic occupancy was approximately 66%, offering further upside potential to the buyer.  The facility’s gross potential income at the time of closing was approximately $1,078,000 per year.

Casino Self Storage contains nearly 85,430 net square feet of self storage space divided into 822 units, including 91 climate controlled units.  The attractive two-story project was built in 2005 and is located on Los Angeles Avenue (also known as State Highway 118) on a highly visible corner in retail and commercial oriented location.  The buildings are constructed of concrete block and stucco with metal partitions, roofs and doors.

“There have only been a handful of foreclosed storage properties listed for sale in Southern California in the past few years and we have been the exclusive listing broker for most of them,” Keller said.  “There are plenty of buyers looking to “steal” lender owned properties, but we have been able to obtain very good and fair prices for the sellers – usually millions of dollars more than the “direct offers” received from potential buyers and other brokers before our listing and marketing of the property.  Self storage is such a unique property type and it takes a specialist with proven expertise and experience to maximize value for sellers in this unique property niche.”

Bancap Self Storage Group is the “#1 Self Storage Broker in California” with over $900 million in completed self storage sales, including many lender-owned “REO” properties, numerous portfolio sales, and a record setting single property sale at over $31 million.  For more information contact Bancap Self Storage Group at (949) 888-5355 or visit the company web site at www.bancapselfstorage.com

Contact: Dean Keller

Phone (949) 888-5355

Fax (949) 203-6105

Email: DKeller@BancapSelfStorage.com

Home Buyers Still in the Dark About Buying Process

Home Buyers Still in the Dark About Buying Process-Image by Getty Images via @daylife

Despite widespread volatility within the housing market and five consecutive years of home value declines, more than two in five (42 percent) of polled prospective home buyers believe home values typically appreciate by 7 percent a year, according to a recent survey by leading real estate information marketplace Zillow (NASDAQ: Z).

This is an unrealistic expectation as, historically, home values in a normal market tend to appreciate by 2-5 percent a year. (1)

Zillow, with Ipsos®, surveyed prospective home buyers (2), asking basic questions about the home buying process.

Despite the unrealistic expectations about home value appreciation, prospective home buyer respondents seem fairly knowledgeable about the home buying process, answering questions correctly more than half the time (65 percent). However, several important parts of the process confused them.  Two in five (41 percent) buyers think they are required to buy private mortgage insurance (PMI) regardless of the amount of their down payment.  In fact, lenders typically require PMI only when buyers are putting down less than 20 percent of the home’s purchase price.

Additionally, more than half of prospective home buyers who were polled confuse appraisals and inspections.  Fifty-six percent said the purpose of an appraisal was to determine if the home is in good condition, when in fact that is the purpose of an inspection.

“It’s troubling that we’re still in the midst of one of the worst housing recessions in history, and yet prospective buyers continue to have such high expectations for home value appreciation,” said Dr. Stan Humphries, chief economist at Zillow. “It’s great that buyers seem to have a fairly solid grasp of the home-buying process, but since this is one of the biggest financial decisions of most people’s lives, it’s even more important that they understand how that investment will appreciate after they sign the papers. Over-estimation of the appreciation potential will lead many to buy real estate when the time in which they plan to live in the house may make renting a better strategy.”

Additional Survey Findings

  • More than one-third (37 percent) of prospective home buyer respondents believe buying homeowner’s insurance is optional.  In reality, lenders require that borrowers purchase homeowner’s insurance. This insurance protects the lender. If catastrophe strikes, the mortgage will be repaid from the insurance proceeds.
  • Nearly half of polled prospective home buyers in the study do not understand when they will actually own the home they intend to buy. Forty-seven percent said a prospective buyer owns a home after the purchase contract is signed.  The purchase and sales agreement merely kicks off the closing phase, which can be a lengthy process.
  • The majority (87 percent) of polled prospective home buyers know that closing costs are negotiable and can vary by bank and lender. Lender fees, like loan-origination fees, administrative costs and other clerical fees, are typically the most negotiable in the home buying process.

 

Interactive Online Quiz and Resources Available

An online version of the Zillow survey, the “Buyer IQ Quiz,” is available at http://www.zillow.com/mortgage-rates/buyer-iq-quiz/ and contains the correct answers. Following the quiz, participants are given a score and resources to learn more about the home-buying process.

About Zillow, Inc.

Zillow (NASDAQ: Z) is the leading real estate information marketplace, providing vital information about homes, real estate listings and mortgages through its website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. More than 24 million unique users visited Zillow’s websites and mobile applications in September 2011. Zillow, Inc. operates Zillow.com®, Zillow Mortgage Marketplace, Zillow Mobile and Postlets®. The company is headquartered in Seattle.

Zillow, Zillow.com and Postlets are registered trademarks of Zillow, Inc.

Ipsos is a registered trademark of Ipsos S.A.

(1)Over the period from 1890 to 2006, the average annual growth in home values was 3.7%.  Source: Irrational Exuberance by Robert Shiller (Princeton University Press 2000, Broadway Books 2001, 2nd edition, 2005)

(2) These are some of the findings of an Ipsos poll conducted August 31-September 1, 2011.  For the survey, a national sample of 1,012 adults aged 18 and over residing in the U.S. was interviewed via Ipsos’ U.S. online omnibus.  Among them, 177 reported that they plan to buy a home within the next 3 years, which qualifies them as “prospective home buyers.”  A survey with an unweighted probability sample of 1,012 and a 100% response rate would have an estimated margin of error of +/-3.1 percentage points 19 times out of 20, of what the results would have been had the entire population of adults in the U.S. been polled.  The margin of error for a subgrouping of the survey population of 177 individuals would be +/-7.4.  These data were weighted to ensure the sample’s regional and age/gender composition reflects that of the actual U.S. population according to data from the U.S. Census Bureau and to provide results intended to approximate the sample universe.  All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

CONTACT: Jill Simmons, Zillow.com, +1-206-757-2794, press@zillow.com

Web Site: http://www.Zillow.com

Secondary Mortgage Market Bill Supported by NAR

Secondary Mortgage Market Bill Supported by NAR

Secondary Mortgage Market Bill Supported by NAR-Image by Getty Images via @daylife

Owning a home has had long-standing government support in the U.S. because homeownership benefits individuals and families, strengthens communities, and is integral to the nation’s economy, the National Association of Realtors® said in testimony today.

NAR President-Elect Moe Veissi outlined the association’s recommendations for housing finance reform before the House Financial Services Subcommittee on International Monetary Policy and Trade.

“We must be better stewards of the U.S. housing finance system if it is to thrive and effectively serve American home buyers and mortgage investors into the future,” said Veissi, broker-owner of Veissi & Associates Inc., in Miami. “Repairs to our current housing finance structure must be made, but we must be careful that changes to the system do not come at the expense of homeownership opportunities for middle- and lower income Americans.”

Toward that end, NAR supports H.R. 2413, the “Secondary Market Facility for Residential Mortgage Act of 2011,” introduced by Reps. Gary Miller, R-Calif., and Carolyn McCarthy, D-N.Y.

“H.R. 2413 offers a comprehensive strategy for reforming the secondary mortgage market and gives the federal government a continued role to ensure a consistent flow of mortgage credit in all markets and all economic conditions,” said Veissi. “Moreover, it supports the use of long-term fixed-rate mortgage products.”

Veissi testified that full privatization of the secondary mortgage market would all but eliminate products like the 30-year fixed-rate mortgage and that mortgage interest rates would be unnecessarily higher and unaffordable for many Americans, shutting otherwise qualified buyers out of the market.

“The 30-year fixed-rate mortgage is the bedrock of the U.S housing finance system, and without government support, there’s no evidence that this type of mortgage would continue to exist,” said Veissi. “Private firms’ business strategies would focus on optimizing their profits, creating mortgage products that are more aligned with the goals of their business than in the best interests of the nation’s housing policy or consumers.”

Veissi said that while the size of the government’s participation in housing finance should decrease if private capital is to return to the market and function properly, the federal government must have a continued role in the secondary mortgage market to avoid losing long-term, fixed-rate mortgage products and keep borrowing costs affordable for consumers.

“Continuing government participation in the secondary mortgage market is critical to ensuring that qualified home buyers can obtain safe and sound mortgage financing products even during market downturns, when private entities have historically pulled back,” Veissi said.

Recent reductions to the conforming loan limits by the federal government are already having an impact on mortgage liquidity according to early data from an NAR survey, which found that consumers who are now above the new lower conventional conforming loan limit are experiencing significantly higher interest rates and the need for substantially larger down payments.

Veissi said that the housing and economic recoveries have been slow and that activities that force economic activity to be constricted further should be resisted.

“For hundreds of years, this country has understood the value of homeownership because it helps families build wealth, supports community stability and contributes to our economy. We need to make sure that future housing policies continue to reinforce our long-standing value of homeownership, for the future of our families and our country,” said Veissi.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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