The California Department of Real Estate makes available a guide for all of us to learn the laws/rules of foreclosure.

You can get it at: www.dre.ca.gov/files/pdf/foreclosure_guide2010_REIS.pdf

Two of the country’s largest rental-home owners have agreed to merge, one of the clearest signs that Wall Street is betting home ownership rates will remain low and that a growing number of U.S. families will rent.

Blackstone Group and Starwood Waypoint Homes plan to combine in a bid for scale and operating efficiencies. The combined company would own about 82,000 homes in 17 metro areas, including Atlanta, Miami and Southern California.

Is this good for our housing market?

Read about it here: www.wsj.com/articles/with-merger-deal-blackstone-starwood-bet-on-being-americas-biggest-home-landlord-1502361000.

• The average 30-year fixed mortgage rate rose for the first time in seven weeks, according to the latest weekly survey from Freddie Mac.
• The 30-year fixed-rate mortgage averaged 3.83% for the week ending September 21, 2017, rising from last week’s 3.78%, and the 15-year fixed averaged 3.13%, up from 3.08% a week ago; last year at this time, the 30-year and 15-year fixed rates averaged a respective 3.48% and 2.76%.
• Higher mortgage rates had been expected following a spike in 10-year Treasury yields.

Source: Seeking Alpha, Carl Surran, SA News Editor, September 21, 2017.

Note: If you are considering selling a property and carrying the note, and your buyer or the property can’t qualify for a traditional mortgage loan, you may want to negotiate a higher interest rate than prime bank borrowers are getting.

• Home builders are one of the best-performing equity sectors in 2017. The sector has surged more than 30%, nearly tripling the performance of the S&P 500.
• Strong US economic data – and the accompanied income growth – has renewed hopes that pent-up demand will be unleashed from the rental markets into home ownership.
• Home builders delivered a strong 9% year over year growth in orders, but the benefits of the recovery continue to accrue to the largest home builders. Small builders have struggled with rising construction costs.
• Buyers continue to find that single family housing is in short supply. Supply constraints have lifted national home values by 44% since 2012. Higher construction costs explain much of the price inflation.
• We are negative on the home building sector relative to consensus. Restrictive zoning, rising construction labor costs, and buyer affordability issues will continue to hold back the recovery.

Source: Seeking Alpha, September 13, 2017, Hoya Capital Real Estate

Long time journalist Dan Walters has written an interesting article detailing how our politicians claim to solve certain housing problems and then cater to their “constituencies” to actually increase the cost.

The article is too lengthy to reprint here, but this is where you can read it:

https://calmatters.org/articles/building-california-housing-expensive-two-bills-make-even-costlier/

Affirm Inc. is in talks to offer installment loans to Walmart Stores Inc. customers. The loans will be largely geared to costlier Wal-Mart items like tires and other purchases over $200. Affirm’s installment loans have fixed annual percentage rates that often range from 10% to 30%, depending in part on the borrower’s credit worthiness.

Affirm’s loans are often geared to people who don’t have enough of a borrowing history to get a credit card. The firm’s average loan is about $750, but its loan sizes generally run as much as $10,000. The company has repayment periods that range from three to twenty-four months, with an average term of nine months.

Source: AnnaMaria Andriotis, Wall Street Journal, August 23, 2017.

Rising home prices are making borrowers comfortable again with the idea of tapping their homes for cash.

Home-equity line originations rose 8% to nearly $46 billion in the second quarter, their highest level since 2008, according to credit reporting firm Equifax. Borrowing via cash-out mortgage refinances hit $15 billion, up 6% from a year earlier, according to data from Freddie Mac.

The main engine driving demand: rising home prices. The median sales price of an existing home rose to $263,800 in June, the highest on record, up 40% from $187,900 at the start of 2014, according to the National Association of Realtors.

Banks insist the increased borrowing doesn’t herald a return to housing-bubble days when consumers came to view their homes as cash registers. Banks say they are being more cautious in how they make such loans and some add they are encouraging borrowers to tackle renovations or consolidate debt – uses that are considered investments rather than luxuries.

Source: Christina Rexrode, Wall Street Journal, August 28, 2017.

https://www.wsj.com/articles/tapping-your-home-equity-for-cash-is-big-again-1503838802.

Foreign buyers and recent immigrants purchased $153 billion of residential property in the U.S. in the year ended in March 2017, nearly a 50% jump from a year earlier. That surpassed the previous record for foreign investment set in 2015, when foreigners purchased nearly $104 billion.

Source: National Association of Realtors report, July 18, 2017.

According to comedian Jeff Foxworthy:

You Might Be a Redneck If…..

-Your wife is also your cousin.

-You think Sherlock Holmes is a housing project.

-Your front porch Christmas lights are on in August.

-You think genitalia is an Italian airline.

-You carry a fishing pole to Sea World.

-You own a homemade fur coat.

-A seven course meal is a bucket of KFC and a six pack.

I think you get the picture! What does Jeff Foxworthy have to do with the note business? Let’s take a look:

You Might Have a Bad Note If…..

-Your note is 6 months old and you have received no monthly payments.

-The property you sold burned down and you did not demand fire insurance be purchased.

-You got a down payment but the check bounced.

-There are more cars in the front yard than in the garage or driveway.

-Your buyer told you he and his wife will live in the home alone. Neighbors say 10 people live there.

-You have little or no documentation to support your transaction and are bewildered that no one wants to buy your note.

I think you get the picture!

Americans are expected to pour a record $316 billion into home remodeling this year, up from $296 billion a year earlier. But economists caution that the current boom is unlike earlier ones in that it is a reflection of a broken housing market. Many Americans are electing to stay put rather than trade up because the inventory of affordable homes is so small.

Source: Harvard University Joint Center for Housing Studies.