A Message From Jimmy Pippin and the Fannie Mae Team

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May 2020, Newsletter

We’re concerned for the health and well-being of our employees, customers, and communities, and we urge everyone to take precautions to protect themselves. We are actively monitoring the current situation and taking every step to help ensure a safe and sound housing market. Continuing to fulfill our mission is our priority.

Fannie Mae is fully operational and open for business. Our ability to serve our customers and support the market is paramount.

We will continue to support our customers by:

  • Remaining focused on our mission to provide liquidity to the market.
  • Keeping our Capital Markets desks open and trading mortgage-backed securities (MBS).
  • Supporting customers as they manage their pipeline — from hedging to funding loans — to minimize risk in this volatile market.
  • Fannie Mae will stay in constant communication with the Federal Housing Finance Agency (FHFA) to address any potential impacts to our employees and business operations. We will continue to take immediate action based on our business continuity plans and guidance and risk assessments from the CDC and local health agencies.

Recognizing the unprecedented situation, Fannie Mae has issued flexibilities and guidance on a variety of impacted components of the mortgage process:

  • Originating & Underwriting flexibilities
  • Appraisal flexibilities
  • Guidance on Selling Loans in Forbearance
  • Guidance on Remote Ink-Signed Notarization
  • Loan Servicing flexibilities
  • Forbearance options for impacted borrowers

Information on Fannie Mae’s response can be found here:

https://www.fanniemae.com/portal/covid-19.html

We will continue to monitor the situation and address issues as they arise.

Life after Covid-19 for the US Housing Professionals

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By James Pesavento, Director NAIBRS

April 2020, Newsletter

Our industry is experiencing the front-end of Covid-19 with stay-at-home orders and open houses coming to a standstill. Many agents are seeing the balance of their pipeline dry up and are uncertain of their future.  It is a scary time but from this pandemic, comes a time to reflect and define your perspective.

We rarely have the opportunity to step back and truly look at the things we can do to grow our business, differentiate our service offerings, and meet the changing needs of our buyer clients. “What will I do with this time to grow my business and create new opportunities now and in the future?” is a thought running through all our minds.   

As real estate professionals we tend to see the world as “glass half full.”  With today’s uncertainty it is critical to be positive about taking control.

The question is….How?

UNIFY

Many of us feel isolated.  The true human need for contact with others is on full display due to the solitary conditions that have become the new normalcy in our lives. We all have family, friends and clients going through the same thing.  We should check in on them and see if they need anything. People will remember the authentic concern in our neighbors.

EDUCATE

Education is the great differentiator in our professional lives. With over 2 million+ licensees across the country, what is your competitive advantage? Now is a unique time to look at trends and position yourself to take advantage of the market opportunities that are right around the corner. Consider these facts…

  • 64% of home buyers are currently interested in new construction
  • Less than 1% of real estate professionals are properly trained to service this massive segment of the buyer’s market
  • Leading housing experts predict a mass migration of urban homeowners to the suburbs. After weeks of being in their small, concrete homes they will yearn for big spaces, backyards and fresh air. Most suburbs are experiencing a housing shortage already, so for many, new construction on open lots and teardowns will be the only option
  • Post COVID-19, new construction homes will be associated with being cleaner and safer, and therefore, more desirable

NAIBRS offers a New Construction Specialist class that provides this valuable education for the real estate community. This certification is valid for 2 years, and will prepare agents for the upcoming wave of opportunities that are right around the corner. Due to the recent pandemic and understanding today’s financial challenges, NAIBRS is offering a $10 discount on this class. Just use the code “NAIBRS” and you will get $10 off, as well as a one-year membership in NAIBRS.  We will always make it a priority to educate our members.

 GROW

So, what can you do right now? Actually, more than you think. Now is the time to grow while others are fearful. Although selling existing homes has a series of challenges in today’s market, land is readily available (one lot in North Carolina went under contract last week), sellable, and if leveraged property – very profitable. Since NAIBRS has a valued partnership with Proposed Properties and their Lot2Home program, now is the time for top agents to build a mega-listing inventory of lots and proposed new homes. This can take the unassuming, low-dollar lot listing and turn it into income opportunities that generate 3-4X the commissions, while bringing in dozens of additional buyers leads. Our partners at Proposed Properties have perfected the process and in these difficult times, are showing agents how they can not only survive, but to prosper.  In one short year, Proposed Properties has over 147 Lot2Home properties representing $125 Million of potential sales.  Why not be part of the new construction wave and take advantage of the 1 million+ open lots for sale in the US. This does not even include the available tear-downs in the market. For more information, reach out to us here at NAIBRS.  We are here to help, and can always be reached at [email protected]

Coronavirus and US Real Estate Market

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By Sondra Barrett, President and the Board of Directors of NAIBRS

March 15, 2020 Newsletter

We live in uncertain times. We are bombarded with news of Coronavirus spreading in every continent except Antarctica. We are certainly going to break 100,000 infected and 3,000 mortalities….and quite frankly, it is terrifying. I’ve talked to so many friends, relatives and colleagues on how the virus has gone from a remote risk to a local concern. There are comparisons to the Spanish Flu of 1918. Most are shocked at 51 million fatalities caused by the pandemic virus.  Many are more shocked when you think our world population was much less than today 102 years ago (less than 2 billion vs almost 8 billion today).

I’ve been thinking about what this will do to our real estate industry…one of the core engines of driving our US economy. Thus, I am writing to you about what our thoughts are on the impact of Coronavirus on our real estate business.

Home prices still remain strong.

Most markets in the US are still going up. There is over 3.3M shortage of housing inventory (per Freddie Mac) and we all keenly understand that homes go up over time. History has shown blips (like a major recession) but prices tend to go up. After all population grows, but land availability does not. Coronavirus will be contained and will be under control as the world if focused on the solution, versus denial and assigning blame.

The Fed Takes Action as a Response to the Impact of Coronavirus

With concerns on an economic slow down, the fed dropped rates 50bps. What this means for us…mortgage rates fell to incredibly low amounts…low 3% range for 30 Year Fixed and some cases below 3% for 15 Year Fixed. This means our clients can afford more house.  For example, if rate is lower by 1%, this improves monthly payment by 12%. Your buyers (with prequalification from solid lenders) can buy more homes and save money.

Take a look at this chart of 10-year treasury rates, which are closely linked to mortgage rates.

10-Year US Treasury Rates

 (Source:  Google)

Many of you are thinking….are 10-year treasury rate and mortgage rates really connected?  Yes, they are very much tied together as the next chart shows how tight they follow each other!

Looks like there is a positive correlation!

What to do Now

By being in a digital work environment, we have advantages available today.

Our New Construction Specialist classes for designation are online.

Proposed Properties LLC has its new construction discovery sessions available on Zoom tele-conferencing.

Be positive– if you look worried then your clients will be worried.

Some Beacons of Hope

Tom Truong, 2019 national president of AREAA believes “We remain confident in the housing market and are optimistic that the combined countermeasures including lower interest rates and high homebuyer demand will make 2020 an outstanding year for our industry!”

Asa Fleming, president of NC Association of Realtors with 47,000 agents states “The demand for housing is extremely strong in my state, and I hear similar feedback from other states.

Per Treasury Secretary Steven Mnuchin, the Treasury Department expects to continue “limited and tailored government support” of Fannie Mae and Freddie Mac after their departure from federal conservatorship. “Stability in the housing finance system is crucial, and there should be no disruption to the market as a result of Treasury’s recommended administrative reforms.”

Jim Pesavento, director of NAIBRS states “We have faced more challenges in our lifetime and this too will pass.”

The Ultimate Advice

There will always be a possibility of a global risk that affects our assets.  Just look at the stock market with daily drops where many 401K values are dropping like a rock. However, people don’t live in their 401Ks…they live in their homes.

You can’t change how fast we will find a cure…but you can choose to take advantage of incredibly low mortgage rates and get into your dream home.

Life is too short to stop living. Like all storms, Coronavirus will come to pass and we will be back on the steady road to wealth creation for our clients.

Best,                                                               

Sondra Barrett

President, NAIBRS

US Housing 2019 Look-Back and 2020 Outlook

by Saurabh Gupta

NAIBRS provides economic commentary on the US housing market. We are pleased on launching our first US market view of housing and renovation. This provides a look-back on 2019 and what to expect in 2020. We live in interesting times (ranging Coronavirus to presidential elections) with lots of variables that can affect our market. Good news is that we aren’t expecting any major downturns in housing overall…enjoy the read.

Saurabh Gupta

About the Author

Saurabh Gupta is an economic advisor to NAIBRS. He is a veteran leader with experiences at Fortune 100 companies in finance, capital markets, business analytics, portfolio risk management and other business development disciplines. Saurabh is a CFA charterholder with an MBA from Carnegie Mellon and MS in Electrical Engineering. He has been a long-term proponent of the housing finance industry in the US and international markets. He can be reached at [email protected]

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