Category Archives: Real Estate

Mexico warns of scammers pretending to be Nationstar

Monday Morning Cup of Coffee takes a look at news coming across HousingWire’s weekend desk, with more coverage to come on larger issues.

Borrowers and lenders, here is your warning! Reports of mortgage scams and financial hackers keep making it to HousingWire’s headlines—beware.

The latest attack involves well-known mortgage company Nationstar. According to a scam alert issued by New Mexico Attorney General Hector Balderas, callers who claim to be with Nationstar are asking for money to be sent to an attorney in Florida promising a loan modification on the victim’s mortgage.

The scammers are asking New Mexicans to wire money upwards of $1200, money that they may never get back, Balderas cautioned.

The alert stated that the calls come from Ymax or Magic Jack phone numbers and can appear to come from any area code.

“Calls and offers like these are scams and New Mexico homeowners need to be vigilant, because once you wire that money you may never get it back,” said Balderas. “If you are struggling to make your mortgage payments, there is legitimate help available to you from our Keep Your Home New Mexico program. Please contact our office and we will work with you to see what options are available to you and your family.”

“Foreclosure can feel like a hopeless, scary situation, but the worst thing you can do is nothing at all. Ignoring the problem will only make it worse so please contact Keep Your Home New Mexico if you need assistance,” Balderas added.

Balderas advised that if borrowers are facing foreclosure, they should take action by calling 1-800-220-0350 or visiting www.keepyourhomenewmexico.org.

The news reiterates the importance behind the tips the Federal Trade Commission and the National Association of Realtors put out earlier this year to warn consumers. Check here for the tips.

Balderas also had tucked into his website a reminder for 192 New Mexico homeowners who need to cash their National Mortgage Settlement checks.

Checks must be cashed, or a new check must be requested, before Aug. 25, 2017 or the funds will be transferred to the State of New Mexico.

“It’s important that New Mexico homeowners receive the money they are entitled to from the National Mortgage Settlement before those funds are transferred to the state as unclaimed property,” said Balderas. “If you believe you should have received a check, please contact Rust Consulting, Inc. immediately in order to avoid forfeiting your settlement funds.”

Mortgage fraud scheme gets 10 years in prison

The alleged ringleader of a complex mortgage fraud scheme will spend the next 10 years in New Jersey state prison for his involvement in a scheme that involved using fake sellers, fake attorneys, fake title insurance agents, fake notaries, and a number of fake businesses to steal nearly $1 million from mortgage lenders in a series of transactions.

According to the office of New Jersey Attorney General Christopher Porrino, Artis Hunter pleaded guilty earlier this year to a charge of first-degree money laundering.

Two of Hunter’s alleged co-conspirators, Laquan Jones and Melissa Phillip, also pleaded guilty to charges stemming from the scheme.

Porrino’s office stated that Harris, Jones, Phillip and additional unidentified co-conspirators used stolen identities to steal more than $930,000 from lenders through at least eight fraudulent loan transactions, including four mortgage loans, three home equity lines of credit, and one auto loan.

Court documents showed that Harris and his co-conspirators used stolen or fictitious identities for basically all parts of the deals in question.

“(Harris and his co-conspirators) created all of the hallmarks of a legitimate residential loan transaction by using stolen and fictitious identities to fill all of the required roles: seller, attorneys, settlement agent, title agent, homeowner’s insurance company, notary and other parties,” Porrino’s office said in a statement.

Porrino’s office added that the loan applications contained “many” falsified documents, including closing documents, wire transfer documents and title insurance documents, all of which were supposedly witnessed, prepared, or reviewed by people either did not actually exist or were wholly unaware of the transactions.

Additionally, the owners of the homes connected to the loans in questions were never parties in the supposed sales, nor where any of the homes in question actually sold.

Court documents also showed that Harris and his co-conspirators established virtual offices for individuals and businesses involved in the loan transactions by setting up dozens of phone numbers, email addresses, fax numbers, websites, and mail drop addresses, all of which was done to maintain the appearance that lawyers, employers, borrowers, sellers, settlement agents, title insurance companies, homeowner’s insurance companies, notaries, and others were actively involved in legitimate lending transactions.

Going through all of those steps allowed Harris and his co-conspirators to deceive a number of lenders into processing fraudulent loan applications.

Once the loan was approved, the lender disbursed the loan proceeds, which for the mortgages ranged from $196,000 to $230,000, to a bank account opened in the fictitious or stolen name of a title company or law firm.

Then, Harris and his co-conspirators would withdraw the loan proceeds by visiting ATMs and bank branches in New Jersey to make “numerous and frequent” withdrawals over a period of time ranging from several weeks to several months until the entire amount stolen from the lender was withdrawn.

Another new all time high

Home prices increased in the second quarter of 2017 to yet another all-time high due to low levels of housing supply, according to the latest quarterly report from the National Association of Realtors.

The national median existing single-family home price increased 6.2% in the second quarter to $255,600. This is up from the second quarter of last year when home prices came in at $240,700, and surpassed the third quarter of 2016’s $241,300 as the new peak in quarterly median sales price.

Home prices increased in 87% of measured markets during the second quarter, or 154 out of 178 metropolitan statistical areas, the report showed. Only 23 areas recorded a decrease in median home prices from last year.

“The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season,” NAR Chief Economist Lawrence Yun said. “Listings typically flew off the market in under a month, and even quicker in the affordable price range, in several parts of the country.”

“With new supply not even coming close to keeping pace, price appreciation remained swift in most markets,” Yun said. “The glaring need for more new home construction is creating an affordability crisis that needs to be addressed by policy officials and local governments. An increasing share of would-be buyers are being priced out of the market and are unable to experience the wealth building benefits of homeownership.”

And the market shouldn’t expect new waves of inventory anytime soon. A new joint report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Developmentshows housing starts and building permits decreased in July.

However, NAR’s report shows less metros are seeing double digit growth in home prices at 23 metros in the second quarter, down from 30 metros in the first quarter. But while less metros are in the double-digit range, more metros are seeing increases as only 85% of measured markets saw an increase in home prices in the first quarter.

At the end of the second quarter, there were a total of 1.96 million homes available for sale, down 7.1% from the 2.11 million home for sale at the end of the second quarter last year. This represents about 4.2 months’ worth of supply at the current sales rate, down from 4.6 months last year.

Solving its inventory crisis

Texas’ inventory shortages won’t be around much longer if the state keeps up its crazy-fast home building pace. The state is currently blowing past the rest of the country in homebuilding, with only three Texas markets – Dallas, Houston, and Austin – on pace to make up more than 10% of all permits in the U.S.

That’s a lot of new homes.

According to a new report from Trulia that breaks down the nation’s homebuilding numbers, the three cities are on pace to build nearly 130,000 new homes in 2017. The permits for the three cities make up nearly as much as 50 other large U.S. metros combined.

The chart below from Trulia compares the three Texas housing markets to other top metros.

Ralph McLaughlin, Trulia chief economist, explained what the growth means for the cities, stating,  “We think the building boom in Austin and Dallas is healthy and welcomed, given the meteoric rise in prices and decrease in affordability we’ve seen over the past year. Massive homebuilding in Houston, on the other hand, may exacerbate the recent cooling in home prices.”

“We can’t say for certain, but at this pace, we would expect new housing construction at these high levels to make a noticeable increase on existing inventory in one to two years in constrained Austin and Dallas, and maybe less in a cooling Houston market,” said McLaughlin.

This is welcomed news for the state since, much like the rest of the country, it has been struggling with a lack of housing inventory.

Earlier this year, the Texas Association of Realtors forecasted that Texas housing in 2017 wouldn’t be quite as rosy as the previous years, due to decreasing inventory, as well as those rising prices, and the state’s rapidly rising property taxes, which are significantly impacting affordability in the state.

But looking at this new Trulia report, things are starting to look up for the state. When it comes to sheer homebuilding activity, the Dallas and Houston metro areas are the top contenders to win this year’s homebuilding gold medal, Trulia stated.

Dallas is the No. 1 homebuilding market in the country, with nearly 49,000 projected permits. Houston is a close second at nearly 48,000 permits.

Applies to short term tenants

Thanks to a newly enacted law in the state of Colorado, renters in the state on short-term leases will now receive more advanced notice of rent increases or lease terminations.

The new law requires landlords to provide a 21-day notice to short-term renters (those on month-to-month leases or those with lease terms under six months) of rent hikes or terminations of their lease.

Previously, landlords were only required to provide a 7-day notice to short-term tenants.

The Denver Post has more details:

The legislation — Senate Bill 17-245 — passed with bipartisan backing from state Rep. Dan Pabon, D-Denver, and state Sen. Kevin Priola, R-Adams County.

Pabon said it took two years to get the legislation passed.

Housing advocates say the new law provides a more reasonable amount of time for renters to find another place if they can’t afford a rent hike or if the landlord needs them out.

Additionally, the owners of the homes connected to the loans in questions were never parties in the supposed sales, nor where any of the homes in question actually sold.

Court documents also showed that Harris and his co-conspirators established virtual offices for individuals and businesses involved in the loan transactions by setting up dozens of phone numbers, email addresses, fax numbers, websites, and mail drop addresses, all of which was done to maintain the appearance that lawyers, employers, borrowers, sellers, settlement agents, title insurance companies, homeowner’s insurance companies, notaries, and others were actively involved in legitimate lending transactions.

Going through all of those steps allowed Harris and his co-conspirators to deceive a number of lenders into processing fraudulent loan applications.

Once the loan was approved, the lender disbursed the loan proceeds, which for the mortgages ranged from $196,000 to $230,000, to a bank account opened in the fictitious or stolen name of a title company or law firm.

Then, Harris and his co-conspirators would withdraw the loan proceeds by visiting ATMs and bank branches in New Jersey to make “numerous and frequent” withdrawals over a period of time ranging from several weeks to several months until the entire amount stolen from the lender was withdrawn.

Slow down construction in real estate

After rebounding in June, housing starts sank once more in July, according to the latest joint report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

Privately-owned housing starts dropped to a seasonally adjusted annual rate of 1.16 million in July, down 4.8% from June’s 1.18 million and 5.6% from 1.22 million in July last year, the report showed.

However, this drop was lead primarily by a drop in multifamily construction. Single-family housing starts dropped just 0.5% from 860,000 starts in June to July’s 856,000 starts.

And privately-owned housing units authorized by building permits also decreased, falling 4.1% from June’s rate of 1.28 million to 1.22 million in July, the report showed. But this is still up 4.1% from 1.18 million in July 2016.

Of these, single-family authorizations remained unchanged from June to July at 811,000 building permits.

Privately owned housing completions decreased to a seasonally adjusted 1.18 million in July. This is down 6.2% from June’s 1.25 million, but up 8.2% from last year’s 1.09 million. Single-family housing completions decreased just 1.6% from June’s 827,000 completions to 814,000 completions in July.

This decrease in housing starts is not welcome news to the housing market, which continues to struggle with low levels of inventory and rising home prices.

Services and vendors in one place

Qualia, a real estate title and closing platform, announced the launch of a new marketplace as an extension of its title settlement software.

The company integrated national and local vendors into its online marketplace. Qualia members are now able to simplify the procurement, management, payments, fulfillment and reconciliation of vendor transactions for services such title search, surveys, release tracking and notary.

Qualia announced the launch provides real estate professionals with these services through its online service, called Marketplace:

  • A selection of services and vendors in one place
  • Visibility and transparency into all vendor performance to optimize efficiency
  • Fulfillment and accounting automation that eliminates manual mistakes and time-consuming tasks
  • Transparency and audit trails that provide easy and thorough access to all of your data should a question or potential lawsuit arise
  • SOC 2 security accreditation that demonstrates established cybersecurity processes and practices and provides a distinct competitive advantage for title professionals

“Stakeholders in real estate closings are in a constant struggle to comply with the highly regulated lending environment, stay on a rigid timeline and lower operational costs,” Qualia CEO Nate Baker said. “The core of our real estate title and closing platform is changing how the industry is doing business but that doesn’t stop us from developing new and innovative ways to reduce unnecessary work and increase value in the real estate title business.”

Rich properties hits 14 million in Q2

Home equity is growing as home prices rise across the U.S., and the number of equity-rich properties increased by 1.6 million from last year, according to the Q2 2017 U.S. Home Equity and Underwater report from ATTOM Data Solutions, a multi-sourced property database.

By the end of the second quarter, ATTOM recorded more than 14 million equity-rich properties, properties where the combined loan amount secured by the property was 50% or less than the estimated market value.

This increase is up by nearly 320,000 properties from the previous quarter and up 1.6 million properties from last year to 24.6% of all U.S. properties. This is up from 24.3% of properties last quarter and 22.1% of properties last year.

The report is based on publicly recorded mortgage and deed of trust data collected and licensed by ATTOM Data Solutions nationwide along with an industry standard automated valuation model updated monthly in the ATTOM Data Warehouse of more than 150 million U.S. properties.

The report showed that about 5.4 million U.S. properties remain seriously underwater, where the combined loan amount secured by the property was at least 25% higher than the property’s estimated market value, by the end of the second quarter of 2017. This is down 64,000 from the previous quarter and 1.2 million from last year.

These properties represented 9.5% of all properties with a mortgage, down from 9.7% in the previous quarter and 11.9% from the second quarter 2016.

“An increasing number of U.S. homeowners are amassing impressive stockpiles of home equity wealth, enjoying the benefits of rapidly rising home prices while staying conservative when it comes to cashing out on their equity, homeowners are staying in their homes nearly twice as long before selling as they were prior to the Great Recession, and the volume of home equity lines of credit are running about one-third of the level they were at during the last housing boom,” ATTOM Senior Vice President Daren Blomquist said.

Individuals to perform appraisals

A former real estate appraiser from Kentucky will spend the next 10 months in either prison or home confinement after admitting in court that he lied on federal appraisal forms and used unlicensed individuals to do his work for him.

According to the U.S. Attorney’s Office of the Eastern District of Kentucky, Matt Garner pleaded guilty earlier this year to charges of conspiracy to commit wire fraud and making false statements to a federal agency.

Court documents showed that Garner, a former licensed real estate appraiser, made false statements about appraisals he submitted to lenders in connection with federally backed mortgages.

According to the U.S. Attorney’s Office, Garner owned and operated Garner & Associates, a company based in Lexington, Kentucky. From 2012 through 2016, Garner’s company was paid to do more than 700 real estate appraisals in various counties surrounding Lexington and Owensboro, Kentucky.

But, in pleading guilty, Garner admitted in court that on many of those appraisals, he paid unlicensed individuals a small portion of the appraisal fee to perform the appraisals on his behalf.

Then, Garner falsely certified on various federal appraisal forms that he personally visited the properties in question and conducted the appraisal, when, in reality, he had not.

Earlier this week, Senior U.S. District Court Judge Joseph Hood sentenced Garner to five months in prison and five months home confinement. Federal law dictates that Garner must serve 85% of his prison sentence.

After his incarceration is over, Garner will also be under supervision of the U.S. Probation Office for three years.

Garner was also ordered to pay a $5,500 fine.

Growth projections unchanged despite political tensions

As tension mounts in Washington, Fannie Mae kept its annual growth predictions unchanged for 2017.

The company explained even a potential government shutdown won’t be enough to derail the projected growth.

And a government shutdown isn’t the only political tension lingering. Fannie Mae also mentioned the looming geopolitical tensions which pose risks to the economy.

Fannie Mae held its economic forecast steady at 2% for the year, according to the August 2017 Economic and Housing Outlook report from Fannie Mae Economic and Strategic Research Group.

“We are keeping our full-year economic growth outlook at 2% as risks to our forecast are roughly balanced,” Fannie Mae Chief Economist Doug Duncan said. “On the upside, consumer spending growth might not moderate as much as we have accounted for in our forecast.”

“A build-up in inventory also should be positive for growth this quarter and nonresidential investment in structures will likely continue to improve as oil prices stabilize,” Duncan said. “In addition, the decline in the dollar and a pickup in global growth should support manufacturing and exports, although the outlook for the trade sector is clouded by uncertainty surrounding trade policy.”

The economy increased by 1.9% in the first half of this year, however Fannie Mae predicts the growth will increase to 2.1% during the second half. Fannie Mae attributes the expected pickup in growth to consumer spending and business investment. After subtracting sizably from growth last quarter, residential investment also will likely be a modest contributor during the second half of the year.

However, there are still setbacks the economy could experience through the second half of the year.

“Headwinds include tax policy uncertainty that could delay business investment, the risk of a partial government shutdown this fall if Congress fails to pass spending appropriations, a technical default if the debt ceiling isn’t raised, and an increase in global political unease,” Duncan said. “However, we believe these headwinds and tailwinds essentially net out overall, and we stand by our view that economic growth will remain on track for 2% in 2017.”