Category Archives: Real Estate

Growth across online real estate businesses

Altisource has announced the appointment of Marcello Mastioni to the newly formed position of president, real estate marketplace.

Mastioni will join Altisource’s executive team in the company’s Luxembourg headquarters. He will be responsible for driving growth by focusing on digital experience and strategy across Altisource’s consumer- and investor-focused marketplaces including Owners.comand Hubzu, a 2017 HousingWire Tech100 winner.

“We’ve built an impressive portfolio of unique online real estate capabilities, and there continues to be an incredible market opportunity to bring greater transparency, ease and other improvements to the home buying and selling experience,” said William Shepro, chief executive officer of Altisource. “Marcello’s digital expertise has enabled him to substantially grow online brands in their respective categories, and we are looking forward to him working to replicate this success at Altisource as he accelerates our growth across our online real estate businesses.”

Mastioni is joining Altisource from HomeAway, where he served as the vice president and managing director of Europe, the Middle East and Africa, overseeing the company’s operations throughout those regions of the world. Prior to HomeAway, Mastioni was the director of strategy and business development for Expedia. Earlier in his career, Mastioni was the head of retail and consumer goods industries at the World Economic Forum and led the operations of a technology business for General Electric.

“Online marketplaces have revolutionized many industries, and real estate is the next big opportunity,” said Mastioni. “Altisource has invested in the technology and talent and has the industry expertise to be the leader in online real estate transactions for consumers and investors.”

Mend your broken heart

It was love at first sight.

Scott and his wife had found the perfect home. It was within their $250K budget, in a great neighborhood close to a good school, and only a short drive away from work. They decided to make an offer immediately after the first viewing, and, because they were pre-qualified for a loan, directed their agent to prepare their bid.

A few hours later they got the call they’d been waiting for – only it was bad news.

“The seller has accepted a cash offer, I’m sorry,” their agent said.

And just like that, the couple went from love at first sight to heartbreak.

As a Realtor for ERA iRealty in Plano, Texas, I see this loan-versus-cash-bid scenario play out every day. And it’s not just Plano. It’s happening across Texas, where the real estate market is hot and inventory only stands for 35 days, but you can still snatch beautiful homes in up and coming communities for as low as $200,000. For many prospective homeowners in Texas, the bidding war is no joke – properties sell within hours and it’s not uncommon to have 15-20 bids on one home.

Over the last five years, cash buyers – most of whom are out-of-state investors looking to convert homes into rental properties – have begun to disrupt the loan-dominated financing model and give families looking to buy homes a real run for their money. Most of the race is happening with homes that offer the most for the least – good home, good neighborhood, good price – usually $250,000 or less. In that price range, on average, for every 10 homes sold, four are sold to cash bidders and six are sold to loan bidders – almost an equal split.

In Collin County, one of the state’s most in-demand markets thanks to an influx of new residents chasing jobs at Toyota, JPMorgan Chase, Liberty Mutual, FedEx or one of the other firms fueling the economy, this bidding war is both familiar and disheartening.

But money doesn’t always talk louder in the form of a bill.

Here are six ways I’ve helped homeowners win a loan-backed bid against a cash offer:

1. Work closely with your lender:

I mean very closely – to the point of having their cell phone number memorized. Your lender is a vital piece of this puzzle – make sure you know exactly what you need to have to make a complete bid.

2. Get fully approved for a loan:

Being pre-qualified is not enough in a competitive market, where waiting several days – or even hours, in some cases – to get fully approved for a loan can cost you the home of your dreams. So before you bid, get your loan approved contingent on appraisal of the home value. Taking this one extra step will put you on the same footing as cash bidders in the eyes of the seller’s agent, who will see your approval ‘as good as cash.’

3. Have your lender call the seller’s agent to give them peace of mind about your bid:

A phone call immediately after bid submission from your lender can go a long way in reassuring the seller that your loan-backed bid really is as good as cash, especially if it is coming from a trusted, certified third party.

4. Write a personalized letter to the seller expressing your interest in the home:

When you have a seller who is attached to their property and interested in seeing it go to the right buyer, a personalized letter could be the strategic advantage that gets you a winning bid. In many cases, cash offers are made by investors looking to either flip the home or convert it to a rental property. If you are a couple looking to raise a family in that home, stating that intention in the letter could appeal to the seller’s emotional side and close the deal in your favor.

Take this quiz to see how much you understand

The exact intricacies of a credit score continue to be one of the most confusing financial concepts for Millennials.

This elusive three-digital number holds the power to some of the most financially expensive purchases in a consumers life, including a house, and yet according to a recent poll from LendEDU, young American consumers only have an intermediate understanding of that all-important number.

LendEDU polled 500 millennials between the ages of 17 and 37 to test their knowledge of credit scores, and interestingly enough, the respondents weren’t too far off in describing their credit score range compared to what their actual credit score is.

The one cohort that did struggle, however, was the low end of the credit score spectrum, as seen in the graph below. More millennials actually had “poor” credit scores than those who described their credit scores as “poor.”

The struggle with credit scores mostly happens when it comes to knowing the factors that go into calculating a credit score.

The poll found that 43.69% of millennials believe that you can improve your credit score by increasing your credit utilization, while 36.27% believe their credit score could be improved by maxing out, but paying a credit card on time.

LendEDU cautioned borrowers to not do the previous two things. “One can only hope that the nearly 80% of millennials that gave the two aforementioned answers are not actively practicing those two behaviors in an attempt to increase their credit scores,” it stated.

Only a small 17.23% gave the correct answer and knew they had to decrease their credit utilization in order to improve their score.

Other key areas of confusion include that 8.42% of poll participants believe race is included in calculating a credit score, while another 8.22% say gender factors into a credit score.

Plus, 8.82% of millennials think that their political affiliation counts toward their credit score.

But all of this is wrong, with none of these personal traits included in formulating a consumer’s credit score.

One area respondents got right is length of credit history. Approximately 72.14% of millennial respondents were able to correctly state that age of credit history is used in the calculation to determine credit score. This is actually true. As your credit history grows older, your credit score will rise with it.

LendEDU also set the record straight on the need to carryover debt. When asked if you need to carryover debt month-to-month in order to have a good credit score, 27.66% of respondents wrongly answered, “Yes, carrying debt is necessary for a good credit score.” Carrying debt is NOT necessary to develop and maintain a good credit score.

The report clarified that while taking on debt can be effective if consumers want to build good credit quick, they can also build good credit by keeping a low credit utilization and paying off your balances in full each month.

Million to boost homeownership in Denver area

Wells Fargo is committing $4.8 million to help increase homeownership in the Denver-Aurora area as part of partnership with NeighborWorks America and its network member Community Resources and Housing Development Corporation.\

The partnership is part of the NeighborhoodLift program, which provides down payment assistance to average- and lower-income homebuyers, veterans, military service members, teachers, law enforcement officers, firefighters, and emergency medical technicians.

Wells Fargo previously brought the NeighborhoodLift program to Denver in 2014 and helped 252 families buy a home.

Through the program, certain buyers are eligible to receive a $15,000 down payment assistance grant.

“Affordable housing is the foundation to building a strong and healthy Denver,” Denver Mayor Michael Hancock said. “For our families, veterans, teachers, first responders and others working to own a home, this program can be a catalyst for achieving this dream.”

To be eligible to receive the down payment grant, the borrowers’ annual incomes must not exceed 80% of the local area median income, which in Denver-Aurora is approximately $67,100 for an individual homebuyer with a family of up to four people (and about $72,500 for a family with five members).

Conversely, veterans and service members, teachers, law enforcement officers, firefighter, and emergency medical technicians may earn up to 100% of the area median income, which in Denver-Aurora is about $83,900 for up a family of four and $90,650 for a family of five.

Approved homebuyers will have up to 60 days to finalize a contract to purchase a home in the Denver-Aurora area to receive the grant. Participating buyers can obtain mortgage financing from any qualified lender, not only Wells Fargo, and CRHDC will determine eligibility and administer the down payment assistance grants.

To earn the full grant amount, participants buying a primary residence with the NeighborhoodLIFT program must commit to live in the home for five years. Borrowers are also required to participate in homebuyer education classes.

“The NeighborhoodLIFT program is another example of our commitment to the greater Denver-Aurora area and our efforts to building better communities through sustainable homeownership,” said John Sotoodeh, Wells Fargo regional president. “In addition to being tailored for average- and lower-income homebuyers, we enhanced the program for veterans, military service members, teachers, law enforcement officers, firefighters and emergency medical technicians in honor of the services they provide to the community.”

According to Gary Wolfe, regional vice president, Western region, NeighborWorks America, the “innovative public-private collaboration” will create more than 240 new homeowners.

 

Americans more excited about personal finances

Consumers became more confident during the first half of August than at any point since January, according to the Survey of Consumers conducted by the University of Michigan.

The Index of Consumer Sentiment jumped 4.5% from last month’s 93.4 to 97.6 at the beginning of August. This is also up 8.7% from 89.8 in August 2016.

“Consumer confidence rose in the first half of August to its highest level since January due to a more positive outlook for the overall economy as well as more favorable personal financial prospects,” Survey of Consumers Chief Economist Richard Curtin said.

“The two component indices moved in opposite directions, with the Current Conditions Index falling slightly from its decade peak, and the Expectations Index posting a more substantial rebound,” Curtin said. “As with the overall Sentiment Index, the component indices nearly regained the peak levels recorded earlier in 2017.”

An article by Jill Mislinski for Advisor Perspectives explains what this means historically:

The Michigan average since its inception is 85.4. During non-recessionary years the average is 87.6. The average during the five recessions is 69.3.

The Current Economic Conditions index slipped 2.1% to 111 at the beginning of August, down from 113.4 in July. This is still up 3.7% from 107 last year.

But the Index of Consumer Expectations increased significantly, soaring 10.6% from 80.5 in July to 89 at the beginning of August. This is also up 13.1% from 78.7 last year.

However, these results do not include most American’s sentiment from after the recent incidents in Charlottesville, Virginia.

“Too few interviews were conducted following Charlottesville to assess how much it will weaken consumers’ economic assessments,” Curtin said. “The fallout is likely to reverse the improvement in economic expectations recorded across all political affiliations in early August.”

“Moreover, the Charlottesville aftermath is more likely to weaken the economic expectations of Republicans, since prospects for Trump’s economic policy agenda have diminished,” he said.

However, while sentiment among Republicans could decrease, Curtin explained the partisan gap in confidence is expected to persist.

“Nonetheless, the partisan difference between the optimism of Republicans and the pessimism of Democrats is still likely to persist, with Independents remaining as the bellwether group,” he said. “At this point, the data continue to indicate a gain of 2.4% in personal consumption expenditures in 2017.”