The Big Thaw and the NAR Settlement
Friday certainly did not go as planned. The NAR settlement changed the course of my day and weekend. More on that later. Spring has sprung in Jackson, WY. The Big Thaw from winter to spring has begun. Yesterday was nearly 50 degrees, and we expect high 40-degree weather with sunny blue skies again today. A few great weekends of spring skiing still ahead. Switching to the big thaw in residential real estate: consumers no longer seem to have expectations that interest rates will return to 2022 levels. The stability of 6 percent mortgages is driving consumer confidence and activity. Mortgage buy-downs are becoming more popular. The Goldman Sachs chart below suggests interest rates may fall to 6 percent flat over the next two years. Coming off the lowest unit volume of 2023 in decades, the Realtor.com trend lines for new listings by month are positive compared to 2023. As we near the end of Q1 2024 and enter the traditional spring selling season, it seems that buyers will have more choices. The Realtor.com Active U.S. housing inventory for sale chart below has inventory building beyond levels seen since 2021. Now it's the buyers' turn to take down the inventory. Come and get it! Our markets across the country perform very differently; real estate is local. From my listening posts, Q1 2024 has been busier than any Q1 since 2021, which included record low interest rates and the great COVID migration. We are all thankful for the thaw! Regarding the NAR settlement: it represents an exceptional opportunity for the good to become great. This includes real estate professionals and brokerage firms. Those individuals and/or companies that focus on perfecting the expression of their value proposition will gain market share. It's that simple! If you have deeper questions, please call me. This is Where We Are Now. Mark McLaughlin serves as CEO of McLaughlin Ventures and M&A Advisory at WAV Group. To view the original article, visit the McLaughlin Ventures blog.

Milestones Awarded for Delivering Mutual Benefits to Loan Officers and Realtors
Generally, technology solutions for real estate and mortgage professionals are separate, siloed solutions that are not connected in the service of the real estate consumer. When a homebuyer is working with an agent to find a home, and a loan officer to find financing, the only collaboration between the two might be email. The real estate and mortgage industries share a common challenge: 82% of past clients do not use their loan officer or Realtor in a future transaction. The primary reason is that the relationship breaks up after the closing as determined by surveys and interviews from the National Association of REALTORS®, as well as counterparts in mortgage. Milestones has become the most popular solution for real estate firms and mortgage firms alike. The invention of the consumer homeownership portal delivers value to the homeowner in managing and maintaining their home with the support of their trusted advisors in both real estate and mortgage. The homeowner hub is provided by service providers in real estate, mortgage, or title industries to past clients, prospects, friends and family. Consumers can invite and manage the service providers of their choice. The good news is that it works. The likelihood of a consumer using their service provider in a future transaction increases if the customer is a homeowner hub user. This is true for both real estate and mortgage. Milestones is a natural solution for enterprise firms that provide a range of affiliated services across real estate, mortgage, insurance, title, home warranty, and more. All of the affiliated services are seamlessly integrated with Milestones, allowing each business unit to contribute to supporting the homeownership journey. For their efforts in mortgage, leading mortgage publication HousingWire named Milestones to the 2024 Tech100 mortgage program. Details below. Milestones Named in HousingWire's 2024 Tech100 Mortgage Program AUSTIN, Tex. – Feb 1, 2024 – Milestones, a leading provider of innovative solutions for homeowner engagement in the real estate and mortgage industries, is proud to announce its recognition in the HousingWire Tech100 Mortgage program for 2024. This prestigious accolade highlights Milestones' commitment to revolutionizing the mortgage landscape through cutting-edge technology and innovative solutions. HousingWire's Tech100 Mortgage program, now in its 12th year, is an annual list that recognizes the most innovative and impactful technology companies in the mortgage and real estate industries. The list can be leveraged to identify partners and solutions to the challenges that mortgage lenders and real estate professionals face every day. "It is an honor to be acknowledged amongst an elite group of companies recognized for their excellence and influence in the mortgage technology sector," said Dustin Gray, CEO at Milestones. "Milestones is delivering on innovation to enhance customer retention and repeat business through its consumer-centric products that emphasize the lender's value between transactions." Milestones has distinguished itself through its commitment to developing forward-thinking solutions that streamline and enhance the mortgage process. The company's innovative technologies have empowered lenders, borrowers, and other stakeholders by providing efficient, secure, and user-friendly experiences. With a white-label approach, Milestones' home management portals assist real estate brokerages, mortgage lenders, title companies, home warranty providers, and insurance companies in being actively involved and guiding their customer's journeys, fostering continuous engagement for repeat business and referrals, as well as driving ancillary products and services to boost revenue. Gray added, "This acknowledgment reflects our dedication to pushing the boundaries of what is possible in the proptech industry in the mortgage sector, and we are grateful for the opportunity to contribute to the ongoing evolution of the housing finance landscape." Learn more about Milestones and talk to Sales here. About HousingWire HousingWire is an information services company that provides unique data and research, respected business journalism and must-attend events for housing leaders to use to advance their understanding and business outcomes. Our vision is a world in which housing leaders have a complete view of the housing market, and a broad community of peers with whom they can connect. We are committed to delivering the data, analytics, media, and events that advance this vision. Because housing is too important for narrow perspectives and missed connections. Informed housing leaders are better housing leaders. A connected housing industry is a better housing industry. And the full picture always reveals new opportunities. Explore more at www.housingwire.com. About Milestones Milestones provides personalized home management portals, referred to as "hubs," that incorporate a variety of tools and resources to assist homeowners throughout the entire homeownership journey, and that are uniquely branded to professionals in the real estate and mortgage landscape. Whether it's buying, selling, moving, or owning a home, homeowners have access to a wide array of home service providers, insights into home value, and much more. Our solution simplifies the complexities of homeownership, while empowering housing professionals to stay engaged, educate, and add value for their clients to foster long-term relationships. Learn more at Milestones.ai. To view the original article, visit the WAV Group blog.

Need to Generate More Revenue? 7 Ancillary Services Brokerages Should Consider
Running a real estate brokerage is rarely a wildly profitable enterprise, but the current environment has been exceedingly tough for even many experienced brokerages. High mortgage interest rates and inflation have combined to put a big damper on would-be buyers' ability to purchase a home, and the lack of inventory means that many would-be sellers are reluctant to leave a good-enough home for the wilds of the unknown. So how can brokerages help to push back against shrinking margins and find new areas of profitability in their businesses? It's not the easiest thing to do, but it's far from impossible. If you haven't yet considered adding one of these ancillary services to your business, then it might be time to ask yourself if it could generate the revenue you've been missing. 1. Mortgage loans Just about everyone who's interested in buying a house — and many people who are interested in selling — are going to need to apply for a mortgage loan. Most buyers need to secure a mortgage loan in order to buy a house, as very few people have the cash on hand to purchase a home outright. And sellers will almost certainly need to move after selling, unless they plan on negotiating some kind of rent-back deal. Instead of referring borrowers to an outside mortgage lender, why not offer your own mortgage loans through your brokerage? Even if only a segment of buyers decide to go with your mortgage loan, the additional revenue could make a big difference for your bottom line. Companies like HomeLendia provide franchise opportunities that can allow brokerages to offer these kinds of products and services without an unreasonable upfront investment. (On Tuesday, October 24, HomeLendia is hosting a webinar to explain how its mortgage franchise works; register now to learn more.) 2. Rental services Another potential area of expansion and growth is helping landlords or investors find qualified tenants for their rental properties. While some rental owners prefer to do this on their own, if they don't live locally or if they only have one or two properties to rent, they may not have a very robust network of people who would make high-quality tenants. As a brokerage, it's almost certain that you have access to a network of aspiring buyers, move-out sellers, and young adults moving out of the house for the first time. If you can leverage that to help landlords and investors fill their properties quickly and seamlessly (and charge a fee for it), that could be a decent amount of extra revenue for a relatively small lift. 3. Property management Both long-term and short-term rentals, especially single-family homes, will require some kind of property management oversight. Short-term rentals like vacation rentals need to be cleaned in between each visit, and if something breaks at a rental property, owners will typically have to call someone to fix it as opposed to fixing it themselves. Many real estate brokerages have existing relationships with house cleaners, general contractors, plumbers, electricians, and other problem-solvers that a property management company might call up to help with a rental. Property managers can charge either flat fees or collect a portion of the rental money, but either way, it's some additional revenue for your balance sheet. 4. Title and escrow To move a real estate transaction from offer to close, title and escrow companies must become involved in order to handle any earnest money deposits, review the home's title and provide title insurance, and serve as notaries on closing day, among many other duties. These tasks are typically outsourced to title and escrow firms, which charge to fulfill them. Offering these services in-house as part of your brokerage can be a good way to increase your bottom line. 5. Relocation help Here's a fact: While people might enjoy shopping for a new home, almost nobody enjoys the process of moving itself. Providing services around moving, from packing to loading to hauling, can generate more business for your brokerage (people love full-service options) as well as potentially create a new revenue stream. 6. Staging and photography services Sellers who want their homes to capture the best possible price are usually going to be interested in professional cleaning, staging, and photography. If you can find the experts and create a suite of products around home staging and selling that cater to this need, you could even consider outsourcing the offerings to other real estate firms. 7. Investing advice and opportunities Many people would like to get their foot in the door of a real estate investment property, so to speak, but they have no idea where to start. As the expert on real estate in your area, providing advice and data to aspiring investors can be another way brokers can increase their baseline sales business while also generating new income in a new way. The market might be tough, but you have options! Remember to register for the HomeLendia webinar to learn more about adding mortgage ancillary services to your brokerage.

zavvie Delivers Power Buying Services to the Mortgage Industry, Expansion Enabling More Buyers to Make Winning Cash Offers
zavvie, a software technology company modernizing real estate brokerages with customized buying and selling solutions, is expanding its Power Buying services, including Cash Offer and Buy-before-you-sell Modern Bridge, to the mortgage industry. By empowering more buyers – including first-time buyers – with the ability to pay cash for a home, zavvie helps loan officers and real estate agents close more deals. "The mortgage marketplace today is ripe for innovation and solutions that can help loan officers make more deals happen for their clients and real estate agent partners," said Lane Hornung, co-founder and CEO of zavvie. Targeting loan officers and lenders nationwide, zavvie now has Power Buyer partnerships with 30 mortgage lenders. Most lenders zavvie is working with today are either a subsidiary of or a joint venture with its brokerage clients. However, zavvie is not limiting its expansion into the mortgage business to brokerage-affiliated lenders: five of its Power Buyer partners are direct-to-mortgage companies. Following a successful beta launch last fall and a recent raise of over $2 million in a VC mezzanine round, zavvie's reach in the mortgage industry now extends to nine new states, with plans to cover 14 states by the end of 2023. The program has closed over 500 transactions since the pilot program began. Hornung notes the adoption of cash offers by loan officers have significantly outpaced real estate agent adoption. Industry research shows that about one-third of all home sales are cash offers. The move to expand its services to the mortgage industry allows zavvie to grow its market reach while also benefiting brokerages, which are already experiencing a 10-to-15 percent increase in their mortgage capture business from working with zavvie. "Lenders are attracted immediately to zavvie's Power Buyer program because historically, cash offers are over four times more likely to be accepted than financed offers, and they close faster, making sellers and their agents happier," Hornung explained. Hornung points out that loan officers act as the quarterback for the financial side of the transaction, typically working in partnership with real estate agents and their buyers. Hornung explained that real estate agents rarely want to be the financial expert, leaving that to an experienced loan officer to help buyers understand all their financing options. "Our Power Buyer programs are a no-brainer for loan officers looking to win more deals," Hornung added. According to zavvie research, consumers gain a significant advantage when they become a cash buyer with no contingencies versus applying for a traditional mortgage with a loan contingency. Historically, zavvie notes that mortgage-backed buyers had to make an average of 7 offers when buying a home, compared to just 1.1 offers when using cash. Being able to offer all cash without contingencies simplifies the transaction, making the buyer's offer more attractive to sellers who value speed and certainty. With cash in hand, buyers can bypass the usual financing delays, remove the risk of loan approval, and potentially shorten the closing period, making their offer stand out among multiple offers that sellers often receive. Moreover, removing contingencies from the equation alleviates one of the primary concerns for sellers — the possibility of a deal falling through. As consumer demand for Power Buyer services continues to rise in 2023, zavvie's expansion into the mortgage business and sustained growth in brokerage-assisted transactions make it an integral part of real estate's modern ecosystem. Its nationwide footprint now covers 47 states, serving over 75,000 agents using its platform and potentially reaching more than 700,000 through partnership integrations.

We Are Likely to See More Banks Fail
The Minsky Moment is a term coined by economist Hyman Minsky, describing a crucial point in the economic cycle when a period of rapid growth and increasing optimism leads to excessive speculation and risk-taking in financial markets. This can ultimately result in a sudden collapse in asset prices and a crisis in the financial system as investors and institutions find themselves unable to repay their debts and meet their financial obligations. The recent banking failures in America have been caused by a combination of factors, including the Federal Reserve's decision to increase interest rates by 4,000%, which has distressed the short-term bonds that banks use to shore up their liquidity. This has led to a liquidity crunch, with many banks struggling to meet their financial obligations. US Bank and the Bank of the West were acquired by other banks in January and February because of stress to their liquidity. Silicon Valley Bank and Signature Bank were taken over by the FDIC because of liquidity, and Credit Suisse was forced to sell to UBS for the same reason. An additional effect of the raising of interest rates at the fastest pace in history is the crisis caused in the mortgage industry. Most existing homeowners are currently enjoying low interest rates, reducing the likelihood of moving or refinancing. This has led to a slowdown in the housing market, as fewer people are buying and selling homes. As a result, mortgage lenders are experiencing a decline in revenue, as the demand for mortgages and refinances decreases. On top of it all, the Fed stopped purchasing mortgage-backed securities in September of 2022. Overall, the recent Minsky moment has highlighted the fragility of the financial system, and the need for policymakers to take action to address the underlying issues. The Federal Reserve's decision to increase interest rates played a significant role in this crisis. Unless the Fed reverses course on hiking interest rates, they will be creating a much bigger problem than inflation – the collapse of our banking institutions and capital markets. While some see the handful of banking failures as anomalies, I see them as the tip of the iceberg. In terms of stock market, we are more likely to see a 12% drop this quarter than we are to see even modest gains. In terms of the housing market, there is some potential for investors to see the stability of housing to protect their cash – rather than risk the uncertainty of cash tied up in failing banks. To view the original article, visit the WAV Group blog.

CFPB Issues Guidance to Protect Mortgage Borrowers from Pay-to-Play Digital Comparison-Shopping Platforms
Today, the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion to protect Americans from double dealing on digital mortgage comparison-shopping platforms. Companies operating these digital platforms appear to shoppers as if they provide objective lender comparisons, but may illegally refer people to only those lenders paying referral fees. When shoppers use a lender that is not the best option for their needs, they may end up with a lower quality lender or paying thousands more in closing costs or interest. The advisory opinion outlines how companies violate the Real Estate Settlement Procedures Act (RESPA) when they steer shoppers to lenders by using pay-to-play tactics rather than providing shoppers with comprehensive and objective information. "Given the rise in mortgage interest rates, it is even more important for homebuyers to shop and compare loan offers," said CFPB Director Rohit Chopra. "We are working to ensure that online platforms are not manipulating their search results in order to coerce kickbacks from lenders." Over the last year, mortgage interest rates have risen substantially. People looking for the best deal on mortgages or other settlement services often are turning to comparison-shopping platforms and mobile apps. Many of the websites and applications claim to offer ranked lists of providers suitable to the individual consumer's needs. After providing their personal data to an online site to get access or run a customized search, people reasonably expect a neutral and fair presentation of the providers that may best meet their mortgage or other settlement needs. Under RESPA, it is illegal for companies and individuals, including digital comparison-shopping platforms, to receive kickbacks and referral fees in connection with a transaction involving a residential mortgage or other real estate settlement service. Eliminating illegal kickback schemes fosters fair competition by forcing lenders and other providers to compete on a level playing field and leads to lower rates and higher quality service. Today's advisory opinion seeks to assist law-abiding companies to comply with existing law. It does not create any new requirements, but rather offers clarity on how firms can navigate issues associated with digital mortgage comparison-shopping platforms. It describes how these companies may violate RESPA, and potentially other laws, if they coerce payments from mortgage professionals, unlawfully steer consumers, or engage in other illegal referral activities, including: Presenting one or more service providers in a non-neutral way: The platform's operator presents lenders based on extracted referral payments rather than the shopper's personal data or preferences or other objective criteria. For example, the operator presents a lender as the best option because that lender pays the highest referral fee. However, the shopper is led to believe the lender was selected based on their shared personal data or preferences. In one variation, digital mortgage comparison-shopping platforms may receive payments from lenders to rotate them as the top presented option regardless of whether the highlighted lender is the best fit for the shopper. Biasing the platform's internal formula to favor preferred providers: The platform's inputs or formula are manipulated to generate comparison options favoring higher-paying or preferred providers. For example, a platform's formula is designed to steer shoppers to use providers in which the operator has a financial stake. In this case, the shopper is unaware that the platform's formula was potentially designed to steer them away from non-preferred providers. The Consumer Financial Protection Act of 2010 transferred authority for RESPA to the CFPB from the Department of Housing and Urban Development (HUD). This advisory opinion supplements guidance HUD provided in 1996 on early versions of comparison-shopping platforms, which the CFPB continues to apply. The CFPB will enforce RESPA to protect consumers and to ensure a robust, competitive mortgage market. Today's advisory opinion also follows a set of Frequently Asked Questions regarding RESPA published in 2020 to help entities understand their obligations under current law. Read the advisory opinion, Real Estate Settlement Procedures Act (Regulation X); Digital Mortgage Comparison-Shopping Platforms and Related Payments to Operators. Read Director Chopra's Statement on Mortgage Comparison Shopping in a Time of Higher Interest Rates. Learn about the CFPB's tools and resources for homebuyers. The CFPB established the Advisory Opinion program in 2020 to provide guidance to companies about how existing federal consumer financial protection law applies to emerging market trends and business practices. Consumers can submit complaints about mortgage and other financial products and services by visiting the CFPB's website or by calling (855) 411-CFPB (2372).

Redfin Launches Down Payment Assistance Feature in Partnership with Down Payment Resource
Redfin has added down payment assistance information to home listings on its website. Potential homebuyers can now use Redfin to discover down payment assistance programs they may qualify for in order to help make homeownership more affordable. The feature is powered by a partnership with Down Payment Resource, a company helping the housing industry connect homebuyers with more than 2,200 homebuyer assistance programs nationwide. Each eligible for-sale listing page on Redfin in the U.S. now displays the number of down payment assistance programs available in that area. Interested homebuyers can input basic information and immediately receive a tailored list of programs they may qualify for, the amount of assistance potentially available to them, and links to the program pages for more information. "Nearly half of Americans who have never owned a home say that saving money for a down payment is a barrier to homeownership, and many young people in particular feel like they'll never be able to own a home," said Christian Taubman, Redfin's chief growth officer. "Down payment assistance programs can make homeownership more attainable, but information about them is often fragmented and hard to understand. We saw a big opportunity in partnering with Down Payment Resource to raise awareness about these programs to help more people become homeowners." This information is especially valuable as the national median home price has soared roughly 40% since the pandemic, making saving for a down payment more challenging. Recent Redfin research found that the typical U.S. homebuyer who took out a mortgage in July made a $62,500 down payment, nearly double the median down payment in July 2019, before the pandemic started. "Our research shows that one in three declined mortgage applications are denied for reasons that could be addressed with homebuyer assistance, which underscores the critical need to increase awareness about these life-changing programs," said Rob Chrane, CEO and founder of Down Payment Resource. "Partnering with Redfin is a great way to get information about financial support into more consumers' hands. With thousands of assistance programs available across the country, many Americans may be able to afford homeownership sooner than they realized." This launch is part of Redfin's broader mission to remove barriers to homeownership and make finding a home clear and achievable. Other efforts include: Ongoing donations to nonprofit community partners through Redfin Rise, the company's philanthropic initiative. This year, Redfin Rise donations have provided housing counseling sessions for 660 families through Clarifi, supported the development of 12 permanently affordable homes through Homestead Community Land Trust, provided $135,000 in closing grants to 45 homebuyers through NHS Chicago, and helped build 226 homes in El Salvador and Mexico with New Story. Maintaining free homebuyer resources, including first-time homebuyer guides in both English and Spanish and homebuying classes taught by expert Redfin agents. Publishing extensive housing market research about affordability and equality issues.

Shock Is Over for BRN Brokers
The Broker Resource Network's Leadership Roundtable had their summit yesterday to discuss key business themes impacting our industry. The biggest news is that adjusting to the shock of stagflation is behind them. During the past six months, many brokers have been laser-focused on cost containment, and some on cost cutting. For those firms who had gotten out over their skis (i.e., spent too much) during the pre-recessionary real estate boom, drawing back expenses and rightsizing staff was important. Most Broker Resource Network (BRN) firms reported that they did not need to right-size because they were never wrong-sized. The general outlook is that companies should strike out their financial performance numbers of 2020 and 2021 and compare today's financials with 2019. When you take that perspective, things are not that bad. Mergers and acquisitions are expected to outpace recruiting and market share gains in driving growth. What Happens Next? The Federal Reserve Bank is in a weird place. If they increase interest rates again (which they are likely to do today), it will further dampen the housing market. Interest rates have doubled since the pandemic, which impacts first-time homebuyers and low-income homebuyers the most. There are early signs of struggle by homeowners including higher rates of late mortgage payments and late utility payments. A significant trend across most American cities has been the activity of investors in the marketplace, therefore making the leap from renting into owning more difficult and driving up housing costs for the lower and middle class. One broker shared that in the middle market of the NFL city where they operate, and a median home price of $250k to $400k, more than 40% of homes are being purchased by real estate investment trusts. The ability by investors to depreciate property acquisitions provided them with a tax-adjusted acquisition cost advantage. The balancing act by the Federal Reserve Bank pits curbing inflation with the creation of other lasting problems. The two biggest problems caused by rapid interest hikes are the recession and the trade deficit caused by the high value of the U.S. dollar. The recession is obvious and easily felt by brokers and agents. Consumer spending and broker spending has become very cautious, thus slowing home transactions and price increases. More consumers are having trouble paying their bills. All U.S. companies have put spending into the caution zone. The bigger issue is the incredible strength of the U.S. dollar – which has it on par with Europe. The dollar is up about 13.5% this year against a basket of peers, on pace for its strongest year in nearly 40 years, while the Euro has been crushed about 12% to below parity, a level untouched in two decades. It creates a great environment for Americans to travel abroad, but sets up a trade problem globally that will hit U.S. producers of exports. We have not seen stagflation (inflation coupled with a recession) since the Nixon administration. This is causing a lot of uncertainty and volativity in the stock market and in the minds of consumers. It is hard to say which way we will come out of this. Back to Basics Brokers offered the refreshing focus on getting back to basics. Call nights are back at some firms and one inspired broker is creating gift baskets for agents to drop off at their customers' homes. The business is becoming normal again with agents more focused on maintaining customer relationships through use and adoption of their CRM, along with other traditional network marketing tactics. A key focus is on the roll out and adoption of customer-for-life continuity programs that position real estate professionals as advisors, not just transaction specialists. Broker Resource Network Leadership Roundtable The Leadership Roundtable is a volunteer leadership group of the BRN that meets bi-monthly to guide the direction of the BRN in its "Broker First" mission. They set the tone of advocacy and research which benefits brokers. Attendees of this roundtable included: Helen Hanna Casey, Howard Hanna; Steve Hayes, Latter & Blum; Kevin Levent, BHGRE Metro Brokers; Eb Moore, Wilkinson ERA Real Estate; Gretchen Rosenberg, Kentwood Real Estate; Jim Fite, Century 21 Judge Fite Company; Michael Barbaro, redwith; PJ Louis, Century 21 All Points; and Wendy Forsythe, Fathom Realty. About the Broker Resource Network The Broker Resource Network subscription includes exclusive access to private discussions with other brokerage leaders through "Peer Advisor Groups," which offer the broadest base of information and sharing among brokerage leaders. Participants also receive at least one resource each week that is focused solely on company leaders, such as articles, research, analysis, benchmarking, webinars and newsletters. Subscriptions to the BRN are open to all brokerage owners and executives in the United States and Canada through an annual fee which includes direct access for up to six leaders from a bona fide real estate firm, including recruiting, marketing and technology leaders. Technology partners focused on the brokerage segment to provide foundational support for the organization. Brokerage applications are submitted online through a secure and confidential application found here. To view the original article, visit the WAV Group blog.

Buyside Rebrands to Percy and Snags $10 Million in Capital for Expansion into Mortgage
WAV Group has been a tremendous fan of Buyside since the company's launch. The product allows brokers to leverage their home buyers to pitch home sellers. During a listing presentation, agents share their seller home marketing plan – but with Percy (formerly Buyside), brokers deploying this product have an unfair advantage. The service allows the broker's agents to show the seller how many buyers the broker has for their home today. The bird is in the hand, not the bush. As firms deployed Percy, they also recognized a significant attachment rate for affiliated services like buyer mortgage prequalification, insurance, etc. Percy deepened the relationship with the agent, the loan officer, and the consumer during the buyer journey. It is these very seeds of discovery that stimulated the company to expand into offering their service to mortgage companies. Capping off the launch plan into mortgage is the name change to Percy, and $10 million in investment to deploy staff in additional product development, marketing, and sales. Please see the full press release here. To view the original article, visit the WAV Group blog.

Why One-Stop Shop Is a Fallacy
After 30+ years in the real estate industry, I find a truism that resonates with me. "The more things change, the more they stay the same." A case in point is our industry's quest to create a "one-stop-shop" for consumers. It has been a highly prized Holy Grail coveted and touted by experts and category leaders since I have been in the business. But the pragmatist in me, combined with personal experiences, has taught me to question conventional wisdom. So, I do. I have often found that conventional wisdom is just plain wrong.

Guaranteed Rate and @properties Enter into Mortgage Origination Joint Venture Agreement
Guaranteed Rate, Inc. and @properties, one of the nation's largest residential brokerage firms, today announced that they have formed a new joint venture, Proper Rate, LLC. The new company, which plans to launch early in 2020, aims to deliver a high-end, customer-focused retail mortgage lending experience. The combined strength of leadership and technology from two of the industry's top companies will drive growth in select markets around the country.

Hanna Financial Driving Real Estate Transactions with Buy Before You Sell Program
Founded in 1983, Howard Hanna Financial Services provides consumers with mortgage, title, insurance, and escrow services. For many real estate firms, these services provide home buyers and sellers with a one-stop shop solution that delivers a tremendous amount of convenience. We have seen these packages of affiliated services propel many real estate firms to heightened levels of success by delivering compelling and differentiated services. Companies like Weichert, Long and Foster, Hunt Real Estate, Fox and Roach, Crye-Leike, Real Estate One, and others experience a tremendous market advantage when the consumer understands the benefits of accessing all of the services needed for a real estate transaction from a single conglomerate. One of the most successful programs offered by Howard Hanna Financial Services is the Buy Before You Sell Program. WAV Group studies the effectiveness of these services for many of the Realty Alliance firms, and Hanna Financial has seen enormous growth in this particular program. Duffy Hanna, President of Howard Hanna Financial Services, expressed that they have seen this particular program double in popularity from 2017 to 2018. Driving the popularity of this service is the scarcity of inventory available to home buyers. In a highly competitive buyer market, home buyers find themselves at a disadvantage when buying a home if they need to submit a home sale contingency. Sellers prefer and accept offers without contingencies more readily. The Buy Before You Sell Program is essentially bridge loan on a buyer's existing home that allows that buyer to buy their next home before selling their current home. There is no payment due for the first three months and then interest only for the next three months or until the home is sold. This program is driven by an understanding of market metrics. Real estate companies and mortgage companies understand the number of days that a home is likely to be on the market before it is sold. Duffy Hanna reports that the average loan term for the Buy Before You Sell Program is 70 days from inception to close. Across the seven states where Hanna Financial provides this program, they have originated about 11,144 loans totaling over $2 billion. Helen Hanna Casey, President of Hanna Holdings, provided some insights on the success that this program has had in converting buyer and seller leads. Many consumers want the certainty of knowing where they are going to move before they close on the sale of their home. It creates a tricky situation whereby the real estate salesperson is often challenged to synchronize a home purchase with a home sale at the same time. Often this puts the seller in a position whereby they feel compelled to accept lower offers on the sale of their existing home in order to secure the home they want to buy. With the Buy Before You Sell Program, home sellers have more latitude to allow the market to work for them by strengthening their buyer offer while not putting discounting pressure on selling their existing home. This program is a keynote of the listing presentations of Howard Hanna sales associates. As you can imagine, Howard Hanna not only leverages these creative programs to benefit consumers, but also articulates the strategic advantage of these programs in their agent recruiting and retention efforts. Howard Hanna agents who clearly articulate these programs to their clients convert more buyers and sellers. One stop shopping is a powerful offering. The execution of great strategy is the key reason why Howard Hanna and other Realty Alliance firms continue to profitable expansion in an increasingly competitive industry. To view the original article, visit the WAV Group blog.

Rate Lock Will Worsen Home Sales
"Rate lock" is not a common term in real estate, but it is pretty easy to understand. And once you understand it, you will appreciate why trade volume in real estate is going to continue to stay low for a long time, and possibly why the stock market is in for a continued rise. Today's homeowners are probably in a loan product that is somewhere around 3.31 percent to 4 percent. If they decide to sell, they will need a new loan product that will probably be around 5 percent. That difference of 1 percent or 2 percent is what causes the "rate lock" effect. When consumers trade houses, the unpaid balance of their loan will see a significant increase in the interest paid on that loan. That is a pretty significant hit that adds cost to the transaction. Rate Lock Is Likely to Get Worse Before It Gets Better

Mortgage Data Turns Table in Buyer's Favor
Every Realtor® has run into it once or twice. Encounters with sellers who are less than forthcoming about their property's shortcomings, including withholding facts about the outstanding mortgage. "Those kinds of surprises are detrimental to closing the deal," says Andrew Balalovski, broker and owner of Balalovski Real Estate in Reynoldsburg, Ohio. "So before I ring a client's doorbell, I'm two steps ahead of the seller. I know everything about the property's worth, its past mortgage, deed history, loan amount, taxes, characteristics, and even how the market is doing in the neighborhood."

Down Payment Help for Military and Veterans; Q1 Homeownership Program Index
In honor of National Military Appreciation Month, Down Payment Resource's First Quarter 2017 Homeownership Program Index highlights the important programs available to veterans and members of the military. The number of total down payment programs decreased to 2,454, down by just nine programs from the previous quarter. Approximately 87 percent (87.2%) of programs currently have funds available for eligible homebuyers, unchanged from the previous quarter. Across the U.S., there are 135 programs with special benefits for veterans or members of the military, making up 5.5 percent of all homeownership programs.

What will a Trump presidency look like for real estate?
In his next four years as president, Donald Trump could have a major impact on real estate selling across the U.S. Licensed real estate brokers and agents nationwide are looking to Trump and how his time in office could change their industry. What are some possible outcomes of the Trump presidency? Trump has centered his platform around deregulation to further the recovery of the financial market, and there are a host of changes that could be made that would affect real estate sales. Lower premiums While Trump hasn't articulated much on his housing platform, he has expressed interest in boosting home ownership and cutting fees for Fannie Mae and Freddie Mac. Lowering premiums for FHA loans could offer the boost consumers need to make owning a home an affordable reality. Potential reforms Fannie and Freddie could also be on the chopping block for cutbacks, alongside such programs as the Low Income Housing Tax Credit and Section 8 housing vouchers.

Down Payment Programs 101: An Overview of the 3 Most Common Homebuyer Programs
Did you know there are more than 2,400 homebuyer programs available across the country? In fact, they can be as unique as the homebuyers and communities they serve. Homebuyers should investigate these financing options early in their home buying journey. What are homeownership programs? They include loans, grants, tax credits and other programs for eligible homebuyers that can help them achieve the down payment faster, cover closing costs and get into a home sooner than they would have otherwise. Who offers these programs? State Housing Finance Agencies (HFA) often offer the broadest array of opportunities. Cities and counties offer programs with criteria adjusted for local median income and home prices. Housing authorities Non-profits Employers What are common requirements to qualify? Both the home and the homebuyer must be eligible. Homeownership programs are for owner-occupant buyers only, no investment properties. Buyers must make a minimum investment, qualify for a first mortgage and complete homebuyer education. Common eligibility factors include home sales price, homebuyer income and homeownership history. There are often additional benefits, or even entirely separate programs, for educators, protectors, health care workers, veterans and households with disabled members.

Selling Tip: Dealing with a Buyer’s Down Payment Anxiety
Following the great housing bubble burst, real estate investment phobias abound. One of the largest fears scaring would-be buyers away from a home purchase: A lost nest egg, gobbled up by a home which, when later sold, nets little to no return on down payment. But what if those precious funds were protected? Would more buyers bite? Crisis of confidence According to a recent Harris Poll, would-be buyers continue to be reluctant to enter the housing market, despite recovery. Only 55% of renters expect to get a return on their down payment investment if they buy today and resell within the next few years.

First Month Impact of TRID
TRID has caused a lot of concern for residential real estate. The high percentage of home sales that include purchase loans makes the relationship between mortgage and home sales vital to the health of the industry and the national economy. There was an enormous amount of preparation to adjust to the new TRID regulations that were implemented October 1st, and a clear belief that closing periods would be dramatically extended. We reviewed the performance of many of our brokerage accounts to see what happened. October was the kind of month that researchers like the WAV Group would prefer to remove from results, or at least circle. Whenever certain technical anomalies like the implementation of the new TRID requirements impact home sales processing, it throws off the data. The Adjustment Results Across our brokerage accounts with mortgage businesses, we saw an acceleration of closings in September ahead of the TRID implementation as everyone worked at peak pace near the end of the month to get deals done. In most markets, mortgage purchase applications were up in October over 2015, but not nearly as high as the September or August year over year comparisons. We think that this is a TRID impact, and may account for about an 8% forecast adjustment. November should be interesting as we get into the second month of TRID and a seasonally adjusted softening in the market.

Quarterly Homeownership Program Index Debunks 5 Down Payment Myths
Atlanta-based Down Payment Resource, the nation's only databank for homebuyer programs, released its Third Quarter 2015 Homeownership Program Index. The volume of programs increased to more than 2,400, making it the fourth consecutive increase in programs. The index reveals the wide range of homeownership opportunities available for homebuyers across the country. Recent surveys, including the America at Home survey by NeighborWorks America, show that consumers have the desire to buy, yet many are unaware of all their home financing options, the home buying process and may overestimate the down payment and home maintenance costs. "Today's consumers are motivated to buy, but the down payment continues to be a primary obstacle. Most homebuyers don't know to look for or ask about homeownership programs that could help them both in the short and long term. The requirements and benefits of programs vary greatly and may help buyers save on their down payment and closing costs, gain a lower interest rate or enjoy a healthy tax credit for the life of their loan," said Rob Chrane, CEO of Down Payment Resource. Five misconceptions about down payments may be keeping buyers on the sidelines for longer than necessary. Myth 1: Programs are only for first-time homebuyers. While first-time homebuyer programs may be common, it's important to note that the definition of a first-time homebuyer is someone who has not owned a home in three years. In addition, the index finds that 37 percent of programs do not have a first-time homebuyer requirement.

3 Down Payment Tips to Share with Homebuyers
Do you have buyers that are wavering about how to finance their home? There are plenty of low down payment mortgage options that potential homeowners may consider, but deciding which of these options best fit their financial needs can be a bit more difficult. The good news is that with a continuously recovering real estate market, even more of these options are becoming available and they have you to help them make the best decision. Here are just a few of the current financing options available to your clients and prospects: 0% down – VA and USDA Loans 3.5% down – FHA Loans 5% down – Conforming loans to $417,000 10% down – High Balance Conforming loans to $625,500 10% down – 80/10/10 loan to $1 million Financing options like the ones mentioned above will be appealing to prospective buyers, because it will allow them to afford a larger home without putting as much down up front. Unfortunately, these options can be more expensive in the long run and it's important that you keep them informed on what to expect in the years to come. 1. Higher Interest Rates – Explain to your clients and prospects that the mortgage industry follows a risk-based pricing system. This means that as risk for the lender increases, the rates and fees your clients or prospects pay will also increase. A low down payment is a high risk for lenders, which is why FHA, VA and USDA loans apply either an upfront funding fee and/or mortgage insurance. Fannie Mae and Freddie Mac, who back up all conforming loans, will generally charge your clients a higher interest rate and/or fees when they have less than a 25% down payment. Depending on their credit score and other factors, rates can vary from .125% to .25% higher for a prospective buyer putting down 10% instead of 25%.

What’s the Average Down Payment?
With affordable loan options on the rise today, it's somewhat surprising that Wells Fargo's annual homeownership survey (released June 16, 2015) found that 36 percent of consumers believe that a 20 percent down payment is always required. Even more troubling, a higher proportion of African-Americans and Hispanics hold this belief, at 58 percent and 55 percent respectively. What's the reality? RealtyTrac's Home Purchase Down Payment Report (released June 3, 2015) showed the average down payment for single family homes, condos and townhomes purchased in the first quarter 2015 was 14.8 percent of the purchase price–a three-year low. The report also found that the average down payment for FHA purchase loans originated in the first quarter was 2.9 percent of the purchase price while the average down payment for conventional loans was 18.4 percent of the purchase price.

Millennials and Misinformation
More housing studies on millennials are out (cue our not surprised face). First-time homebuyer participation in home sales has been at record lows for several years. However, the usual suspects–student debt and the economy–don't tell the entire story. So, what's the deal? Turns out a big theme is misinformation. Consider this: A new Chase survey found that just one in four buyers correctly answered a series of questions about home buying — including how annual percentage rates work, down payments and lenders. Chase also said 60 percent incorrectly believe you need to put down at least 10 percent to obtain a home loan. They cited a lack of access to cash for a down payment as the biggest reason for renewing that rental agreement. A recent survey by ClosingCorp said that two out of every three Millennials who are planning to be homebuyers don't know what closing costs are. Young buyers are doing much more home research online, and they are looking for tech savvy agents and lenders who make the right connection with information on home financing basics, including down payment programs and homebuyer education. By simply addressing their greatest challenges upfront, the door to home buying conversations is opened.

9 Ways to Help Clients Improve Credit Scores
Being a real estate professional isn't just about getting listings and showing houses. Many times, you'll also need to help develop prospective buyers – turning them from renters into homeowners by coaching them on their credit and how to improve their access to financing. It isn't about getting them into bigger loans than they can afford. It's about maximizing their choices (and your commissions). The bottom line: The better your clients' credit score, the lower the interest rate, and the bigger the mortgage they will qualify for at any level of income. Many real estate agents and brokers are facing an uphill battle when it comes to credit. According to a recent survey from the Corporation for Enterprise Development, the majority of Americans have subprime-level credit scores. Simply put, America's credit sucks. With today's tools, there's no reason for any buyer, or real estate professional helping a buyer, to get surprised by a credit turn-down when applying for a mortgage to buy an owner-occupied home. If the buyer doesn't walk in with a prequalification letter in hand, always run a credit check and address any issues on the front end. Here are some steps to help make the credit process easier, for both of you. 1. Check Your Client's Credit How can you run a credit check? It's easy nowadays. First, everyone is entitled to one free credit report per year from each of the major credit bureaus. If a client doesn't have a recent one handy, the beginning of the house hunting process is a great time to pull it. Second, you can use the credit bureau services themselves. For example, Experian Connect allows real estate professionals to review a client's credit report and score. The client pays a fee of $14.95.

In Her Words - Ginger Wilcox Joins Sindeo, Tackles Home Financing
If you've ever financed a home, you know how complex and frustrating getting a mortgage can be. Even with mountains of disclosures, you may not really understand what you're paying for or feel confident you're getting the right loan. Having spent the last four years at Trulia engaging with thousands of real estate agents and brokerages, I have a great appreciation as to how the current mortgage process impacts both consumers and their agents' ability to help them. Earlier today, Sindeo, a modern mortgage marketplace, announced that I joined the company along with top executives from SoFi, Prosper Marketplace and the Consumer Financial Protection Bureau to transform the mortgage experience. I am excited to work with former colleagues Chris Conway and Keith Louie from Trulia, along with many other talented members of our 40-person team to bring transparency, efficiency and better service to home financing. A better way I joined Sindeo because I believe there is a better way to:   Help consumers make informed decisions and enable them to get the right loan – when the timing is right for them Provide real estate pros with the tools to nurture and reach early stage consumers preparing to finance a home; and to provide more visibility throughout the transaction to reduce surprises that cause deals to fall through Enable lenders to work with better-informed borrowers, who get loans based on what they can afford, rather than what they can get approved for Promote financial literacy and help local communities and non-profits educate prospective homeowners about safe, affordable homeownership Help close more loans quickly, with less hassle, in a shorter amount of time with amazing service

Kamel Boulos Joins ClosingCorp as CTO
ClosingCorp offers several solutions to help mortgage lenders, real estate professionals, title and settlement companies calculate closing costs on residential real estate transactions. I love the value their products provide to source estimated closing costs and list options for service providers with actual rates and fees. In my mind, their closing calculator should be as pervasive as mortgage calculators on consumer property search websites. Kamel joined ClosingCorp from the mortgage industry. He's extremely excited about the opportunity because mortgage and title companies have really taken to the company's offerings. Both groups work with consumers that need to know what a transaction is going to look like before it closes. By utilizing best in class technology they deliver accurate data and information to their customers efficiently, it should help them close more transactions while being compliant – now that's a win. Join me in welcoming Kamel to the industry. WAV Group looks forward to watching how the company provides implementation solutions into agent and broker websites, consumer portals, and transaction management solutions. If you have not looked at ClosingCorp in a few years, you may want to put it on your list – visit Closing.com today. You can view the press release regarding Kamel's hiring on the next page.

What's a Public Service App?
Real estate professionals are no strangers to using apps. Over the past few years, mobile and web-based applications have become indispensable to agents and brokers. But there's an entire category of real estate app that you may not have heard of--public service apps. These tools can help you better serve the needs of your community and position your business as a valuable resource. Apps for Serving the Community Coined by MRED CEO Russ Bergeron, the term "public service app" refers to web-based tools that offer benefits directly to the consumer. The apps augment MLS listing data with information that motivates a consumer to purchase a home or helps a seller better market theirs. To get a clearer idea of what we're talking about, let's look at a few examples: Walk Score - Provides information on the walkability of neighborhoods, nearby public transit and amenities. Consumers can also calculate commute times in order to find a home that's close to work. SourceMLS™ - When the SourceMLS badge appears on a listing, consumers can rest assured that the data is timely and accurate because it comes directly from the local MLS. Fannie Mae Short Sale Assistance Desk - Helps expedite the short sale process, reducing the chance of foreclosure. My Home EQ/My Home Energy Score - A utility tool that reveals the energy efficiency of a home, enabling consumers to make a better informed choice about where to live. Down Payment Resource - Flags properties eligible for down payment assistance programs within the MLS data feed, and provides consumers information on those programs.

Regulatory Compliance: An Essential Skill Set For the New Business Model
The North American real estate industry has, for many years, been quite fortunate relative to regulation. Despite its relative size in terms of the number of licensees, the dollar volume of its gross product and the significant impact its services can have on large numbers of consumer households, regulation of the industry over the past twenty-five years has been fairly limited. The licensure of real estate professionals has traditionally been a state function since its widespread inception in the 1960s. Industry regulation under title VIII of the Civil Rights Act of 1968 (Fair Housing Act) was intended to prohibit discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status, and disability. This program has been administered by the Department of Housing and Urban Development since 1968. Industry regulation under the Real Estate Settlement Procedures Act (RESPA), an act passed by the United States Congress in 1974 was, until recently, managed by the Department of Housing and Urban Development. On July 21, 2011, Congress transferred RESPA regulation from the Department of Housing and Urban Development to the Consumer Financial Protection Bureau (CFPB). So what is this not so mild mannered regulatory upstart and where has it been hiding? The Consumer Financial Protection Bureau (CFPB) is an independent federal agency that holds primary responsibility for regulating consumer protection with regard to financial products and services. The CFPB was created in 2011 as a result of the Dodd–Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank was a response to the financial crisis of 2007–08, which played a significant role in creating the Great Recession. The CFPB opened for business in early 2011. Following a novel attempt by Republican lawmakers to block his appointment, Richard Cordray from Ohio was named CFPB director.

This Thursday: Learn How to Serve the New Generation of Home Buyers
Don't miss the final installment of our October webinar series this Thursday! In "Is Your Website Designed to Meet the Needs of Tomorrow's First-Time Homebuyers?" we'll be learning more about IDX tools to help you and your agents serve the incoming generation of new buyers. Every generation faces their own set of homebuying challenges. For Millennials, these challenges are often financial, thanks to a sluggish job market and a massive increase in student loan debt. These factors mean that this generation of first time buyers often can't overcome the biggest obstacle to homeownership--saving enough for the down payment. Thankfully, there's a tool you can add to your IDX website that can remove this common homeownership hurdle. It's called Down Payment Resource (DPR), and it aggregates data on all active assistance programs in your area and flags eligible listings in your website's IDX search. At a glance, buyers are able to see if a home qualifies for down payment assistance. A full two-thirds of agents say that with DPR they are able to convert sidelined prospects into qualified homebuyers! To learn more about leveraging this tool on your IDX website, join us for a free webinar this Thursday. We'll be interviewing real brokers and agents who are taking a proactive approach in educating first-time homebuyers by adding valuable information and tools such as Down Payment Resource to their sites. Leading IDX vendor WolfNet will highlight ways they are helping serve their agent and broker customers to prepare for this emerging first-time homebuyer market. Join us Thursday, October 24 at 2pm EDT/11am PDT to learn more!

The Future of Housing Finance on Horizon
Guest contributor Down Payment Resource says: Housing once again became a hot marketplace topic when President Obama laid out his plan for the future of housing finance last week. He urged Congress to take action on housing legislation before year end. As the market improves, there's now focus on what should happen next to meet long term market needs. With a wide range of opinions on how much or how little government should be involved, we offer a few critical points to consider when forming your own opinion: Government Sponsored Enterprises (GSEs) The Fannie/Freddie model of private gains and public loses is obsolete. Will the huge dividends now being returned to the Federal coffers by the GSEs slow momentum for reform?

6 Reasons Why Down Payment Assistance Matters
Guest contributor Down Payment Resource says: Down payment assistance helps make buying a home as affordable as possible. We believe it can make a significant impact for many buyers, and it's never been truer than in today's market. According to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey results, the percentage of first-time homebuyer purchase transactions are increasing in recent months, after hitting an all-time low at the end of 2012. And, market indicators of future home purchases hit a four-year survey high in February. However, access to a down payment still remains the number one obstacle for homebuyers. We review six key reasons why down payment assistance matters to today's homebuyers: 1. Helps homebuyers purchase a home sooner: Instead of waiting on the sidelines, down payment assistance can help a buyer get into a home faster. It immediately builds their buying power and can help them take action on a purchase more quickly. Many buyers have remained on the sidelines, saving money, watching interest rates and seeking desirable inventory. Down payment assistance can be a valuable tool to help move those buyers off the sidelines and get them into a home. 2. Makes the purchase as affordable as possible: Homebuyers of all income levels have seen the housing crisis up close and want to ensure their purchase is an affordable and sustainable one. However, since the downturn, down payments for fixed rate mortgages have significantly increased. Even with lower interest rates and home prices, the cost of buying a home was out of reach for many moderate-income families. Homebuyer programs can help more families take advantage of these record low interest rates.

The Role of Mortgage on Broker Dollar
Only the largest brokerages in a given region provide loan solutions through joint ventures or wholly owned mortgage companies. This provides these companies with a distinct advantage in many areas of providing a full array of consumer services around home ownership. For these companies, it is a generous source of additional revenue and the consumer loves the convenience. The Mortgage Bankers Association reported that independent mortgage banks earned between $2150 and $2450 profit per loan in 2012. The average production profit in basis points ranged between 107 and 120. The average production was between 1700 and 2000 loans per quarter. The total loan production expense (commissions, compensation, rent, equipment, and other expenses) averages just over $5100 per loan. About $3300 is personnel expense.

The FTC MAP Ruling and How It Impacts You
Guest contributor RatePlug says: In August of 2011, the Federal Trade Commission passed new regulations, referred to as "MAP," that directly affect the real estate industry. What exactly does MAP stand for? More Annoying Paperwork? Sounds like a bowl of alphabet soup! Our government has a way of using acronyms for just about everything, which really gives the public no clue as to what really is being passed. The Mortgage Acts and Practices (MAP) regulations were enacted to regulate unfair or deceptive advertising of mortgage products by anyone involved in a real estate transaction. This includes builders, mortgage brokers, lenders, and real estate professionals like you! Ask yourself the following four questions to see how the MAP ruling impacts your day-to-day business practices: Do you provide your clients ANY mortgage related information (flyers, rate information, etc.) to assist them in the buying process? Does your marketing collateral or website have any misleading mortgage tools or statements? Do you provide a relationship disclosure on ALL mortgage related advertising? Do you maintain archived records for two years on all mortgage information provided to your clients? Are those records retrievable by date, agents involved, and property address?

Common Ground
This is the second in a series of four articles from RPR. Read the first article here. Question: What do the REALTOR® and the mortgage investor have in common? Answer: The need for the proper and accurate valuation of properties. In this post, I will explain how RPR tools and features created for REALTORS® to use with their clients and customers also support the transaction within the mortgage industry. To better understand this relationship, let us start with the basics of mortgage credit risk: the 3 "C"s of underwriting: Credit: Lenders examine a potential borrower's credit history to determine their likeliness to repay debt. Capacity: Lenders determine the stability of the consumer's income, their debt-to-income ratio, and if they have adequate reserves. Collateral: The determination of the loan-to-value ratio and the quality of the down payment (are funds borrowed? Seller-assisted gifts, etc.). This is also known as the borrower's "skin in the game." The lower the loan-to-value the less likely a borrower will walk away or default.

Connecting the REALTOR® and the Mortgage Lender
Since RPR's formation as an Advisory Board in 2008, and its subsequent evolution into NAR's wholly owned technology corporation in 2009, we have had two main objectives. Create a national database designed to reinforce the core competencies of NAR's one million REALTOR® members through cutting-edge technology with advanced analytics and dynamic reports that agents and brokers can provide to their clients and customers. To provide accurate and timely information from this REALTOR® owned and operated technology system to the governmental agencies and lending institutions tasked with providing much-needed liquidity for home financing. Today, RPR is available to the majority of NAR's REALTOR® members. In 2011, RPR began to place greater focus on the communications and relationships needed to engage the entities responsible for mortgage liquidity. With the support of NAR's Washington D.C. based Legislative Staff, RPR has been participating in numerous meetings with various governmental agencies and financial institutions. The purpose is to provide them with advanced analytics and valuation tools created by RPR to reinforce confidence in property valuations. This has the potential to bring stability to the market and thereby provide more capital to the housing industry.

My MID-life Crisis
My wife and I had just settled down in front of the TV the other night when the saddest advertisement came on. A grandpa was sitting with his grandson on the steps of their home, talking about how he hoped homeownership would still be around when the little kid grew up. I thought I could see a tear in the old guy's eye. I was so upset that it ruined the whole first half of Dancing With the Stars for me. Who in his right mind would want to get rid of homeownership? It's as much a part of the American Way of Life as consumer debt, outlet malls and cell phones. So I asked Ernest S. Crowe, my mortgage guy, and Bea Meriwether, my real estate agent, over coffee the next morning. "Oh, Homer. It's just code," said Bea. Now I was really confused. "Code like spies use?" "No, silly. When real estate people say they want to preserve homeownership what they really mean is they want to preserve the mortgage interest deduction. 'Homeownership' is code talk for the MID." Now the mortgage interest deduction is something I know all about since I'm an expert homeowner, but when Felicity and I bought our first house 20 years ago, we had never heard of it. On the day we put a contract on a house we went out to dinner with my parents and my father gave me a little knowing wink, the kind of guy-to-guy wink that usually refers to something mysteriously naughty. "And just think of the tax benefits," he whispered. Tax benefits? That didn't sound naughty to me at all.