Homeownership rate

July 31, 2013

Housing data was plentiful yesterday with both good news and not so good news. Home prices continue to move higher as evidenced by the 12.2% year-over-year gain in the Case/Shiller 20-city Composite Home Price Index. It was the biggest annual gain since March of 2006. From April to May, prices rose 2.4% for the 20-city index.

Over in the foreclosure front, Corelogic reports that completed foreclosures dropped by nearly 20% from June of 2012 (68,000) to June of 2013 (55,000). The 55,000 in June was slightly higher than the 53,000 recorded in May. Since the beginning of this year, foreclosure inventories have declined by 14%. A completed foreclosure occurs when a property is auctioned and results in the purchase of the home at auction by either a third party, such as an investor, or by the lender.

The homeownership rate in the U.S. has now fallen back to levels not seen in two decades and is well below its record high of 69.2% hit back in 2004, currently at 65.1%. During the recent housing crisis, more than 7 million Americans were ripped from their homes after the bubble burst and busted. The rate is expected to fall to 64% due to foreclosures as people enter the rental markets.

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New Home Sales surged

July 24, 2013

Despite the recent rise in home loan rates, New Home Sales surged by 8.3% in June from May to an annual rate of 497,000 units. The 497,000 was above expectations of 483,000 and sales are now up 38% since June of 2012, the largest annual increase since 1992. However, sales in May were revised lower to a 459,000 annual rate from the initial number of 476,000.

Within the New Home Sales report it showed that inventories are at 3.9 months, down from 4.2 months in May. A normal supply is around six months, which is considered a more healthy balance between supply and demand. The median price now stands at $249,700, up 7.4% from the $232,600 recorded in June of 2012.

Ford Motor reported earnings today that were well above estimates driven by record profits in North America. The automakers market share has now increased to 16.5% across the nation. Ford’s net income in the second quarter was $1.2 billion, up from $1 billion in the previous quarter. However, Ford does expect weakness in South America and the European markets.

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Federal Housing Finance Agency (FHFA) reported today…

July 23, 2013

Consumer bellwether United Parcel Service (UPS) reported that second quarter profits declined by 4% as customers moved to lower price shipping companies. Revenues came in at $13.51 billion versus the $13.59 billion expected. UPS is considered a bellwether along with FedEx due to the high volume and large assortment of goods they move around the globe.

The Federal Housing Finance Agency (FHFA) reported today that housing prices rose 7.3% in the 12 months ended in May as buyers vied for a smaller amount of listings as inventories have declined. In addition, there was a 0.7% rise from April to May. The FHFA Housing Price Index measures transactions for single-family properties that are financed through Fannie Mae and Freddie Mac.

The closely watched S&P 500 Stock Index hit yet another closing record high (1,675) yesterday and can be attributed in part to the easy money policies from the Federal Reserve (the Fed). The Fed has been purchasing $85 billion a month in Treasury Securities and Mortgage Backed Securities in an effort to stimulate the economy and to ensure job growth.

There were no economic reports released today and the rest of the week’s calendar is on the light side with readings on New Home Sales due out tomorrow and Weekly Initial Jobless Claims on Thursday.

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Mortgage application volume continues to decline

July 17, 2013

Fed Chairman Bernanke’s speech to the House Financial Services Committee was released this morning saying that that the Fed’s asset purchases are by no means on a preset course. Mr. Bernanke went on to say that Bond buying could be reduced at faster pace, a slower pace, or even increased for a time, depending on outlook and they could begin later this year.

Housing Starts declined by nearly 10% in June from May to 836,000 units annualized and below 958,000 expected to the lowest level since August 2012. The drop was attributed towards a big decrease in apartments. Building Permits, a sign of future construction, fell by 7.7% to 911,000 and below the 1 million expected.

Mortgage application volume continues to decline as the Mortgage Bankers Association reported today that its Market Composite Index, a measure of loan application volume, fell by 2.6% in the latest week. The refi index declined by 4.2% while the purchase index rose marginally by 0.5%. The slowdown in application volume could be attributed towards the recent rise in home loan rates.

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Freddie Mac reported today that the 30-year fixed conventional home loan rate rose

July 11, 2013

The Labor Department reported that Americans filing for first time unemployment benefits rose by 16K in the latest week to 360K, highest level since the week ended May 11. A year ago this time, claims were at 363K. The higher number is due in part to the July 4 holiday, the annual retooling at automakers where they shut down for a few weeks and temporary layoffs related to the end of the regular school year. The four-week moving average of new claims, which smoothes out any seasonal abnormalities, were up by 6,000 to 351,750.

Freddie Mac reported today that the 30-year fixed conventional home loan rate rose to 4.51%, but to obtain that rate a potential borrow would have to pay 0.8 in points and fees. This is up from 4.29% last week and up from 3.65% a year ago. Home loan rates have been rising since the May 1 lows, due to ongoing talk that the Fed will pull back on its stimulus programs geared towards holding rates low.

Don’t look now, but gas prices at the pump could be spiking in the next several days due to rising oil prices. The current national average is at $3.51, up 3 cents since Tuesday. Gas prices were higher a month ago at $3.63…unrest in the middle east and the summer driving season will push prices up in the coming weeks. In addition, inventories in the U.S. dropped for a second week.

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Yesterday’s news: borrowers who are underwater on their current mortgage has declined

July 09, 2013

In its monthly National Housing Survey, Fannie Mae reported that home prices may enter the purchase market sooner rather than later as people feel that mortgage rates and home prices to rise. Within the survey it showed that those who feel that mortgage rates will go up in the next 12 months rose by 11% to 57%, the highest level in the three-year history of the survey.

As the housing market continues to recover, delinquencies around the country have fallen 43% from the peak levels of 2010 as reported by Lender Processing Service (LPS). In addition, the number of borrowers who are underwater on their current mortgage has declined by 47% from Q1 2012 to Q1 2013. In addition, LPS reported that originations were up 1.8% in April from March to 835,000 new loans originated.

There are no economic data points set to be released today and the rest of the week’s economic calendar is on the light side this week. Stocks are starting the week to the upside ahead of the start of quarterly corporate earnings season begins today. The big event this week will be the minutes from the June 19 Federal Reserve meeting. The members most likely discussed the ongoing stimulus program dubbed QE III and how long the Federal Reserve will continue to stimulate the U.S. economy.

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Minnesota mortgage lender refocuses after crash

July 08, 2013



imageRoy Sperr, founder of Equity Source Mortgage, sat in on a mortgage closing at Edina Realty in Woodbury on June 28 with a client who is a first-time home buyer.Richard Sennott • rsennott@startribune.com,

Minnesota mortgage lender refocuses after crash

  • Article by: Todd Nelson
  • Special to the Star Tribune
  • July 7, 2013 – 2:00 PM


If you’re looking for a $500,000 home loan, have a 25 percent down payment in hand and a stellar credit rating, most mortgage lenders — including Roy Sperr, founder of Equity Source Mortgage in Rogers — likely will be happy to work with you.

What Sperr said sets him apart, however, is that he might be more interested in your business if another institution has turned you down because of credit challenges, mounting debt or an upside-down mortgage.

Working with consumers who have gotten rejected elsewhere has become a specialty at Equity Source Mortgage since 2008, as the housing market crash hit both homeowners and the mortgage lending industry, Sperr said. Most Equity Source customers are well-qualified borrowers, many of them return customers or referrals.

But Sperr said he will take time — sometimes years, without charge — to figure out why consumers get told no, in some cases incorrectly. He may offer advice on improving a credit score or help find government programs that enable those with negative equity stay in their homes, staying in touch with the consumer month after month until those who can qualify for a loan are able to secure one.

“I’m a sucker for human beings,” Sperr said. “I’m not just going to turn somebody down because I don’t have time. That’s not fair. It might be a legitimate ‘no,’ but they need to know why and how to fix it, how to turn a ‘no’ into a ‘yes.’ ”

Sperr’s focus in launching Equity Source Mortgage in 2000 was offering a high level of service, building long-term customer relationships and making the home loan process more transparent. He believed he could offer better service while operating more efficiently based on his experience as a real estate appraiser and a mortgage-lending officer at other brokerages.

Equity Source Mortgage grew exponentially as the housing market boomed, Sperr said. At its peak in 2004, the company had 20 employees and originated more than $200 million in residential financing. But the business became more transaction-based, with little time to get to know people.

The crash, Sperr said, was a “godsend” and a “great awakening.’’ As loan volume plummeted, the company downsized, sold its building and moved three times to stay in business. Emerging from the market meltdown, Sperr returned to the core values on which he had founded the company and developed his niche of working with customers who were having difficulty getting loans.

Equity Source Mortgage now has four employees, including Vice President Shawn Hunter, an industry veteran who is the only employee besides Sperr who originates loans for the company. Sperr said the company originated $27 million in residential financing last year, an increase of nearly 60 percent from 2011. He’s projecting more than $30 million in loans this year, and plans to grow cautiously. He has capacity to do additional business without hiring.

“There is a customer service [opportunity] for a small company,” Sperr said. “I can move fast, I don’t have the overhead, I don’t require the same margins. Most importantly, I can stay with the customer from the application all the way to the closing table. They appreciate that immensely.”

Sperr attributed his outlook to his upbringing, growing up on a farm and understanding the feeling of “wanting something but someone’s telling you no.”

“The law says everyone is entitled to equal credit,” Sperr said. “I don’t feel I’m doing my job if I don’t give them just that, an equal opportunity to obtain credit. Will I make a little less money? I will. But that’s the reason that we have this niche.”

Sandi Arvin said she and her husband, Chuck, worked with Equity Source Mortgage for almost two years to improve their credit score before they qualified for a loan and closed on a home in Maplewood. Hunter, the company’s vice president, checked in at least monthly.

“They will help you every step of the way; they’re a partner through the whole process,” Sandi Arvin said. “Anytime I had a question, [Hunter] would answer it, knowing he hadn’t gotten a dime for all the work. I got some advice on bringing up the score and it was clear and easy to follow. We love the house.”

The expert says: Herb Tousley, director of the master’s in real estate program and adjunct faculty member in the finance department at the University of St. Thomas’ Opus College of Business, said he believes there’s a defi­nite market for Sperr’s niche. (Sperr has a mini-MBA in real estate from St. Thomas.)

While model borrowers are easy to finance, Tousley said he wasn’t aware of others pursuing a similar niche.

“There’s a lot of people that got hurt by the recession,” Tousley said. “I haven’t seen anybody that’s willing to spend the time, even over a long period, to help them, like he said, get from a no to a yes.’’


Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com

© 2013 Star Tribune


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