Fair Housing: It’s the Law, Damn It.

Fair Housing is one of my big bugaboos. It is for most REALTORS® I’d like to think. In fact, the National REALTOR Association (NAR) has a big website section on it this month because April is National Fair Housing Month.

For me, as a middle-aged, middle-income, white woman, it’s hard to imagine being turned away from a home loan or a neighborhood because of the color of my skin or my gender but it happens and I’m damned lucky. To be turned down for a rental because of my children or my handicap may seem inconceivable, but it happens. It’s also fucking illegal.

The Civil Rights Act of 1968 (as it expanded upon the Civil Rights Act of 1964) was brought to fruition by President Lyndon B. Johnson and amended further over time. A brief history is presented by the Office of Housing and Urban Development here so I won’t bother to go into that. A quick Google will lead you down the tortuous path of people’s pain and horrible experiences.

My own experience with fair housing violations annoyed the crap out of me and resulted in me firing a client.  I was asked to find a townhouse with, “No HOA and no black people.” Right. That’s a negative Ghost Rider and here’s why: it’s illegal and crappy, bitch. Besides, I don’t have that kind of demographics because who would even have the life energy to go around and do that? Before you get snarky, the US Census does have that information, they don’t look at or publish it in that kind of micro-statistic. Besides, no HOA for a townhouse? Good luck fixing that roof leak.

With that in mind, NAR has published a Fair Housing Declaration for REALTORS®

I agree to:

  • Provide equal professional service without regard to the race, color, religion, gender (sex), disability (handicap), familial status, national origin, sexual orientation or gender identity of any prospective client, customer, or of the residents of any community.
  • Keep informed about fair housing law and practices, improving my clients’ and customers’ opportunities and my business.
  • Develop advertising that indicates that everyone is welcome, and no one is excluded, expanding my client’s and customer’s opportunities to see, buy, or lease property.
  • Inform my clients and customers about their rights and responsibilities under the fair housing laws by providing brochures and other information.
  • Document my efforts to provide professional service, which will assist me in becoming a more responsive and successful REALTOR®.
  • Refuse to tolerate non-compliance.
  • Learn about those who are different from me and celebrate those differences.
  • Take a positive approach to fair housing practices and aspire to follow the spirit as well as the letter of the law.
  • Develop and implement fair housing practices for my firm to carry out the spirit of this declaration.

Real Estate Professionals Are Experts at Keeping You Safe When You Sell

Real Estate Professionals Are Experts at Keeping You Safe When You Sell | MyKCM

If you’re on the fence about whether or not you want to sell your house this year, there’s good news. For nearly two years, real estate professionals have worked tirelessly to ensure the safety of buyers and sellers during the pandemic.

Today, they’re seasoned experts, not just in the art of buying and selling homes, but also in how to keep you safe throughout the process. Real estate professionals have learned new technologies plus safety and sanitation measures. As new variants emerge, those lessons continue to be key ways agents add value.

Real Estate Advisors Stay Current on Guidance for In-Person Showings

Agents don’t leave your health up to chance. They follow guidance from the Centers for Disease Control (CDC) and the National Association of Realtors (NAR) to ensure in-person showings are safe. NAR maintains industry-specific resources to ensure agents are informed on the latest recommendations and best practices.

Guidance from the CDC also equips real estate professionals with the know-how to employ sanitization and disinfectant measures during the health crisis, so they’re safe for you and your potential buyers.

Digital Tools Can Enhance Your Home Sale

In addition, agents are also well versed in using technology and digital tools to sell your home efficiently. In their guidance for realtors, NAR says:

“The COVID-19 pandemic is impacting members in unprecedented ways, and raises numerous unique and novel issues for the real estate industry.”

Real estate advisors have responded by reimagining the tech and tools they use. For instance, serving clients at a distance and limiting exposure to others is more important now than ever. That’s because restricting the number of people you need to interact with during the sales process is one of the best ways to keep everyone safe.

To accomplish this, agents now use a variety of methods to serve their clients, including:

  • Virtual Open Houses, Tours, and Listing Appointments
  • High-Quality Photos for Websites and Social Media
  • eSignature
  • Video Conferencing

Bottom Line

The health challenges we face today have fundamentally changed the way real estate professionals conduct business for the better. Let’s connect today so you have the latest tools on your side to feel safe and confident when you sell your house this year.

December Market Stats

Residential Review: Metro Portland, Oregon
December 2021
Residential Highlights

New listings (1,599) decreased 8.1% from the 1,740 listed in December 2020, and decreased 28.3% from the 2,229 listed in November 2021.

Pending sales (1,942) decreased 3.0% from the 2,003 offers accepted in December 2020, and decreased 27.0% from the 2,660 offers accepted in November 2021.

Closed sales (2,582) decreased 7.4% from the 2,789 closings in December 2020, and decreased 8.8% from the 2,832 closings in November 2021.

Inventory and Total Market Time Inventory decreased to 0.6 months in December. Total market time increased to 32 days.

Year-To-Date Summary Comparing the twelve months of 2021 to the same period in 2020, new listings (40,531) increased 5.4%, pending sales (35,405) increased 7.8%, and closed sales (35,182) increased 9.8%.

Average and Median Sale Prices Comparing 2021 to 2020 through December, the average sale price has increased 15.8% from $494,000 to $571,900. In the same comparison, the median sale price has increased 15.7% from $440,000 to $509,000.

The Difference Between a REALTOR and a Real Estate Agent

Do you know the biggest thing that differentiates a REALTOR® from a real estate agent? One of the most important things is THIS piece of paper and everything it stands for.

My most recent Ethics class certification.

A real estate agent is just someone that passed a couple of tests – a state law and knowledge test and a national law and knowledge test. It’s really not hard. I passed the tests a long time ago and have to keep my knowledge growing and updated with new technology, laws, conditions, and policies. To keep my real estate license, I must take a minimum of thirty hours of classes every two years. Three hours of those must be about the law and changes thereof.

A real estate agent is not required to be a REALTOR®.

A REALTOR® is a member of the National Association of REALTORS® (the largest trade association in the US) at the very least. I have to also be a member of the Oregon Association of REALTORS® and the Portland Metropolitan Association of REALTORS®. What do those groups do? They are business associations that offer insight and opinions to our local, state, and national governments and keep watch on the real estate business on many levels. They work to promote homeownership and the interests of REALTORS® nationwide. Personally, I call them The REALTOR® Mafia and/or “The Union” (even though it’s not). A member of The National REALTOR Association are called (guess?) REALTORS®. According to NAR, about half of the agents in the US are REALTORS®.

Here in Portland, an agent must be a REALTOR® to access the Regional Multiple Listing Service.

The NAR Code of Ethics was adopted in 1913 and is actually the first of any trade association to require an ethics code for its members. It was originally written to assure customers that their agents are well trained, have spotless reputations, and are held accountable by the organization for infringements. It did, and still does, ensure that REALTORS® best serve their clients by cooperating with each other.

What makes a REALTOR® different is a three-hour class I have to take every three years on Ethics.  It’s mandatory for members of the National Association of REALTORS and I can be kicked out of NAR if I don’t go. In fact, if I don’t attend, I would lose my RMLS access and my real estate key!

It isn’t just an “Ethics” moral code, it’s an enforceable reputation and standard of care for our clients, strict adherence to law and statute, the way we treat each other and the public, and even the manner in which we speak. The enforcement of the Code of Ethics is carried out by the local boards and may involve anything from a nastygram to fines to official censure to being removed from the Association.

A link to both the official Code of Ethics and Standards of Practice that we all agree to abide by.

I won’t post the whole thing here because I trust that my readers are both smart and have the means to click a link. (And it isn’t that exciting, trust me.)

The entire gist of the eight-page, 8pt., double-column document as it applies to clients, buyers, sellers, and other agents can easily be summed up with Wheaton’s Law: Don’t Be A Dick.

‘The Fed might have to really stop on the brakes’: Mortgage rates surge to highest level in over a year

Last Updated: Jan. 8, 2022 at 9:29 a.m. ETFirst Published: Jan. 6, 2022 at 10:51 a.m. ETBy Jacob Passy

The latest uptick in mortgage rates could be the start of a prolonged increase

Mortgage rates rose markedly in the first week of 2022 — potentially setting the tone for a year in which economist expect interest rates to move steadily higher.

The 30-year fixed-rate mortgage averaged 3.22% for the week ending Jan. 6, up 11 basis points from the previous week, Freddie Mac FMCC reported Thursday. This is the highest level for the benchmark mortgage rate since May 2020, Freddie Mac chief economist Sam Khater noted in the report.

The 15-year fixed-rate mortgage, meanwhile, rose 10 basis points to an average of 2.43%. The 5-year Treasury-indexed adjustable-rate mortgage averaged 2.41%, unchanged from the previous week.

Right now, most signs point to interest rates continuing to climb higher in the year to come. In particular, the economic recovery from the COVID-19 pandemic remains strong. There are around 11 million job openings nationwide now, providing ample runway for the job market, which should bring the unemployment rate down. Supply-chain issues remain, but have shown some signs of abating.

High levels of inflation, meanwhile, mean that the Federal Reserve looks set to take decisive action more quickly than previously expected. “With economic momentum gaining, the Federal Reserve’s recently-released minutes point to a faster pace of balance sheet reduction in the months ahead,” said George Ratiu, manager of economic research at Realtor.com, adding that this pushed the 10-year Treasury note’s yield BX:TMUBMUSD10Y to the highest level since last May.

Typically, mortgage rates generally follow the direction of long-term bond yields, including that of the 10-year Treasury. “This also indicates that rising mortgage rates are on the horizon,” Ratiu said.

‘This inflation picture we’re talking about — if it doesn’t cool off, the Fed might have to really stop on the brakes as opposed to gently tapping them.’— Michael Frantantoni, chief economist at the Mortgage Bankers Association

Economists generally expect mortgage rates to rise higher this year. The question is: How high? Michael Frantantoni, chief economist at the Mortgage Bankers Association, said his team predicts mortgage rates will end the year around 4%. And he said that an even more pronounced increase in rates was more likely, as of now, than a decrease in interest rates.

“This inflation picture we’re talking about — if it doesn’t cool off, the Fed might have to really stop on the brakes as opposed to gently tapping them, and we could see the rate path move even higher even faster than we have in our baseline forecast,” he said during a Barron’s Live webcast on Wednesday.

“Honestly, I wouldn’t even have talked about the higher rate path much last year, so the fact that I bring it up [indicates] there is probably a higher probability than another drop in rates,” he added.

This isn’t to say another drop in rates isn’t possible, as Fratantoni pointed to two factor that could bring rates down again. For starters, he said that another, more severe coronavirus variant could cause economic upheaval in the future if it were to gain traction as the latest omicron variant has done.

Additionally, he suggested that geopolitical unrest could cause investors to seek safety in bonds, which would bring rates down. Examples of this include a potential Russian invasion of Ukraine or an escalation in tensions between China and Taiwan, he said.

“I often tell people that this job keeps you humble because rates can move for any number of reasons and in directions that really will surprise most of us,” Fratantoni said. “So could rates go down? Absolutely. I don’t think it’s the most likely outcome, but it could happen.”

How To Hit Your Homebuying Goals This Year [INFOGRAPHIC]

How To Hit Your Homebuying Goals This Year [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you’re looking to buy a home, you may want to put these items on your to-do list to ensure you hit your goals.
  • It’s important to start working on your credit and saving for a down payment early. When you’re ready to begin your search, work with a real estate professional and get pre-approved so you know how much you can borrow.
  • Connect with a real estate advisor so you have the guidance you need to achieve your homebuying goals this year.

There Won’t Be a Wave of Foreclosures in the Housing Market

There Won’t Be a Wave of Foreclosures in the Housing Market | MyKCM

When mortgage forbearance plans were first announced and the pandemic surged through the country in early 2020, many homeowners were allowed to pause their mortgage payments. Some analysts were concerned that once the forbearance program ended, the housing market would experience a wave of foreclosures like what happened after the housing bubble 15 years ago.

Here’s a look at why that isn’t the case.

1. There Are Fewer Homeowners in Trouble This Time

After the last housing crash, over nine million households lost their homes to a foreclosure, short sale, or because they gave it back to the bank. Many believed millions of homeowners would face the same fate again this time.

However, today’s data shows that most homeowners exited their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again. The latest data from the Mortgage Bankers Association (MBA) studies how people exited the forbearance program from June 2020 to November 2021.

Here are those findings:

38.6% left the program paid in full
  • 19.9% made their monthly payments during the forbearance period
  • 11.8% made up all past-due payments
  • 6.9% paid off the loan in full
44% negotiated work-out repayment plans
  • 29.1% received a loan deferral
  • 14.1% received a loan modification
  • 0.8% arranged a different repayment plan
0.6% sold as a short sale or did a deed-in-lieu
16.8% left the program still in trouble and without a loss mitigation plan in place

2. Those Left in the Program Can Still Negotiate a Repayment Plan

As of last Friday, the total number of mortgages still in forbearance stood at 890,000. Those who remain in forbearance still have the chance to work out a suitable plan with the servicing company that represents their lender. And the servicing companies are under pressure to do just that by both federal and state agencies.

Rick Sharga, Executive Vice President at RealtyTrac, says in a recent tweet:

“The [Consumer Financial Protection Bureau] and state [Attorneys General] look like they’re adopting a ‘zero tolerance’ approach to mortgage servicing enforcement. Likely that this will limit #foreclosure activity for a good part of 2022, while servicers explore all possible loss [mitigation] options.”

For more information, read the warning issued by the Attorney General of New York State.

3. Most Homeowners Have More Than Enough Equity To Sell Their Homes

For those who can’t negotiate a solution and the 16.8% who left the forbearance program without a work-out, many will have enough equity to sell their homes and leave the closing with cash instead of facing foreclosures.

Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home. As Frank Martell, President & CEO of CoreLogic, explains:

“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth.”

4. There Have Been Far Fewer Foreclosures Over the Last Two Years

One of the seldom-reported benefits of the forbearance program was that it allowed households experiencing financial difficulties prior to the pandemic to enter the program. It gave those homeowners an extra two years to get their finances in order and work out a plan with their lender. That prevented over 400,000 foreclosures that normally would have come to the market had the new forbearance program not been available. Otherwise, the real estate market would have had to absorb those foreclosures. Here’s a graph depicting this data:

There Won’t Be a Wave of Foreclosures in the Housing Market | MyKCM

5. The Current Market Can Easily Absorb Over a Million New Listings

When foreclosures hit the market in 2008, they added to the oversupply of houses that were already for sale. That resulted in over a nine-month supply of listings, and anything over a six-month supply can cause prices to depreciate.

It’s exactly the opposite today. The latest Existing Home Sales Report from the National Association of Realtors (NAR) reveals:

“Total housing inventory at the end of November amounted to 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, a decline from both the prior month and from one year ago.”

A balanced market would have approximately a six-month supply of inventory. At 2.1 months, the market is severely understocked. Even if one million homes enter the market, there still won’t be enough inventory to meet the current demand.

Bottom Line

The end of the forbearance plan will not cause any upheaval in the housing market. Sharga puts it best:

“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging. It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect. . . .”

FHFA hikes fees for high-balance and second-home loans

New fees seen as first step toward holistic review of GSE pricing

January 5, 2022, 12:24 pm By Georgia Kromrei

The Federal Housing Finance Agency introduced new upfront fees on Wednesday for some high-balance and second-home loans sold to Fannie Mae and Freddie Mac.

Upfront fees for high balance loans will increase between 0.25% and 0.75%, tiered by loan-to-value ratio. For second home loans, the upfront fees will increase between 1.125% and 3.875%, also tiered by loan-to-value ratio. 

The new pricing framework will take effect April 1, 2022, to “minimize market and pipeline disruption,” the agency said in a press release.

Loans in some affordable programs — including HomeReady, Home Possible, HFA Preferred and HFA Advantage — will not be subject to the new fees. First-time homebuyers in high-cost areas whose incomes below 100% of the area median income will also be exempt from the new high-balance upfront fees, although only a small number of those borrowers seek second homes and high-balance loans.

In a statement, FHFA Acting Director Sandra Thompson said the fee increases are another step FHFA is taking to both strengthen the government-sponsored enterprises’ safety and soundness, and ensure access to credit for first-time homebuyers and low- and moderate-income borrowers.

“These targeted pricing changes will allow the enterprises to better achieve their mission of facilitating equitable and sustainable access to homeownership, while improving their regulatory capital position over time,” said Thompson.

While the new fees on high-balance and second homes will function similarly to the now-suspended limits on investor and second homes, mortgage industry stakeholders welcomed Thompson’s decision.

Mortgage Bankers Association President Bob Broeksmit said he appreciated the delivery date for the new fees is in April, which gives lenders more than 90 days to adjust their rate sheets appropriately.

He also said he expected that this announcement would not be the last word on pricing adjustments, and that it sets the stage for reducing loan-level price adjustments for first-time borrowers, and those facing higher fees due to the loan-to-value ratio or their credit score.

“To the degree they recognize better margins on these loans, we would expect that cross-subsidy would flow to mission-centric borrowers,” said Broeksmit.

In an October interview with National Housing Conference President David Dworkin, Thompson said carrying out a broader review of the GSEs pricing was on her “to-do list.”

“One of the things that we committed to doing was taking a look at pricing, we haven’t done a holistic review of the Fannie and Freddie pricing analysis, g-fees and everything that comprises g-fees and pricing for enterprise loans,” said Thompson.

The FHFA also formally signaled its intent to update the GSEs’ pricing framework in its 2022 Scorecard for Fannie MaeFreddie Mac, and their jointly owned securitization platform, Common Securitization Solutions. The regulator directed the regulated entities to “increase support for core mission borrowers, while fostering capital accumulation, achieving viable returns and ensuring a level playing field for small and large sellers.”

During her tenure so far as FHFA acting director, Thompson has made affordability a top priority. In August, FHFA proposed new affordability benchmarks for the GSEs, setting goals for purchase loans in low-income and minority communities, and substantially increasing the low-income refinance goal.

Those actions have elicited praise from the affordable housing community. But some of the same groups have also argued there is still ample room for improvement. In October, a coalition of twenty affordable housing groups called on the regulator to reject the Duty to Serve plans the GSEs proposed in May for 2022 to 2024.

The affordable housing groups said those plans did not meet the “spirit or the letter” of the regulation, because the plans would eliminate programs to purchase manufactured housing loans titled as personal property. The plans would also reduce loan targets for manufactured housing, affordable housing preservation and rural housing.

Some have also questioned whether FHFA’s decision to back mortgage loans of nearly $1 million aligns with the GSEs’ mission, and have asked for more clarity on the government’s role in the housing finance system.

“Whether taxpayer backing of $1 million mortgages is consistent with the GSE charter is a question that legislators and policymakers should address,” said Ed DeMarco, president of the Housing Policy Council and acting director of the FHFA from 2009 to 2014, in a December interview with HousingWire.