Lending standards increased sharply after the financial crisis in 2008, and even after the recession ended in 2009. Lenders have yet to ease their stricter standards, according to a report by Goldman Sachs economists Hui Shan and Jari Stehn.

Why? The researchers say it’s mostly because there’s less money available to lend.

“During the housing boom, as brokers produced a flood of new mortgages, Wall Street bankers churned out a torrent of mortgage-backed bonds for investors waiting to snap them up,” an article at MSNBC.com notes, in describing the study’s findings. “That market has all but vanished; 90 percent of new mortgages written today are backed by the government.”

Also, researchers found that lenders are swamped with more paperwork, which is also causing delays in processing. Many lenders have issued stricter documentation requirements before they’ll approve a loan. Nowadays, nearly 90 percent of mortgage applications require “full documentation” before getting approved. From 2000 to 2006, less than 60 percent of applications required “full documentation,” researchers found.

Source: “Tight-Fisted Mortgage Lenders Pressure Home Sales,” MSNBC.com (Jan. 27, 2012)

Editor’s Note: Another reason banks have tightened up their lending is because Fannie Mae and Freddie Mac are requiring banks to repurchase some of the loans they’ve made. As reported by Bloomberg News, banks don’t want to get hit with more mandatory repurchases, so they have added “overlays” (such as minimum downpayment, debt ratio, etc.) to FHA, Fannie, and Freddie standards, and are only making the most conservative loans.

Here are ways for consumers to show lenders that they are low-risk borrowers, according to a recent article at The New York Times:

Credit score: According to one mortgage broker, ideal borrowers nowadays have a FICO score of 740 or higher to qualify for the best pricing.

Property types: Buyers of a duplex, four-unit building, or condo may have a rate premium added. Also, lenders will charge borrowers more if they plan to rent out the property rather than live there.

Down payment: Borrowers who put down at least 25 percent will most likely attract the best pricing, lenders say. “Lenders offer different breaks on rates if equity is higher, so you should ask what is available,” The New York Times article notes.

Also, borrowers who are able to get a low rate now may want to lock it in if they are heading to closing soon. “Lenders typically agree not to change an offered interest rate for 60 days, but borrowers confident of a quick closing may be willing to accept a 45-day rate guarantee, or even a 30-day lock, in exchange for a small discount, because the transaction’s speed helps the lender reduce its risk,” The New York Times article notes.

Source: “Mortgages: Shopping for the Best Rates,” The New York Times (Jan. 12, 2012)

According to housing experts in a recent Kiplinger article, here are some predictions for the real estate market in the coming year:

Home prices stabilize: Mark Zandi, chief economist at Moody’s Analytics, predicts that home prices nationwide may still drop another 3 to 5 percent in 2012, but the new year will most likely finally bring a leveling off of home prices before gains start to take shape in 2013. When markets do begin to stabilize in the new year, “price appreciation tends to spread unevenly, creating a lot of confusion about where the recovery is occurring and when,” David Stiff, chief economist at Fiserv Case-Shiller, told Kiplinger. “Even within a single city, more desirable neighborhoods will stabilize first, while prices in other neighborhoods may fall at a rapid pace.”

Housing affordability high: Housing affordability — the ratio of median home prices to median family income — will likely remain at record levels in 2012. Homes in many cities are “substantially undervalued,” the Kiplinger article notes. That may even lead to a mini bubble with double-digit spikes in prices, such as an increase of 10 to 15 percent in a given year in some markets, housing experts say.  

Low mortgage rates: Helping to keep affordability high, low mortgage rates are expected to continue on in 2012 — at least the first part of the year, economists predict. The 30-year fixed-rate mortgage, the most popular among home buyers, has been hovering under a 4-percent average the past few weeks, staying in record low territory. Rates are expected to stay between 4 to 5 percent in 2012, predicts Guy Cecala, publisher of Inside Mortgage Finance, an industry publication.

Sales increases: The National Association of REALTORS® has already been showing a tick up in sales taking shape with increases in existing-home sales during the summer and early fall of 2011. High inventories of homes continue to flood the market but a drastic slowdown in new-home building the past three years is “gradually easing the surplus,” the Kiplinger article notes.

Foreclosures: Foreclosures remain the problem and still plague many markets. After a slowdown with lenders processing the paperwork, foreclosures have began to pick up once again. About 1.84 million home loans are 90 days or more delinquent and 2.17 million have finished the foreclosure process but aren’t up for sale yet, according to RealtyTrac data. Alex Villacorta, director of research and analytics at Clear Capital, told Kiplinger that he predicts regardless of the downward price pressure caused from foreclosures, overall home prices won’t fall as long as lenders bring additional foreclosures to the housing market at a steady pace.

Source: “What’s Ahead for Home Prices in 2012,” Kiplinger (January 2012)

Women tend to rely on recommendations from their friends when it comes to mortgage rates, while men are more likely to shop around and talk to several lenders in finding the best rate, the researchers note.

Researchers aimed to shed light on why a 2006 study found that women are 32 percent more likely to get a subprime mortgage than men.

Researchers suggest that “gender disparity in mortgage rates may be addressed by policies aimed at improving women’s financial literacy and search skills.”

Source: “When it Comes to Mortgages, Women Don’t Shop Enough,” AOL Real Estate (Nov. 18, 2011)

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, surged 10.4 percent to 93.3 in October from 84.5 in September and is 9.2 percent above October 2010 when it stood at 85.5. The data reflects contracts but not closings.

Read more at: http://tinyurl.com/wrar11-19-11

The NAR Board of Directors meeting at the end of the 2011 REALTORS® Conference & Expo in Anaheim on Monday voted to rescind a Multiple Listing Service policy on the display of Internet Data Exchange (IDX) listings on franchisors’ Web sites.

A work group has been tasked to broaden the policy to address listing displays over mobile devices and via social media (with a broker opt-out option). Listing data sent via RSS (Really Simple syndication) won’t be included because of the difficulty in controlling access to RSS feeds.

In other changes to MLS policy, directors took the following actions:

• Sales price information. Amended the Statement of MLS Policy and the implementing model MLS rules to allow MLSs to require reporting of sale prices by participants. In “non-disclosure states,” if sale prices are provided by the MLS to government agencies and or third-party entities for uses other than those authorized in the amended Policy Statement, sellers may request that their sale price not be provided to such entities.
• REOs. Gave MLSs discretionary authority to require listing participants to disclose whether listed property is a foreclosure, bank-owned, or real estate-owned (REO).
• Lockboxes. Increased from $200 to $300 the maximum security deposit associations and MLSs can require for lockboxes.

At the meeting, the Directors took actions on other areas of association business:

Nominating Rules

• Adopted a set of binding endorsement guidelines for members of the NAR Nominating Committee, alternates, and members of the Leadership Team to promote impartiality toward members running for association office
• Required that regions appoint an alternate representative as a non-voting member of the Nominating Committee to help ensure continuity on the committee.
• Established criteria for state or regional endorsements of candidates

Appraisal Policy

• Sent a set of property valuation principles back to a workgroup to ensure they don’t conflict with the NAR Code of Ethics. The principles would support independent valuations of real property. The Responsible Valuation Principles were developed by a workgroup of the Appraisal subcommittee and address the licensing of appraisers, coercion of appraisers to reach valuations, and compliance with the appraisal industry’s Uniform Standards of Professional Appraisal Practice.
• Changed the structure of the Appraisal Committee to be a broader based Real Property Valuation Committee. Members of the reconstituted committee, which came out of a valuation summit held earlier this year, will provide recommendations on valuation-related issues and will be composed of appraisers, brokers, and members engaged in other real estate disciplines.

Code of Ethics and Professional Standards:

• The Delegate Body adopted language to implement discretionary authority for boards and associations to require their members mediate disputes that would be otherwise arbitrated.
• The board also adopted a new Standard of Practice 3.9 to prohibit REALTORS® from accessing or using, or permitting or enabling others to access or use, listed or managed property on terms or conditions other than those authorized by the owner or seller.
• In the Delegate Body meeting, delegates changed the word “competitors” to “other real estate professionals” in a provision in Article 15 of the Code that prohibits the making of false or misleading statements about others.

 Federal Policy

• The board adopted a policy to oppose any efforts in the federal government to consolidate the operations of the U.S. Department of Housing and Urban Development and the U.S. Rural Housing Service. Under the policy, if the two agencies were consolidated, NAR would seek to ensure there’s no diminishment or disruption in programs.
• To help address what practitioners say is an increasing number of lawsuits against brokers alleging violation of Section 8 (anti-kickback) of the federal Real Estate Settlement Procedures Act (RESPA), NAR will create a group to examine the legislative, regulatory, administrative, and judicial terrain of RESPA and identify recommendations for changes.

Internal Business

• The board amended the association’s investment statement for governing the management of its funds, including its new REALTOR® Party funds. Among other things, up to 50 percent of funds may be placed with an outside investment manager, up from 40 percent.
• The board also authorized NAR to purchase a 2012 Master Policy for the Professional Liability Insurance Program for itself, its affiliates, and state and local associations and their wholly owned MLSs and affiliates.  The $1.2 million premium is 14 percent lower than this year’s premium.
• The Delegate Body changed Article III, section 8, of the NAR Constitution to broaden the definition of an NAR international affiliate to “organization” from “association” to reflect that many international affiliates aren’t structured as associations.

State and Local Political Activism

NAR will provide Issues Mobilization funding of $332,140 to the Oregon Association of REALTORS® for the next phase of their Coordinated Campaign to pass a Constitutional ballot measure in 2012 to permanently prohibit real estate transfer taxes in Oregon.

People

The Nominating Committee announced its NAR leadership slate for 2013: Gary Thomas of Alison Viejo, Calif., for president; Steve Brown of Dayton, Ohio, for president-elect; Chris Polychron of Hot Springs, Ark., for first vice president; and Bill Armstrong, Damascus, Maryland, for treasurer.

The Nominating Committee also announced that three NAR members have filed for office of first vice president: Bill Brown of Oakland, Calif.; James Helsel of Camp Hill, Pa.; and Thomas F. Salomone of Coral Springs, Fla., and for treasurer, Michael C. McGrew of Lawrence, Kan.

The Distinguished Service Award went to Adorna Carroll of Realty Three Inc., in Berlin, Conn., and PeggyAnn McConnochie of ACH Consulting in Juneau, Alaska. They’re the 79th and 80th recipients of the DSA Award, respectively.

The William R Magel Award went to Gary Clayton, CEO of Illinois Association of REALTORS®.

REALTOR.com

REALTOR.com President Errol Samuelson gave a report on NAR’s official consumer marketing site. The site now incorporates an international site on which U.S. property listings are made available to home buyers in other countries and automatically translated into 11 other languages. He also talked about changes to the site to bring listings and other information to consumers via mobile devices.

Past NAR President Cathy Whatley, who represents NAR on the board of REALTOR.com operator Move Inc., cautioned NAR members against surrendering too much of their data to data aggregators, such as Trulia and Zillow, that can’t be counted on to protect their interests.

REALTOR® University

REALTOR® University Board of Trustees Richard Rosenthal of Riverside, Calif., said the university is on track to receive accreditation by the State of Illinois and expects to roll out its first academic program in March 2012. Just under 300 people have submitted an expression of interest to begin studies at the university, far more than the 40 that NAR originally budgeted for. Rosenthal said the university is ready to handle 150 students.

The university’s scholarship program has gotten off to a great start as well. State and local associations have pledged more than $250,000 to find scholarships for students. NAR will be matching the money, bringing the total to more than $500,000. “This will ensure the brightest and best in the industry are encouraged to come to REALTOR® University,” Rosenthal said.

Twenty-seven percent of Americans say they plan to buy a home in the future (with most saying in two or more years), and only two percent say they plan to purchase a home in the next 12 months, according to a new Move Inc. survey of 1,000 American adults. So why are so many buyers continuing to wait on the sidelines when home affordability is high and interest rates are at or hovering near record lows?

About 23 percent of those surveyed say they are delaying buying a home because they are concerned about the real estate market in their local area, particularly with concerns over the future of home values, the economy and jobs, as well as difficulty in saving for a down payment.

“Perceptions as much as the realities of home ownership are standing in the way of boosting demand for housing,” Errol Samuelson, chief revenue officer of Move Inc., said in a statement. “Concerns that the economy will continue to put jobs at risk and that prices won’t rise near term are keeping buyers on the sidelines as much as the difficulty they’re having in getting credit or saving for down payments. Until these concerns are resolved, we expect both buyers and sellers to remain on the sidelines.”

Nearly 35 percent of those surveyed say their inability to get credit or find affordable credit are the main reasons why they’re putting off purchasing a home.

The Move survey also found that younger adults—the millennial generation—tends to look at home ownership as a place to be happy, not an investment. But this large segment of first-time home buyers admit they are picky when it comes to finding a home—80 percent say they are picky, in fact. A lot of that pickiness comes from the fact that 75 percent say that their home defines them and is a part of who they are.

The survey also found that younger adults tend to spend more on housing than older adults. For example, the survey revealed that two out of five–or about 40 percent–of millennials say they should spend 30 to 60 percent of their gross monthly income on housing. More than half of older Americans, on the other hand, say they plan to spend less than 30 percent of their gross monthly on housing.

Lenders often recommend spending 28 percent of annual gross wages on housing, when taking into account principal, interest, and taxes.

Source: “2012 Presidential Elections: 69.6% of Americans Said Housing Will Influence Their Vote,” Move Inc. (Nov. 8, 2011)

How can I submit an application?
You can access the online form here, or by visiting our main “30 Under 30″ page.

Who’s eligible to enter?
For the 2012 feature, any REALTOR® member of the NATIONAL ASSOCIATION OF REALTORS® who is 29 years old or younger on May 31, 2012, and who has not been profiled in a previous “30 Under 30.”

What’s the deadline?
Applications are due by Jan. 15, 2012.

What are the judges looking for?
Several factors are considered  — business success is just one. Community and professional leadership also are important factors. We strive for balance: We want to ensure we have a diverse group of finalists in terms of business niches, gender, ethnic background, and geographic location. Finally, we look for compelling stories that bring to life innovative business strategies that have worked for you or obstacles you’ve overcome.

What is the selection process?
Initially, all applications are screened by REALTOR® Magazine editors to ensure all necessary information has been provided. In the initial screening, we also  winnow the group down to 75-100 semifinalists. A panel of judges then reviews this group, weighing the factors mentioned above, until a consensus is reached on 50 finalists. Of those, we tentatively choose 30 honorees and five alternates. The 30 are vetted with their local and state associations and with the state regulatory boards for ethical violations or disciplinary actions. If a finalist is disqualified for any reason, a replacement is chosen from the list of alternates.

Can I make changes to my application?
Yes. During the application period, you can retrieve your saved application using the e-mail address and password you created when you started the application. The application period for the 2012 “30 Under 30″ feature is from Sept. 30, 2011 to Jan. 15, 2012. After Jan. 15, the system will no longer available and your application will be considered final.

Can my broker or colleague provide supporting letters?
Recommendation letters in support of your application can be submitted, but are not required. They must be submitted online via a link on the application form. No e-mail, faxes, or snail mail will be accepted. A maximum of three letters can be submitted.

Can I submit other supporting documentation (awards, certificates, etc.)?
Due to the high volume of applications we receive (more than 500) we can’t accept other supporting documents. Awards, designations, and other honors should be mentioned in the application. The editors will contact you if clarification or additional information is needed.

What if I don’t yet know my closed sales volume or transaction sides for 2011?
You should indicate on the application that 2011 figures are estimates. If you obtain actual sales volume and transaction side data for 2011 before the Jan. 15 deadline, you can go back into the application and update that information, using your e-mail address and the password you selected.

Why do you ask about ethics violations and state regulatory actions? Will either eliminate me from consideration?
Our “30 Under 30” finalists represent the next generation of industry leaders and as such they should set an example of professional and ethical behavior. An ethical violation or disciplinary action does not result in automatic disqualification. The editors will consider the circumstances and weigh the incident against other factors in your application.

Will my sales numbers be independently verified?
Yes. If you are selected as a finalist, we will seek verification from either your broker or MLS.

Do I have to be a member of NAR?
Yes. Only REALTOR® members of the NATIONAL ASSOCIATION OF REALTORS® are eligible. If you’re not already a member, you can join before the deadline and still submit an application.

I don’t know my NRDS number. Where can I find it?
Your NRDS number is your NAR membership identification number. You must enter your NRDS number to initiate the “30 Under 30″ application process. If you don’t know your number, you can find it here.

How will I know if my application was received?
An e-mail will be sent to the address listed in the application to confirm receipt of the submitted form. If it’s determined that the application is incomplete or missing some information, a second e-mail will be sent.

How and when will I be notified of the judges’ decision?
All applicants will be notified of their status via e-mail in May 2012.

Why is May 31 the birthday cutoff?
The feature appears in the June issue of REALTOR® Magazine and profiles practitioners under the age of 30.

I’m turning 30 on May 20. Can I still apply?
Unfortunately, no.

Whom can I contact if I have more questions?
Please contact Katherine Tarbox at ktarbox@realtors.org or 312/329-8403.

Go to “30 Under 30″ Main Page

The population of the United States at the mid-century mark will have been shaped by major demographic shifts that are already underway, according to Dr. William H. Frey, a demographer and senior fellow with the Brookings Institution, a Washington, D.C.-based public policy organization.

Frey, who spoke at the Mortgage Bankers 2011 Conference & Expo last week, used 2010 census data to identify the following trends as central to understanding what America will look like in 2050:

• By 2042 at the latest, the U.S. will reach a “tipping point,” at which the white American majority becomes a plurality.
• Hispanic Americans, who accounted for more than half of all U.S. population growth from 2000-2009 and about 16 percent of the overall population, will still be the second-largest racial/ethnic group in the country. However, Latinos will have for a much larger share of the population in 2050, possibly more than one-third of the total.
• Americans will continue to migrate south and west. Many of these will be African-Americans, largely reversing the “Great Migration” of the early 20th Century. However, more immigrants will opt for major metros on the coasts.

As a result of these and other developments, Frey identified the following three emerging “demographic regions” in the United States:

Melting Pot America (includes California, New York, New Jersey, Illinois, Florida, Texas, New Mexico, and Hawaii): This non-contiguous “region,” which is currently 51 percent white, will see declines in American-born residents, but dramatic increases in its immigrant population. More than 20 percent of people living in these states already speak a language other than English in their homes. “Magnet” areas include New York, Los Angeles, Miami, and Chicago.

The New Sunbelt (includes Virginia, North Carolina, South Carolina, Georgia, Tennessee, Washington, Oregon, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona): This fast-growing region, which can be geographically divided into the eastern and mid-South and Mountain West, will have the largest gains in domestic migration, as well as under-18 and over-65 age groups. It will also be where most of the traditional, “Ozzie and Harriet” new households will form, Frey said. “Magnet” areas include Phoenix, Riverside, Calif., Atlanta, and Dallas.

The Heartland (includes the remaining states): This region, which is the “oldest and whitest,” will have the lowest levels of growth, and some states will actually lose people.

While major changes in the composition of the U.S. population aren’t uncommon, the transformations we’ll see in the coming years are without precedent in a couple of ways, Frey said. First, there’s the aging of America and the decline of the nuclear family. Less than half of all households today are married couples, and only about one-fifth have children, he explained, and these percentages will likely continue to fall.

Additionally, diversity that was previously limited to major urban centers will become more common in the suburbs, Frey said. Right now, just 65 percent of the suburban U.S. population is white (which is actually less than the approximately 72 percent of whites who make up the overall U.S. population), and more than half of all minority groups are residents of suburbs.

Are you seeing examples of any of the trends above in your area? How is it impacting your business?