[David] Alice, great to talk with you and it’s interesting about what Adam DeSanctis had to say about the MBA’s position with Basel. Everyone who has not read the book, I’ve recommended several times, the Tower of Basel, it’s a must read book. Then right after that, the sequel to that is the Creature from Jekyll Island talks about the Federal Reserve, talks about the world banks that are out there, and the Tower Basel speaks to that. Alice, go ahead and give us a up legislative update.
[Alice] Okay I’ll segue on the Basel three re proposal that Adam brought up. So for those of you who don’t know, those requirements are designed for international banks. They basically apply to the big banks of a hundred billion or more, and bank holding companies. So for those of us in the mortgage side, the ripple down effect usually becomes our warehouse lending prices. And so if they have to have higher capital requirements, then obviously there’s a higher cost. So I’ll let the others on the call provide more on that if they like. But it because it doesn’t affect everybody every day, it’s not something we usually dive into too much detail on. But I love your recommendation, Dave, to read the book. Does anybody else wanna opine on Basel before I get into government shutdown?
[David] Bill? Thoughts? Okay. Nothing. He’s shaking his head. All right. Yeah. All right. Let’s go to a fun sizzling topic. Government shutdown, Alice.
[Alice] It’s really been, we’ve had these threats out there. As you guys mentioned earlier, year after year there was a short term shutdown. I think it was the previous Trump administration. So for our world it’s the FHA, VA and USDA. And as you mentioned earlier, the Ginnie Mae. Entities and the business that we have going on with them. So certainly if you’re trying to get approved, you need something that requires a human there may be some impact to those areas, but there’s a big chunk of VA in particular that in years past was considered accepted. So meaning or exempted. So they weren’t laid off or furloughed, whatever the term’s going to be this year. We can do a lot of things electronically. We can still get case numbers for our consumers out there who are listening. You can still buy a house. You can still get an FHA VA or USDA loan. All of the things from the mortgage standpoint still work and function. The things that do slow down or sometimes we have a crimp in our things like getting a new condo project approved and USDA in particular can be dicey. So check with your lender are they gonna be okay with closing any USDA rural development loans if there is a shutdown, because we can’t get the guarantee usually.
[David] That’s the guarantee issue. That’s the issue circulates around the guarantee issue. Does it not help?
[Alice] And just for USDA, the other two entities, it’s all automatic. That’s all. Point USDA is the only one that. It’s still, and Ginnie Mae, in times past the remittance has still happened. Anybody wanna add anything from their experience or what they’re thinking for this year,
[David] Mr. Kittle?
[Kittle] One thing in there around the condo approvals if you’re with a lender who has the authority to do it, and I’ll throw that out there. That’s what my daughter does for a living, is handle approvals for Stockton Mortgage in Kentucky. Throw a plug out there for that, so you can still get a few of those. It depends on what lender you select, right?
[Alice] Absolutely. I think those are good. For those of you who are consumers, ask your lenders or realtors, if you’re concerned, just ask and your lender will let you know if they do everything they can so that it’s a non-event for the forward facing side of the transaction. And most lenders are able to get most of that through. We’ll probably have our same hiccups with trying to obtain a 4506C. The tax transcript because that division does have a tendency to go away or that function stuff. But again, things can be different this year and we always, as lenders have ways around that. So we’ll look for any memos. The agencies haven’t issued any. As of about 10 o’clock this morning when I checked. If they are concerned that it’s imminent, we usually get a memo from one or two of them to give us any guidance if there’s anything that’s dramatically different from years past. So just…
[David] And let me interject, Alice, for those of us listening to this, we’ll be publishing this live like it is if it was recorded live. We’re recording this Monday at noon, so if possible that we, so when it’s being released, it may, something happens and I don’t want that to come as but Alice just said because Alice has said.
[Alice] Yeah. I’ll throw that in. Yeah. I’m a day late, not a dollar short. Okay.
[David] Yeah, that’s right.
[Alice] But the other thing as we were talking last week about seller contributions, it hit me that it has been a year since the National Association of Realtors settlement and so then I started thinking about. That transparency now that buyers are more involved in understanding the commission splits and having to more openly negotiate the seller to pay their half, was that having an impact that really hadn’t we hadn’t thought about? So I did go do some looking and seems like realtors are basically saying that, it was a non-event. There wasn’t anything major. Certainly they had some adjustments, they had some new forms. But not any big change in the market. So I thought I’d throw that out there and ask this group, what have you seen a year later and looking back at NAR, was it Y2K or did you actually see something happen?
[David] Yeah, I’m, I definitely have heard a lot. It is everyone that’s I’ve talked to, Alice has said it’s a non-event. It’s just became a whole lot of hoopla Y2K, like you said earlier. Marc, what do you are invested in real estate companies. What are you experiencing out there?
[Marc] It’s still slow in the real estate industry, just like it’s slow in the mortgage banking industry. But I think it’s picking up some I talked to the management team about a week ago and we were getting a lot more contacts that’s coming in the phone light up a little bit, I think a little bit of anticipation of rate reductions. But some of that was coming in and they also had the highest month of listings last month that they’ve had in eight months. So I don’t know if that tells a story nationwide, but it certainly tells…
[David] it’s becoming a buyer’s, it’s in many players, it’s a very much of a, it’s a buyer’s market right now. There’s so much the inventory issue is by and large in most parts of the country gotten a lot better. So we’re not, it’s a buyer’s market.
[Marc] And I will tell you one other thing too, that we, in the subdivision, we have a home in Alabama is about, I’m thinking it’s about 60 homes. They’re all priced in the 350 to $500 range, maybe a few over $500,000. And when we first got here, there wasn’t a sale sign at all and I can ride through now and there’s 10 to 12 sale signs at any given time. And that’s a big change. And that is only a change that has happened in the last 60 days here, and it’s not, school’s not over, people aren’t moving. So to have that at this time of year coming into holidays surprises me that many people would’ve their homes on the market. But that’s probably people who’ve been around all year wanting to sell it. But there hasn’t been, anybody could come and afford to buy a house and but now sticking it out there, hoping interest rates are gonna come down and it’s probably gonna help ’em,
[David] Yeah. Allen, what is the market in Florida there? Because I know in Texas, in Austin, Texas area, it is, it’s really slowed down. Some deals are starting to get written in Austin.
[Allen] In North Florida specifically, south of Jacksonville, it’s booming. Property values are still rising. Yep. Even I sold my house after my divorce. If you all remember probably I sold it in May. I got top dollar, sold it within one day and the value, my realtor still sends me updates. The value of my home has gone up already. Other homes are listed high. I live in a unique area, so that’s why, but even some areas a little bit south of me are still booming, so it’s very different. We talk about that a lot out here. We have this unique little pocket. We have a booming tourist area as well. The Jacksonville Beach area. A lot of money’s going into Jacksonville. So the towns around Jacksonville, which are north of me are also are growing. Things are getting more expensive out here, so it’s hard to say because we are a unique spot in the country.
[David] It’s really interesting because I live in the hill country of Texas, Central Texas, and this has been one of the demanding, most demanding places to live, especially on the lake. And I was talking to my realtor who had our houses on the market, had an open house at our house, and not one person showed up and they had two waterfront listings and they only had one person show up at the waterfront listings. He says he’s never seen anything like it. And in our particular area, we’re finding realtors filing bankruptcy and going out of business. They just they can’t afford those land yachts. They drive around to show people in the old school.
[Allen] It’s crazy. David, what’s interesting and it’s a whole separate topic, so I’ll just bring it up really briefly. There’s a lot of people investing in properties still. Not institutions though, more privately. I have one friend alone who went to a local seminar who wanted to get into property investing and he said it was jam packed and it was a three day event. But in addition, where my daughter goes to school, which is college campuses, and this is not just at my daughter’s school at the University of Mississippi. I’m actually right now in the middle of buying a condo. It’s $360,000. It was 285 a year and a half ago, and they are renting for $1,200 a night. It’s a two bedroom, two bath condo. So there’s also areas that like the entire area around the university as well as many others throughout our country are also increasing. So it, to me, real estate’s very interesting. But the last piece, David, is, if you remember about six months ago or so square footage on rentals was over $2 a square foot. So you’re looking at a 2,000 square foot house where the rental was $4,500. A lot of people now are getting into Airbnb arbitrage, which is a whole another thing. But it’s very interesting out here. I don’t know if I just live in this crazy world in Florida or it’s like that throughout the country, but that’s what’s going on over here.
[David] Yeah. Airbnb arbitrage. Go figure that one out. That’s unusual. That’s good. Alice finished up. Head to drop and go, but we have got time for a tech update and then Mark’s musings. We’re gonna finish up with Mark’s musings today. So.
Alice Alvey, Master CMB
She handles development of their World Class Training program designed to support UHM partners and organizational effectiveness.
Prior to UHM, Alice served as Senior Vice President at Indecomm leading the Indecomm-Mortgage U division, Internal QA and Compliance and SaaS technologies. Indecomm acquired Mortgage U in 2013, where Alice was President/Co-founder, providing training and consulting since 1996. Prior to MU she served as SVP of Operations at a national bank overseeing operations for wholesale, retail and correspondent from underwriting through servicing, and compliance.
She has been in the trenches of mortgage lending operations from application through servicing for over 30 years. Her authoring work in training content, policies and procedures and the FHA/VA Practical guides illustrates her ability to bridge regulatory requirements with day-to-day operations.
Alice has been a weekly contributor to the Lykken on Lending show since its beginning in April 2009 and has made her weekly contributions to 450+ episodes!