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Slowing Traffic In A Weakening Real-Estate Market

A report from The Plains Dealer in Ohio. “JPMorgan Chase has continued to cut jobs nationwide in mortgage lending, eliminating 400 jobs last week, including at least 20 in downtown Cleveland. The nationwide cuts, first reported by the Wall Street Journal, were confirmed today by Chase spokeswoman Carlene Lule. She called it a ‘very small reduction in Chase’s home lending division last week,’ affecting less than 3 percent of the mortgage division’s total employment in Columbus, Cleveland, Jacksonville, Florida; and Phoenix.”

“U.S. Bank in July started shutting down its Bedford mortgage office, eliminating 260 jobs. That location at Rockside Road near Broadway Avenue is closing permanently, U.S. Bank said.”

“Last year, New York Community Bank, the parent of Ohio Savings, cut 210 mortgage-related jobs from its Cleveland headquarters at 1801 E. 9th St. in Cleveland after it sold its mortgage business to Freedom Mortgage of New York. Also eliminated were 14 jobs in Brooklyn.”

From Inman News. “This month, the steady rise in interest rates has negatively impacted investor sentiment. So, how are real estate’s biggest companies positioned with a potential correction on the horizon?”

“Zillow has been relatively quiet since its acquisition of Mortgage Lenders of America on Aug. 6, which sliced the company’s market cap by $1.6B the next day. Zillow CEO Spencer Rascoff said the drop in market cap and share values was ‘due to lowered guidance’ for one of the company’s four marketplaces. But investors told another story, saying that said the integration of Mortgage Lenders of America alongside the company’s iBuyer moves posed too much risk for 2019.”

“‘Investors … don’t want an interest-rate-sensitive company that owns homes; they bought Zillow because it’s a high-margin, asset-light online real estate play with a fabulous multi-year growth story,’ said CNBC’s Jim Cramer. ‘In short, it’s not what the shareholder base signed up for.'”

“Much of the news from Redfin over the past month has focused on the launch of a new price estimate tool for off-market homes, continued expansion efforts for Redfin Mortgage, and a controversy surrounding the accuracy of Redfin Estimate after sudden, dramatic price hikes. Redfin CEO Glenn Kelman did lower the company’s Q3 forecast, citing ‘slowing traffic growth in a weakening real-estate market.'”

From Atlanta Agent Magazine. “We recently sat down with three lending professionals to hear their thoughts on the current housing market, challenges in the industry and how to improve the lending process for homebuyers in the future. What are your thoughts on the current status of the mortgage industry?”

“Holly Walther, branch manager, Holly Walther & Team, Success Mortgage Partners: ‘I believe that we are currently in an over saturated market. Every day more companies are moving into the mortgage business, increasing competition, lowering returns and diminishing customer service.'”

“Mortgage interest rates remain relatively low, but there has been a recent rise and some experts say it could continue to increase. What are you projecting?”

“Josh Moffitt, CEO, Silverton Mortgage Specialists: ‘I think the overall thought is that interest rates will continue to slightly rise as we move through 2018 and 2019. So as homes rise and rates rise along with them, that does add pressure. But, as long as you have a wage increase to go along with it, then it should work out okay.'”

From WBAL TV in Maryland. “Some residents of a neighborhood in Owings Mills are fed up with a vacant house, so they contacted the 11 News I-Team. No one wants to live on a street with vacant houses, which can bring down property values and attract squatters. David Redd, a member of the Lyons Manor Architectural Committee, and other residents are fed up with a vacant house in their neighborhood.”

“‘That house has been vacant for years — not months, years,’ Redd said.”

“Arron Moore, the president of the Lyons Manor Homeowner’s Association, said he has watched 9909 Linden Hill Road sit vacant since 2011 after one of the owners died. Eventually, the property went into foreclosure and has been in the name of Bank of America since June 2015.”

“Even though the property is groomed in a recorded video, it has been in violation of the homeowner’s association many times for overgrown weeds and high grass. Crews came out to cut the grass. But that’s not all.”

“‘Some of the siding and some of the property — the wood — needs to be repaired, and it’s just not being repaired. Bank of America is not doing anything,’ Redd said. Bank of America told the 11 News I-Team that it spent $40,000 on repairs to the property, but they ran into delays because of squatters. A second set of squatters was evicted in July.”

“Bank of America said it will take another $20,000 to complete additional work for the house to be in a condition where they can convey it back to the U.S. Department of Housing and Urban Development, since it was secured with an FHA loan. After that, HUD will market the property and sell it to new owners.”

This Post Has 17 Comments
  1. ‘vacant since 2011…in the name of Bank of America since June 2015’

    ‘Bank of America said it will take another $20,000 to complete additional work for the house to be in a condition where they can convey it back to the U.S. Department of Housing and Urban Development, since it was secured with an FHA loan’

    I know a bit about this process of conveying. And BoA is not telling the truth. It doesn’t take 3 years and it doesn’t take tens of thousands of dollars.

  2. ‘So as homes rise and rates rise along with them, that does add pressure. But, as long as you have a wage increase to go along with it, then it should work out okay’

    But that didn’t happen Josh.

    DONG!

    1. My grandmother always used to say “Things will work out, one way or the other.”

      How it’s probably going to work out for Josh is collapsing prices, rising unemployment and cascading defaults.

  3. ‘Investors … don’t want an interest-rate-sensitive company that owns homes; they bought Zillow because it’s a high-margin, asset-light online real estate play with a fabulous multi-year growth story,’ said CNBC’s Jim Cramer. ‘In short, it’s not what the shareholder base signed up for.’

    Ooo, I know Jim: flying cars. Zillow should start making flying cars. Even better, driver-less flying cars. Cuz what is Zillow anyway? A wildly inaccurate website? That’s Shirley worth billion$.

    1. “It’s dead, Jim,” is a popular catch phrase from the original Star Trek television series (infused into modern culture by its countless reruns) that is used as a pronouncement that something is no longer alive or working. Not only in a physiological way, but also in an mechanical, electrical, physical, or temporal sense not related to a biological system.

      As in, Zillow is dead, Jim.

  4. She called it a ‘very small reduction in Chase’s home lending division last week,’ affecting less than 3 percent of the mortgage division’s total employment in Columbus, Cleveland, Jacksonville, Florida; and Phoenix.”

    Looks like they’re playing the Quiet Game in Columbus, Cleveland, and Jacksonville.

    https://www.youtube.com/watch?v=bYL6p7PFZhs

  5. FHA rates now 6.202%…the low price end of the market was the only market moving, or so we are told…now sure how they will handle rates moving up day after day.

  6. TIMBERRRRRRRRRRRRRRRRRRRRR

    Seattle Update:

    “Seattle Real Estate in September: Sales Down 29% YoY, Inventory up 78% YoY “

    1. Houses can still move quickly in and around Seattle….

      *IF*… (go into full Lorax-mode here )

      They are priced right. Which means a lower prices that undercuts the trend lines of the past few years by a noticeable amount.

      Unfortunately, that means a lot of houses that were either purchase in the last few years stand a good chance of losing money for their owners. Doesn’t matter if it was a primary residence and they have to move or a flipper.

      There is a house on our street, that had been in foreclosure, with incomplete work on it due to a landslide (caused by the owner removing tree/ground cover) and had sat for a couple years ago. It was just recently purchased by someone who is finishing up/fixing it up to flip. In the opinion of those of us on the street who follow such things, the numbers will only work for the new buyer if this new downturn suddenly and sharply reverses itself. We’re not optimistic for the outcome – the buyer is a nice person, but stands a good chance of loosing a 6-figure amount.

        1. An even better wishlist would be to see realtime webcam shots of the faces of our dear departed HBB permabull trolls as they realize their smug declarations of “it’s different here” and other Kool-Aid-imbibing REIC dogma go up in smoke, along with their pipe dreams of unearned speculative riches in their shack “investments.” The expressions on their faces would be priceless right about now as they cycle through the stages of grief.

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