Fannie Mae expects home sales to stabilize in 2019 after falling in 2018, according to the Fannie Mae Economic and Strategic Research Group’s January 2019 Economic and Housing Outlook.

Mortgage rates are expected to change little in 2019 from their level late last year of around 4.5 percent, allowing potential homebuyers time to adjust to the rate environment after the volatility experienced in 2018.

[caption id="attachment_9271" align="alignright" width="300"] Doug Duncan[/caption]

"The Fed’s continued efforts to unwind expansionary monetary policies implemented during the recession have the potential to add to the headwinds facing the economy,” said Fannie Mae Chief Economist Doug Duncan. “However, we believe that contained price pressures should afford the Fed sufficient latitude to slow or pause rate hikes this year. This will allow the economy to continue growing, albeit at a slower pace, and housing to regain its footing.”

A slower pace of house price appreciation (4.2 percent in 2019 from 5.5 percent in 2018, according to the Federal Housing Finance Agency purchase-only home price index), and stable rates should make and buying a home more affordable and increase buyer confidence.

At the same time, Fannie’s forecast for continued job growth implies that the unemployment rate will remain near historic lows--a positive for wage growth and affordability. It expects single-family starts to grow modestly in 2019 as home buying firms. Although labor shortages will likely continue to frustrate builders, lower interest rates should help contain their borrowing costs. However, solid labor market conditions and favorable demographic trends, including household formations by Millennials, are expected to provide support to the multifamily sector in 2019.

Total residential investment, which includes new construction and home improvement spending as well as brokerage fees, is projected to rebound this year after contracting last year for the first time in seven years.

According to The Summary of Economic Projections released at the December 2018 Federal Open Market Committee, the Federal Reserve anticipates fewer rate hikes. The median federal funds rate projection in December implied two rate hikes in 2019, compared with the September projection of three. The federal funds futures contracts that trade on the Chicago Mercantile Exchange implied no Fed rate increases in 2019, according to Fannie’s analysis.

In addition, the minutes of the December FOMC meeting showed a dovish shift in the Fed’s thinking. The Fed still expects “further gradual increases” in the federal funds rate but acknowledged that it can “afford to be patient about further policy firming.” In addition, Fed Chairman Powell has noted the partial government shutdown will postpone data releases, making it difficult for the Fed to assess the economy.

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By Brian Sacks

My guess is that you were probably trained to always return your phone calls immediately, and that you should be available 24 hours per day, seven days a week, to succeed as an originator.

Am I right?

I know that’s how I was trained many years ago. In fact, it was so long ago that I had a pager and always carried around a roll of quarters, so I could use a pay phone to return calls.

Also, you were told to be seen as an expert, right?

Maybe more than all other trainers or originators, I have preached the idea of being an expert by picking a niche and letting everyone know about it. But here is the problem: Experts never return calls in the evenings or weekends.

They never return them immediately either. Usually they have a secretary or assistant that handles these tasks for them. I realize you and I probably don’t have that luxury--but please pay attention because your actions send messages.

Think about your accountant, attorney, doctor, dentist or any other professional that you go to. They aren't immediately available to clients. So, let’s discuss what not to do and why:

1. Being accessible 24/7/365:
   First, this will lead you to be burnt out and feeling grumpy. You need set hours people can reach you. If you feel that you must be available like a Seven Eleven than you have a lead generation and conversion problem to fix.
2. Immediately returning all calls:
   When you pick up the phone the second it rings you are subconsciously telegraphing that you are desperate. Busy people never pick up the phone the minute it rings. Please don’t think that means giving bad service. It doesn’t.

You should return all calls within a reasonable time frame, an hour or less, but it’s a good idea to keep people waiting and have, at the very least, the appearance of being busy.

The other issue with answering calls, immediately, is that you rush people off the phone, and they notice that. Most don’t appreciate it and will often go elsewhere. Sometimes, this rush might also cause you to forget important facts or miss certain issues critical to the loan approval.

If you are trying to be seen as the mortgage expert in your local city, which I highly encourage, then you must first start acting like an expert would. If your business is not quite where you need it to be, then I know this will be difficult.

But it’s more important to do when you are slow because your positioning with your clients, prospects and referral sources is critical to your success. Next time the phone rings, let it go to voicemail.

Oh, and speaking of voice mail, it would be a great idea to let people know the hours and days you are available on your message, so you can set expectations, boundaries--and your status as the expert.

About the Author

Brian Sacks, is a national mortgage expert with Homebridge Financial Services Inc. in Owings Mills, Md. During his 30 year career, he has closed 8,000 loans in excess of 1 billion. You can learn more about his new book, “48 Proven Ways To Immediately Grow Your Production” at https://48waysbook.com/special.

 

 

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Earlier this week, January 16, Congresswoman Maxine Waters, D-CA, Chairwoman of the House Committee on Financial Services, delivered her first policy speech in the 116th Congress. Excerpted below, are her comments on the government sponsored enterprises, causes of the financial crisis and her core principles for housing.

The committee also has a responsibility to look at our housing finance system and address the fates of Fannie Mae and Freddie Mac, the government sponsored enterprises. The GSEs have been in government conservatorship for more than a decade.

Contrary to Republican claims, Fannie Mae and Freddie Mac did not cause the financial crisis. The Financial Crisis Inquiry Commission and others have made that clear. The financial crisis was driven by predatory lending, the private market packaging those toxic, risky loans into securities and then selling those securities to unsuspecting investors.

Fannie and Freddie did not drive those actions, but the events that transpired during the crisis made clear the need for their reform. When it comes to housing finance reform, I have advocated for core principles that I believe should be part of legislative efforts to address the future of housing finance reform.

The principles include the following:

• Maintaining access to the 30-year fixed rate mortgage;
• Ensuring sufficient private capital is in place to protect taxpayers;
• Providing stability and liquidity so that we can withstand any future financial crisis;
• Ensuring a smooth transition to a new finance system;
• Requiring transparency and standardization in a way that ensures a level playing field for all financial institutions, especially credit unions and community banks;
• Maintaining access for all qualified borrowers that can sustain homeownership and serving homeowners of the future; and
• Ensuring access to affordable rental housing.

It is particularly important to ensure that underserved borrowers and communities are not overlooked. This means housing finance reform will need to include a comprehensive strategy around access to affordable mortgage credit, as well as access to affordable rental housing.

Also important for housing access is the rigorous enforcement of our fair-housing laws. Unfortunately, our fight to make progress on fair housing has become much more challenging under the Trump Administration. Let’s not forget that President Trump himself was sued by the government for serious violations of the Fair Housing Act. Under Trump’s leadership, the affirmatively furthering fair housing mandate under the Fair Housing Act was badly undercut when Secretary Carson halted implementation of the Obama administration’s affirmatively furthering fair housing rule.

In fact, Secretary Carson once likened the rule to a “failed social experiment.” Secretary Carson has also reportedly proposed taking the words “free from discrimination” out of HUD’s mission statement. He also reportedly halted several fair housing investigations, and sidelined top advisors in HUD’s Office of Fair Housing Enforcement. These are unprecedented attacks on fair housing that we will not stand for.

To that end, in addition to conducting robust oversight of the Trump Administration’s activities at HUD, I will be reintroducing the Restoring Fair Housing Protections Act, my bill to reverse the harmful steps taken by Secretary Carson and the Trump Administration to undermine fair housing. I promise to continue to stand up for fair housing opportunities for all people.

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LenderCity has deployed FinKube's Electronic Loan Services Assistant, a chatbot for interacting with prospective borrowers on the LenderCity website.

"The technology enabled us to offer a high-tech, high-touch experience by leveraging technology to reduce cost," said Gregg Harris, principal at LenderCity. "It enabled us to reduce the work the loan officer does up front. The chatbot provides assistance to borrowers that have questions or need information. That means, we don't have to make a person available to answer their questions."

[caption id="attachment_9220" align="alignright" width="225"] Greg Harris[/caption]

Now used to qualify leads, in the future, LoanCity will use ELSA to help borrowers with frequently asked questions, fill out a loan application or get a rate quote. So far,  however, just a few months into the implementation, 20% of consumers use ELSA, rather than filling out a form. That percentage will increase with time and because ELSA provides assistance to users that have questions or need more information, without having to make a call or search the website.

"Consumers want immediate answers to their home finance questions and ELSA is smart enough to provide the information they need and gather the information we need to prequalify the borrower," said Harris.

ELSA uses artificial intelligence and machine learning to enhance the origination process from origination to close. It’s powerful enough to gather borrower information, render decisions, and automate time-consuming tasks.

LoanCity anticipates attaining significant efficiency and costs savings--on client acquisition and service costs. For instance, the organization has assigned a loan officer to answer questions from borrowers--which it will no longer have to do. And there are other efficiency benefits as well.

"We anticipate over time being able to reduce customer acquisition costs by 50 percent to 80 percent, engagement by 500 percent, reduce customer service costs 50 percent to 80 percent, and increase loan retention by a factor of six," said Harris. "And the technology puts me on the map to compete with bigger players,"

 

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