Challenger bank Current doubles customers in six months

The 5-year-old company, which recently raised $131 million, says its strong growth reflects the timeliness of its mission: helping consumers who live paycheck to paycheck build wealth.
Source: American Banker

Executives must know their members when a crisis strikes

There is a difference among various demographics on what offends them most. That means credit unions must understand their member base and what drives their engagement and retention.
Source: American Banker

Banks push back on OCC’s bid to ban lending bias

The industry is asking for more time to comment on a regulatory proposal that aims to prohibit banks from denying services to oil and gas companies and other firms in politically sensitive industries.
Source: American Banker

These markets are attracting the most out-of-state real estate investors

The pandemic has shifted the pecking order of the real estate industry’s location-location-location axiom for many homebuyers — high-cost and high-density urban is out, while suburban is back in vogue and rural is experiencing a bit of a revival.

Many real estate investors were serendipitously ahead of this shift even before the pandemic started, driven by both affordability and an affinity for overlooked markets.

“Currently I’m in some of the Southern markets like Alabama, Mississippi, Texas, Indianapolis, Ohio. Those markets I’m able to put a little bit less money in but also make a comfortable amount of return,” said Bijan Green, a Denver-based real estate investor. “A deal for me is a property I can buy for under $100,000, typically.”

Green gave the example of a Fort Wayne, Indiana, property he purchased on Auction.com via a bank-owned (REO) auction in July 2019. Following extensive renovations that took nearly a year to complete, the property was resold to an owner-occupant buyer in July 2020.

Located 125 miles northeast of Indianapolis and about 170 miles southeast of Chicago, Fort Wayne is in Allen County — a top 50 market for out-of-state buyers like Green, according to data from the Auction.com marketplace.

The data shows 30% of all properties purchased via online REO auction in Allen County were to out-of-state buyers, ranking 36th highest among 198 U.S. counties with at least 10 online REO auction sales through the first 10 months of 2020. The 30% of purchases going to out-of-state buyers in Allen County so far in 2020 is up from 21% in 2019 and 11% in 2018.

Allen County fits a similar profile to the top five counties with the highest percentage of out-of-state buyers so far in 2020: counties outside of major metropolitan areas with populations between 60,000 and 200,000. Three of the four counties are home to an army base or other army facility.

Those top five counties were Comanche County/Lawton, Okla. (75% out-of-state buyers); Calhoun County, Ala. (60%); Richmond County/Augusta, Ga. (56%); Salem County, N.J. (56%); and Rock Island County/Quad Cities, Ill. (54%). See sidebar for more details on these markets.

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Investing Where the Heart Is

Out-of-state buyers often have a personal connection or special affinity for the markets where they are purchasing, even if those markets are literally across the country. San Francisco-based real estate investor Will Wenzel started purchasing distressed properties in his hometown county of Fairfield County, Conn. — 2,959 miles away from San Francisco — when he had a “Eureka Moment” shortly after the declaration of the pandemic in March.

“We wanted to see the area do well. We wanted to invest capital back into the area in which we grew up,” said Wenzel, who is partnering in the venture with a long-time friend who is a designer and general contractor in Connecticut. “When the pandemic started, we realized that we were at the beginning of a great suburbanization where the millennial generation is moving to the suburbs.”

The Auction.com analysis shows that 58% of online REO purchases made by buyers located in California were for out-of-state properties, the fourth highest of any state behind Utah, Colorado and Arizona. In some coastal counties such as Contra Costa, Los Angeles, Orange and San Diego, the percent of buyers purchasing out of state was above 60%.

Wenzel’s willingness to start buying in the uncertain days and weeks immediately following the pandemic declaration paid off.

“There was just no one else buying,” he said. “It was just a once-in-a-lifetime opportunity.”

Wenzel said competition for distressed properties has picked back up since those early days of the pandemic, but he still sees plenty of opportunity for these value-add investing opportunities given the broader millennial-driven suburbanization trend.

“You have the housing stock sitting on the market and it’s kind of obsolete in terms of being useful to the next generation,” he said, adding that he and his business partner completely renovate the homes they purchase to make them like new construction once completed. “These suburbs, they’ve really been lacking investment the last 10 years. They need people like us to come in and invest with capital and build for the future.”

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Top 5 Counties for Out-of-State Buyers

Comanche County, Oklahoma
Located on Interstate 44 about 80 miles south of Oklahoma City and about 200 miles north of Dallas-Fort Worth, Comanche County had a population of 120,749 in 2019, according to data from the Census Bureau. The county experienced a net population increase of 221 people in 2019, its biggest increase since 2012. Lawton, Oklahoma is the primary city in the county and adjacent to the Fort Sill army base.

Auction.com data shows that 75 percent of all REO properties in Comanche County that sold via online REO auction so far in 2020 went to out-of-state buyers — up from 45 percent in 2019 and 29 percent in 2018. The average sales price for REO properties sold so far in 2020 in Comanche County was $28,240 — just $20.10 per square foot.

Calhoun County, Alabama
Calhoun County has attracted the nation’s second highest share of out-of-state buyers so far in 2020 despite a slight decrease in population in 2019. Census data shows a population of 113,605, down by 726 from 2018, for the county, which is located off Interstate 20 about 70 miles east of Birmingham and about 100 miles west of Atlanta. The county seat is Anniston, home to the Anniston Army Depot.

Sixty percent of REO properties purchased via online auction in Calhoun County in the first 10 months of 2020 went to out-of-state buyers, according to the Auction.com data. That was up from 20 percent in 2019 and 50 percent in 2018. REO properties in Calhoun County have sold for an average price of $30,808 so far in 2020. That amounts to $24.10 per square foot.

Richmond County, Georgia
Home to the city of Augusta, Georgia — host of the Masters Golf Tournament — Richmond County is the most populous of the top five counties for out-of-state buyers. Census data shows a population of 202,518 in 2019 and a net population gain of 851 compared to 2018. Augusta is located about 150 miles southeast of Atlanta and about 160 miles northwest of Charleston, South Carolina. The Fort Gordon U.S. Army base is also located in Richmond County.

Auction.com data shows 56 percent of REO properties in Richmond County that sold via online auction in the first 10 months of 2020 went to out-of-state buyers, up from 22 percent in 2019 and 31 percent in 2018. The average price for REOs sold so far in 2020 in Richmond County was $67,880, or $40.80 per square foot.

Salem County, New Jersey
Salem County is the only county among the top five for out-of-state buyers that posted a decrease in its share of out-of-state buyers through the first 10 months of 2020 compared to 2019. The Auction.com data shows 56 percent of REO properties sold so far in 2020 went to out-of-state buyers, equaling the share in Richmond County, Georgia, but down from 60 percent in 2019.

With a population of 62,385 in 2019, Salem County is also the least populated of the top five counties for out-of-state buyers. The county is located only about 45 miles southwest of Philadelphia and about 120 miles northeast of Washington, D.C. Census data shows a net population loss of 361 people in 2019. The average price for REO properties sold via online auction in the first 10 months of 2020 was $70,405, or $44.90 per square foot.

Rock Island County, Illinois
Home to two of the four cities that comprise the Quad Cities on the Illinois-Iowa border, Rock Island County had a population of 141,879 in 2019, down by 742 people from 2018, according to the Census Bureau. The county is home to the Rock Island Arsenal, the largest government-owned weapons manufacturing arsenal in the United States.

The Auction.com data shows that 54 percent of all REO properties purchased via online auction in Rock Island County in the first 10 months of 2020 were to out-of-state buyers. That was up from 40 percent in 2019 and 42 percent in 2018. The average price for REO properties sold via online auction so far in 2020 was $45,719, or $35.40 per square foot

The post These markets are attracting the most out-of-state real estate investors appeared first on HousingWire.

Source: HousingWire Magazine

New home sales juggernaut continues

Sales of new homes rose to an annualized rate of 999,000 in October – 0.3% below September’s 1,002,000 revised rate but still a massive 41.5% higher than the same time last year, according to the Census Bureau and the Department of Housing and Urban Development.

With October’s data in, new home sales have had the strongest three-month stretch since mid-2006, with each month falling just short of 1 million. However, demand has construction playing catch-up, as the estimate of new houses for sale at the end of October was just 278,000. This represents a supply of 3.3 months at the current sales rate.

While Wednesday’s report reflected the strong appeal of new homes, supply constraints will likely limit the growth of new home sales going forward, said Doug Duncan, Fannie Mae’s chief economist.

“Sales are increasingly being driven from homes not yet under construction. The share of homes sold but not yet started rose for the third straight month and now represents the highest share of total sales since 2005, while the number of fully completed homes sold hit the lowest level since the COVID-19-related shutdowns this past April,” Duncan said.

Record low mortgage rates, tightened supply and the allure of a brand new, never-lived-in home brewed a hot summer season that continued straight into Fall, said Matthew Speakman, economist at Zillow.

“Homebuilders are certainly reading the tea leaves,” Speakman said. “A measure of new home sales expectations for the next six months is at a record high.

“And more sales means more construction means more sales: A large share (38.5%, up from 28.5% a year ago) of the new homes sold in October were not yet under construction,” Speakman continued. “That means that both a good portion of last months’ housing starts — which were up almost 5% from September — very likely represent closed sales from several months ago, and that today’s strong sales figures bode well for continued strong building activity going forward.”

National Association of Home Builders chief economist, Robert Dietz, said a recent analysis showed that the gap between construction and sales was at an all-time high in early Fall. As a result, the NAHB is forecasting an acceleration in single-family starts with some slowed pace of growth as new home sales work to catch-up.

Duncan though, says the current sales pace may be unsustainable.

“We continue to project a convergence in coming months via a softening of sales while housing starts show comparative strength. However, due to the revisions to past months’ numbers and third quarter sales coming in stronger than previously thought, our fourth quarter forecasts for both new sales and new housing starts will likely be revised upward,” Duncan said.

The median sales price of new homes was $330,600, while the average sale price was $386,200, according to census data.

The post New home sales juggernaut continues appeared first on HousingWire.

Source: HousingWire Magazine

What Yellen as Treasury Secretary would mean for housing

U.S. Treasury

As early as 2005, a prescient Janet Yellen foretold that systemic risk in the housing market could send the U.S. economy plunging into a historic recession. Fifteen years later, as Treasury Secretary, Yellen looks likely to get the chance to tackle another recession, one in which the housing market is arguably stronger than ever.

President-elect Joe Biden on Monday nominated Yellen to lead the Treasury Department as Treasury Secretary, where, if confirmed, she will be tasked with spearheading the revival of an economy devastated by the coronavirus pandemic – with 12 million people out of work, slowing job gains, and 3 million homeowners in foreclosure. 

Yellen’s nomination is expected to appeal to Democrats, Republicans, and Wall Street – all of which have worked with and expressed admiration for Yellen in the past. She would be among the few Biden cabinet picks likely to pass a nomination hearing with comparatively few bumps and bruises. 

“For them, recommending her for Treasury Secretary was certainly a bipartisan gesture in the sense that Biden essentially skipped the opportunity to make a political statement,” said Tim Rood, head of industry relations for SitusAMC. “Janet Yellen is someone I think is universally accepted and admired.”

More critically, a Yellen appointment signals that the Biden administration would push to increase federal spending to jumpstart the economy, lobby the Federal Reserve to keep interest rates low, and slow-roll any Trump administration plans to move the government-sponsored entities out of conservatorship, several mortgage and housing industry veterans told HousingWire. 

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The post What Yellen as Treasury Secretary would mean for housing appeared first on HousingWire.

Source: HousingWire Magazine

Reducing mortgage defaults starts with beefing up housing supply

Default risks soar in minority neighborhoods during challenging economic times because, data shows, homes there are overpriced relative to incomes. Zoning and other changes could make loans more affordable by boosting housing stock and driving down prices.
Source: American Banker

Record low mortgage rates hold steady at 2.72%

The average U.S. mortgage rate for a 30-year fixed loan remained unchanged at 2.72% this week, Freddie Mac said in a report on Thursday – the second week in a row rates have sat at the lowest recorded level in the survey’s near 50-year history.

The average fixed rate for a 15-year mortgage also remained unchanged from last week at 2.28%.

After another week at the record low, there have now been 18 consecutive weeks when average mortgage rates have been below 3%. This also marks the second time in the survey’s history rates have fallen below 2.75%.

These consistently low rates are advantageous for borrowers – putting 19.4 million “high quality” candidates up for refinance savings eligibility, according to a recent report from Black Knight. With current rates, Black Knight estimates some homeowners could save up to $400 or $500 a month.

Last week alone, both the refinance index and the share of refinance applications were at their highest levels since April, as rates drew more conventional loan borrowers in to the market, Joel Kan, MBA’s associate vice president of industry and economic forecasting said.


Leveraging eClosings to Effectively Manage Increased Loan Volumes

With no end in sight to record low rates and the increased loan volume, lenders must streamline workflows and accelerate time to close. Evolving from traditional closings to hybrid closings to full eClosings can help lenders process more loans at a faster pace without overwhelming their resources.

Presented by: SimpleNexus

“Mortgage rates remain at record lows and while that has fueled a refinance boom, it’s been driven mainly by higher income borrowers. With about 20 million borrowers eligible to refinance, lower- and middle-income borrowers are leaving money on the table by not taking advantage of low rates,” said Sam Khater, Freddie Mac’s chief economist.

However, Khater noted the homebuying surge has created a seller’s market, where inventory is at a record low and home prices are rising, beginning to offset the benefits of the low rates.

With so many borrowers jumping at the chance of a record-low rate, home prices are responding to the demand. The S&P CoreLogic Case-Shiller index covering home prices of all nine U.S. census divisions rose 7% in September from a year ago, the greatest year-over-year gain since 2014.

The post Record low mortgage rates hold steady at 2.72% appeared first on HousingWire.

Source: HousingWire Magazine

Achieva Credit Union lands fourth merger in 10 years

Coast 2 Coast Financial Credit Union has agreed to join the Florida-based Achieva, which previously acquired two community banks.
Source: American Banker

High hopes for Yellen; JPMorgan fined $250 million by OCC over weak controls

Praise for the former Fed chair as she confronts a troubled economy as presumptive Treasury secretary; the fine is the bank’s second large penalty in the past three months.
Source: American Banker