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Monday Morning Cup of Coffee: Welcome to 2016

Let's take a look back and a look ahead

January 4, 2016

Monday Morning Cup of Coffee takes a look at news coming across HousingWire’s weekend desk, with more coverage to come on bigger issues.

Well, since you’re reading this, it appears that we all survived another New Year’s Eve.

And whether you spent it crammed into Times Square like a sardine, hanging from the rafters at a secret underground rave, using Netflix to convince your kids that Jan. 1, 2016 actually starts at 9 p.m. on Dec. 31, 2015, or sitting at home on your couch and consequently falling asleep before the ball dropped, it’s now time to get geared up for 2016.

But before we move forward, let’s take a quick look back at 2015, the year of TRID.

The implementation of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures rule dominated the headlines here on HousingWire and other outlets for much of the year.

Early in the year, it was all about getting ready for TRID and all that it entailed. At first, the industry was preparing for an Aug. 1 implementation date, but that was pushed back – and then pushed back again.

Finally, Oct. 3 came and TRID came with it.

In the months after that, the effects of TRID were felt throughout the housing and mortgage industry.

The industry worried about how exactly the CFPB would be enforcing TRID, especially in these first few months, but late in 2015, the CFPB extended a bit of an olive branch, telling the Mortgage Bankers Association in a letter that became public that its first few months of examinations will lead to corrective actions instead of punitive ones.

So, now we can say goodbye to the year of TRID, but we must say hello to life with TRID, because like it or not, it’s not going away anytime soon.

But at least now, lenders can sleep just a little easier knowing that the CFPB isn’t planning to offer some carrots and not just sticks.

Now, let’s take one last look back at 2015, via the stock market.

The Dow Jones Industrial Average and the S&P 500 both finished 2015 with a “whimper” on Thursday with both indices snapping multi-year winning streaks.

In fact, the Dow-Jones posted its first annual loss since 2008.

Here’s Marketwatch on the end of the year in stocks:

U.S. stocks finished 2015 with a whimper Thursday as both the S&P 500 Index SPX, -0.94% and the Dow Jones Industrial Average DJIA, -1.02% snapped multiyear winning streaks. The Dow industrials fell 178.84 points, or 1%, to close at 17,425.03, a 2.2% decline on the year, snapping a six-year winning streak. The S&P 500 dropped 19.42 points, or 0.9%, to end the year at 2,043.94. The S&P 500's 0.7% decline over 2015 snapped a three-year streak of gains. Earlier Thursday, the index had traded fractionally higher for the year. Only the Nasdaq Composite Index COMP, -1.15% which closed down 58.43 points, or 1.2%, at 5,007.41 Thursday, saw a gain in 2015, advancing 5.7%.

The housing industry got bit of shock last Thursday, albeit not an unexpected one, when mortgage interest rates rose back above 4% for the first time in five months, according to the latest report from Freddie Mac.

But the news wasn’t quite as dramatic over on Zillow, where buyers were still quoted interest rates well below 4% in the week that ended Tuesday, Dec. 29.

From Zillow:

Mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow at 3.81 percent, up 6 basis points from last week.

The 30-year fixed mortgage rose throughout the week, reaching 3.86 percent on Saturday before falling to the current rate on Monday.

“Mortgage rates increased modestly early last week, mostly due to market anomalies associated with the holiday-shortened week,” said Erin Lantz, vice president of mortgages at Zillow. “We expect another quiet couple of days in mortgage markets this week.”

Looking ahead to 2016, DNAinfo.com presents 16 predictions for New York City’s housing market in 2016.

Among the 16 predictions: Ultra-luxury condos will see price cuts, high-end rentals in Manhattan will steal thunder from pricey condos, and baby boomers flock to the city.

Click here for a full look at DNAinfo.com’s full 16 predictions for NYC housing in 2016.

Another hot housing market is Denver, where some foreclosures are selling for so much more than what is owed on the house, there is $2 million in unclaimed funds from short sales.

Here’s the Denver Post on the situation:

If you've recently lost a house to foreclosure in Denver, you may be due some money, thanks to the city's red-hot real estate market.

The Denver Clerk & Recorder's Office is in possession of more than $2 million in excess funds owed to 62 homeowners who have been foreclosed on since 2012, officials said.

Excess funds occur when foreclosed homes sell for more than what was owed. Some people, though, never come forward to collect the extra money.

So far this year, the Denver Public Trustee has reunited $1.8 million in excess funds with its rightful owners. Denver expects to oversee about 700 foreclosures in 2015, down from 1,087 cases in 2014, officials said.

In some markets, like San Francisco, younger and first-time buyers basically can’t afford to buy anything, but in New Mexico, one homebuilder is doing its part to help younger renters become younger homebuyers.

In an article spotted by CoreLogic’s deputy chief economist, Sam Khater, the Albuquerque Journal spotlights a local builder that’s building smaller, “entry level” homes designed for first-time homebuyers.

From the Albuquerque Journal:

The low-priced end of the new home market is getting the flashback treatment by locally owned Twilight Homes, whose entry level product line called Eos New Homes is aimed at moderate-income households that want to make the jump from renting an apartment to owning a new home.

The $79,990 base price that Twilight is asking for its least expensive home near Los Lunas is like a step back in time to the late 1990s, when families could find a starter home for around $77,000 on Albuquerque’s Southwest Mesa.

According to the Albuquerque Journal report, the median home price in Albuquerque is approximately $236,500, placing these new homes on the lower end of the scale.

But just because they’re cheaper, doesn’t mean they’re cheap, according to Mike Fietz, one of the co-founders of the builder.

Again from the Albuquerque Journal:

The homes lack the bells and whistles that drive up home prices — it’s linoleum floors and laminate countertops in the kitchens, for example — but have the same construction quality and energy efficiency as Twilight’s more expensive move-up homes, said Mike Fietz, another Twilight cofounder.

“The most important thing to note is these homes are not cheap, they’re affordable,” he said. “There’s some uniqueness to this.”

And finally, no banks were reported closed by the Federal Deposit Insurance Corporation for the week ending Jan. 1.

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