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Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
Investments Lending

Monday Morning Cup of Coffee: Was TRID worth it to homebuyers?

Questioning Fed policy, investing in LA property and a really filthy house

January 18, 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.

Today's federal holiday commemorates Martin Luther King Jr., and banks and the post office are closed, as well as the stock and bond markets. That could be a good thing after the losses seen in the Wall Street bloodletting last week. The week ended with oil less than $30 a barrel and other stocks following the energy sector off a cliff. From Reuters:

"Pain was dealt widely, with the day's trading volume unusually high and more than a fifth of S&P 500 stocks touching 52-week lows. The major S&P sectors all ended sharply lower. The Russell 2000 small-cap index dropped as much as 3.5 percent to its lowest since July 2013."

That Wall Street craziness has some analysts questioning the wisdom of the Fed's interest rate policy decisions in December. The Wall Street Journal ran a blog on Sunday that asks Is the Market Right that the Fed is Wrong? Fed watchers will be eager to see what, if anything, the Fed does at the next FOMC meeting Jan. 27.

All that for nothing? A story in the Boston Herald on Sunday examines whether homeowners are using the new Loan Estimate — mandated in the CFPB's TILA-RESPA Integrated Disclosure rule beginning last October — to shop around for lenders with the best rate, fees, etc. The story interviewed several mortgage lenders and found no evidence of this kind of comparison shopping. From the story:

Bill Emerson, chief executive of Quicken Loans, the country’s second highest volume mortgage lender, says his firm is seeing no surge in shopping by applicants using the Loan Estimate. “I don’t think consumers are changing the way they shop simply because” they have a new tool to do so, Emerson said in an interview. The process of buying and financing a home is so complicated and emotional that many people find it easier to simply locate a reputable lender quoting a good interest rate, he said, and go with that lender rather than making multiple applications and comparing Loan Estimates.

Paul Skeens, president of Colonial Mortgage Group in Waldorf, Md., says barely 5% of his clients are using the Loan Estimate to comparison shop, while 95 percent “are doing it the old way.” Seattle area mortgage banker Charley Murphey told me he has “heard of no borrowers walking away with a Loan Estimate in hand to go shopping for a better deal.’’

That's disappointing news to the mortgage industry, which has turned its processes upside down to adhere to the new rules and give consumers a clear idea of what they owe. The Boston Herald article ends by noting that the CFPB is hopeful that trend will change soon. “As the marketplace adapts to the new rule,” said spokesman Sam Gilford, “we hope to see more consumers shopping around for loans, just like they shop for houses.” Read the whole story here.

Looking to invest in Los Angeles? The LA Times ranked the city's hottest ZIP codes  based on the change in the median price per square foot in the last year. Classic areas like Manhattan Beach (up 21.4%) and Santa Monica  (up 37.5%) feature median homes at $2.1 million and $3.2 million respectively. But other neighborhoods on the list are more affordable.

Compton, up 20.6% and with a median price of just $274,000, represents a real bargain. And that's not because the area is riddled with crime as in past years. According to the piece, "Compton was an epicenter of the housing bust as buyers who financed their homes with subprime loans went belly up. But prices have been rebounding for years, as has the city's reputation. Crime has plummeted and after once shunning the city, large retailers have moved in." Read the whole story here.

Looking for a filthy house in Houston? Realtor Paul Gomberg might have just what you need. Gomberg is listing a house that looks nice enough from the outside, but offers a truly monumental amount of filth inside. As he puts it in this video, "Recently, 12 dogs, 6 cats and a pot-bellied pig lived here and converted this lovely home into a giant toilet." Make sure you watch long enough to see the play room.

No banks were closed by the FDIC for the week ending Jan. 15.

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