“Though most media signs point to a never-ending real estate boom, actual investor intentions from the Generations survey indicate fewer assets allocated to future real estate purchases,” said Beverly Moore, managing director of Wealth Strategies at MainStay Investments. “Whether or not this means the real estate market is cooling off, there are some very real opportunities out there for advisors to help investors select other investment options for those assets, because if they aren’t sinking large sums into real estate, they have to put it elsewhere,” she continued.

As investors move away from investing in real estate and non-retirement assets, non-retirement assets for Boomers declined to 57 percent in 2005 from 79 percent in 2004. Indications point to the strong interest in fund-of-funds, which pool mutual funds together to achieve and enhance asset allocation: Three-quarters of GenXers and Boomers, and 57 percent of Matures are interested in investing in mutual fund-of-funds

“This next generation of pooled investment products—or fund-of-funds—are low-maintenance and well diversified," Moore said. "We're seeing a strong demand among investors for professional management and advisory services. Whether we're talking about long-term planning or asset allocation, the percentage of investors seeking do-it-yourself solutions is definitely on the decline."

The survey also found that half of GenX investors, 46 percent of Boomers and 45 percent of Matures said they “need the help of professionals,” up roughly 10 percent across the board from 2004. Investors also acknowledge the need for more comprehensive financial planning. Among investors who do not currently have a financial plan, 56 percent of GenXers and 39 percent of Boomers expect to need a financial plan in the future, up from 50 percent and 35 percent respectively in 2004, the survey said.

Reversing the trends of 2004, investors across all age groups are seeking conservative investment options. The market in the 12 months preceding the survey in 2004 (New York–based Standard & Poor’s 500 return March 2003 through February 2004: 38.54 percent) may have led investors to feel comfortable with a more aggressive approach. This was followed by a much weaker 12-month period ending in February 2005 (6.96 percent). Meanwhile, 26 percent of GenXers report their investment styles as conservative in 2005, up from 19 percent in 2004. Similarly, 40 percent of Boomers and 49 percent of Matures identify themselves as conservative investors, up from 28 percent and 39 percent, respectively, in 2004, the survey said.

“Investors who change their investment approach—and shift assets as a result—based on the recent history in the capital markets are far more likely to do damage to their long-term financial well-being than those who follow a comprehensive financial plan,” Moore said. “We’re seeing a real disconnect between investors’ attitudes and their lifetime goals. They’re driving by the rear-view mirror.”

The survey was conducted by an online research firm during the spring of 2005 who polled 1,537 individuals ages 26 to 82 on their investment attitudes, behaviors, objectives and priorities. Respondents were U.S. residents with a total net worth of at least $100,000.
(Back To Top)

In the District of Columbia, organizations receiving grants included Children's Law Center Inc.; DC Action for Children; Latin American Youth Center; and Community Foundation for the National Capital Region.

In Maryland, several organizations received funding for their programs including National Center for Children and Families; Crossway Community; St. Stephens Economic Development Corp.; and Court Appointed Special Advocate (CASA)/ Prince George's County Inc.

Among the grantees in Virginia were Stop Child Abuse Now (SCAN) of Northern Virginia; Center for Multicultural Human Services; Northern Virginia Family Service; and Voices for Virginia's Children.

****
SunTrust Mortgage Inc., Atlanta, ranked highest in a study by J.D. Power and Associates, Westlake Village, Calif., of mortgage servicers. The study, “Highest in Customer Satisfaction among Mortgage Servicing Companies, ” ranked more than 40 national mortgage servicers based on responses from more than 9,000 home mortgage customers across the United States. In the J.D. Power study, servicers were evaluated in key areas including account review and administration, billing and payment process and customer service.

****
Oak Street Mortgage, Carmel, Ind., selected GMAC Mortgage Corp. Horsham, Pa., to subservice its mortgage loans on a private-label basis. Under the arrangement, GMAC Mortgage will subservice the loans that Oak Street Mortgage originates for resale to third parties.

Oak Street Mortgage will use GMAC Mortgage's DSU platform, which allows GMAC Mortgage to service multiple mortgage loan products.
(Back To Top)

Proceeds from the CapitalSource loan will fund the acquisition, pre-development costs and the construction hard costs associated with the conversion.

The development plan includes maintaining the existing “landmarked” exterior of the building and construction for the addition of five floors. The ground floor of the former church, located in the Greenwich Village neighborhood of New York City, will include two garden apartments with outdoor patios and the fourth and fifth floors with two penthouse duplexes and terraces, based on the plans.

"Renovations and conversions of historically unique, ‘non-traditional’ assets have been gaining the attention of developers and have proven acceptance in the market," said Chris Kelly, managing director and head of real estate at Capital Source. Kelly said St. Anne's Church in Brooklyn and the Pythian Temple on West 70th Street in Manhattan are examples of this trend to renovate churches into residential condominiums.

Sales on with sales ranged from $1,100 to more than $1,600 per square feet on average. “We were encouraged by the borrower's successful track record, as well as the market characteristics of the Greenwich Village neighborhood, which has recently been driven by the introduction of numerous high-end condominium and rental properties,” Kelly said.

CapitalSource Finance’s structured finance business increased its existing line of credit to $75 million last month for Sovereign Investment Co., an affiliate of Marcus & Millichap Co., Encino, Calif. Sovereign focuses on net lease portfolio transactions to “unlock the value of real estate.”
(Back To Top)

The first annual Corporate Diversity Leadership (CDL) Awards will be presented to the winners at MBA's 92nd Annual Convention and Expo in October.  Awards will be given in two categories to acknowledge both the best overall program and the diversity champion of the year. An award winner and honorable mention may be awarded for each of two classes within each category: national impact and regional/local impact.

"It is important for the mortgage banking industry to work to close the minority homeownership gap, and a key step in that process is for companies to identify and implement ways to increase the diversity in their own employee base," said Jonathan Kempner, president and CEO of MBA. "With a diverse workforce that more closely reflects the communities that companies serve, our industry will be better able to help all consumers achieve the dream of homeownership. The CDL awards recognize companies that are dedicated to this goal."

The CDL Awards will be given in two categories. 

The Best Overall Corporate Diversity Program Award category recognizes the corporate diversity programs within real estate finance companies that best exemplify innovation and effectiveness, and include both employee- and customer-focused initiatives. Award selection will be based on the following:

• Program development and organization history;
• Organization and employee acceptance;
• Obstacles overcome while implementing the program;
• Creativity and innovation in program delivery, marketing and assessment; and
• Beneficial impact to your organization and the mortgage banking industry.

The Diversity Champion of the Year Award category recognizes an industry professional who facilitates, advocates, and promotes diversity within the industry, his or her company and the community. Award selection is based on:

• The role nominee has played in developing and/or launching diversity initiatives;
• Specific obstacles and/or challenges overcome; and
• Outstanding accomplishments and/or innovative projects completed during the past year.

"So many companies in our industry, both commercial and residential, have innovative programs and initiatives designed to broaden the diversity of their workforces," said Jeannette DeLaGarza, senior vice president and managing director with Wells Fargo Bank and a member of MBA's Diversity Committee. "The CDL Award program is a way for MBA to shine the spotlight on companies and individuals who are leaders in this arena."

Nominations will be reviewed by a selection committee comprised of representatives from MBA's Commercial and Residential membership, the Chair of the MBA Diversity Task Force, a representative from the U.S. Department of Education, and a representative from Department of Finance of Howard University.

Winners will be notified in September and award presentations will take place at MBA's
92nd Annual Convention & Expo from October 23-26 in Orlando, Fla., and all winners will also be recognized during MBA's Commercial Real Estate Finance/Multifamily Housing Convention & Expo February 5-8, 2006 in Orlando.

All entries must be accompanied by an application fee of $100 ($150 for nonmembers). All fees are donated to the Path for Diversity Scholarship program. Visit www.campusmba.org/CDLawards to download the application.
(Back To Top)

MBA Participates in RESPA Small Business Roundtable
On August 4 the Mortgage Bankers Association , represented by David Bird, president of Heartland Mortgage and Ken Markison, senior director and regulatory counsel, participated in a RESPA Small Business Roundtable co-sponsored by the HUD and the Small Business Administration Office of Advocacy.  The 40 participants included mortgage brokers, title agents and insurers, real estate firms, credit bureau owners, appraisers, some mortgage lenders and their trade association representatives, as well as representatives from HUD and SBA.

Following HUD's PowerPoint discussion concerning the 2004 rule HUD finalized but withdrew from OMB and its description of the 2004 Good Faith Estimate and Packaging (MPO) form, a spirited discussion ensued.  Mortgage broker representatives objected to disclosure of the yield spread premium and suggested that mortgage brokers should have the same disclosure requirements as lenders. 

MBA indicated that while it supported a level playing field disclosure for brokers and lenders, disclosure of lenders' yields was neither warranted nor appropriate considering borrowers had different expectations in lender and broker relationships, the disclosure was not of a settlement fee and such a requirement would not be legally supportable under RESPA 

Most of the representatives at the roundtable supported revisions to the Good Faith Estimate and criticized HUD's packaging proposal on a variety of grounds.  These included that packaging was not transparent and would harm small business.  MBA indicated that it was considering a variety of approaches, that it long supported simplifying the settlement process, which packaging and a simpler GFE could accomplish.  MBA also suggested that volume discounts could help lenders and others shop for those services for which consumers do not shop.  Finally, MBA pointed out that requiring the disclosure of every cost item increases lenders' costs and does little for consumer understanding. MBA suggested that either a package or a disclosure of the major categories of costs would be simpler and more useful for consumers.

MBA members will participate in the next HUD SBA Roundtable in Fort Worth, Texas on August 11 .

For more information, please contact Ken Markison at (202) 557-2930 (kmarkison@mortgagebankers.org).

MBA Solicits Member Views on Reporting Internal Control
During a conference call earlier this week, MBA solicited members' reactions to recent efforts by the Public Company Accounting Oversight Board (PCAOB) and the Securities & Exchange Commission (SEC) to improve the quality, and reduce the costs of, audits of internal control conducted by auditors of public companies pursuant to Section 404 of the 2002 Sarbanes-Oxley Act.  MBA filed a letter on February 25, recommending that the PCAOB and SEC work to reduce the high costs of these audits by, among other things, encouraging more reasonableness by auditors in the planning and performance of internal control engagements. 

The primary purpose of the call was to determine whether MBA should send a follow-up letter to the PCAOB and/or SEC at this time.

Among the topics discussed during the call was whether guidance released by the PCAOB on May 16 relating to the proper conduct of such engagements is likely to address the concerns and recommendations expressed in MBA's February 25 letter. 

While several members agreed that it is unlikely that public companies' audit costs will decline by any measurable degree in 2005, they agreed also that it is too early to make a definitive statement to that effect.  They recommended instead that MBA solicit member opinions again later in 2005, when the impact of the PCAOB's new guidance and the costs of 2005 audits are better known and understood.  Consequently, MBA is planning to hold another call on this matter later in the year.

For more information about this issue, please contact Alison Utermohlen at (202) 557-2864 (autermohlen@mortgagebankers.org). 

MBA Staff Attends ALEC's Annual Meeting
This week, MBA staff attended the American Legislative Exchange Council's (ALEC), annual meeting in Grapevine, Texas.  ALEC is the nation's largest bipartisan individual membership association of state legislators.

President Bush addressed the conference on Wednesday.  MBA staff attended various committee meetings, including the Commerce, Insurance & Economic Development Committee and the Banking and Finance Subcommittee.  These committees focused on state legislative issues relating to the application of federal Sarbanes-Oxley standards to state insurance regulation and breaches of personal information.

For more information, please contact Beth Percynski at (202) 557-2866 (bpercynski@mortgagebankers.org)

MORPAC Western Swing
MBA MORPAC Chair David Kittle and MBA MORPAC Director Julie Eddy spent last week in Los Angeles, San Francisco and Seattle discussing MORPAC with MBA member companies.  It was a very successful week, as the pair secured four new company campaigns and kicked off two additional campaigns.

MORPAC staff and MORPAC committee members are happy to lend their time to speak with you and your employees about MORPAC and the importance of getting involved.  If you are interested in running a MORPAC company campaign, please contact Julie Eddy at (202) 557-2808 or jeddy@mortgagebankers.org.

MORPAC Fundraisers Outside the Beltway
A number of MBA members have shown interest in hosting fundraisers for Members of Congress in their home districts.  On the evening of August 16, MBA Chairman Mike Petrie, CMB and MBA Board of Directors Member Bob Griffith will host a fundraiser for Senate Banking Committee Member Evan Bayh, D-Ind ., in Indianapolis.  The reception will take place at Petrie's home from 6:00-8:00 p.m.  In addition, MORPAC Committee Vice Chair Teresa Bryce and Scott Stern, CEO of Lenders One, will co-host a reception for House Financial Services Committee Member William Lacy Clay, D-Mo ., in St. Louis on the evening of August 18th. 

Marilyn Brown, liaison from the New York MBA, will host a joint fundraiser for Rep. Joe Crowley, D-N.Y., and Rep. Vito Fossella, R-N.Y ., in Manhattan in September. Crowley and Fossella are both members of the House Financial Services Committee.  Paul Reich of Ivanhoe Financial will host an Orlando fundraiser for Rep. Tom Feeney, R-Fla.,  who is also a member of the House Financial Services Committee, in October. 

If you are interested in attending any of these events or you are interested in hosting a fundraiser for a member of Congress, please contact Julie Eddy at (202)557-2808 or jeddy@mortgagebankers.org
(Back To Top)