(Orawin Velz is director of economic forecasting in the Mortgage Bankers Association’s economics and research department. She provides commentary and analysis on key monthly economic indicators. She can be reached at ovelz@mortgagebankers.org.)
(Back To Top)

According to more recent data from the Mortgage Bankers Association, at least 35 percent own their house outright, with no mortgage, while 50 percent of homeowners have fixed-rate debt only, with no sensitivity to interest rates and payment strain. That leaves about 15 percent, of which about 8 percent are jumbo loans or those who have other mortgage products.

The survey also includes information on the characteristics of the housing units or properties, including: location, year built, year acquired, purchase price and current value, age restrictions, recent capital improvements, and any receipt of subsidy or assistance. The basic demographics of the owners was collected including; age, race, sex, Hispanic/Latino origin, veteran status and income.

For rental properties, information is reported on rental income, vacancy losses, real estate taxes, costs for maintenance and repairs, utility and fuel expenses, administrative and management expenses, capital improvement expenditures and legal form of ownership.
(Back To Top)

For more information on this article, visit www.mortgagebankingmagazine.com.
(Back To Top)

The first joint venture is between Cornerstone Housing LLC and the Danville Redevelopment and Housing Authority (DRHA); the second is between Cornerstone and the Portsmouth Redevelopment and Housing Authority (PRHA). The new developments parallel recent efforts by both cities to redevelop and revitalize their historic downtowns through programs targeting specific nearby development zones.

The redevelopment programs look to incorporate housing designs that resemble the best architectural samples from each respective area, while maintaining complex affordability. The programs also encourage resident self-sufficiency services to assist tenants with the eventual goal of homeownership. The new developments are part of HUD’s HOPE VI program, a program created to transform distressed public housing into new, vibrant mixed-income communities.

“In many cases, the revitalization process not only involves the rehabilitation of buildings, but the creation of an entirely new community with new homes, services and opportunities,” said Ryan Sfreddo, senior vice president at Related Capital.

In the Danville transaction, Related Capital provided $2 million in equity in exchange for tax credits generated by the $5-million development of Seeland Road One, an affordable housing development of 31 single-family homes. The complex also received $2.8 million in HOPE VI funds and $200,000 in financing from DRHA.

Seeland Road One represents the second phase of Seeland Crossing, a multi-phase HOPE VI development comprised of rental and for-sale units along Grant Street and Seeland Road in Danville. Seeland Crossing will feature designs similar to Danville’s historic structures in traditional, single-family style.

Extensive in-unit amenities will be similar to those at Westbury 3A, as will social services which will be provided by DRHA. Common area amenities will include an existing community center with kitchen facilities, and a First Tee golf training facility open to the neighborhood. One- to three-bedrooms units will be housed in cottages and duplexes ranging up to 1,260 square feet. All of the units will be restricted to tenants earning 40 percent or less of the area median income.   

The second transaction involves $7.6 million to develop Westbury 3A in Portsmouth. The development, 59 single-family homes, duplexes and triplexes, is the third phase of Westbury, a $50-million, multi-phase HOPE VI redevelopment comprised of rental and for-sale units along County Street and South Street. The redevelopment replaces the 663-unit Ida Barbour public housing with a signature Portsmouth neighborhood reflecting architectural styles represented throughout the city. It is the first community of its kind in the area and is part of the City’s long-term strategic plan for community and economic development, “Vision 2005”, implemented in 1993. Earlier phases of the new complex have been highly successful.

Related Capital provided $3.5 million in equity in exchange for tax credits generated by Westbury 3A. The complex also received a $2.7 million HOPE VI loan and $1.3 million in financing from PRHA.

Westbury 3A is located in downtown Portsmouth, across the Elizabeth River from Norfolk. The complex is within a growth corridor, with the Norfolk area labeled a “Boom Town” by Forbes, owing in part to a 31 percent increase in home prices in the past three years. In keeping with this need, rents at Westbury 3A will be more than 80 percent lower than area market-rate properties.

The complex will consist of 59 units in one-story cottages, duplexes and triplexes. One- to three-bedroom units will be larger than competing properties, totaling up to 1,400 square feet, with all of the units targeted toward residents earning 60 percent or less of the area median income. The architectural designs will be “traditional neighborhood” style with a single-family image, in keeping with the theme of earlier phases of the development. Future phases will include rental and homeownership units, as well as commercial space.

Westbury 3A’s amenities will include a frost-free refrigerator, garbage disposal, dishwasher, washer/dryer connections, central air conditioning, mini-blinds, wall-to-wall carpeting in living areas, porches/balconies and a playground. Social services, to be provided by PRHA, will include family self-sufficiency programs such as job placement and adult education and after-school programs.

“In each of these sites, we’ve built on the strongest of the existing urban fabric to renovate the neighborhood, and integrate it into the larger community economy,” said Mary Roosevelt, director of program management and operations with Cornerstone Housing.
(Back To Top)

Hear from a diverse group of leaders who understand the intricacies of the real estate finance industry.  These sessions focus on government housing programs, diversity, emerging markets, and key legislative and regulatory issues.
  
Monday, October 24, 2:00 p.m.-3:15 p.m.
What's Going on with the Government Housing Programs?
Hear from and ask questions of program leaders as they work to create more affordable housing opportunities for all Americans while protecting consumers from mortgage fraud and abuse.
 
Mortgage Fraud Against Lenders: The Growing Threat to Lenders and Homeowners
The real estate finance industry has proven to be a backbone of the U.S. economy and homeownership is one of the keys to wealth for American families. Yet the fraudulent acts of a few can threaten the stability of the system for all. Mortgage fraud against lenders can be financially devastating to lenders and to consumers-putting the American dream of homeownership at risk.  This roundtable discussion focuses on the status of mortgage fraud and where the industry and government need to go next in combating this threat.
 
3:30 p.m.-4:45 p.m.
Why Diversity Matters: Important Business Rules and Reasons
Educating managers and staff on working effectively in a diverse environment helps everyone prevent discrimination and promote inclusiveness. There is evidence that managing a diverse work force well can contribute to increased staff retention and productivity. Join us for this roundtable discussion as we examine the issues surrounding diversity and share ideas that work.
 
Tuesday, October 25, 2:45 p.m.-4:00 p.m.
Customer Retention in a Shrinking Marketplace
As the refinancing tide has ebbed lenders have begun the search for new ways to increase production volumes and retain customers. Some of today's successful lenders are focused on effectively reducing portfolio runoff while others are adding multiple channels to capture greater market share. If lenders wish to hold on to profits generated through a healthy portfolio, figuring out ways to retain those borrowers should be a core initiative.

Emerging Markets Lending: Best Practices and Challenges
As population demographics change, the understanding of emerging markets plays a more vital role in the mortgage industry. Join our panel to learn about developing and executing effective strategies. Better understand challenges and best practices for reaching this increasingly important segment of our population.

Legislative and Regulatory Update
This panel session addresses the latest developments facing the industry on Capitol Hill and in the Bush Administration such as oversight reform of the Government Sponsored Enterprises, revitalization of the Federal Housing Administration, greater consumer protections to combat predatory lending, simplifying the mortgage process through RESPA reform, and other pressing legislative and regulatory issues.
 
11:00 a.m.-12:15 p.m.
Differentiating your "On-Brand" Experience for Improved Margin and Market Share
The greatest profitability in any industry comes from differentiation of services from those of your competitors. A buyer advocacy marketing and fulfillment program can bring greater market share, better consumer branding and higher quality margins. Panelists discuss innovative solutions for balancing the need for safety and soundness of valuation systems and at the same time addressing the profit and expansion of the mortgage lending business.

Register Today to hear about the latest Business Strategies
Join the largest gathering of residential real estate finance professionals at MBA's 92nd Annual Convention & Expo 2005.  The convention offers you strategies so you can adapt and adjust your business to thrive in a constantly changing marketplace.  While providing opportunities to network with your peers, the convention also offers the opportunity to gather valuable information on innovative business practices, learn about winning products and services, get updates on the latest technology, and to meet and exchange ideas with industry leaders.

For more information, visit the Convention Web Site at http://events.mortgagebankers.org/92nd_Annual/default.html.
(Back To Top)

The Gallup poll, conducted September 26 through 28, first asked about family finances in February; since then, the results have shown only modest variations on a month-to-month basis. The percentage of Americans who said they are worried about their finances have ranged from 38 percent to 44 percent over the past eight months.

Other results of the poll show some variations among demographic subgroups. Only 23 percent of Americans living in households earning $75,000 or more per year said they are worried about their families' finances. Those that are worried are higher among households earning between $30,000 and $74,999 per year (42 percent) and is even higher among those in households earning less than $30,000 per year (63 percent).

Twenty-eight percent of consumers with postgraduate educations said they are worried about their finances, compared with 36 percent of those with undergraduate degrees, 41 percent of those with some college education, and 49 percent of those with high school educations.

Gallup also asks consumers monthly to identify the most important financial problem their families face. Energy costs, including oil and gasoline prices, are at the top, according to 17 percent of respondents. Following energy costs, health care costs ranked second at 11 percent, lack of money or low wages (10 percent), too much debt (8 percent), inflation (7 percent) and college expenses (7 percent). Eighteen percent of Americans said they have no financial problems now.

Over the past several months, Gallup has found some shifts in Americans' perceptions of the most important financial problem facing their families. In April, 11 percent of Americans mentioned energy prices as the most important problem facing their families. This sentiment decreased to 5 percent in May and remained at this level until August, when 20 percent mentioned energy prices as the top financial problem. The latest poll finds a slight decrease, to 17 percent.
(Back To Top)