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Vol. 9 No. 8
April 24, 2017
www.csrej.com
Forget Millennials: Gen X is driving the market Millennials may often get all the attention, but members of Generation X are really the ones who have been driving the housing market lately. Gen Xers, who are between the ages of 37 and 51, make up the second largest share of home buyers, comprising 28 percent in 2016, according to data from the National Association of REALTORS®. They also are buying the largest, most expensive homes compared to any other generation. The median price of homes purchased by Gen X buyers is $261,000, and the median size of the homes is 2,100 square feet, according to NAR. Further, Gen Xers boast a median household income of $106,600, higher than any other generation. Some Gen Xers are drawn to previ-
ously owned homes for their charm and character, while others prefer new homes in order to customize design features, NAR data shows. Gen X buyers are also the most likely to purchase a home in neighborhoods that are convenient to schools. But they're willing to compromise: “They also 21 percent of are buying Gen Xers indithe largest, cate a willingness most to make concesexpensive sions on the conhomes dition of a home, compared more than any to any other other generation. generation” The largest share of sellers are also members of Gen X at 29 percent, according to NAR. They are selling homes at a
median price of $240,000. One in five Gen X sellers say they wanted to sell earlier but couldn't because their home had been worth less than their
mortgage. On average, Gen X sellers purchased their home 10 years ago. See Gen X | Page 2
While CFPB’s future is cloudy, its RESPA enforcement commitment is clear As you’ll recall, RESPA Section 8 prohibits a person from giving or receiving a fee, kickback or “thing of value” in exchange for referrals of settlement services related to a federally-related mortgage. The regulation applies to, among others, mortgage lenders, title companies, lawyers, servicers and real estate agents. In this instance, the CFPB charged Prospect with paying real estate brokers for leads and also encouraging the listing broker to require a Prospect loan preapproval before accepting an offer. While it appears the parties cited had clearly crossed the RESPA line, the CFPB’s enforcement also has implications that it would be wise for our industry to focus on. I’m specifi-
cally referring to marketing service agreements (MSAs) and desk rental agreements that are common between lenders and real estate brokers. In order to stay within compliance, MSAs need to be based on a true proportional share of all co-marketing expenses. Likewise, desk rentals should not be based on the volume of referrals, but rather the market value of the office space itself. While it’s important to adhere to these benchmarks, it’s also important to remember they are just that. At this time, the CFPB has not provided specific rules on how MSAs and desk rentals agreements should be structured. As a result, it’s especially important to adhere not just to long-standing RE-
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SPA guidelines, but also to the intent behind them: to help home buyers more easily compare real estate closing services costs and to eliminate practices resulting in unnecessary settlement costs. As our industry seeks to serve homebuyers while remaining viable in a competitive marketplace, vigilance in regard to marketing efforts is advised. Until the CFPB provides clear standards on MSA and desk rental arrangements, these practices should be approached with care. If an action seems to be skirting the letter or spirit of RESPA, using common sense and consulting with a qualified legal advisor remains prudent.
National News............ Page 2 Local News................ Page 6 On the Move.............. Page 13 Local Expert.............. Page 14 Around the Corner....... Page 15
Debbie Havens
Marianne Elep Turner
Amanda Smith
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Branch Manager
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While the future of the Consumer Financial Protection Bureau (CFPB) un- By Jon Paukovich Vice President and der the new admin- Senior Chief Lending Officer Ent Credit Union istration is cloudy, it — remains clearly committed to enforcing existing consumer protection statutes. Recently, the CFPB alleged that Prospect Mortgage, LLC had violated the Real Estate Settlement Procedures Act (RESPA) by paying illegal kickbacks for mortgage business referrals. While RESPA action against lenders is nothing new, this is the first time in recent memory that enforcement has also been taken against the participating real estate brokers.
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debbie.havens@academymortgage.com
Loan Officer
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marianne.elepturner@academymortgage.com
Loan Officer Assistant NMLS #1561851 State Lic #100506142
amandas@academymortgage.com