AZBUILD
DECEMBER | JANUARY 2016
ArizonaHomebuilder
You’re an Arizona Builder, We’re an Arizona Lender.
BILL ROGERS Founder & CEO of Homeowners Financial Group
“As an Arizona based lender we always welcome and
EXPERIENCE THE HFG DIFFERENCE
recognize the value of working with builders who are
with local and in-house Processing,
building Arizona communities. Working with other local
Underwriting & Funding. Call us
companies helps Arizona to build stronger communities.”
today to find out how we can help
-Bill Rogers, CEO of Homeowners Financial Group
you sell more homes and give your clients better service!
Corporate Office | 16427 N. Scottsdale Rd. Suite #145 | Scottsdale, AZ 85254 | www.homeownersfg.com | 480.305.8550 All loan products and loan amounts may not be available in your area and are subject to credit and property approval pursuant to guidelines. Information is subject to change without prior notice. Other restrictions and limitations may apply. Homeowners Financial Group USA, LLC is licensed in AZ: Mortgage Bankers License No. BK 0906222, NMLS#93718; CA: Department of Business Oversight under the Finance Lenders Law License No. 603 F033; ID: Mortgage Broker/Lender License MBL-5879; NM: New Mexico Mortgage Loan Company License 03068; ND Money Broker License MB102538; OR Mortgage Lending License ML-5229 WA: Consumer Loan Company License CL-93718; MN: Residential Mortgage Originator License MN-MO-93718; MT: Mortgage Broker/Lender License 93718; NE: Mortgage Banker License NE93718 and registered in CO: Mortgage Company Registration.
Produced by Desert Lifestyle Publishing • 480.460.0996 • www.DesertLifestyle.net
Jordan Rose, Rose Law Group and Jim Belfiore, Belfiore Real Estate Consulting
SKY’S THE LIMIT
AZ DealMakers 2016
AZ DealMakers 2016
TRID TALK
Turning the Corner in Housing January 5, 2016 Industry leaders will talk about the challenges builders face and geographic hot spots for Arizona housing. Attendees – developers, homebuilders, real estate agents, brokers, lenders, appraisers, and analysts – will walk away knowing what to expect from homebuyers and the industry in 2016. This forum brings together the deals and the deal makers by exposing JIM BELFIORE strategic data vetted by the best and brightest in Arizona real Belfiore Consulting estate. Industry notables will potentially base their future decisions given the valuable information provided at this must attend real estate event. AZ DealMakers is an annual real estate bellwether gathering for the housing industry. Hosted by Jim Belfiore, founder and president of Belfiore Real Estate Consulting, the DealMakers event is slated for January 5, 2016 at the Arizona Biltmore Resort Hotel. Belfiore Real Estate Consulting is a real estate analytics company known for its sophisticated, independent data and information analysis. Its sole purpose is to provide industry professionals with accurate, timely, and thoughtful information. Organizations with a key interest in the housing market are the deal makers by which Arizona measures its future housing success. By developing strategic and key events, Belfiore Consulting helps to anticipate market tides, feedback and future trends that help to shape the many platforms of Arizona’s unique housing marketplace. Belfiore’s keynote address, “Have We Turned The Corner?” sets the tone of Arizona’s housing insights. Powerful questions, immediate answers. Event panelists will discuss attached, detached, infill, suburban, and exurban housing – what and where is affecting the success of each project. Now in its seventh year, the in-demand AZ DealMakers panels are moderated by experts in their field who provide lively panel discussions with factual data collected over many platforms. This format gives the audience a perspective of industry leaders, followed by a chance to ask questions. Key leaders share their robust knowledge as it relates to the past, present and future of this leading Arizona industry. Real estate is one of Arizona’s leading economic indicators by providing infrastructure of communities, leading the way for job creation and providing dynamic infrastructure for surrounding growth. “We’re very proud of the organic growth of this event, as it contributes to the growth and strength of our industry,” says Belfiore. “Each year the stakes are higher as Arizona reports its housing momentum. Our panel of 2016 key speakers is a select, elite group who collectively shape our theme and dialogue for the future of all of our real estate businesses.”
MICHAEL JESBERGER TerraWest Communities LLC
One major theme, “Location, Location, Location – Where New Homes Are Going,” is delivered by top area panelists including Michael Jesberger of TerraWest Communities LLC. TerraWest Communities makes real estate investments in the metropolitan Phoenix marketplace through asset purchases, joint ventures, land banking and note purchases. The target investment size is from $2 million to $40 million. Recent project, The Enclave at the Borgata, is a new addition to their portfolio.
“After four years of attending this event, we realize that Belfiore’s information assists our company in accessing all of our real estate investments. Together with the sharing of industry ideas and networking opportunity, we wouldn’t miss it,” says Jesberger. Moderator Court Rich is Senior Partner of Rose Law Group. Moderator of the expert panel discussion, “Land, Labor and Product – The Challenges Builders Face” is Jordan Rose, founder of Rose Law Group. The firm has been cited as one of the most prominent legal firms in the Southwestern United States. Partnering for four years on DealMakers, Rose says, “We know that the more we can learn about our clients’ business the better we can serve their
various needs. If we understand their business we will better know what to look for in terms of drafting purchase and sale agreements, doing development agreements, or gaining entitlements. Belfiore is the king of good information and the more we can learn from him, the better true counselors we can be to our homebuilders and other industry clients.” Rose Law Group is a notable full service business and real estate law firm, providing services ranging from trusts and estates and family law to employment, complex finance, election law, renewable energy, business and real estate transactions, and lobbying. It is the only law firm in Arizona to combine attorneys with an array of urban planners, LEED certified consultants, project managers, energy consultants, and construction managers so that the firm can take a project from due diligence and acquisition through planning and project management on to actual construction. Rose believes “Arizona is to real estate as Silicon Valley is to technology. Arizona is literally ‘the place to be’ if you’re doing any kind of real estate business and Jim’s event gives you an in depth look at the business on almost a technical level. You will learn more in those few hours than you will anywhere else.” “The Challenges Builders Face” panelists will include Michael lles Cremieux, Division President of Richmond American Homes, Reed Porter, Division President of CalAtlantic Homes, Bob Flaherty, Division President of Toll Brothers, and Mark Hammons, Principal of Land Resources. When discussing the greatest challenge faced by Arizona homebuilders next year, lles Cremieux responds, “The labor shortage is the elephant in the room, impacting our ability to forecast our revenue streams accurately. This is a nice problem to have given our permit activity increased 40% from 2014 to 2015. It just illustrates how important our ‘Trade Family’ is to our business.”
MICHAEL ILES CREMIEUX Phoenix Division President Richmond American Homes
The event has grown from just a few sponsors and 200 attendees, to dozens of sponsors and a sell-out crowd of more than 500. It has fast become the real estate event of the year for the Arizona development and homebuilding community, as well as those who serve its growing needs. From a statewide perspective and given the national landscape of homebuilding, AZ DealMakers sheds light on numerous perspectives and delivers critical information for attendees who are stewards of their real estate business practice. Bill Rogers, founder and CEO of Homeowners Financial Group, USA LLC says, “We’re proud to be a sponsor of AZ DealMakers. We garner significant and valuable information from Belfiore events. This one is especially resourceful because our core business relies on builder demand, financing and production. Homeowners Financial Group is directly impacted by the strong relationships we’re able to build by supporting this event, as well as the research, trends and dialogue from the top leadership in our industry. It’s a must attend industry forum.”
Register for AZ DealMakers at: www.azdealmakers.com. A limited number of seats remain. Jim Belfiore | Belfiore Real Estate Consulting | www.belfioreconsulting.com Jordan Rose | Rose Law Group | www.roselawgroup.com Bill Rogers | Homeowners Financial Group | brogers@homeownersfg.com Cover Photo: SunState Helicopters | Chris Dobkins | chris@sunstateheli.com
For good reason the new mortgage industry regulations nicknamed ‘TRID’ have become the primary, if not the only, topic of recent conversation. Lost in all of the preparation lenders are doing to BILL ROGERS maintain these compliance standards were Founder and CEO a number of changes to conventional loan Homeowners Financial Group product guidelines by Fannie Mae and Freddie Mac, the two largest purchasers of mortgage loans. In addition, the government’s Housing and Urban Development (HUD) made some changes to FHA qualifications and provided additional guidance on documentation requirements. Lenders are rejoicing at some of the changes as certain webs were untangled. In some cases, these changes have additional restrictions that could affect homebuyer’s ability to qualify. Let’s take a look at some of these highlights. First we can look at the summer improvements. Unreimbursed employee business expenses have been a very difficult conversation when a mortgage loan is being reviewed by underwriting. Formerly, when an employee paid for their own professional licenses, work uniforms or even certain meals, those expenses had to be subtracted from the applicant’s monthly income. As of August 2015, that is no longer always the case allowing more buying power using their full income amount. “Buy and Bail” was a term coined during the housing downturn where consumers were buying a new primary residence at a low price and then strategically defaulting on their former primary residence that was under water. Many strict rules were put in place to prevent this from happening which has been relaxed. For “move up buyers” Fannie Mae and Freddie Mac have removed the 30% equity requirement making it easier to purchase a new home, or move up. Even better, there is now latitude for buyers converting their current home into a rental by allowing that rental income to be used immediately. Also, for buyers planning to sell their current home, an executed purchase contract is now acceptable to eliminate those housing costs when qualifying for the new home. (Certain terms required, please contact your lender for more information.) Looking at some of the tougher changes to swallow, FHA has added some additional requirements when any portion of the buyer’s down payment is a gift. Lenders are now required to obtain a bank statement from the donor’s bank account to show their ability to provide the gift funds. In addition, buyers that have multiple job changes or gaps in employment may find a longer wait before they can buy again. Rules have been established for three changes in one year or job gaps lasting six months or longer. Also student loan debt must now be included in debt-to-income ratios, even when the debt is deferred. As we discuss these changes, it is important to address that this is nothing new to an industry whose constant is change. Whether you’re a first time buyer looking for a new home with more space or buying your dream home, it is imperative to discuss your exact situation with your lender and not leave anything out related to your finances or credit history. As long as the whole picture is painted, it will give your lender the ability to locate the right loan options that fit your needs. Bill Rogers is the founder and CEO of Homeowners Financial Group. For more information contact him at brogers@homeownersfg.com.
What is a Fed Rate Hike? TIM JORDEN Senior Vice President of Sales Homeowners Financial Group
There is a lot of “water cooler talk” about the Federal Open Market Committee’s (FOMC) decision to hold the federal funds rate steady at recent meetings. Although the federal funds rate has not changed since 2008, a rate increase in the near future seems imminent. You may hear all kinds of variations of how a Fed rate hike is perceived, but what exactly is a Fed rate hike?
The FOMC meets seven or eight times per year to determine if they will raise, lower or maintain the federal funds rate. The federal funds rate is the interest rate at which depository institutions (banks and credit unions) actively trade balances held at the Federal Reserve. In other words, banks making overnight loans to other banks! Depository institutions are obligated by law to maintain certain levels of liquid reserves, so institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets. The federal funds rate does not directly affect other types of interest rates, but a rise in the federal funds rate almost always leads to an equal increase to the prime rates at banks. The prime rate is used to determine the rate on most commercial loan commitments by banks. Does a rise in the federal funds rate directly change residential mortgage interest rates? It does not. In fact, many times mortgage rates will fall on the day when the Fed raises rates. This effect can take place because the market has already factored in the expected future change in the federal funds rate prior to the date of the rate change. Is a rise in the federal funds rate a sure indicator that mortgage rates will rise for the foreseeable future? It is definitely not a foolproof indicator, but historically the Fed uses a series of rate increases rather than just one single rate increase. Based on history, once the Fed starts moving the federal funds rate higher, we can anticipate that mortgage rates will trend higher, too. Tim Jorden is the Senior Vice President of Sales at Homeowners Financial Group and oversees the Arizona Builder Division. He can be reached at TJ@homeownersfg.com.
AZ DealMakers 2016
TRID TALK
Turning the Corner in Housing January 5, 2016 Industry leaders will talk about the challenges builders face and geographic hot spots for Arizona housing. Attendees – developers, homebuilders, real estate agents, brokers, lenders, appraisers, and analysts – will walk away knowing what to expect from homebuyers and the industry in 2016. This forum brings together the deals and the deal makers by exposing JIM BELFIORE strategic data vetted by the best and brightest in Arizona real Belfiore Consulting estate. Industry notables will potentially base their future decisions given the valuable information provided at this must attend real estate event. AZ DealMakers is an annual real estate bellwether gathering for the housing industry. Hosted by Jim Belfiore, founder and president of Belfiore Real Estate Consulting, the DealMakers event is slated for January 5, 2016 at the Arizona Biltmore Resort Hotel. Belfiore Real Estate Consulting is a real estate analytics company known for its sophisticated, independent data and information analysis. Its sole purpose is to provide industry professionals with accurate, timely, and thoughtful information. Organizations with a key interest in the housing market are the deal makers by which Arizona measures its future housing success. By developing strategic and key events, Belfiore Consulting helps to anticipate market tides, feedback and future trends that help to shape the many platforms of Arizona’s unique housing marketplace. Belfiore’s keynote address, “Have We Turned The Corner?” sets the tone of Arizona’s housing insights. Powerful questions, immediate answers. Event panelists will discuss attached, detached, infill, suburban, and exurban housing – what and where is affecting the success of each project. Now in its seventh year, the in-demand AZ DealMakers panels are moderated by experts in their field who provide lively panel discussions with factual data collected over many platforms. This format gives the audience a perspective of industry leaders, followed by a chance to ask questions. Key leaders share their robust knowledge as it relates to the past, present and future of this leading Arizona industry. Real estate is one of Arizona’s leading economic indicators by providing infrastructure of communities, leading the way for job creation and providing dynamic infrastructure for surrounding growth. “We’re very proud of the organic growth of this event, as it contributes to the growth and strength of our industry,” says Belfiore. “Each year the stakes are higher as Arizona reports its housing momentum. Our panel of 2016 key speakers is a select, elite group who collectively shape our theme and dialogue for the future of all of our real estate businesses.”
MICHAEL JESBERGER TerraWest Communities LLC
One major theme, “Location, Location, Location – Where New Homes Are Going,” is delivered by top area panelists including Michael Jesberger of TerraWest Communities LLC. TerraWest Communities makes real estate investments in the metropolitan Phoenix marketplace through asset purchases, joint ventures, land banking and note purchases. The target investment size is from $2 million to $40 million. Recent project, The Enclave at the Borgata, is a new addition to their portfolio.
“After four years of attending this event, we realize that Belfiore’s information assists our company in accessing all of our real estate investments. Together with the sharing of industry ideas and networking opportunity, we wouldn’t miss it,” says Jesberger. Moderator Court Rich is Senior Partner of Rose Law Group. Moderator of the expert panel discussion, “Land, Labor and Product – The Challenges Builders Face” is Jordan Rose, founder of Rose Law Group. The firm has been cited as one of the most prominent legal firms in the Southwestern United States. Partnering for four years on DealMakers, Rose says, “We know that the more we can learn about our clients’ business the better we can serve their
various needs. If we understand their business we will better know what to look for in terms of drafting purchase and sale agreements, doing development agreements, or gaining entitlements. Belfiore is the king of good information and the more we can learn from him, the better true counselors we can be to our homebuilders and other industry clients.” Rose Law Group is a notable full service business and real estate law firm, providing services ranging from trusts and estates and family law to employment, complex finance, election law, renewable energy, business and real estate transactions, and lobbying. It is the only law firm in Arizona to combine attorneys with an array of urban planners, LEED certified consultants, project managers, energy consultants, and construction managers so that the firm can take a project from due diligence and acquisition through planning and project management on to actual construction. Rose believes “Arizona is to real estate as Silicon Valley is to technology. Arizona is literally ‘the place to be’ if you’re doing any kind of real estate business and Jim’s event gives you an in depth look at the business on almost a technical level. You will learn more in those few hours than you will anywhere else.” “The Challenges Builders Face” panelists will include Michael lles Cremieux, Division President of Richmond American Homes, Reed Porter, Division President of CalAtlantic Homes, Bob Flaherty, Division President of Toll Brothers, and Mark Hammons, Principal of Land Resources. When discussing the greatest challenge faced by Arizona homebuilders next year, lles Cremieux responds, “The labor shortage is the elephant in the room, impacting our ability to forecast our revenue streams accurately. This is a nice problem to have given our permit activity increased 40% from 2014 to 2015. It just illustrates how important our ‘Trade Family’ is to our business.”
MICHAEL ILES CREMIEUX Phoenix Division President Richmond American Homes
The event has grown from just a few sponsors and 200 attendees, to dozens of sponsors and a sell-out crowd of more than 500. It has fast become the real estate event of the year for the Arizona development and homebuilding community, as well as those who serve its growing needs. From a statewide perspective and given the national landscape of homebuilding, AZ DealMakers sheds light on numerous perspectives and delivers critical information for attendees who are stewards of their real estate business practice. Bill Rogers, founder and CEO of Homeowners Financial Group, USA LLC says, “We’re proud to be a sponsor of AZ DealMakers. We garner significant and valuable information from Belfiore events. This one is especially resourceful because our core business relies on builder demand, financing and production. Homeowners Financial Group is directly impacted by the strong relationships we’re able to build by supporting this event, as well as the research, trends and dialogue from the top leadership in our industry. It’s a must attend industry forum.”
Register for AZ DealMakers at: www.azdealmakers.com. A limited number of seats remain. Jim Belfiore | Belfiore Real Estate Consulting | www.belfioreconsulting.com Jordan Rose | Rose Law Group | www.roselawgroup.com Bill Rogers | Homeowners Financial Group | brogers@homeownersfg.com Cover Photo: SunState Helicopters | Chris Dobkins | chris@sunstateheli.com
For good reason the new mortgage industry regulations nicknamed ‘TRID’ have become the primary, if not the only, topic of recent conversation. Lost in all of the preparation lenders are doing to BILL ROGERS maintain these compliance standards were Founder and CEO a number of changes to conventional loan Homeowners Financial Group product guidelines by Fannie Mae and Freddie Mac, the two largest purchasers of mortgage loans. In addition, the government’s Housing and Urban Development (HUD) made some changes to FHA qualifications and provided additional guidance on documentation requirements. Lenders are rejoicing at some of the changes as certain webs were untangled. In some cases, these changes have additional restrictions that could affect homebuyer’s ability to qualify. Let’s take a look at some of these highlights. First we can look at the summer improvements. Unreimbursed employee business expenses have been a very difficult conversation when a mortgage loan is being reviewed by underwriting. Formerly, when an employee paid for their own professional licenses, work uniforms or even certain meals, those expenses had to be subtracted from the applicant’s monthly income. As of August 2015, that is no longer always the case allowing more buying power using their full income amount. “Buy and Bail” was a term coined during the housing downturn where consumers were buying a new primary residence at a low price and then strategically defaulting on their former primary residence that was under water. Many strict rules were put in place to prevent this from happening which has been relaxed. For “move up buyers” Fannie Mae and Freddie Mac have removed the 30% equity requirement making it easier to purchase a new home, or move up. Even better, there is now latitude for buyers converting their current home into a rental by allowing that rental income to be used immediately. Also, for buyers planning to sell their current home, an executed purchase contract is now acceptable to eliminate those housing costs when qualifying for the new home. (Certain terms required, please contact your lender for more information.) Looking at some of the tougher changes to swallow, FHA has added some additional requirements when any portion of the buyer’s down payment is a gift. Lenders are now required to obtain a bank statement from the donor’s bank account to show their ability to provide the gift funds. In addition, buyers that have multiple job changes or gaps in employment may find a longer wait before they can buy again. Rules have been established for three changes in one year or job gaps lasting six months or longer. Also student loan debt must now be included in debt-to-income ratios, even when the debt is deferred. As we discuss these changes, it is important to address that this is nothing new to an industry whose constant is change. Whether you’re a first time buyer looking for a new home with more space or buying your dream home, it is imperative to discuss your exact situation with your lender and not leave anything out related to your finances or credit history. As long as the whole picture is painted, it will give your lender the ability to locate the right loan options that fit your needs. Bill Rogers is the founder and CEO of Homeowners Financial Group. For more information contact him at brogers@homeownersfg.com.
What is a Fed Rate Hike? TIM JORDEN Senior Vice President of Sales Homeowners Financial Group
There is a lot of “water cooler talk” about the Federal Open Market Committee’s (FOMC) decision to hold the federal funds rate steady at recent meetings. Although the federal funds rate has not changed since 2008, a rate increase in the near future seems imminent. You may hear all kinds of variations of how a Fed rate hike is perceived, but what exactly is a Fed rate hike?
The FOMC meets seven or eight times per year to determine if they will raise, lower or maintain the federal funds rate. The federal funds rate is the interest rate at which depository institutions (banks and credit unions) actively trade balances held at the Federal Reserve. In other words, banks making overnight loans to other banks! Depository institutions are obligated by law to maintain certain levels of liquid reserves, so institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets. The federal funds rate does not directly affect other types of interest rates, but a rise in the federal funds rate almost always leads to an equal increase to the prime rates at banks. The prime rate is used to determine the rate on most commercial loan commitments by banks. Does a rise in the federal funds rate directly change residential mortgage interest rates? It does not. In fact, many times mortgage rates will fall on the day when the Fed raises rates. This effect can take place because the market has already factored in the expected future change in the federal funds rate prior to the date of the rate change. Is a rise in the federal funds rate a sure indicator that mortgage rates will rise for the foreseeable future? It is definitely not a foolproof indicator, but historically the Fed uses a series of rate increases rather than just one single rate increase. Based on history, once the Fed starts moving the federal funds rate higher, we can anticipate that mortgage rates will trend higher, too. Tim Jorden is the Senior Vice President of Sales at Homeowners Financial Group and oversees the Arizona Builder Division. He can be reached at TJ@homeownersfg.com.
AZBUILD
DECEMBER | JANUARY 2016
ArizonaHomebuilder
You’re an Arizona Builder, We’re an Arizona Lender.
BILL ROGERS Founder & CEO of Homeowners Financial Group
“As an Arizona based lender we always welcome and
EXPERIENCE THE HFG DIFFERENCE
recognize the value of working with builders who are
with local and in-house Processing,
building Arizona communities. Working with other local
Underwriting & Funding. Call us
companies helps Arizona to build stronger communities.”
today to find out how we can help
-Bill Rogers, CEO of Homeowners Financial Group
you sell more homes and give your clients better service!
Corporate Office | 16427 N. Scottsdale Rd. Suite #145 | Scottsdale, AZ 85254 | www.homeownersfg.com | 480.305.8550 All loan products and loan amounts may not be available in your area and are subject to credit and property approval pursuant to guidelines. Information is subject to change without prior notice. Other restrictions and limitations may apply. Homeowners Financial Group USA, LLC is licensed in AZ: Mortgage Bankers License No. BK 0906222, NMLS#93718; CA: Department of Business Oversight under the Finance Lenders Law License No. 603 F033; ID: Mortgage Broker/Lender License MBL-5879; NM: New Mexico Mortgage Loan Company License 03068; ND Money Broker License MB102538; OR Mortgage Lending License ML-5229 WA: Consumer Loan Company License CL-93718; MN: Residential Mortgage Originator License MN-MO-93718; MT: Mortgage Broker/Lender License 93718; NE: Mortgage Banker License NE93718 and registered in CO: Mortgage Company Registration.
Produced by Desert Lifestyle Publishing • 480.460.0996 • www.DesertLifestyle.net
Jordan Rose, Rose Law Group and Jim Belfiore, Belfiore Real Estate Consulting
SKY’S THE LIMIT
AZ DealMakers 2016