Issuu

DECEMBER 2019 Vol. 06 | Issue 12

December

opportunity for homebuyers an

HUD and

affordable housing

VINCE MALTA President of

FIRST BANK WISDOM

Home is where the heart is.

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104 E Ontario Ave Corona, CA 92879 NMLSID: 461807 eric.frazier@fbol.com

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CONTENTS

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magazine

12. Decemver’s price freeze creates the best opportunity for homebuyers 18. Real Estate market remains unharmed despite the rising mortgage rates 22. FHA finances improved markedly but officials won’t cut premiums yet 28. Private mortgage insurers’ market share nearly equals FHA’s 32. Vince Malta, President of National Association of Realtors 36. Work vs. Family. How do you do it? 44. HUD looks to eliminate regulatory barriers to affordable housing 44. Secretary of commerce Wilbur Ross leads business excecutives across the Indo-Pacific 50. The weekly application grows stronger due to refinance boom 54.This is how the housing market could behave in 2020

FROM THE

EDITOR ear esteemed readers,

Wow, we have made it this far and the year 2019, is almost over! As the chill for the holiday season sets in, settle down with The Power Is Now with some hot chocolate because real estate is bustling and almost everywhere you turn, there are some exciting real estate developments. Here at The Power is Now Media, we are committed to making sure that nothing passes you by. As we prepare to usher in the year 2020, I must say that we are very excited about what the future holds. During this last month of 2019, I like to reflect on what the year has been like as well as use this time to plan for what is yet to come. I am looking forward to the great possibilities of 2020. I challenge you to live your best and pursue your life’s passion. The Power Is Now Media prides itself as an information hub for all people, whether investors or realtors, homeowners or homebuyers and thus, one of our continuous goals is to make sure that you have the right information to make homeownership a reality. With that said, I would encourage you to sign up for one of our many workshops. What I can tell you for a fact is that if you haven’t signed up, you are truly missing a lot of great information. In addition to our events and seminar, we do not want you to miss out on other local and national events happening around the community, as such, keep checking on our events pages to find out what’s happening around you each month. These seminars and events are created with the homebuyer in mind. At each event, there are tons and tons of information you can grasp to help you in your journey to homeownership. The country is in a housing crisis, in fact, ever since the financial crisis, the country has been on a recovery road, but we are not there yet. Statistics

show that the levitating levels of housing costs are forcing families to dedicate more than 30 percent of their household incomes to housing alone. For instance, in 2017 alone, about 37 million renters spent more than half of their monthly income on housing. What’s even worse is the fact that the number is growing, between 2001 and 2017, the number of renters paying more than half of their rent to house grew to a staggering 45 percent. Housing is especially in the state of California given that each month, more people are coming to the county on search of better opportunities, only to find themselves on the streets. With the current rate of homelessness, if we do nothing to correct the situation, and I mean to build more houses, before long, we may have to declare housing affordability a national disaster. Earlier this year, the president signed Executive Order 1378, “Establishing a white house council on eliminating regulatory barriers to affordable housing.” I applaud this decision because it about time somebody realizes that we have a situation that needs immediate attention. It is surprising though, that it took people literally sleeping on the streets for the Federal Government to realize the veracity of homeless in the country. It is a story we have documented and constantly kept tabs on. Have you ever asked yourself, when should I buy a house? If you are a frugal person, I am quite sure you have. This year, data from ATTOM Data Solution shows that December is the best time to get yourself a house. For the last 5 years, the best time to buy a house has been very consistent showing December 4th, 26th, and 31st present the best time to buy a house. Read on to find out more about this and how to take advantage of the situation. Still, on that note, suppose you are looking to finance your housing using a loan, what would you opt, between FHA and Private Mortgage Insurers?

Given the rapid rate of growth for the PMIs, I think they are offering better options compared to FHA. FHA has been raising its premiums each year which makes the reemerging dominance of PMIs very easy. This is a developing story we have covered in length and will continue to follow. For many professionals, balancing work and family is not easy to the point that some even have to quit either one of them. So how do you balance between work and family? Jenny Gonzalez, one of our VIP agents and a mother shows you a complete workaround to help you balance between your work and family. Read on to find out more. African Americans as minorities in the United States and must come together and support each other. No one is coming to our rescue to solve our problems with housing and homeownership. We must solve our own problems, thus we cannot afford to lose our ideals, morals, and culture, cooperation and partnerships. One way to make sure that our values and spirit of cooperation and partnership as a community stay intact is to hold regular meetings that lead us into self-introspection and one such meeting is the Black Community Circles. This is an event that runs from September 30, 2019, to December 30, 2019. The next event under the Black Community Circles is happening on December 30, 2019. The purpose of the event is to bring black people together through the community for our own advancement. It is a great event as Black people from all walks of life come together to share their own stories as well as deepen their own understanding of the impact of the historical forces on our emotional lives, relationships and the wellbeing of the black community. Come and enjoy quality time in a company of great men and women. Read more about the event here. Last but least, become apart one of the fast-growing real estate media companies, The Power Is Now Media has been in existence since 2009 and in that time, we have grown a large following both online and offline. Sign up with us to become one of our VIP agents and tap into the wide pool of resources available at The Power Is Now Media. Find out more about the VIP Agent program here and subscribe to our membership at https://thepowerisnow.com/subscription/ Sign up with us to become one a member and tap into the wide pool of resources available at The Power Is Now Media. From the Editorsâ€™ desk and the entire Power Is Now fraternity, we would like to thank you, our readers, listeners, and contributors for the continued support. We invite you to join us online for invaluable blog posts, engaging radio shows and the latest issue of our magazine to enhance your learning in the field of real estate, finance and success. You have the power to change your life because The Power Is Now Media. Eric Lawrence Frazier,MBA CEO The Power Is Now Media Inc.

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[POWER ECONOMICS]

DECEMBERâ€™S PRICE FREEZE CREATES THE BEST OPPORTUNITY HOMEBUYERS 12

he holiday season is right here with us and among the hustles of this season, home prices hibernate giving consumers a glorious chance to purchase a house. According to an annual analysis report by ATTOM Data Solutions, winter is the best season to buy a home. Autumn and winter are generally the best seasons to buy a house across almost every region in the united states.

FOR

As the holiday season kicks in, most of the buyers and sellers are already making plans and celebrating with their families, which means people who are in the market looking for a house are focused on other things, as a result, the competition during this time of the year is very low. The analysis shows that only three days of the year offer discounts below the estimated market value- all falling in the month of December. Buyers willing to close on a home purchase deal the day after Christmas realize the biggest discounts

The Power Is Now Magazine | December 2019

below the full market value of any day of the year. “Closing on a home purchase the day after Christmas or on New Year’s Eve can be one of the most financially beneficial holiday-season gifts you can get,” said Todd Teta, chief product officer with ATTOM Data Solutions. “While lots of folks are shopping the day-after Christmas sales or getting ready to ring in the New Year, our data shows that buyers and investors are buying homes in those days at a discount. That’s a far cry from buying during June when they are likely paying about a 7 percent premium.”

Best Months To Buy A House Since the 2008 crash, the united states market has rebounded favorably. Assuming you bought a property at the lowest point of the recession and still own it, the asset has appreciated by 25% or even more. However, going by the trend, the housing market is expected to decline in 2020, which brings the question, when is the best time to buy a house? Before we get there, most real estate experts agree that the main determinant when deciding what month to purchase a home is price. Buyers can refer to the following chart to see the months that had the best sales.

Data from the Federal Reserve Bank of St. Louis For seasonally adjusted data;

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Data from Federal Reserve Bank of St. Louis and US Census Bureau

The analysis of ATTOM data solutions looked at the best months to buy or invest in real estate at the national level. While December may be considered as the best month to invest in real estate, there is a 1.2% premium. However, if you are considering buying or investing in real estate during the summers, you can expect to pay a higher premium with June having the highest premiums at 7.1%. Going by the states, Ohio realizes the highest or the biggest discounts below the full market value with -7.4% in January; Michigan with -7.2% in February; Delaware with 6.3% in February; Tennessee with -6.2 in January; and New Jersey with -5.8 in December.

December best days On the other hand, an analysis by FitSmallBusiness shows that January is the best month to buy a home. Going by the data given in the Seasonally adjusted data table, January presents the best time to buy a home for the price-sensitive buyers. In January, the median sales prices of homes are typically low, properties have been on the market for around 90 days on average, few people during this time are not in the market looking for a house, meaning less competition. The longer a home is on the market, the more room the buyer has to negotiate better and lower prices and potentially avoid a bidding war.

Worst Month To Buy A Home April is the worst month to be looking for a home to purchase. The transition between spring and summer is the worst time to buy a home. Houses closing in April sell quickly and with a lot of competition, which drives up the prices. With a lot of inventory coming to the market, most buyers have no room to negotiate on the prices.

The shorter the property takes on the market, the more competition, steeper median sales prices and a higher percentage of homes selling make April the worst month to buy a house. Most people consider the price to be the primary determining factor when purchasing a home, however, some shoppers are willing to spend more to get their ideal property, which means, for these shoppers, housing inventory matters a lot. Spring and summer are the two seasons that usually bring the highest numbers of new homes to the market. A shopper with more houses to choose from, having a better chance of finding his or her ideal property in June and July because this is the period when new listings are at their highest, with a total inventory of 1.92 million to 1.93 million homes for sale.

New Listing & Inventory If you look at the seasonally adjusted data table and the new listings and inventory data table, you will notice a discrepancy in the U.S. existing home sales and the total inventory. Total inventory is based on a month-by-month analysis, while the existing home sales are

The Power Is Now Magazine | December 2019

based on a seasonally adjusted annual rate. Adjusting data makes the neighboring months easy to compare and to see seasonal movements in the direction of the U.S. existing home sales.

Source: YCharts

Is 2020 a good year for investment? Most experts agree that the United States economy may be headed for another recession, including the housing market, making it a buyer’s market. Research by Zillow shows that 2020 and beyond will be the best time to buy a home. Here at The Power Is Now we continue to bring you the latest developments in the real estate market. We are committed to making sure that you are updated with what’s happening around you. We have partnered with First Bank to provide the products and programs that First Time Homebuyers need to buy a home now because tomorrow it will be even more difficult. Go to www.neverrentagain.com and get started today.

Sources https://fitsmallbusiness.com/best-and-worst-timeto-buy-a-house/?__cf_chl_jschl_tk__=2305e93d4 eb785d1148c29d71222ccb622c20738-15752666410-AWDETfEf6qe0o8zKnxqxMVQfSYJrm6-RdT nTUedIsHKlzD7JahUDk0wUxVzsHkEcBKQz1IS zDeHIaKIYhPjef7LwRPOdzBC8RfsLdCGa_7-YfHZm2ObC0R4mg4tk1RYKf03VjMm_yhT1LKjpgjB8SO7_ YVLaJ2I-Zf90jDhAM6JPnaR2qRmGbHUm12xnC2qTVTQDa1r Eid1dlqxLwA-Qs0YbPEOyYPkMNioQeOQ-_kg2boecmizKb7r vJ7dZBhYk0WnLnLigDjzLzFkOAEoEmGTnnjThwrsqtdgsv9u 3fSVrH7QB-ZlgQW0mLiycLkwUg https://www.nationalmortgagenews.com/news/decembersprice-freeze-creates-best-opportunity-for-homebuyers https://blog.nationwide.com/best-time-to-buy-a-house/ https://www.attomdata.com/news/market-trends/attomdata-solutions-2019-best-day-to-buy-a-home-analysis/

Eric Lawrence Frazier MBA Vice President and Mortgage Advisor of First Bank NMLS 461807 President and CEO of The Power Is Now Media Inc. www.thepowerisnow.com

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Why did we choose to start this program? First Bank has recognized the need for a program that allows CPAs, PhDs and professionals in the legal and medical ﬁelds the opportunity to close loans based on current and/ or contracted guaranteed employment and income levels. We realize your desire to secure a home for you and your family prior to a career change, move or re-location. What would be better than having your home established prior to starting new employment? Talk about taking the stress out of your move!

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* Program Guidelines: • Bank Portfolio, ARM and fixed loans • Attached/Detached SFR’s and PUD’s. • Low down payments available. No Private Mortgage Insurance. • 700 minimum FICO score. No derogatory credit in the prior 12 months. • Available in footprint states only. • Owner-occupied residence only. No second homes are eligible. • Borrowers must establish First Bank Checking account as well as set up automatic payment withdrawal prior to closing. • Borrower must start employment within 30 days of closing. • Employment must be verified with fully executed, accepted, non-revocable contract. • Two-year history in line of work must be verified and documented. Education in field of employment for prior two years acceptable provided it was in the field of employment.

Personal Touch! One point of contact. You’ll never wonder who you should call with questions. Great Rates! It’s not too late to get a great rate on your mortgage. Contact a local First Bank Mortgage Loan Consultant today for our current low rates. Let the highly-trained professionals at First Bank walk you through the process, so you can focus on what you do best.

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Eric Lawrence Frazier Vice President & Mortgage Advisor (714) 475-8629 eric.frazier@fbol.com 104 E Ontario Ave Corona, CA 92879 NMLSID: 461807

[POWER ECONOMICS]

Real Estate Market Remain Unharmed

Despite the Rising Mortgage Rates

ortgage rates have been on an upward tra jectory, but despite that, this is not putting a damper on real estate sales activity according to Freddie Mac. The housing market will continue to stand firm as home sales rise to 6.0 million for 2019 before increasing to 6.1 million for 2020. “The economy has seen increased volatility in November as hopes for a favorable resolution to the trade dispute have recently waned,” said Sam Khater, Freddie Mac’s Chief Economist. “However, given low-interest rates, modest inflation, and a solid labor market, the U.S. housing market continues to stand firm, and, our forecast is for the housing market to maintain

momentum over the next two years.” “Following a decline in the first nine months of 2019, mortgage rates have traded narrower during the last two months with a modest drift upward due to an improved economic outlook,” said Sam Khater, Freddie Mac’s Chief Economist. “While there has been a lag in the housing market’s response to lower rates, real estate volumes have clearly shifted into a higher gear. Moreover, the recent improvement in the cyclical segments of the economy and easing financial conditions will provide a gentle tailwind to the real estate market rebound over the next few months.”

The Power Is Now Magazine | December 2019

The rate for a 15-year fixed home loan remained unaffected stagnating at 3.15% while the fiveyear Treasury-indexed hybrid adjustable-rate mortgage averaged 3.43%. The mortgage rates move in a cycle with the demand for the bonds, which moderates when the economy shows signs of improvement. After the Federal Reserve made 3 cuts to its benchmark rate and the yield curve, seen as a portent for economic contraction- reverted to an upward sloping path making fears of recession wane. “Fears about an imminent recession have faded considerably,” Wells Fargo economists wrote in a report this month. “The Fed has shown that it will do what it takes to offset the headwinds from slower global economic growth and continued uncertainty around U.S. trade policy.”

The Economy Shows a Positive Housing Market Performance, or does it? The U.S. economy grew at a 2.1 percent annualized pace in the third quarter, the Commerce Department said in a report on Wednesday showing acceleration from the second quarter’s 2 percent. The U.S. housing market has been heavily banked on the low mortgage rates for growth. However, the report from the Commerce Department surprised many economists who expected the second estimate to be unchanged at 1.9% based on an average of the projections. For some time now, the U.S. housing market has been driving high as a result of the low 30-year fixed-rate mortgage. Sam Khater orates that an improved economic outlook and an increased purchase of the mortgage applications are a healthy sign for the U.S. housing market. However, is Freddie Mac ignoring the obvious red flags that increased mortgage rates could trigger in the future? Over the past couple of months, the U.S housing market has been showing signs of weakness, for instance, home sales dipped in September, prices fell despite the tight inventory situation. And that’s not all, home sales took a dip too, declining much more than projections from the analysts. Tight inventory is largely to blame for www.thepinmagazine.com

the September slump, but what’s alarming is the fact that the situation is about to aggravate in the near-term, the October numbers are yet to be released.

Worse is yet to come! Improved mortgage rates is just one factor, which shouldn’t lead us to overlook the obvious signs. If there’s another decline in the housing starts, more buyers will be pushed to the edge, thanks to the lack of housing supplies. Homebuyers have been relying on the low mortgage rates to buy homes. That’s because home prices for a time now have been shooting over the roof while the same cant be said about the wages. In such a set-up, buyers could refrain from buying new homes, thanks to the high mortgage rates. The National Association of Home Builders in a report says that just 21 percent of those who are looking to buy a new home think it becoming easier to buy one, which means, buys are getting nervous about buying a new home. As mortgage rates continue to rise, consumer perception about home purchase and affordability will worsen, also propelled by the tight supply. The economic outlook for the United States is not all that rosy and this does not bode well for the housing market. The New York Fed estimates a 0.4 percentage growth in the fourth quarter, with the Atlanta Fed predicting even a more bearish forecast of 0.3 percent. These estimates tell us that the U.S. economic growth might end up festering by the years’ end, denting consumers’ confidence and forcing them to become more reserved. Assuming that economic growth eventually comes to a standstill, people will prefer living in their existing home than buying new homes. Nine years ago, an average American lived in their homes for 13 years, but now, according to a report, an average American stay in their house for 13 years. The prolonged stay in the existing homes only means tight inventory for the existing homes, on the other hand, the severe decline in new 19

housing supplies means that there will be a shortage of new houses on the market. As long as there will be a tight inventory supply, the situation will continue pricing more buyers out of the market as the mortgage rates continue to rise. There is an eventuality that most people are not willing to shed light on, the sellers might have to offload their inventories on the cheap, which will drive the price downwards. As such, mortgage

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rate rise is a bad omen for the housing market given the adverse economic condition and the huge level of debt that households already owe. The power is Now Media is a media company and we are committed to making the dream of homeownership available to everyone. We offer numerous resources to help you through the homeownership journey. Invest in homeownership before you invest in anything else. Our goal, to help everyone become homeowners. We have partnered with First Bank to provide the products and programs that First Time Homebuyers need to buy a home now because tomorrow it will be even more difficult. Go to www.neverrentagain.com and get started today.

Works Cited https://www.nationalmortgagenews.com/news/risingaverage-mortgage-rates-wont-harm-real-estate-activity https://www.nytimes.com/2019/10/31/business/economy/fedmortgage-rates.html http://www.freddiemac.com/pmms/ https://freddiemac.gcs-web.com/news-releases/ news-release-details/freddie-mac-novemberforecast-housing-market-continues-stand?_ ga=2.23710074.1987998796.15749685582139357401.1574968558 https://www.housingwire.com/articles/freddie-macmortgage-rates-tick-up-as-economic-outlook-improves/ https://markets.businessinsider.com/news/stocks/mortgagerates-increase-slightly-1028722066 https://www.ccn.com/rising-mortgage-rates-can-sink-ushousing-market/

The Power Is Now Magazine | December 2019

[POWER FINANCIAL]

FHA finances improve marke

officials won’t cut premiu A

leg up for the low-income homebuyers hangs in the balance. Since his ascension in office, Trump’s first action in power early 2017 was to put the Housing and Urban Development’s proposed FHA’s annual insurance cuts on hold, which were introduced under President Obama’s terms. The president commissioned Brian Montgomery as the commissioner of FHA, which he was, under President

George W. Bush and one of the top agendas in his to-do list since his return to the office was deciding whether FHA premiums will be cut. Before President Obama’s exit from the office, the HUD had proposed annual FHA insurance premium cuts, lowering the insurance rates by 25 basis points. The FHA this year again broke a few hearts when it announced that there would not be any cuts to the mortgage insurance premiums. In the fiscal year The Power Is Now Magazine | December 2019

2017, the flagship program performed weaker than expected. This year, the FHA’s flagship mutual mortgage insurance fund is in the best condition since before the financial crisis, with capital levels at the highest level since 2007.

The Housing Reforms Proposals Speaking during the annual report to the congress, the FHA commissioner Brian Montgomery said that premium cuts were something that the department was thinking about. He also noted that changes to the premiums were something envisaged in the housing reforms proposals.

edly, but

ums yet “When do we think we’re at a sufficient level to make any adjustments to premiums? I don’t think we’re there yet, but it’s something we’re looking at overall.” www.thepinmagazine.com

Early this year, the White House gave a directive to the Departments of Treasury and Housing and Urban Development (HUD) to develop plans for the administrative and legislative reforms to the housing finance market with a view to ending the federal conservatorship of the GSEs (Fannie Mae and Freddie Mac). The reform plans outline touch many aspects delineated in the presidential memo, including GSE capital requirements, affordable housing, the role of the FHA, and promoting private competition. They also consist of a series of recommended legislative and administrative reforms that are designated to

protect the taxpayers against future bailouts, preserve the 30-year fixed-rate mortgage, and help hardworking Americans fulfill their goal of becoming homebuyers. “The Trump Administration is committed to promoting muchneeded reforms to the housing finance system that will protect taxpayers and help Americans who want to buy a home,” said U.S. Treasury Secretary Steven T. Mnuchin. “An effective and efficient Federal housing finance system will also meaningfully contribute to the continued economic growth under this Administration.” The HUD reform plan contains a mix of legislative and administrative reform proposals which are mostly aimed at internally refocusing FHA. This has two ma jor connotations, first the reduction of the risk to the FHA portfolio and this is where the premiums cuts come in and secondly improving FHA’s technology. The vast ma jority of the proposed legislative reforms in the HUD plan target FHA, and to a much lesser extent, Ginnie Mae. The legislative plan is somehow limited to address highly specific matters of some technical complexity. This includes establishing statutory limitations on FHA cash-out refinances and addressing the suspension periods and civil money penalties that the FHA uses when establishing penalties. 23

The MIP Might have improved… but “…we’re there yet” The annual report to congress showed a capital ratio rise of 4.84%, from 2.76% last year. However, the fund’s improved status doesn’t mean that the fund is ready to cut the ‘life of loan’ policy, instituted in 2013. Typically, a mortgage borrower making a down payment of less than 20 percent of the purchase price of the home will be required to pay mortgage insurance. Mortgage insurance lowers the risk to the lender, which means that you can qualify for a loan that you might otherwise not get, but to reciprocate, the cost of the loan will increase. Note that mortgage insurance doesn’t in any way protect the loan borrower, rather, the lender. In the event you fall behind on your payment, your credit score will adversely be affected and you could lose your home through foreclosure. Two things to note; first, the improved condition of the Mutual Mortgage Insurance Fund doesn’t mean the FHA is ready to cut the life of the loan policy and secondly, it

doesn’t mean that the premiums are going down.

homeownership journey. Invest

“When do we think we’re at a sufficient level to make any adjustments to premiums? I don’t think we’re there yet, but it’s something we’re looking at overall.”

invest in anything else. Our

Also, worth noting, the congress requires that the fund maintains at least a 2% ratio in reserves, this is the fifth year that it has. In the fiscal year 2019, the FHA’s market share for the home-purchase mortgages dropped to 11.4% from 12.3% in 2018.

and programs that First Time

This year, FHA endorsed 990,429 home mortgages through the forward mortgage program, including 743,280 purchase loans. For the 2 years, about 83 percent of the borrowers were first time home buyers. The power is Now is a media company and we are committed to making the dream of homeownership available to everyone. We offer numerous resources to help you through the

in homeownership before you goal, to help everyone become homeowners. We have partnered with First Bank to provide the products Homebuyers need to buy a home now because tomorrow it will be even more difficult. Go to www.neverrentagain.com and get started today.

Works Cited https://www.nationalmortgagenews. com/news/fha-finances-improvemarkedly-but-officials-wont-cutpremiums-yet https://www.americanactionforum. org/insight/treasury-and-hudrelease-sweeping-blueprint-towardcomprehensive-housing-financereform/ https://home.treasury.gov/news/pressreleases/sm769 https://www.housingwire.com/articles/ fha-capital-level-is-the-highestsince-2007/ https://www.hud.gov/sites/dfiles/ Housing/documents/2019FHAAnnualRe portMMIFund.pdf https://www.houseloanblog.net/hudsuspends-fha-mortgage-insurancepremium-cut/ https://www.aei.org/housing-center/ what-to-make-of-suspending-the-fhamortgage-insurance-premium-cut/ https://www.consumerfinance.gov/askcfpb/what-is-mortgage-insuranceand-how-does-it-work-en-1953/ https://www.housingwire.com/ articles/47414-fha-will-not-cutmortgage-insurance-premiums/

The Power Is Now Magazine | December 2019

Your loan officer should be as invested in your home as you are. Let’s feather your nest. First Bank Mortgage offers three tips to help you on the path to homeownership! 1. Start by checking your credit score. Your credit history is an important factor when you decide to apply for a loan. The score reflects how well you manage your debt. It’s important to discuss this, and other factors, with your First Bank home loan consultant. If you find that your credit score is too low, there are a number of steps you can take to improve your credit score. 2. Get organized. Getting a loan requires a few different documentations including, but not limited to, pay stubs, tax returns, and financial statements. You’ll also need to provide copies of additional monthly payments such as car loans, credit cards, and student loans. Keep all of this in mind, when you begin organizing. If you have this information readily available when you decide to apply for a home loan, it will make the process much more efficient. 3. Start Saving! Set up a designated savings account and start saving as much as you can each pay period to use as a down payment on the purchase of your new home. Although we offer first-time homebuyer programs with little to no down payment, it is still a good idea to have some available funds in reserve to use for a potential down payment, utilities, moving expenses, new home furnishings, or unforeseen emergencies. With some preparation now, you’ll be even closer to rolling out the welcome mat on your own, new home later. We’re here to help answer any questions to help make that dream a reality.

104 E Ontario Ave Corona, CA 92879 FirstBanks.com/Mortgage NMLS 551928

Eric Lawrence Frazier MBA Vice President & Mortgage Advisor Office: (714) 475-8629 Fax: (314) 264-0211 NMLS: # 461807 eric.frazier@fbol.com Firstbanks.com

[POWER FINANCIAL]

PRIVATE MORTGAGE INSURERS’ MARKET

SHARE NEARLY EQUALS FHA’S

he private mortgage insurance now has almost matched the Federal Housing Administration program in the market stake. In the past five years, the PMI has gained approximately eight percentage points according to research by Keefe, Bruyette & Woods. The shift in credit enhancement for the low-down-payment mortgage is likely to continue moving forward. Back in 2018, the PMIs had a banner as all the six largest private mortgage insurers were profitable and continued to grab the market share from the FHA.

As earlier predicted, a better operating environment could further amplify these companies. In 2018, the purchase volume, where the private mortgage insurers generate most of their new insurance written was underwhelming, even though this year’s home sales prospects are better off. In 2017, there were 6.12 million homes, which fell to 5.98 million in 2018.

The re-emerging dominance of PMIs If there was worst time for the PMIs, 2008-2009 and the post-

recession crisis would explain it better. Hitting a low in 2009, the private mortgage insurers have been deliberately picking up the market share compared with the FHA and the VA loans. Before the financial crisis, private mortgage insurers were the primary insurance sources for high loan to value (LTV) lending; representing almost 60 percent of the total in 2000 and 77 percent in 2007. The GSEs by charter cannot be in the first loss position on mortgages greater than 80 LTV because these loans necessitate mortgage indemnification. The financial crisis prompted the mortgage insurers to raise their premiums, while the FHA insurance premiums did not increase. As a result, this discouraged the uptake of the private mortgage, FHA share stake distended, while the PMI share hit a 15 percent low. Ever since, the FHA has raised its premiums severally, making the PMIs very attractive. In fact, FHA premium hikes have resulted in an increase of the PMI share to 36 percent for 2013 (41 percent by the fourth quarter of 2013).

The Power Is Now Magazine | December 2019

PMI share of the home purchase market will continue to increase The private mortgage insurance’s growth rate should outpace that of the total mortgage debt outstanding for 2019 as more and more

buyers lack the ability to put down the 20% opt for the GSE loans, instead of a government program. As of the end of 2018, the total insurance-inforce, from all the 6 private mortgage insurers as well as that from the FHA was $2.3 trillion, which is a figure higher by 1.7% from the 3rd

quarter and 7.2% from the end of 2017. The mortgage debt outstanding grew by an approximate 3% Y-O-Y as of the third quarter of 2018. Comparing FHA’s share of unmitigated low down payment credit enhancement, relative to PMI continued to shrink. At the end of 2018, 52% of the total insurance in the market was held by FHA, with the six dynamic and three runoff private companies holding the residual 48%, the report from Keefe, Bruyette & Woods noted. This is a big change from five years ago where the FHA share of the market was 60% while the PMI’s share was 40%. “We believe that private MI growth will continue to remain strong in the near to medium term driven by

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sustained high penetration in the purchase market led by a growing demographic of firsttime homebuyers using GSE loans,” the KBW report written by analysts Bose George, Thomas McJoynt-Griffith and Eric Hagen said. “Despite a decline in interest rates late in 4Q18, persistency remained elevated in the period and we do not expect much of a decline unless rates drop further. The decrease in premiums by the MIs (effective in June) should result in some market share shift from the FHA. According to the FHA Annual Report from November, nearly 15% of FHA borrowers in the 2018 fiscal year had a FICO score of over 720. We believe that with the reduced MI pricing, this cohort should have lower premiums with private mortgage insurance.”

The power is Now is a media company and we are committed to making the dream of homeownership available to everyone. We offer numerous resources to help you through the homeownership journey. Invest in homeownership before you invest in anything else. Our goal, to help everyone become homeowners. We have partnered with First Bank to provide the products and programs that First Time Homebuyers need to buy a home now because tomorrow it will be even more difficult. Go to www.neverrentagain.com and get started today.

The report estimates that in 2017, the private MI’s insurance-in-force increased by $112 billion, while the FHA’s share rose by $43 billion.

Even in a turbulent environment, PMIs are unshaken “While a robust mortgage origination and housing start environment would be the ideal scenario for long-term growth, the key factors affecting mortgage credit quality are home price appreciation and employment,” said FBR analyst Randy Binner in a report. “We expect these trends to persist, and losses among the MIs to remain low in 2019, supporting earnings per share. The MI group we track is trading at 37% of its 10-year median price to earnings ratio and at 19% of its five-year valuation range.” “GSE reform will be in the headlines with the new FHFA commissioner, Mark Calabria, confirmed in 2019. While his past rhetoric has been antiGSE, we expect a status quo approach, given market volatility and the 2020 election cycle. At the same time, the recent FHA audit implies that this market will seed share to private MIs in 20192020.”

Works Cited https://www.nationalmortgagenews.com/list/6reasons-why-pmi-is-thriving-in-an-uncertainhousing-market https://www.urban.org/urban-wire/re-emergingdominance-private-mortgage-insurers http://research.urban.org/publications/413061. html https://www.mtgprofessor.com/A%20 -%20PMI/A%20Brief%20History%20of%20 Mortgage%20Insurance.html https://www.forbes.com/advisor/mortgages/ pmi-4-things-you-should-know-about-privatemortgage-insurance/

The Power Is Now Magazine | December 2019

Vince Malta

Vince Malta The President of

National Association of Realtors

rowing up, Vince Malta was very much involved in his family’s real estate business doing activities like cleaning up properties, collecting rent and the like. From an early age, Vince realized that real estate was a tough business and it took hard work, resilience, and passion to succeed. So, he got a law degree from the University of San Francisco School of Law instead. But even so, real estate was something burning in his veins, it was his first love, and therefore, he came back to real estate business, but this time, to run his own brokerage firm. Vince embarked on a long career of association involvement, including stints testifying before the Congress on behalf of the National Association of Realtors, serving as the vice president of Government Affairs, as well as being the president of California Association of REALTORS® (C.A.R.). Currently, he serves as the 2020 president of N.A.R, a challenge he is taking with his trademark enthusiasm and dedication.

But who is Vince Really? Vince Malta is the 2020 National Association of Realtors president. The NAR elections were held during the Board of Directors meeting on May 18 at the 2019 REALTORS® Legislative Meeting & Trade Expo and Vince Malta was elected as the president. He and other officials elected will take office in November www.thepinmagazine.com

2020. He is a third-generation REALTOR® and the CEO of Malta & Co., Inc. He is a graduate of the University of San Francisco and the University of San Francisco School of Law. Malta has been in the real estate business for over 31 years and has served the industry in countless roles. On the national level, Malta has testified before Congress multiple times on behalf of NAR on issues such as the impact of increasing conforming loan limits, insurance reform, and housing policy. He has served on the NAR Board of Directors from 2002 to the present. Since 1988, Malta has been deeply involved with the California Association of REALTORS® (C.A.R.). In 2002 he became an Honorary State Director for Life, and in 2006, C.A.R. elected him President. He was awarded REALTOR® of the year for the State of California in 2007. Malta sat on the Board of Directors of the San Francisco Association of REALTORS® from 1987-1994, was its Treasurer in 1990 and President in 1993. The San Francisco Association awarded him REALTOR® of the Year in 1996.

Industry’s Take According to Vince, one of the biggest challenges facing brokers is profitability. Decreasing profit margins are an ongoing

Opportunities that Brokers and Agents should take advantage of

issue as there are venturecapital-backed firms who are going after the top producing agents. There are also companies coming in with the iBuying Programs which overall is affecting the broker’s profitability. Confronting these issues ultimately will require adjusting accordingly and compete by providing value to the consumer. Vince recognizes that there will always be a cheaper, faster way that always seems more attractive to the consumer. As such, brokers have to explain why what they provide is more attractive than that. “At the association level, we need to help brokers and agents break that down and help them communicate that better to the consumer.”

Recruitment and agent Retention One of the problems the

industry is facing right now is the top agents being lured away by big money. “We need to take stock in what we’re providing to our agents and we need to continue communicating with agents. We need to embrace different models out there that agents want, like the team model.” He also adds that brokerage firms need to see how they can work better with agents in terms of branding. In addition, brokerage firms have to be better partners with the agents and to also nurture relationships with the agents just as they do with consumers and also emphasize the valuable services that they offer. “Because we have our agents until we lose them… and by that time it’s too late.” Therefore, brokerage firms have to provide more resources to make sure that their agents are utilizing the services, thus creating a winwin situation.

“One of the biggest opportunities invol ves technology and its ability to enhance the level of service we provide for clients. We also have an election year in 2020, which is a great opportunity to express what’s important to our industry.” Vince also adds that it’s paramount to look at the tax reform, what it did and did not do. For instance, it took away a lot of incentives for the homeowners, and this forces agents to be creative and come up with some constructive alternatives. Another challenge that’s likely to have a huge impact on the industry is the reformation of Fannie Mae and Freddie Mac. Malta notes that the administration is coming up with proposals to reduces the footprint of these agencies, which means, “We need to ensure a smooth transition is in place so that we don’t have a shock to the system.” Flood Insurance is another opportunity that brokers need to step up and grab in 2020. Malta adds that the industry needs to work towards a longterm flood bill to create more certainty in the market.

The Power Is Now Magazine | December 2019

[POWER COMMUNITY]

Work vs Family

How Do You Do It? W

hen I was single it was so easy to go to work and just do what needed to be done and enjoy the rest of my day/evening and that was it. When you settle down and get married and have kids the whole scenario changes and you find yourself wondering what happened? Where is my time? By Jenny Gonzalez Realtor DRE#01249788 36

I found out pretty quickly that planning each day of the week out was very important. I had 3 children under 5 years old and decided to work from home because of The Power Is Now Magazine | December 2019

Stand out nothing getting done on the home front. Now I know that everyone canâ€™t just quit their job and find a job working from home but I was lucky enough to have a husband to support me and motivation to make it work. This was the best decision for me to make. I was able to take the kids to school, pick them up from school, take them to any after school activities, etc. How did I do it? By saying NO! Yes, that is what I did. I had a lot of people pulling me in a lot of different directions and I had to focus on what was most important (needs) and less important (wants). In life, we seem to always want the things that are shiny but the truth is we can live without them and if we canâ€™t we find a way to get it for free, bartering, or at a discount. This is how I got through in the beginning.

as a real estate

professional online

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After I found a way to do babysitting swaps and late-night appointments that fit my schedule and the schedule of my clients it was seamless from there. I always tell my clients that my family is first and what times I am available. Now that my kids are grown I find I have more time to reflect on what I did to succeed in my career that has lasted 21 years and I am proud to say I made it through with my sanity intact and respect from those that required so much of my time before. If you block out time for yourself every day even 30 minutes to close your eyes a whole new outlook comes into play! Try it and let me know how you feel NO cheating with phones! www.thepinmagazine.com

Finding the perfect home for your clients can be hard. Finding the perfect loan is easy. Let’s get moving.

• • •

$2,000,000

Provided to Real Estate Professionals for information only. Regulatory requirements prohibit public or consumer distribution. Eric Lawrence Frazier MBA Vice President & Mortgage Advisor 104 E Ontario Ave Corona, CA 92879 (714) 475-8629 eric.frazier@fbol.com NMLS# 461807

For more information, please have your buyers call me today.

Firstbanks.com firstbanks.com/mortgage

Business Banking Mortgage Wealth Management Mobile Solutions

NMLS 551928

[POWER FINANCIAL]

HUD LOOKS TO ELIMINATE

REGULATORY BARRIERS TO AFFORDABLE HOUSING

he Department of Housing and Urban Development recently published a Request for Information (RFI) seeking public comment on the Federal, State, Local and Tribal law, regulations, land use requirements and administrative practices that artificially raise the cost of affordable housing development and contribute

to the shortage in America’s housing inventory. RFI is a request for the members of the public to share information and knowledge requisite regarding recommendations to HUD’s regulations, and practices that unnecessarily impede housing supply and information on innovative practices that promote increased housing supply. “Owning a home is an essential

component of the American Dream. It is imperative that we remove regulatory barriers that prevent that dream from becoming a reality,” said HUD Secretary Ben Carson. “Through this request, communities across the country will have the opportunity to identify roadblocks to affordable housing and work with State, Federal, and local leaders to remove them.”

Earlier this year, the president signed Executive Order 13878 “Establishing a white house council on eliminating regulatory barriers to affordable housing.” The Executive Order recognizes that many Americans are facing difficulties accessing affordable housing. The levitating levels of housing costs are forcing families to dedicate a larger share of their monthly income to housing. In 2017 alone, an approximate 37 million renters and owner households spent more than 30 percent of their incomes on housing. Between 2001 and 2017, the number of renters spending more than half their incomes on rent grew to an astonishing 45 percent.

• P olicy interventions, solutions, or strategies available to State, local, and federal decision-makers to incentivize State and local governments to review their regulatory environment or aid them in streamlining, reducing or eliminating the negative impact of state and local laws, regulations, and administrative practices;

In the RFI, HUD is looking for the following information;

• C ommon motivations or factors that underlie local governments’ adoption of laws, regulations, and practices that demonstrably raise the cost of housing development, and whether such factors vary geographically;

• Specific HUD regulations, statutes, programs, and practices that directly or indirectly restrict the supply of housing or increase the cost of housing;

• W ays that State-level laws, practices, and programs contribute to delays in the construction industry and specific laws, practices, and programs that could be reviewed;

The Power Is Now Magazine | December 2019

• Peer-reviewed research and/or representative surveys that provide quantitative analyses on the impact of regulations on the cost of affordable housing development;

economic mobility. In addition, it will strengthen American communities and the quality of services offered in them by allowing hardworking Americans to live in or near the communities they serve.”

• Performance measures, quantitative and/ or qualitative, the Council should consider in assessing the reduction of barriers nationally or regionally and advantages and disadvantages of each measure; and

• Recommendations on how to best utilize HUD’s Regulatory Barriers Clearinghouse for States, local governments, researchers and policy analysts who are tracking reform activity across the country. The White House Council on Eliminating Regulatory Barriers to Affordable Housing is eight federal member agencies who are engaging with governments at all levelsstate, local and tribal and other private sector stakeholders on ways to increase the housing supply so more Americans have access to affordable housing. As the Executive Order states, “Increasing the supply of housing by removing overly burdensome regulatory barriers will reduce housing costs, boost economic growth, and provide more Americans with opportunities for

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Works Cited https://www.hud.gov/press/press_releases_media_ advisories/HUD_No_19_171 https://www.federalregister.gov/ documents/2019/11/22/2019-25388/white-house-councilon-eliminating-regulatory-barriers-to-affordable-housingrequest-for-information https://www.housingwire.com/articles/hud-looks-toeliminate-regulatory-barriers-to-affordable-housing/

Do you know

Peppermint Ridge? We provide a community of loving homes and empowering support services for individuals with intellectual and developmental disabilities.

support and encourage our residents to live their

lives and fulfill their dreams by fully embracing their indvidual abilities and interests. With 24-hour specialized care and staffing, we provide comfortable, secure homes and recognize that everyone feels a sense of belonging when they have familiar places in which to spend time with family and friends.

There

is a true sense of family at Peppermint Ridge. Of the 94 adults who

live at The Ridge, 38 have lived here for more than 20 years, with 10 of those calling The Ridge home for 40 years or more. Residents have the opportunity to flex their muscles of independence while developing rich lives of their own away from their loved ones. About 30% of our residents have no family, so other Ridgers and our staff have become their family.

Many

caring companies, organizations and individuals in

the community enjoy getting to know The Ridge by helping on small projects, hosting fundraisers, lending a hand at events, volunteering in our office, and assisting residents in activities such as arts and crafts, pool days, horseback riding, music and piano lessons, and exercise classes.

825 Magnolia Ave â€˘ Corona CA 92879 â€˘ 951.273.7320 www.PeppermintRidge.org â€˘ Tax ID: 95-2409851

firstbanks.com

CalHFA VA Features:

• A 100% LTV VA first mortgage loan • 30-year term, fixed interest rate

Are you a veteran or service member with closing cost assistance combined into one perfect package? CalHFA VA is for you. Call me for more information!

ADDITIONAL BENEFITS:

First-time homebuyers can also add these to CalHFA VA for up to 105% CLTV: • MyHome Assistance Program – deferred payment junior loan for down payment and/or closing costs • School Teacher and Employee Assistance Program (School Program) – up to 4% of the home’s sale price in a deferred payment for teachers and staff serving California’s public schools

ERIC L. FRAZIER MBA Vice President, Home Loan Advisor First Bank NMLS ID: 461807 o: 619-476-3269 c: 714-475-8629 Eric.Frazier@fbol.com

The California Housing Finance Agency does not discriminate on any prohibited basis in employment or in admission and access to its programs or activities. Not printed at taxpayers’ expense. CalHFA is not a direct lender and uses private mortgage lenders to qualify consumers and make all mortgage loans. Sample loan terms: (Amount: $200,000; Term: 30 years; 4.750% sample interest rate, 5.0439% Annual Percentage Rate (APR) includes lender fees and insurance; Est. monthly payment: $1,043.30 includes principal, interest, taxes and insurance).

[POWER ECONOMICS]

SECRETARY OF COMMERCE WILBUR ROSS LEADS BUSINESS EXECUTIVES ACROSS THE INDO-PACIFIC

resident Donald J. Trump echoed the United States’ commitment and interest to the “Indo-Pacific” during his 13-day tour to the Asian Countries. The president is keen on increasing American commercial activities across nations in the Indo-Pacific region and in pursuit of that, the U.S. Secretary of Commerce Wilbur Ross led a business delegation including 16 companies to Thailand, Indonesia, and Vietnam from November 3 to November 8. A mission spawned to increase new partnerships

But why the Indo-Pacific Region? During his visit to the Asian countries, the President reiterated his trademark, “America First” policy, but he also underlined the United States continued commitment to the IndoPacific Countries. But why Asia? US businesses that need to trade to be successful have shown interest in accessing the natural pool of resources, businesses and billions of consumers and workers in the region. Countries like China, Japan and India are known to be key trading partners of the United States, so strengthening business ties in the region expediates expansion of regional trade. In 2016, the united states exported goods worth more than $200 billion to those three countries and imported more than $600 in return. China alone exported around one-fifth of all goods imported into the united states. Over the past 10 years, trading ties with China

as well as several business agreements, which potentially represent billions in investments. “The Trump Administration is building new relationships across the Indo-Pacific, creating a bright future, not only for the United States but for countries across the region,” said Secretary of Commerce Wilbur Ross. “Last year, trade between Indo-Pacific nations and the United States increased to a record of nearly $2 trillion - tying our great countries ever-closer together.”

and India have increased histrionically. United States exports, in that same period, have more than doubled between 2006 and 2016. In the same timeframe, imports from China have grown by more than 60 percent and imports from India grew by more than 100 percent. Speaking in Vietnam, Trump said that he wanted to sign one-on-one deals with the countries that would “abide by the principles of fair and reciprocal trade.”

Is china a threat that needs to be contained? The grand strategy and the playbook that American has always used is suppressing, at whatever cost, security competitions and the rise of a rival hegemon. China has been a force; a not so peaceful force in terms of economic and military actions and its ambition to craft a new maritime and continental order

The Power Is Now Magazine | December 2019

in the “Indo-Pacific” pose a huge challenge to the seven decades of American preeminence in the region. This is a reality that the Trump-administration has acknowledged as seen in the first National Security Strategy. To counter China’s efforts, the Administration has often touted its “IndoPacific” strategy, which is essentially is a plan that seeks to strengthen American ties by building a network of allies and partners to contain and push back against the Chinese pragmatism. Some US officials have said that China could use the clout it has in the region to create trading rules in partner countries that favor Chinese businesses and disadvantages the US businesses. In 2015, Barrack Obama deliberated his fears on the same issue saying, “Right now, China wants to write the rules for commerce in Asia.

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… We can’t let that happen. We should write the rules.” The battle for the Asian region hasn’t started in the recent past, back in 2011, that desire led to the US supporting the Trans-Pacific Partnership. The free trade deals that included Japan, Australia, New Zealand, Vietnam, Singapore, Malaysia, and Brunei was seen as a vital component to securing US access to the Asian markets. Although the US exit from the TPP may not kill it, the remaining 11 countries have expressed their willingness to salvage it, which means, China may be left as the region’s rulemaker. Note, Beijing has initiated negotiations, a 10-country negotiation for free trade deal known as the “Regional Comprehensive Economic Partnership” (RCEP) without the United States. For quite some time now allies across the Asian region have

enunciated concerns about whether the United States is a reliable partner, and a number of countries including Australia, India, South Korea, and Several ASEAN members have sought sort of a hedging strategy with respect to China.

Sealing the pact While in Vietnam, Secretary Ross and Prime Minister Nguyen Xuan Phuc witnessed the signing of five ma jor business deals and MOUs that will further deepen US ties with Vietnam. Some of the deals signed are; • A ES signed an MOU with the Ministry of Industry and Trade to solidify cooperation on the Son My 2 Combined Cycle Gas Turbine Power Plant. The Government of Vietnam approved the project in September 2019, representing an investment

of $1.7 billion. Together with the $1.4 billion Son My LNG import terminal, the plant represents a total investment of almost $3.1 billion. • Varian Medical Systems signed an MOU with the National Institute of Medical Equipment & Construction for strategic cooperation on the maintenance and calibration of existing and future Varian Linear Accelerators. To further the delivery of effective cancer treatment in Vietnam, the U.S. Trade and Development Agency committed up to $1 million to support a critical training program for healthcare professionals connected to the expansion of oncology services.

• Vietnam Airlines signed two deals during the ceremony. The first was a multi-year engine service agreement with Pratt & Whitney valued at approximately $1 billion. In addition, Vietnam Airlines signed a multi-milliondollar agreement with the technology company Sabre, adopting solutions that will strengthen their forecasting and inventory control capabilities. • Murphy Oil signed the Block 15-2/17 production sharing contract with Vietnam National Oil and Gas Group (PetroVietnam), PVEP, and SK Innovation. While the tension between the US and China has commanded global attention, Vietnam seems to be enjoying every bit of it. One thing, Vietnam is an

emerging player in the global trade and has become the alternative for the companies looking to diversify their supply chains and hedge against political uncertainty. The country [Vietnam] opened its markets in recently joining the CPTPP trade pact, leading to companies and suppliers decamping from chine, and also sealing free trade deals with the EU. And so far, so good. Vietnam’s trade surplus in goods with the united states soared from $31.98 Billion in 2016 to $39.49 billion in 2018 and this year alone, the surplus is up 39 percent through June. Taking notice of this, the Trump Administration has launched fusillades about how Vietnam is “even worse than china” and must work round the clock to reduce the “unsustainable trade deficit.”

The Power Is Now Magazine | December 2019

Trade Wars do not benefit anyone The public support for free trade is shrinking by the day and the long-standing political consensus that trade liberalization is beneficial is under severe attack. Protectionism seems the way ma jor economies are doing and handling things nowadays, in fact, the US has perfected the art by imposing trade tariffs and continuously threatening its largest trading partners, EU, and china. While Trump Administrationâ€™s strategy seems to be geared to attract voters in poor, deindustrialized regions who feel left behind by globalization, these actions put the efforts and enormous achievement of the last decades, both in the US and Globally at jeopardy. American businesses, workers and even consumers do not benefit from protectionism. And while it is important to protect local jobs, repeated claims that high tariffs will protect domestic jobs or even create jobs need to be taken with caution since the immediate secondary effects may lead to job losses in other sectors. Trumpsâ€™ administration points to the US trade deficit with the EU and China, which it wants to resolve, but the message no matter how it may be perceived to be of benefit in terms of politics, it is too simplistic. The rallying idea that trade deficits are a bad thing in principle ignores that importing cheap intermediate

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goods makes US manufacturers more competitive on the global market, boosting exports elsewhere. Lastly, it is important to note that consumers benefit from imports as competition and increased product variety lower prices. The power is Now is a media company and we are committed to making the dream of homeownership available to everyone. We offer numerous resources to help you through the homeownership journey. Invest in homeownership before you invest in anything else. Our goal, to help everyone become homeowners. We have partnered with First Bank to provide the products and programs that First Time Homebuyers need to buy a home now because tomorrow it will be even more difficult. Go to www.neverrentagain.com and get started today.

Our Sources: https://www.weforum.org/agenda/2019/11/who-benefitsfrom-a-trade-war/ https://thediplomat.com/2019/08/the-next-battleground-intrumps-trade-war-vietnam/ https://www.dw.com/en/why-is-the-united-statesinterested-in-the-indo-pacific/a-41335289 https://www.the-american-interest.com/2018/08/03/whoseindo-pacific/ https://www.commerce.gov/news/press-releases/2019/11/ secretary-commerce-wilbur-ross-leads-businessexecutives-across-indo

First Bank Legacy For over four generations, First Bank has enjoyed a legacy of strength, agility, and long-term perspective. Since 1910, we have remained dedicated to serving the communities in which we operate with an unwavering commitment. This commitment began over 100 years ago in a small, rural community in St. Louis to help local clients reach their financial goals. And, although First Bank has grown to be one of the largest family-owned banks in the country, the steadfast commitment to serving our clients—and treating them like family—still remains the same. From Main Street America to large-scale metropolitan areas, First Bank continues to be a vital part of the communities in which we serve. At First Bank, you’ll find the products and offerings typically only found with larger, publicly held financial institutions. Quite simply, we’re big enough to provide the products and services you need, but small enough to provide caring, personal service. At First Bank, our clients become part of the family.

1910

William Dierberg, Sr.,

President, Creve Coeur Farmer’s Bank

1945

William Dierberg, Jr.,

President, Creve Coeur Farmer’s Bank

1966

James Dierberg,

President, Creve Coeur Farmer’s Bank

2016

Michael Dierberg, Chairman, First Bank

1973 Creve Coeur Bank becomes First Missouri Bank

Missouri Bank 1986 First becomes First Bank

1974

First Acquisition: Hermann, MO

1995 First Bank expands into California

1983

Expansion into Illinois

century of treating 2010 Aclients like family

[POWER FINANCIAL]

THE WEEKLY APPLICATION GROWS STRONGER

DUE TO REFINANCE BOOM A

report from the Mortgage Bankers Association last week notes that the refinance volume drove the total mortgage application activity 3.8% higher with the applications to refinance home loans jumping 9% for the week and 146% higher than a year ago.

From as early as last month, mortgage specialists and experts began reporting that the mortgage rate will remain below 4% throughout 2020 and by now, you would think that everyone had refinanced their mortgage to take advantage of the historically low-interest rates, but apparently. Refinance volume drove the total mortgage application activity 3.8% higher last week

compared with the previous week according to data from Mortgage Banker Association seasonally adjusted index. Volume was 63% higher than the same week a year ago. “Low mortgage rates continue to be the trend as 2019 comes to an end, and mortgage applications responded accordingly last week, rising 3.8 percent…” said Joel Kan, MBA’s Associate Vice President of Economic and Industry

The Power Is Now Magazine | December 2019

Forecasting. “Purchase applications were down slightly, but were 5 percent higher than a year ago, which is in line with the gradual growth in the purchase market seen throughout this year.”

direction taken by mortgage rates, well it’s not. The rates are going to be much more responsive to the Dec. 15 deadline for the additional U.S. tariffs on Chinese Goods.

“The November jobs data showed increased payroll gains and low unemployment, which means conditions remain favorable for steady purchase growth in the coming months.” Added Kan.

“In general, a delay or cancellation would be bad for rates, but markets are already expecting a delay to some extent,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “The bigger deal would be waking up Monday morning of next week to find the tariff hike had been implemented. In that case, rates would likely benefit (i.e. move lower!).”

Data from Black Night, a real estate analytics company point out that all year, the refinance volume has been incredibly strong at 17% of the total active mortgage market with a bigger percentage of the growing number of borrowers now opting for the cash-out refinances, an option that has picked up in this decade. All through last week, the mortgage rates were essentially flat from the previous week, with the average contract interest rate for the 30year fixed-rate mortgage with conforming loan balances ($484,350 or less) increasing to 3.98% from 3.97%, with points increasing to 0.33 from 0.32 (including the origination fee) for the loans with a 20% down payment.

“The 30-year fixed mortgage rate remained under 4 percent for the fourth straight week, and rates for FHA loans declined close to their lowest level of the year. The decrease in FHA rates led to a 27 percent jump in refinance applications for those loans, and their share of refinancing activity - at 14 percent - was the highest since 2016.” The housing shortage in the country is getting worse by the day as fewer homes than normal are getting in the market, the supply for new starts is leanest at the lower end of the market, while demand keeps on growing. While you’d expect that Wednesday afternoon’s announcement on the interest rates by the Federal Reserve to change the narrow range

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Works Cited https://themortgagereports.com/57908/mortgage-rateprediction-wrong-again https://www.investopedia.com/refinancing-ahome-4689701 https://www.thebalance.com/mortgage-refinancingadvice-1798415 https://www.mba.org/2019-press-releases/december/ mortgage-applications-increase-in-latest-mba-weeklysurvey

Make your clients’ next home purchase a “gimme”. Your clients can get pre-approved prior to contract, and then close in as little as 14 days. At First Bank, you’ll experience exceptional service. In fact, in a recent survey of clients, 96% reported that they would recommend First Bank Mortgage to a friend or family member. And unlike the pros who will be in town for the championship, your clients won’t be feeling the pressure of making a three-foot putt! If you know anyone who is looking for personal and professional service, I would be grateful for the referral.

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Eric Lawrence Frazier MBA Vice President & Mortgage Advisor Office: (800) 261-1634 Fax: (314) 264-0211 NMLS: # 461807 eric.frazier@fbol.com Firstbanks.com

[POWER ECONOMICS]

THIS IS HOW THE HOUSING MARKET

COULD BEHAVE IN 2020 J

uly this year, Zillow released its analysis and prognostications saying the United States economy is headed for a recession, which is due to happen in 2020. The company cited that the most likely triggers of the recession will be trade policies, stock market correction or the geopolitical crisis. This means that housing demand will decrease, however, this slowdown will not be the causative of the economic slump. On the other hand, Redfin projections cite the year 2020 as one with so many buyers, fewer homes which equal more bidding wars. Redfin predicts that the housing market in 2020 will be very aggressive as the cooldown that began in the second half of 2018 comes to an end.

“As we close in on the longest economic expansion this country has ever seen, meaningfully higher interest rates should eventually slow the frenetic pace of home value appreciation that we have seen over the past few years, a welcome respite for would-be buyers,” said Zillow senior economist Aaron Terrazas in the research report. “Housing affordability is a critical issue in nearly every market across the country, and while much remains unknown about the precise path of the U.S. economy in the years ahead, another housing market crisis is unlikely to be a central protagonist in the next nationwide downturn.” If the predictions from the expert panelists are true, then the current economic expansion will be the longest ever to be chronicled. While a housing crush marshaled the 2008-2009 recession, experts and the survey respondents agree that the next recession will be not be centered on the

The Power Is Now Magazine | December 2019

housing market. Activities by the federal reserve, when it comes to interest rates will be the biggest reason for the imminent recession. When the rates go up, it becomes difficult to access a mortgage, which shuts out buyers out of the purchasing process. If the Fed raises the rates too quickly, this could lead to a slowdown in the economy, thus leading to a recession.

Bidding wars

hit the market, supply and demand will become more stable, but this will happen much later in the year.

Hispanic Americans to gain more For the first time, Hispanic Americans will gain more wealth from home equity than the White Americans. The ma jority of new homeowners are Hispanic, and the home value in Hispanic neighborhoods are increasing faster in value than in white neighborhoods. For instance, if you look at Texas, you will note that there are more Hispanic homeowners than in any other state. Texas cities are likely to experience stronger gains in home values over the next decade as more people will be moving here from the more expensive places like San Francisco and Los Angeles. Hispanic families are also likely to benefit from the home equity gains for the generations to come. Channeled correctly, the Hispanic families could exploit their home equity to finance their children’s education or to start businesses. In the long span, this will improve the economic equality for Hispanic Americans.

The Redfin analysis shows a more aggressive buyer market, with Charleston and Charlotte at the forefront of home price acquisitions, thanks to homebuyers moving from expensive cities. Given the low mortgage rates, this will continue to strengthen homebuying demand however, the demand will go unmet due to the severe lack of new homes for sale, and homeowners staying put longer, meaning, mostly 2020 will be dominated by lack of housing than in the past 5 years. If the demand is high and the supply is low, the consequence is bidding wars which will rebound in the first quarter. In 2019, one in ten offers faced bidding wars and in 2020, the situation will only get worse as one in four offers will face a severe bidding war. The stiff competition will push the year-over-year growth up to 6% in the first half of the year, which is extensively stronger than the 2% growth seen in the first half of 2019. As more listing and newer inventory

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The 30-year fixed mortgage rate will stabilize at 3.8% According to Redfin, throughout 2020, the 30-year fixed mortgage rate will remain low, hovering at 3.8%. the low mortgage rate will invigorate the buyers’ market which will lead to increased competition as the nation’s housing inventory continue to dwindle. “Low mortgage rates started to revitalize the market at the end of this summer, but we won’t see their full impact on demand for housing until next year,” said Daryl Fairweather, Redfin’s chief economist. “In 2020, buyers will have fewer homes to choose from than they have in five years. But the return of bidding wars is good news for sellers who may have been holding out this year as the market stabilized.” Faced with a slow economic growth rate, the

Federal Reserve will keep the interest rates low, and even though the housing market is strong, weakness in other sectors like manufacturing will be pulling the economy down since the investors are already bracing for the possibility of a recession. Redfin also predicts that the mortgage rates will not fall much lower than 3.5% in 2020 even if the economy abates. If the economy strengthens, we expect the mortgage rates to stay below 4.1%.

Millennials will maintain their buying streak While the baby boomers are expected to hold up inventory, millennials will be actively hunting for houses. Data from Realtor.com shows millennials made up 46% of all the mortgage originations in the month of September, which is up by 3% from the previous year. Meanwhile, the share of Gen-Xers declined. This is not surprising though, at the top of their to-do list, millennials rank homeownership as a top goal, which is higher than marrying or even having kids and given

the low market rates and higher incomes, it would only seem logical that this is the best time to buy. Unfortunately, looking ahead millennials face an uphill battle as they may be entering a very turbulent housing market in 2020. Faced with a limited supply environment, coalesced with growing demand and increased homes antagonism which will accelerate home price growth. Millennial problems are likely to be deepened by the baby boomer generation as many of them opt to stay put in one place, keeping homes off the market than ever before. “Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices,” said Pulsenomics founder Terry Loebs, which conducted the survey for Zillow. “These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers.” Here at The Power Is Now we continue to bring you the

latest developments in the real estate market. We are committed to making sure that you are updated with what’s happening around you. We have partnered with First Bank to provide the products and programs that First Time Homebuyers need to buy a home now because tomorrow it will be even more difficult. Go to www.neverrentagain.com and get started today. Eric Lawrence Frazier MBA Vice President and Mortgage Advisor of First Bank NMLS 461807 President and CEO of The Power Is Now Media Inc. www.thepowerisnow.com Sources https://www.investopedia.com/ investing/next-housing-recession2020-predicts-zillow/ http://zillow.mediaroom.com/201907-25-Next-Recession-Will-Begin-in2020-Experts-Say https://www.forbes.com/sites/ alyyale/2019/11/15/2020-housingoutlook-expert-predictions-formortgage-rates-home-prices-techand-more/#429a19142935 https://www.redfin.com/blog/2020housing-market-predictions/ https://www.housingwire.com/articles/ this-is-how-the-housing-market-couldbehave-in-2020/

HOME OWNERSHIP By Eric Lawrence Frazier MBA

Home ownership brings stability to individuals and families who have never had a dwelling place that they could call their own. There is something special about owning real estate that is unlike anything else on earth you can own. Real Estate you own is not like cars that decay over time and you have to replace them. Real Estate you own is not like clothes that go out of style and you have to buy new ones. Real Estate you own is not like expensive vacations or experiences that only last a moment in time. Real Estate you own is not like an apartment where the landlord may increase the rent until it’s no longer affordable. Real Estate you own is not like staying at your parents house where you know can’t stay forever. Home ownership is the beginning of wealth that increases over time and becomes your estate & legacy Home ownership is the pride of a mother nurturer and the kitchen her domain Home ownership is the pride of a father provider and protector of his territory and family. Home ownership is the foundation of permanence and the place where life happens, birthdays celebrated, deaths mourned. Home ownership is the place you build memories that can never be taken from you. Memories etched in walls and concrete, experienced in rooms and floors, Memories living in trees and shrubs planted by your hand. Howe ownership is the manifestation of you - your style, your colors, your smell, your stuff, your junk, your memories, your yard and your spaces, your life. It’s the height markers on your first child’s bedroom wall. It’s the hearts drawn in the concrete slabs when you pour your patio floor It’s the birthday parties, and anniversaries in the living room and kitchen. It’s the back yard barbecue with friends, neighbors and family contentions it’s the high school and college graduation, and wedding receptions Its’ the family nights and block parties and the fellowship of family connections Home ownership It’s more than real estate. Land, brick and mortar, wood frame construction and chicken wire. It’s more than money saved, gifts recieved and grants obtained It’s more than the debt you incur to buy it. It’s more than the payments you make to own it. It’s more than the appreciation that comes with keeping it over time. It’s memories, it’s family, and it’s life that can happen in one place Until you say it’s time to move.