the secondary market overview
APRIL 2011
MASSACHUSETTS MORTGAGE PROFESSIONAL MAGAZINE
NationalMortgageProfessional.com
18
Assuming that Libya stabilizes either under the present or a new regime, the country will realize quickly that producing oil will help them rebuild. The result could actually be more production of oil, not less. This means that oil prices could finish the year lower than where they are now. We are not saying that is going to happen, but many analysts believe this to be the case, especially if the crisis does not spread and deepen to Saudi Arabia and other oil producing countries. As a matter of fact, the initial reaction to the devastating crisis in Japan has been lower oil prices—and interest rates. Now real estate. We had similar bubble which burst in real estate around the time of the fiscal crisis and recession. Real estate does not move in price as quickly as the stock market or oil and therefore the rise and fall was more gradual and less pronounced. Like oil, the price of real estate has been recovering over the past two years. However, this recovery was pumped up by the existence of tax credits and other government subsidies. Everyone knew that when the tax credits ended that there would be a negative effect on the markets. Therefore, the second half of 2010 saw the real estate market, including prices, weaken. Some have said that this is the beginning of a “double-dip” in prices. Again, we caution observers to keep an open mind. While real estate will be weighed down by shadow inventory and a steady stream of foreclosures for some time, the one factor the real estate market needs to reverse the slide is a stronger employment picture. Again, this appears to be happening with the unemployment rate and weekly employment claims sliding. A few stronger months will not get the economy turned around, but it appears we are heading in the right direction. If people can get jobs, kids will move out from their parents’ houses and household formulation will increase. We are not building enough homes to accommodate this latent
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heard on the street
“While real estate will be weighed down by shadow inventory and a steady stream of foreclosures for some time, the one factor the real estate market needs to reverse the slide is a stronger employment picture.” demand. Even those who were foreclosed upon will need houses to rent. The conclusion? If the economy continues to progress thorough 2011, the real estate market could turn around quicker than the doomsayers expect. So, while the tendency will be to hang your head low while the flying monkeys are around, those who lead this industry in the future will be ahead of the curve. Recently, it was reported that sales of million dollar homes were up significantly in 2010. Those who are successful do not wait for the markets to turn around, they act when others don’t. Many loan officers are scared to make moves with refinances slowing and the compensation plans about to be put in place. What you should be doing getting ready for the recovery so you are ready when it comes. That means understanding what your customers will need in the new world. You will need to be an expert—letting them know what is happening with rates to helping them qualify when others cannot. More on this later. For now, gain some long-term vision. Even the Wizard was not who he appeared to be …
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announced the addition of the following regional account managers: James R. Loving in the Midwest region, Joel Dulmage in the Central U.S. region, Diane Keane in the Southeast U.S., Carrie Felix in the Midwest region, Debra Noguera in the South Central U.S., Whit Brame in the Mid-Atlantic region and Michael Bender in the Northeastern United States. Kislak Mortgage has named Carlos Coloma as area manager of the company’s southern Florida region. Steve Brunworth has joined Mortgage Builder Software as western region sales manager. Primary Capital Mortgage (PCM) has announced the addition of Vicki Blum as southeast account executive. Landmark Mortgage Group has announced the additions of David Morris and Todd Galde to the company as mortgage advisors. Platinum Data Solutions has hired Ray Petta as a consultant focusing on building the company’s brand building and business development.
Resource National Title Agency has added Donna Betley as an account executive in the firm’s retail division. TitleVest has named James Leslie as its new chief financial officer and Glen Chernick as senior underwriting counsel.
Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of:
Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
Dave Hershman is a leading author for the mortgage industry, with eight books and several hundred articles to his credit. He is also a top industry speaker. If you would like to stay ahead of what is happening in the markets, visit www.ratelink.originationpro.com for a free trial. Dave’s NewsletterPro Marketing System can be found at www.webinars.originationpro.com and he may be contacted by e-mail at dave@hershmangroup.com.
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