Across the nation, a number of mom-and-pop investors are pulling money out of their retirement accounts and safe, but low-yielding, savings to take on the risk of becoming “hard-money” mortgage lenders, who charge high interest rates to borrowers who have been rejected by traditional banks. Although this represents just a tiny slice of the mortgage market, the activity is growing rapidly. Guy D. Cecala, publisher of trade publication Inside Mortgage Finance, estimates hard-money loans will account for about 1% of the 5.5 million mortgages expected to be originated this year. But he says activity in that sector is up sharply from a few years ago, when very few hard-money loans were originated. In the past two years, Dallas attorney Joey Messina has funded 20 mortgages, ranging in size from $40,000 to $102,000. The mortgages carry interest rates of 14% — more than double the rates charged by most banks and far superior to the returns Messina received on his savings account. Typically, lenders are matched with borrowers through loan brokers, who make a commission on each deal. Most loans are short-term, lasting a few months or as long as several years. Some are set up with low monthly payments and a balloon payment due at the end of the loan term. (www.wsj.com)
Wall Street Journal (7/21/11); Dawn Wotapka

As the housing slump enters its sixth year, small companies such as Betenbough Homes in west Texas and giants such as PulteGroup Inc., the largest U.S. home builder by revenue, are using green marketing as a weapon in the battle for buyers who have their pick of low-priced existing properties, including foreclosures. To label its homes green, Betenbough Homes added a few features, such as low-flow toilets, and paid for inspections, allowing it to get the bronze level of certification by NAHB’s National Green Building Standard. The company had previously adopted design elements including energy-efficient windows, to block out heat and dust, and prefabricated roof trusses, which save money and create less waste. Buyers in west Texas, where home sales are stronger and energy costs are lower than in many other parts of the U.S., aren’t willing to pay a lot extra for a green home, according to Betenbough. “If I can do something that does increase the cost and the buyer can recover the money in two years, I’m game,” said Betenbough, who has sold about 250 green homes. “If it takes 10 years, you’ve lost me. Most people don’t live in a home that long.” Going green adds about 3% to building costs, which aren’t always passed on to customers, according to Allison Bailes, president of Energy Vanguard LLC, a Decatur, Ga.-based training, consulting and design firm. David Weekly Homes, one of the biggest closely held builders, is subsidizing some of the additional costs because mortgage appraisers don’t give full credit for the average $3,000 it spends on green features, according to Mike Humphrey, the company’s vice president of operations. If the homes were appraised at a higher value, the Houston-based company wouldn’t have to take a hit to its margins, he said. (www.bloomberg.com)
Bloomberg (7/18/11); Prashant Gopal

Single women have become a major force in the real estate market. According to the National Association of Realtors®, last year unmarried women made up 20% of all home buyers, while single men accounted for 12%. According to the Joint Center for Housing Studies of Harvard University, the three main reasons single women are buying homes in record numbers are: to relocate closer to a job or family; because they need more space; and the No. 1 reason cited, because they have a strong desire to nest. Taking note, in new home construction builders are putting in extras such as security features, gourmet kitchens and yards with little or no maintenance required. As a single woman, Jan Gray, a Northern California Realtor® who specializes in coastal properties south of San Francisco, knows the joys of feathering a nest by oneself. “When women shop for a home with a man, I always see them deferring to him: his need for a garage, or a work space, or a man cave. When women buy for themselves, they are excited about turning this place into something that reflects them and who they are — they know they could even paint the bathroom pink if they wanted.” (www.MSNBC.com)
MSNBC (7/12/11); Jane Ganahl

Until recently, real estate brokers in New York City rarely shared information about one another’s listings. As a result, buyers had no way of knowing whether their agent was showing them every property available, and sellers wondered whether their homes were getting the exposure necessary to secure the best deal. Companies like StreetEasy, Zillow and The New York Times have helped open up the market by gathering listing information from various real estate databases and making it easy for consumers to search for homes online. But many brokerages still display only the firm’s exclusive listings on their websites — either because they are focusing on selling their own properties or resigned to the fact that customers have migrated elsewhere to research what is on the market. Other brokerage firms are getting into the digital game themselves, creating a “virtual office website” or VOW. These are sites operated by brokers that enable clients to search for most of the available properties in a particular market, not just the firm’s exclusive listings. While brokers have mixed feelings about whether these sites are worth the investment, the emergence of the VOW is yet another sign that once tightly guarded listing information has finally been set free in New York. (www.nytimes.com)
New York Times (7/8/11); Susan Stellin

The battered housing market is roughing up the job market, complicating new hires and long-distance moves. Few companies still offer straight-forward benefits including guaranteed buyouts of executives’ homes. Instead, creative new enticements are taking their place: payments to aggressively market a house, bonuses for selling quickly, financial aid for extended temporary housing. The trick is settling the brightest workers into the best spots, while avoiding costs related to homes left behind. Employees, meanwhile, are having to take new risks or bypass enticing job offers. The leap is especially big for the nearly 25% of U.S. mortgage holders who owe more than their homes are worth — or likely will bring at sale. Ultimately, the housing slump may have little impact on employee mobility. Out-of-state moves associated with job opportunities remained steady from 2007 to 2009, according to U.S. Census Bureau data. (www.indystar.com)
Indianapolis Star (7/25/11); Lisa Bernard-Kuhn, Cincinnati Enquirer

An estimated 1 million customers at one national bank alone had their credit lines reduced, frozen or canceled without appraisals during 2009 in the tense months following the near-collapse of the capital marketplace. Now, clearing the way for a possible giant class action, a federal district court in Chicago has given the green light to clients of JPMorgan Chase to proceed with a consolidated lawsuit alleging that equity lines were yanked or reduced illegally, costing them billions of dollars in lost borrowing power. The litigation pulls together eight suits seeking class certification filed by home owners in Arizona, California, Illinois, Minnesota, Ohio and Texas. It is considered a bellwether test of the rights home owners have under the Truth in Lending Act and state consumer protection statutes when they take out equity lines of credit. It also shines light on the controversial computerized tools many lenders use to make quick, inexpensive assessments of property values in lieu of more costly professional appraisals. (www.washingtonpost.com)
Washington Post (7/15/11); Kenneth R. Harney