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Freddie Mac (OTCQB: FMCC) Multifamily today announced a series of policy and process enhancements that further strengthen underwriting due diligence, bolster fraud detection and deterrence, and mitigate other risks. Effective April 18, the changes include enhanced property inspection requirements and additional due diligence, among other measures.

"Freddie Mac remains focused on risk management and works to enhance our processes to better detect and deter fraud and misrepresentation,” said Ian Ouwerkerk, senior vice president of Multifamily Underwriting & Credit. “We take these issues seriously, and these enhancements are just the latest step in our effort to manage risk and improve our execution."

The enhancements will appear in Freddie Mac’s Multifamily Seller/Servicer Guide (“Guide”) and take effect on April 18. They specifically include the following:

  • Property inspections will require an increased number of unit inspections and higher lease audit sample sizes. Additional documentation will be required for lease audits to confirm actual tenant rental payments.
  • Stronger “Know Your Customer” requirements, including enhanced due diligence for first-time borrowers and borrowers with limited multifamily experience, additional liquidity verification and verification of real estate owned by the borrower.
  • Updated process to limit Freddie Mac Multifamily business with certain title companies when applicable.
  • Additional appraisal review and appraiser independence requirements to safeguard the independence, objectivity and impartiality of appraisers.

The April updates reflect another step in Freddie Mac’s ongoing effort to enhance its processes. In November 2023, the company announced new measures to clarify multifamily documentation chain of custody requirements as loan due diligence moves from borrower to lender.

Freddie Mac Multifamily is the nation's multifamily housing finance leader. Historically, more than 90% of the eligible rental units we fund are affordable to families with low-to-moderate incomes earning up to 120% of area median income. Freddie Mac securitizes about 90% of the multifamily loans it purchases, thus transferring the majority of the expected credit risk from taxpayers to private investors.

Freddie Mac’s mission is to make home possible for families across the nation. We promote liquidity, stability, affordability and equity in the housing market throughout all economic cycles. Since 1970, we have helped tens of millions of families buy, rent or keep their home. Learn More:
Website

Posted On Tuesday, 16 April 2024 06:04 Written by

The buzzwords of today’s digital age are ‘AI’ and ‘Artificial Intelligence.’

These excite some and strike fear into others. Yet whatever your position, this Hard Trend is undeniable and will shape the future of your business or organization in some way.

Applications like ChatGPT, deep data algorithms, and others are changing the face of work and how we approach business practices at an unprecedented speed. So what does that mean for the roles we have at work? Better yet, how do employers acquire talent with the skills necessary to keep operations progressing into the future? And finally, how do employees adapt when many of the tasks they are used to completing are being transformed by AI?

AI Is Moving Fast

Organizations and employees alike find comfort in their tried-and-true operations, but the business world is never constant — change is the only constant. According to a recent report completed by Goldman Sachs, 60% of the jobs available today did not exist in the 1940s. With the accelerated rate at which AI is transforming our current roles, today’s positions will be exponentially different in the next 5, 10, 15, and 20 years.

We do not have the luxury of sitting back and becoming complacent in our current roles, no matter what level they are at. Instead, we need to take an Anticipatory approach to work, looking at the future of AI technology in the workplace and proactively arming our workforce with essential knowledge and skills.

Do Not Let AI Lead You — Be the Leader

Because AI is progressing at such an exponential rate and will continue to do so, many organizations are still finding it difficult to obtain and retain top talent. Likewise, workers are finding it difficult to assimilate to their new roles in a technology-driven workforce.

Adaptation to AI is certainly on everyone’s minds; however, there is a slight problem with the concept of adaptation. It is a complacent and reactive approach to this digital disruption and will continue to be. Essentially, using agility to face AI will continue to put you in a place of professional anxiety.

With the uptick in AI applications, many companies have allowed AI to come to them. As a result, they wind up disrupted and feel that AI is at fault. Let me be frank: AI applications are not sentient beings. They merely exist and can or cannot be put into action.

It is up to you to apply AI within your business or organization. But applying AI is only half the battle. There is the human factor of the equation, in which your employees are affected by those AI applications. What ends up happening is business leaders either replace employees with those who have the technical skills necessary to work with AI or they force their current employees to learn these skills at unrealistic speeds.

But in reality, no matter the option you select, you are already behind at this point.

High-Level Skills and Technical Knowledge Are a Powerful Combination

Implementing AI applications in Anticipatory ways is definitely part of the equation, but as a leader, you are dealing with humans at your organization. Humans need to be taught how to work with these AI applications.

Teaching the essential skills at the heart of AI encompasses more than just technical know-how of coding languages, data sets, and machine learning principles. These are valuable skills, but employers need to teach how to leverage the higher levels of cognitive domain that human beings bring to the table.

In 1954, psychologist Benjamin Bloom developed a framework for categorizing educational goals: Bloom’s Taxonomy of Educational Objectives. The categories are:

•  Knowledge

•  Comprehension

•  Application

•  Analysis

•  Synthesis

•  Evaluation

Knowledge and comprehension are the lower levels, while application, analysis, synthesis, and evaluation are higher. By creating a space for employees to foster these higher levels, you not only encourage them to develop confidence in their use of these new skills, but employees will also have the advantage of examining data and filtering the most crucial information in a way that AI cannot. 

Bringing It All Together

Creative problem-solving, decision-making, and the ability to communicate effectively are key skills that AI cannot touch. A mastery of these skills gives you, your team, and your business or organization the competitive advantage in your industry!

As you can see, an Anticipatory approach to AI in your industry and others is not just about working AI into your system. Human employees will always be a valuable asset to any business or organization, but much like AI applications, they too need to evolve and “upgrade.”

Combine these high-level skills with modernized knowledge in your training, make it interactive, and give current employees downtime to explore and learn these competencies fully. Meshing teaching critical-thinking skills with learning new technology is the way of the future.

To learn more about how you can take advantage of AI and accelerated digital transformation while retaining high-value employees, join my Anticipatory Leader Membership. Right now, you have a choice to make. You can react to problems and disruptions to your life, your career, and your organization after they happen, or you can tap into this unique learning system that will empower you with the ability to accurately foresee disruptions and game-changing opportunities. Learn more: https://www.burrus.com/become-anticipatory.

Posted On Tuesday, 16 April 2024 00:00 Written by
Posted On Monday, 15 April 2024 14:20
Posted On Monday, 15 April 2024 12:44 Written by
Posted On Monday, 15 April 2024 11:59

Lack of affordability is the most commonly cited reason renters don’t believe they’ll ever own a home

Nearly two in five (38%) U.S. renters don’t believe they’ll ever own a home, up from roughly one-quarter (27%) less than a year ago, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Lack of affordability is the prevailing reason renters believe they’re unlikely to become homeowners. Nearly half (44%) of renters who don’t believe they’ll buy a home in the near future said it’s because available homes are too expensive. The next most common obstacles: Ability to save for a down payment (35%), ability to afford mortgage payments (33%) and high mortgage rates (32%). Roughly one in eight (14%) simply aren’t interested in owning a home.

This is according to a Redfin-commissioned survey of roughly 3,000 U.S. residents, including about 1,000 renters, conducted by Qualtrics in February 2024.

Buying a home has become increasingly out of reach for many Americans due to the one-two punch of high home prices and high mortgage rates. First-time homebuyers must earn roughly $76,000 to afford the typical U.S. starter home, up 8% from a year ago and up nearly 100% from before the pandemic, according to a recent Redfin analysis.

Home prices have risen 7% in the last year alone, and monthly mortgage payments have risen more than 10%, which helps explain why renters today are more likely than they were last year to say they don’t see themselves owning a home anytime soon.

Many renters can’t fathom homeownership because they’re already struggling to afford their monthly housing costs. Nearly one-quarter (24%) of renters say they regularly struggle to afford their housing payments, and an additional 45% say they sometimes struggle to do so.

Rents have soared over the last few years because so many people moved during the pandemic, upping demand for rentals. The median U.S. asking rent is roughly $2,000, near the record high hit in 2022—but the good news for renters is that prices aren’t growing nearly as fast as they were during the pandemic, partly because an influx of apartment supply is taking some of the heat off prices.

“Housing costs are high across the board, but renting is a more affordable and realistic option for many Americans right now—especially those who have never owned a home and aren’t able to tap into equity from a previous sale,” said Redfin Chief Economist Daryl Fairweather. “While owning a home is usually a sound long-term investment, the barriers to entry and upfront costs of buying are higher than renting. Buying typically requires a sizable down payment and approval for a mortgage—things that are difficult for many people today, when the typical down payment is near $60,000 and mortgage payments are sky-high. The sheer expense of purchasing a home is causing the American Dream of homeownership to lose some of its shine.”

Gen Z renters are most likely to believe they’ll own a home

Broken down by generation, Gen Z renters are by far the most likely to believe they will become homeowners. Just 8% of Gen Z renters believe they’ll never own a home, compared to 22% of millennials, 40% of Gen Xers and 81% of baby boomers.

That stands to reason, as adult Gen Zers (aged 18-27) are in the early stages of their careers and have a lot of time to eventually become homeowners. Older generations, especially baby boomers, may have already owned a home and decided to rent for the convenience and low-maintenance lifestyle, or are on a fixed income.

To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/renters-becoming-homeowners-2024

Posted On Sunday, 14 April 2024 06:41 Written by

Nearly 20% of recent buyers have no idea who paid their agent and how the amount was determined

39% of homeowners with plans to sell think a 3% buyer’s agent commission seems high, but nearly the same share think it seems just about right

More than one-quarter of recent homebuyers (28%) have no idea how much their agent was paid, and 17% have no idea how the amount was determined, according to a new report from Redfin (www.redfin.com). A similar share—19%—have no idea who paid their agent.

The report is based on a Redfin-commissioned survey conducted by Qualtrics in February 2024. The nationally representative survey was fielded to 2,995 U.S. homeowners and renters. This report focuses on the roughly 120 respondents who indicated they bought a home in the last year and used an agent.

Just over one-third of recent homebuyers know exactly how much their agent was paid (37%) and who paid them (38%), and a slightly lower share have a full understanding of how the amount was determined (33%).

These commissions have always been negotiable, but it has been commonplace for the home seller to cover payment for both their agent and the buyer’s agent, with a commission equal to 2.5%-3% of the home sale price typically going to their agent and another 2.5%-3% typically going to the buyer’s agent.

“Many Americans make the biggest purchase of their life without knowing precisely how the professional they hired to guide them through the transaction is getting paid,” said Redfin Chief Economist Daryl Fairweather. “Home sellers often have a candid conversation about fees with their agent before signing an agreement to work together. Buyers would benefit from doing the same. People feel awkward talking about money, but it's important to understand what your agent is charging and have a discussion about whether you will need to ask the seller to cover your agent's fee as part of your offer negotiation or pay for it out of pocket.”

Real estate agent commissions have been in the news recently because the National Association of Realtors (NAR) in March agreed to pay $418 million to settle a series of class action lawsuits regarding agent pay. As part of the settlement, NAR agreed agents will be required to enter into written agreements with buyers before they tour any home. These agreements must specify the compensation that agents will receive.

Roughly 40% of Homeowners Planning to Sell Soon Think Agent Pay Is Too High…And Roughly 40% Think It Seems Just About Right

About two of every five (39%) homeowners who plan to sell their house in the next year think a 3% commission for a buyer’s agent seems “a little” or “very” high. But a similar share (36%) of likely sellers said it seems “just about right” and 26% said it seems “a little” or “very” low.

Redfin asked likely sellers (and likely buyers) to provide their thoughts on both a 3% commission for buyers’ agents and a 3% commission for sellers’ agents. This data covers the 260 respondents to this question who plan to sell a home in the coming year.

The response rates were similar when Redfin asked about pay for sellers’ agents. Roughly two of every five (39%) homeowners who plan to sell their house in the next year think a 3% commission for a seller’s agent seems “a little” or “very” high. But almost exactly the same share (40%) said it seems “just about right” and 21% said it seems “a little” or “very” low.

Redfin charges customers a listing fee as low as 1% and lets sellers decide how much, if any, commission to offer an agent who brings a buyer. For its entire history, the company has advocated for lower fees, transparency and more choices for real estate consumers.

To read the full report, including charts, visit: https://www.redfin.com/news/real-estate-commissions-survey-2024

Posted On Friday, 12 April 2024 06:20 Written by

-- Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.88 percent.

“Mortgage rates have been drifting higher for most of the year due to sustained inflation and the reevaluation of the Federal Reserve’s monetary policy path,” said Sam Khater, Freddie Mac’s Chief Economist. “While newly released inflation data from March continues to show a trend of very little movement, the financial market’s reaction paints a far different economic picture. Since inflation decelerated from 9% to 3% between June 2022 and June 2023, the annual growth rate of inflation has remained effectively flat, ranging from 3.1% to 3.7% and averaging 3.3%. The March estimate of 3.5% annual growth is in the middle of that range. However, the market’s reaction was dramatically different, as illustrated by a significant drop in the Dow Jones Industrial Average post-announcement.”

Khater continued, “It’s clear that while the trend in inflation data has been close to flat for nearly a year, the narrative is much less clear and resembles the unrealized expectations of a recession from a year ago.”

News Facts

  • The 30-year FRM averaged 6.88 percent as of April 11, 2024, up from last week when it averaged 6.82 percent. A year ago at this time, the 30-year FRM averaged 6.27 percent.
  • The 15-year FRM averaged 6.16 percent, up from last week when it averaged 6.06 percent. A year ago at this time, the 15-year FRM averaged 5.54 percent.

The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. For more information, view our Frequently Asked Questions.

Freddie Mac’s mission is to make home possible for families across the nation. We promote liquidity, stability, affordability and equity in the housing market throughout all economic cycles. Since 1970, we have helped tens of millions of families buy, rent or keep their home. Learn More: Website

Posted On Friday, 12 April 2024 06:16 Written by
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