MReport May 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 11 MDWELL into the 'shiny new toy' syndrome where you can end up putting a bunch of things on the tech roadmap that might look good separately but are quite bad once stitched together. It is important for business leaders to know what they want from that technology; to talk to their team to get a sense of what's happening and keep the bar for technology to actually make it on the roadmap unbelievably high. It is important to be selective. There's a quote from Shakespeare's Hamlet that says, "Give every man thy ear, but few thy voice." I would tweak that in this context and say, "Give every man thy ear, but few thy investment dollars." M // What do you think are the most critical issues facing the mortgage industry today? STUBBS // We must address the issue of affordability. Millennials are trying to enter the market in earnest as their incomes rise. But down payment savings, as well as persistently low housing inventory, continue to be a challenge restraining would-be buyers from really coming into the market the way that they desire. The industry can begin to address this challenge through, low down payment programs, which is something that many lenders are already discussing. We are also starting to see private capital coming back into the market, and residential mortgage- backed securities gain a foothold again. Shared equity programs are also at an interesting juncture, where lenders or even a third party are keeping a stake in the equity and the appreciation in the prop - erty in exchange for a lower down payment for the buyer. Moving ahead, that that could be a power- ful lever in this space. Lastly, mobility is becoming a challenging issue, because the work force is evolving. With rising interest rates coming our way over the next couple years, some of the current discussions on mortgage portability can take a turn. Product innovation is one of our sweet spots at Flagstar and we're certainly doing our part to bring innovative solutions to some of these challenges. First-Time Homebuyers: It's Not Just About the Prices Market watchers looking at owning their first home should check out these cities for the right mix of manageable prices, growth prospects, and low competition. B uying a first home can be a tough task, especially when a buyer is weighing low prices as well as potential for future appreciation in a highly competitive market. Zillow recently weighed five metrics first-time buyers should consider—median home values, where markets with lower home values scored higher because of their relative affordability; markets with strong forecasted growth as healthy forecasts indicate a good start for buyers to grow equity and wealth; the inventory-to-household ratio, where markets with more inventory per household scored higher to measure available supply for buyers; markets with more listings with at least one price cut, as they are assumed to be somewhat less competitive; and the local buy-rent breakeven horizon, where markets with a shorter breakeven horizon showed a stronger financial incentive for local residents to buy instead of rent. Source: Zillow "Best Markets for First-Time Homebuyers" report MOST AFFORDABLE CITIES FOR FIRST-TIME BUYERS Population Growth: Share of Listings with Price Cuts: Median Home-Price: Breakeven Horizon: Home Value Forecast: Inventory: San Antonio, Texas 2 percent 18.8 percent $169,300 2 years 2.3 percent 8,036 homes Houston, Texas 1.7 percent 16.7 percent $186,800 1 year, 10 months 2.7 percent 26,275 homes Indianapolis, Indiana 0.7 percent 16.4 percent $143,200 1 year, 7 months 4.0 percent 6,476 homes Tampa, Florida 1.9 percent 18.7 percent $195,200 1 year, 11 months 3.1 percent 13,733 homes Orlando, Florida 2.3 percent 14.9 percent $216,100 1 year, 8 months 3.5 percent 9,351 homes

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