Category Archives: 6 Figure Business Secrets

3 Simple Strategies For Rising To The Top

Life is full of ups and downs and sometimes has a few sideways thrown in too. When things go wrong or don’t go as planned, or when something happens to throw us off balance and doubt ourselves it can be … Continue reading

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Coronavirus hits Habitat for Humanity hard as nonprofit set to lay off 10% of its staff

The impact of the coronavirus has already caused numerous real estate companies, including Compass, Opendoor and eXp Realty, to lay off employees, and it turns out that even one of the biggest housing nonprofits is not immune from having to make hard decisions these days.

Habitat for Humanity International, the umbrella organization for the local and national Habitat programs that operate in all 50 states and in more than 70 countries, announced Friday that it is laying off 10% of its employees.

The nonprofit said that the layoffs are part of an effort to “cut expenses in reaction to short- and long-term financial forecasts and operational impacts of the COVID-19 pandemic.”

Beyond the layoffs, “several other” employees will have their work hours reduced. Additionally, members of the nonprofit’s senior leadership have chosen to take a pay cut.

According to the company, the moves will “immediately impact its U.S.-based staff, and its regional offices throughout the world” in the coming weeks.

“Habitat for Humanity is a ministry of people who share a vision of a world where everyone has a decent place to live,” said Jonathan Reckford, CEO of Habitat for Humanity International.

“For so many of our team, Habitat is not merely a job — it is a cause. It breaks our hearts to take these significant, but necessary, actions,” Reckford continued. “We are compelled by the economic realities of this global pandemic, and by our responsibility to steward Habitat for Humanity so that we can resume serving our communities as quickly as is safe to do.”

The company’s network of programs served more than 7 million people last year, and has helped more than 29 million people find new or improved housing since 1976.

According to the nonprofit, the spread of the virus has hit the company hard in recent weeks.

As the virus spread, Habitat suspended the “vast majority” of its construction activities throughout the U.S. and around the world. Beyond that, more than 900 home improvement Habitat ReStores in the U.S. and Canada are closed to the public.

Habitat also suspended its Global Village volunteer builds through the end of 2020.

According to the company, volunteer fees from these builds provide “significant funding” for Habitat’s work in many of the 70 countries where it operates.

“Since the initial spread of the virus, Habitat has taken several proactive steps to suspend its operations to help prevent the transmission among its volunteers, staff and the people in the communities it serves,” the company said. “These measures have had immediate financial impacts for the organization. Global economic turbulence has also led the donor-funded nonprofit to significantly revise its revenue projections.”

That’s left many of the local and national Habitat organizations facing “significant funding shortfalls,” leading to similar cost-cutting measures as the international organization is taking.

“Housing conditions can literally mean the difference between life and death,” Reckford said. “In any disaster, it is those with the least who are impacted the most. These are the families with whom Habitat partners. Now, more than ever, we need to make sure we are ready and able to answer the call.”

The company is also calling for additional support for the housing industry and those who occupy those homes.

“Habitat is also advocating, both in the United States and in the more than 70 other countries where it works, for housing stability during the pandemic crisis,” the company said. “That includes enlisting the support of its staff, volunteers and partners to call for foreclosure and eviction moratoriums as well as housing payment assistance and market liquidity.”

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[PULSE] Here’s how to talk to your clients about mortgage forbearance

If you are like most mortgage professionals, you are getting calls about forbearance. The longer you have worked in the industry, the more calls you are getting.

Since the COVID-19 pandemic, I have had friends, neighbors, relatives and even Realtor referral partners ask about mortgage payment relief and the consequences of such relief.

Quentin Hardy
Guest Author

What are you saying to those who ask you about forbearance? Have you suddenly become an expert on a topic that was rarely discussed in the last few years?

This is not my first time being deluged with calls about forbearance. I live and work in a part of New York that was severely impacted by Superstorm Sandy in 2012. Many in my circle reached out to me at that time about not being able to pay their mortgage. My best advice: Study the specific terms of your lender’s offer.

It sounds like a no-brainer, but I’ve spoken with people who did not follow that simple rule. Some found out they had deferred payments but had a balloon payment after three or four months. They were unable to catch up all at once and fell into a more serious financial difficulty.

A year after their forbearance, some clients found out they could no longer qualify for a mortgage. They could not refinance or buy a new property using a mortgage. Their credit history showed too many late payments on their mortgage. Some had more than one instance of “not paid as agreed.” They were surprised because they did not understand the specific terms of what was offered to them.

A few said they heard on the news that they didn’t need to make mortgage payments. They believed a state law or disaster area declaration would allow them to skip or not pay for a month or more. They stopped paying without communicating with anyone. Of course, their loan servicer didn’t give forbearance since they didn’t even know the borrower’s intentions.

Forbearance is one word, but it can mean many things. It could be a full moratorium on payments. It could be a reduced interest rate. It could be a reduced payment. It may mean a balloon payment. It may mean adding the principal and interest payment on to the back end of the loan.

It may impact one’s credit negatively or it may not. Keep in mind: There’s no such thing as a free lunch. Some are making it sound like this is a freebie. Let’s remember forbearance means “holding back” as in holding back a foreclosure. When someone defers a payment, it may mean they are paying extra interest on the deferment. This makes those missed payments more expensive.

Of course, balloon payments are problematic for most. A forbearance gives a borrower time to resolve their problem. In some cases, that means selling the home. In some cases, it means pulling money from other resources or getting help from family.

So, what advice do we give people when they call us and ask about forbearance?

  1. Forbearance is a way to avoid foreclosure. It is serious. If you can pay your mortgage, that is likely the very best option.
  2. The CARES Act covers two categories of loans. It covers loans that are federally owned and loans that are backed by federal agencies and entities. Find out if your loan falls in that category. About 38% of mortgage loans in the United States are not federally backed (according to the Urban Institute) and therefore do not qualify for this protection.
  3. Communicate with your loan servicer. Don’t stop paying without a formal agreement.
  4. Get the terms of the agreement in writing. Regardless of what is said on the phone, get your offer in writing. That is what counts.
  5. Understand your specific terms. There is no one size fits all. It doesn’t matter what you heard on the news or what your friend or neighbor got.

According to the Federal Reserve report on the Economic Well-Being of U.S. Households in 2018 survey, about 40% of Americans would have to borrow money when facing an unexpected expense of $400. Twelve percent would be unable to pay the expense by any means. The average mortgage payment in the United States is just over $1,500 per month according to the Census Bureau.

Right now, many people in the country are facing unexpected expenses or some type of income interruption. Many more will likely be facing this in the upcoming months as we enter the “new normal.”

Let’s be sure to give accurate and helpful advice with empathy and understanding.

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David Stevens: Calabria may be “the absolute worst person for this job at this time”

Over the last several weeks, the housing industry’s finance sector has lobbied the government to set up a federally-backed liquidity facility for U.S. mortgage servicers to address a substantial increase in forbearance requests from the nation’s financially strained borrowers. HousingWire Digital Producer Alcynna Lloyd sat down with the former head of the Federal Housing Administration and former Mortgage Bankers Association President David Stevens, who now serves as CEO at Mountain Lake Consulting to gauge his thoughts on whether or not the government has done enough to address the issue.

Below you will find two of the six questions Stevens answered with the full audio in a video at the end. This interview has been lightly edited for length and clarity.

Alcynna Lloyd: You have been very outspoken on the forbearance issue and what the Federal Housing Finance Agency and GSEs should be doing. Do you think their recent efforts have been enough to address the industry’s forbearance concerns?

David Stevens: I’m glad they did something, but it’s a little bit late. We already saw significant credit tightening as a result of the FHFA not stepping in. Instead of having servicers be required to advance forbearance payments for the full term of forbearance, they kept it at four months only at which point the GSEs would then take over the advance requirements. The problem is that in that four-month period, we could see an extraordinary amount of liquidity being advanced, and unlike other forbearance programs that have existed prior to the CARES Act, I don’t think we’ll get any repayment back until the borrower ends his or her forbearance plan and begins to repay their advances, which could take months or years. So, there’s still an outrageous amount of liquidity being advanced for servicing that Freddie Mac and Fannie Mae own, and it’s putting a really outrageous amount of liquidity pressure onto the nonbank community.

Alcynna Lloyd:  FHFA Director Mark Calabria recently said that no nonbank is too big to fail and that he expects forbearance requests to remain at low. The industry has said otherwise and data shows that forbearance has already passed Calabria’s projections. Do you think anyone can change Calabria’s mind or philosophy?

David Stevens: Mark is a libertarian. His perspective is that the government should not intervene in housing markets, and he’s been very vocal over the years about the role of FHA and the GSEs being too big. I believe he is exercising his economic philosophy that the markets will improve without intervention. I think his recent comments were blasphemous and they aided in additional tightening of credit. The statements also reflect his lack of experience in the business. He’s never been in the industry; he’s always been an economist. I’ve seen much more aggressive positions taken about his job right now. I think Mark is being naive, and putting the housing finance system at risk. More importantly, this is going to have huge negative pressure on an economy that’s already struggling. The housing system is 40 basis points of the gross domestic product and about a fifth of GDP is housing. This will be a core component of economic recovery, and you want it to be strong as we go back to work. Mark is doing anything but providing that support.

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What does the mortgage industry’s post-pandemic future hold?

The challenges facing the mortgage industry were raised by three prominent industry leaders during a webinar sponsored by the National Association of Minority Mortgage Brokers of America.

Kristy Fercho, president of mortgage at Flagstar Bank in Troy, Michigan, predicted that in 12 months the industry will “still be dealing with the remnants of COVID.” She noted that her bank sent all of its employees home on March 13 to test its telecommuting system and business continuity plan, not realizing that the state would issue a shelter-in-place edict that week. And while the work-from-home set-up has not been problematic, Fercho wondered what will happen when it is finally lifted.

“I think in the next 12 months, we’ll still be dealing with what’s going to happen with work-from-home,” she said. “How do you transition the workforce back into the workplace?”

Fercho acknowledged that the company’s internal business productivity metrics showed the at-home employee structure did not disrupt operations.

“This past week, we asked our people if they were more productive at home or at work and 96% of our employees say they’re about the same or have higher productivity working from home,” she stated. “Do we stay letting people work remotely?”

But while the pandemic is still present, Fercho believes the purchase loan market could stage a comeback sooner than expected, pointing to the latest Mortgage Bankers Association applications survey.

“If you actually dig in and go into the state level data, it actually showed that the top 10 states saw an increase in purchase week-over-week,” Fercho said. “I think the opportunity now is to really continue to invest and nurture those referral partner relationships.”

Laura Brandao, president of American Financial Resources in Troy Hills, N.J., stated her company is fixated on having the right talent in place for the next 12 months.

“I have a management meeting every Friday at 11 o’clock,” Brandao said. “And the first thing I say to my team is not only do we need to find the talent, we need to grow the talent. We need to develop the talent and we better be prepared on how to do it remotely. We better have that plan and training program to be able to do it for people that are brand new to our industry, that have never gone through that training before, and make them successful.”

Brandao agreed with Fercho on the purchase market’s vibrancy, revealing that her company’s activity was “probably 80% purchase.” She also identified potential new homebuyers who are eager to get into the market once stay-at-home orders are lifted.

“Right now, people have spent more time in their homes than they have ever in their entire lives,” she explained. “That has created a lot of opportunities, with people saying: ‘Maybe I want a bigger backyard. Maybe I want to have a place where I can have a home office, because now I might be working remotely much more.’”

Brandao also theorized that markets with large shares of second homes may see those properties get listed after the pandemic abates.

“You have some people that have second homes that are like, ‘You know what, I don’t think I’m going to go to Florida for the next two years because I don’t want to get on an airplane. Instead of paying that mortgage, maybe I’ll sell my second home.’”

Michael Dubeck, president and CEO of Planet Home Lending in Melville, New York, praised federal policymakers.

“I think the regulators have been very quick to bring a lot of solutions and clarity to the table,” he said. “I’m actually thinking we’re pretty fortunate to have a Treasury secretary that speaks the word ‘mortgage’ and knows what a rate lock and a servicing advance is.”

Dubeck also predicted buyer interest will not wane in the immediate post-pandemic months.

“Maybe the homebuying season is just going to be pushed out till July or August,” he said. “And at that time, I think we’ll see a huge increase in demand and pent-up activity, both from buyers and sellers. You know, we saw a lot of demand in January and February. And the truth is that the buyer that was a buyer a month ago is still interested in being a buyer.”

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Nareit April Rent Survey Shows Industrial, Multifamily, Office REITs Performing Well

A Nareit survey of April rent collection across the REIT industry points to a strong performance by industrial, multifamily, and office REITs.

Nareit Executive Vice President for Research and Investor Outreach John Worth told the REIT Report April 22 that industrial REITs saw 99% of typical rents received in April. The survey was conducted between April 8-15.

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