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REPORT: RECOVERY INFLUENCERS BETTING ON DIFFERENT MARKETS When looking at the housing recovery through the lens of prices, the industry appears to be well on its way. However, according to economists at the online real estate marketplace Trulia, prices are only half of the picture. "A full housing recovery requires rebounds in both prices and new construction," Trulia stated with the release of the company's latest price and rent monitor reports. Prices were up 11 percent year-over-year in August, according to Trulia, which monitors list prices. Construction activity, however, is severely lagging. Trulia says construction permits for the year through August are between 60 and 70 percent of their historical averages from 1990 through 2012. Additionally, when it comes to price gains and increases in construction, markets tend to be experiencing one or the other. Markets that have seen rapid price growth are prone to more meager construction activity. "Investors and builders have bet on different local markets," said Jed Kolko, chief economist at Trulia. "Investors have bought in the boomand-bust metros." On the other hand, "[b]uilders, however, are betting on markets that avoided the worst of the crash, like Boston, much of Texas, and the expensive California coast," Kolko said. Las Vegas, for example, topped the charts with a 33.6 percent increase in asking prices year-over-year in August. However, the level of construction permits year-to-date is just 39 percent of the market's historical norm. The California markets of Sacramento, Oakland, and Riverside-San Bernardino 46 demonstrate similar trends with annual price gains above 25 percent but construction activity ranging between 38 and 60 percent of historical norms. Two exceptions to the current "either/ or" trend are Orange County and San Jose in California. Both of these markets posted annual price gains above 20 percent in August with construction permit activity higher than historical norms. In the rental market, Trulia identified a continuation in rising rents with a wide discrepancy in growth among apartment rents and single-family home rents. Overall, rents rose 3.5 percent annually in August. However, apartment rents rose 3.9 percent, while single-family home rents rose just 1.6 percent, according to the Trulia Rent Monitor. Among the 25 largest rental markets in the nation, Seattle, Washington, experienced the greatest increase in rents year-over-year in August at 9.8 percent. Apartment rents in the market increased 10.5 percent, while singlefamily home rents rose just 2 percent, according to Trulia. Portland, Oregon, ranked second with an overall rent increase of 8.2 percent year-overyear in August. Miami, Florida, followed with a 7 percent increase in rents. Houston, Texas, posted the fourth-highest rent increase in August, but it was an exception to the general trend. Rents increased 6.7 percent overall in Houston, but single-family home rents posted a higher increase than apartment rents—7.4 percent and 6.6 percent, respectively. EXEC ADVISES LAIDOFF LOAN OFFICERS TO LOOK TO SPECIALTY SERVICING As mortgage rates climb and the refinance boom comes to a close, the origination sector is in flux. Last month, mortgage applications declined 7.7 percent, according to data compiled from the Mortgage Bankers Association's weekly application survey. From August to September, refinance applications sank 13 percent, while purchase applications rose a mere 1.3 percent. Also evidence of declining refinance volumes, Ellie Mae reported in July that purchase originations outpaced refinances for the first time since Ellie Mae began recording origination data about two years ago. With declining volumes, the industry cannot support the number of loan officers it's had on staff of late, and many originators are shedding employees. Wells Fargo, for example, is reportedly cutting 2,300 production jobs. This glum news, however, may have a silver lining, according to at least one industry executive. "There's a huge opportunity for former loan originators taking their existing skill set and industry knowledge and applying them in specialty servicing," Patrick Norton, SVP of Fay Servicing in Chicago, told DS News. "There's enormous opportunity, and I don't think it's going to fade away in the near future," Norton said. Loan officers already have a broad and deep understanding of the mortgage industry. They are used to working with customers with challenging credit profiles, and they are adept at relationship-building, according to Norton. These skills "translate very nicely to a career in specialty servicing," Norton said. In fact, Fay Servicing is expanding, and the company "targets exclusively former loan originators," according to Norton. Unlike refinancing, which experienced a recent boom and is now on the decline, Norton says specialty servicing will not likely see a decline any time soon. Even after the industry works through the current backlog of delinquent and troubled loans, specialty servicers will remain an integral part of the industry, according to Norton. The biggest adjustment for loan officers transitioning to servicing is the "distinct regulatory environment," according to Norton. Fay Servicing offers new employees transitioning from the originations sector a two-week course to familiarize them with industry regulations and best practices.

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