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CONFERENCE WITH HOMEOWNERSHIP, THERE'S NO MIDDLE CALENDAR PLACES TO BE THIS MONTH GROUND FOR THE MIDDLE CLASS NOVEMBER 3-6 17th Annual CRA & Fair Lending Colloquium HYATT REGENCY GRAND CYPRESS ORLANDO, FLORIDA Contact: 781.663.5302 Online: CRACOLLOQUIUM.COM NOVEMBER 6-8 National Property Preservation Conference MARRIOTT CHICAGO DOWNTOWN MAGNIFICENT MILE CHICAGO, ILLINOIS Contact: 800.852.8306 Online: SAFEGUARDPROPERTIES.COM NOVEMBER 9-12 UTA's 38th Annual Educational Conference CLAREMONT HOTEL CLUB AND SPA BERKELEY, CALIFORNIA Contact: 949.260.9020 Online: UNITEDTRUSTEES.COM/CONFERENCE NOVEMBER 11-12 SIFMA 2013 Annual Meeting MARRIOT MARQUIS NEW YORK, NEW YORK Contact: 212.313.1210 Online: SIFMA.ORG/ANNUAL2013 NOVEMBER 13-14 TMBA Mortgage Servicing Forum WESTIN GALLERIA DALLAS DALLAS, TEXAS Contact: 512.480.8622 Online: TEXASMBA.ORG/SERVICING NOVEMBER 14-15 Annual E-Signature Conference CONVENE NEW YORK, NEW YORK Contact: 212.803.8200 Online: SOURCEMEDIA.COM/EVENTS 12 Homeownership is not as attainable for most as some of the latest financial news would lead one to believe. Buying a home is still a cheaper option than renting because mortgage rates remain below housing bubble levels, but incomes have not risen to pre-crisis levels, making homeownership unaffordable for many. A recent report from Trulia reveals that for the middle class, homeownership is more probable in the Midwest and the South. Trulia examined homes for sale across the country and determined one's total monthly payment must be less than 31 percent of the metro's median household income for the home to be considered affordable. The results of the study showed that those looking to live comfortably in their homes should consider moving to Ohio, Indiana, South Carolina, or Alabama where incomes are lower, but housing costs are even lower relative to income. Two challenges face the middle class as they look for avenues to purchase homes. For one, affordable homes are not only in limited supply, but they are limited in square footage, making space constraints noticeable and diminishing the worth of the home. Second, affordability is worsening nationwide as median incomes are not keeping pace with increasing home prices and rising mortgage rates. "Affordability ranges widely both within and between metros," said Jed Kolko, chief economist for Trulia. "In parts of New York and California, affordability is the most pressing housing concern—even though mortgage rates are still well below historical norms and buying is cheaper than renting. Yet elsewhere in the country, affordability is a distant worry compared with vacancies, foreclosures, and sluggish local job growth. All housing is local—and so are the biggest housing challenges." ANALYSTS EXPECT SPECIALTY SERVICERS TO PLAY LARGER ROLE IN REFI MARKET After releasing a mortgage origination forecast of $349 billion for the third quarter in early October, FBR Capital Markets raised its estimate to between $400 billion and $420 billion for the quarter. FBR explains its revision is in part due to the $388.5 billion of mortgage-backed securities (MBS) issued during the third quarter. Traditionally, a good estimate of originations is 92 to 97 percent of MBS issuances in a quarter, according to FBR. FBR continues to stand behind its forecast of $1.4 trillion in originations for 2014, relying on a strong spring homebuying season and an uptick in refinances as rate hikes stall. Despite the coming increase, FBR expects "the next two quarters could be somewhat sluggish." FBR anticipates a rise in refinances under the Home Affordable Refinance Program (HARP) as small specialty servicing shops are "still playing catch-up" from the recent boom. "While many will argue that refi activity will not resume as the market has already burned out, we believe there are still plenty of loans that are eligible for HARP refis," FBR stated in its revised outlook. FBR continues to anticipate strength among specialty servicers, partly because of "their ability to effectually mine acquired portfolios for refinancing opportunities." FBR estimates Nationstar originated about $6.8 billion in loans in the third quarter with about $6.5 billion more from Walter Investment Management Corp. Nationstar's MBS issuance to the GSEs rose 80.3 percent during the third quarter of this year, and Walter Investment's loan sales ticked up 93.2 percent. These specialty servicers are ramping up activity as larger banks are relinquishing some of their market share, according to FBR. Wells Fargo, for example sold the GSEs 19.5 percent of the MBS they purchased in the third quarter, down from 23.4 percent a year ago and 30 percent in early 2012. JPMorgan Chase reduced its MBS sales by 0.2 percent, while Bank of America scaled back 0.7 percent, according to FBR. STAT INSIGHT 939,000 U.S. homes in some stage of foreclosure as of August, down 33% from a year earlier. Source: CoreLogic

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