Market Conditions

Is Marketplace Lending a Friend or Foe to Mortgage Firms?


The burgeoning marketplace lending sector seeks to disrupt traditional financial services with online platforms that connect borrowers to individual and institutional investors.
But in real estate, marketplace lenders — which are also known as peer-to-peer or alternative lenders — have focused on facilitating loans to underserved niches within both the residential and commercial sectors. It’s an approach that, at least for now, seeks to co-exist with, rather than supplant, the traditional mortgage market.
“Banks in the beginning really didn’t know how to view peer-to-peer lending. Like, ‘Is it going to hurt us? Is it competitive to us?’ But I think banks have come to recognize that it can actually be very complementary to their businesses,” said David Manshoory, CEO of marketplace lender AssetAvenue in Los Angeles.
Marketplace lenders such as AssetAvenue see their best prospects for real estate lending in private commercial real estate loans […]

Home Prices Rose at Slower Pace in May


Home prices in 20 U.S. cities rose at a slower pace in the year ended May, keeping more properties within reach for prospective buyers.

The S&P/Case-Shiller index of property values increased 4.9% from May 2014 after rising 5% in the year ended in April, the group said Tuesday in New York. The median projection of 28 economists surveyed by Bloomberg called for a 5.6% year-over-year advance. Nationally, prices climbed 4.4%.

The slower pace of appreciation may give younger or first-time buyers an easier point of entry into the market, especially as wages have seen little growth for much of the economic expansion. It also gives Federal Reserve officials room to be patient as they consider raising interest rates, which hasn’t occurred since 2006.

“Nationally, single-family home-price increases have settled into a steady 4%-5% annual pace […]

New Home Sales Unexpectedly Fall to Seven-Month Low


Purchases of new homes unexpectedly retreated in June and prior readings were revised down, painting a picture of less robust improvement during the industry’s busiest time of year.

Sales fell 6.8% to a 482,000 annualized pace, the weakest since November and lower than any forecast of economists surveyed by Bloomberg, Commerce Department figures showed Friday in Washington. Three of four regions suffered setbacks.

The report represents a departure from recent data that’s shown the housing industry was accelerating amid steady job growth and still-low mortgage rates. That may mean the residential real estate market is about to plateau as a tight supply of available homes and meager wage gains present hurdles to growth.

“The rapid rate of improvement that we’ve seen over the last few months won’t be sustainable indefinitely,” Thomas Simons, a money market economist at Jefferies LLC in New York, said […]

Late Payments on Home Equity Loans Drop, Defying Warnings


Late payments on home equity credit lines hit their lowest level in more than six years, defying warnings about the looming aftershocks of loose bubble-era lending standards.

The percentage of borrowers who were at least 30 days delinquent on a home equity line of credit dipped to 1.42% in the first quarter, its lowest mark since the third quarter of 2008, according to new data from the American Bankers Association.

The late-payment rate for closed-end home equity loans also fell to its lowest level since the financial crisis.

The ABA chalked up the improvements to rising incomes and rebounding home prices.

“As property values improve, fewer people have negative equity in their homes,” ABA Chief Economist James Chessen said in a press release. “Greater household wealth and income gives consumers more breathing room to meet their financial obligations.”

In recent months, analysts and regulators have been […]

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