Investors Indicted for Bid Rigging at Real Estate Autcions

The Antitrust Division has prosecuted bid-rigging in multiple states

By Jeff Sorg, OnlineEd Blog

(November 7, 2017)

canstockphoto8484345aution sold(WASHINGTON, DC) A federal grand jury in West Palm Beach has returned an indictment against three high-volume Florida real estate investors for conspiring to rig bids submitted through the online property foreclosure auction process, the Department of Justice announced on November 3, 2017.

The indictment, filed in the U.S. District Court for the Southern District of Florida, charges three individuals with conspiring to rig bids during online auctions in Palm Beach County, Florida in order to obtain foreclosed properties at suppressed prices. The indictment alleges that the conduct took place from at least January 2012 until June 2015.

These are the first indictments related to bid-rigging in foreclosure auctions filed in Florida by the Justice Department’s Antitrust Division. The Antitrust Division previously has prosecuted similar bid-rigging conduct in Alabama, California, Georgia and North Carolina, resulting in more than 100 guilty pleas and convictions in those states.

 

A real estate investor pleaded guilty for his role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced earlier this month.

According to court documents, the individual participated in a conspiracy to rig bids by agreeing to refrain from bidding against other co-conspirators at public real estate foreclosure auctions in San Mateo County. The conspiracy began no later than August 2008 and continued until January 2011 and had as its primary purpose to suppress competition in order to obtain selected properties offered at San Mateo County public foreclosure auctions at non-competitive prices.

The Department of Justice has an ongoing investigation into bid rigging at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California. To date, 74 individuals have pleaded guilty or been convicted at trial.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Texas Bank Penalized $2 Million for Violations of Anti-Money Laundering

FinCEN assesses civil money penalty against Lone Star National Bank (Lone Star) of Pharr, Texas for willfully violating the Bank Secrecy Act

By Jeff Sorg, OnlineEd Blog

(November 2, 2017)

canstockphoto18625424 compliance street sign(WASHINGTON, D.C.) – The Financial Crimes Enforcement Network (FinCEN) today announced the assessment of a $2 million civil money penalty against Lone Star National Bank (Lone Star) of Pharr, Texas for willfully violating the Bank Secrecy Act (BSA). The action underscores the dangers that institutions face when taking on international correspondence activities without properly equipping themselves to manage such business. As noted in FinCEN’s assessment, among other lapses, Lone Star failed to comply with section 312 of the USA PATRIOT Act, which imposes specific due diligence obligations with respect to correspondent banking.

Many of the lapses in Lone Star’s BSA compliance were previously covered in an earlier action by the Office of the Comptroller of the Currency (OCC), but FinCEN’s action focusing on the bank’s 312 violations specifically highlights the need for a financial institution to avoid taking on international business for which it is not prepared. Lone Star’s Mexican financial institution customer was moving millions of dollars through Lone Star in a manner inconsistent with the parameters of a relationship which, at the outset, required greater scrutiny. Lone Star failed to identify and consider public information about the foreign bank owner’s alleged involvement in securities fraud. It also failed to verify the accuracy of assertions by the foreign bank with respect to source of funds, purpose of the account, and expected activity.

“Lone Star plainly failed to ask obvious due diligence questions in connection with its foreign bank account relationship, and did not follow up on inconsistencies in answers to the questions that it did ask,” said FinCEN Acting Director Jamal El-Hindi. “Notwithstanding the fact that the OCC already fined the bank, FinCEN’s assessment takes into account the penalties specifically applicable under FinCEN’s Section 312 authority. Smaller banks, just like the bigger ones, need to fully understand and follow the 312 due diligence requirements if they open up accounts for foreign banks. The risks can indeed be managed, but not if they are ignored.”

With respect to many of the deficiencies noted in FinCEN’s assessment, the OCC entered into a Consent Order and a Memorandum of Understanding with Lone Star in 2012. Lone Star continued to have severe programmatic anti-money laundering (AML) deficiencies through 2012, 2013, and 2014. As a result, in 2015, the OCC issued a Consent Order for a Civil Money Penalty in the amount of $1 million against Lone Star. Lone Star’s previous penalty payment to the OCC will be credited to FinCEN’s assessment and the bank will pay an additional $1 million to satisfy its obligation to FinCEN.

FinCEN recognizes that Lone Star has expended considerable resources to respond to the findings regarding its BSA program and to promote compliance with the OCC’s Consent Order. Lone Star is no longer engaging in the correspondent banking activities for which it was ill prepared. The bank has contracted outside consultants to conduct independent testing, conduct customer due diligence and suspicious activity lookbacks, and has expanded its BSA compliance organization.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

CCB will no Longer Immediately Issue Licenses for In-person Delivery of Application

Plan on ten business days to get your Oregon CCB license

By Jeff Sorg, OnlineEd Blog

(November 2, 2017)

canstockphoto11770861contractor 45(SALEM, OR) – As of Nov. 6, 2017, the Oregon Construction Contractors Board (the CCB) will no longer immediately issue licenses for new applications delivered in-person. In-person CCB staff will still be able to check the application documents for accuracy and completion, and accept the fee. Applications will be processed as quickly as possible but will take as many as 10 business days for completion. Additionally, the CCB lobby now closes at 4:30 p.m. instead of 5 p.m.

The Oregon CCB license requires just 16-clock hours of online pre-license education at a cost of just $71.50 for the online course, manual, and shipping to the continental US. Enrollments are accepted online at www.oregoncontractorcourse.com.

 

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

National Home Prices NSA Index Reaches New Highs as Momentum Continues

U.S. National Home Price NSA Index reported a 6.1% annual gain in August, up from 5.9% in the previous month

By Jeff Sorg, OnlineEd Blog

(November 1, 2017)

(NEW YORK, OCTOBER 31, 2017) – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for August 2017 shows that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog: www.housingviews.com.

YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.1% annual gain in August, up from 5.9% in the previous month. The 10-City Composite annual increase came in at 5.3%, up from 5.2% the previous month. The 20-City Composite posted a 5.9% year-over-year gain, up from 5.8% the previous month. Seattle, Las Vegas, and San Diego reported the highest year-over-year gains among the 20 cities. In August, Seattle led the way with a 13.2% year-over-year price increase, followed by Las Vegas with an
8.6% increase, and San Diego with a 7.8% increase. Nine cities reported greater price increases in the year ending August 2017 versus the year ending July 2017. The below charts compare year-over-year returns for Seattle and Las Vegas with different ranges of housing prices (tiers).

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Pattern Shows People Moving to Affordable Political Red and Purple Counties

The average home in a blue county costs around $360,000—more than 62 percent more than homes in red counties

Jeff Sorg, OnlineEd Blog

(October 16, 2017)

SEATTLE–(BUSINESS WIRE)– (NASDAQ: RDFN) — In the first half of 2017, 7.4 percent more people moved out of politically blue counties than to them, according to a new analysis from Redfin (www.redfin.com), the next-generation real estate brokerage. Red counties saw about 1 percent more people moving in than moving out. Purple counties, where there’s a more balanced share of Democrats and Republicans, saw 3.9 percent more migrants moving in than out.

The trend is even more pronounced in swing states, which saw blue counties lose 9.2 percent more people than they gained, while Republican counties gained 2.3 percent more than they lost.

Redfin analyzed Redfin.com user search data, comparing where prospective homebuyers currently live to where they are searching for a home to buy. Redfin’s user data covers more than 72 percent of the voting age population and is concentrated in urban metropolises, which gives the company a specific and recent look at where residents of blue counties are looking to move. Counties were classified as “blue” if the Democratic candidate for 2016 won by more than 20 percentage points and vice versa for “red” counties.

High housing costs in blue counties are driving this trend. Nationwide, the average home in a blue county costs around $360,000—more than 62 percent more than that of homes in red counties ($223,000).

“As blue counties are becoming increasingly less affordable, we see a great number of residents moving to red counties where they can afford the lifestyle they want,” said Redfin chief economist Nela Richardson. “At Redfin, we see this as a sign of hope for a less divided country, where people with differing views gain better understanding and tolerance of each other through sheer proximity.”

However, politics can be a key factor for people in deciding where to move. A Redfin survey found that 41 percent of recent homebuyers reported hesitations about moving to a place where most people have political views different from their own. In contrast, fewer than one in 10 respondents was enthusiastic about moving to a different political climate, with the remaining half neutral.

While the evidence that people will continue to self-sort by political beliefs is strong, Redfin contends that the housing affordability crisis in the bluest counties is unprecedented. With no sign of a drastic drop in prices anytime soon, there’s an argument that many more people, regardless of politics, will move to where they can buy a comfortable home.

To read the report, complete with data, interactive visuals and methodology, visit https://www.redfin.com/blog/2017/10/migration-patterns-show-more-people-leaving-politically-blue-counties.html.

[Source: Redfin press release]

Contacts
Redfin Journalist Services:
Alina Ptaszynski, 206-588-6863
press@redfin.com

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Real Estate

September New Home Purchase Mortgage Applications Down 7.5 Percent Year over Year

 Applications decreased by 20 percent when compared to August 2017

By Jeff Sorg, OnlineEd Blog

(October 13, 2017)

canstockphoto17668349down arrowThe Mortgage Bankers Association (MBA) Builder Applications Survey (BAS) data for September 2017 shows mortgage applications for new home purchases decreased 7.5 percent when compared to September 2016. Additionally, applications decreased by 20 percent when compared to August 2017. This change does not include any adjustment for typical seasonal patterns.

“Applications for new home purchases were down year over year in large part due the impacts of hurricane activity,” said Lynn Fisher, MBA’s Vice President of Research and Economics. “In particular monthly applications fell by 37 percent in Florida and 11 percent in Texas, which account for a large share of the applications in the survey.”

Conventional loans composed 72.3 percent of loan applications, FHA loans composed 13.9 percent, RHS/USDA loans composed 1.0 percent and VA loans composed 12.7 percent. The average loan size of new homes decreased from $334,940 in August to $334,722 in September.

For additional information on MBA’s Builder Applications Survey, please click here.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

How to Become an Authorized Home Energy Assessor in Portland, Oregon

This entire process to get authorized is estimated to take a minimum of four weeks

By Jeff Sorg, OnlineEd Blog

(October 4, 2017)

canstockphoto49733006 energy audit(PORTLAND-OR)  – Outlined below are the required steps to become an authorized home energy assessor with the City of Portland Home Energy Score program. This entire process is estimated to take a minimum of four weeks and $625 to complete. To complete the process, you must hold an Oregon CCB license for residential contractor, residential specialty contractor license, or residential restricted Home Energy Performance Score Contractor. Interested persons need to follow these steps to get authroized:

  1. Obtain and verify qualifying US Department of Energy (US DOE) credentials.
  2. Complete Home Energy Score Simulation training.
  3. Obtain and verify home energy assessor Oregon Construction Contractors Board (CCB) certificate.
  4. Complete the home energy assessor participation agreement.
  5. Attend mandatory orientation.
  6. Successfully complete required mentoring session.
  7. Authorization.

Step 1: Complete at least one of the following US Department of Energy (US DOE) qualifying credentials listed on the ODOE – Home Energy Assessor Training Certification Form. After completing the training, email completed form to PDXHES@earthadvantage.org. Note: If you have yet to complete the US DOE Home Energy Score Simulation Training, disregard the “USDOE online simulation training” fields on the form. Estimated cost: varies by market rates. Estimated timeframe: varies by training provider.

STEP 2: US DOE will email you access to the Simulation Training. This is a self-paced training process where you will conduct virtual home walk-throughs designed to show a variety of situations you might encounter, in order to learn how to produce an accurate home energy score. Once complete, US DOE will email you to confirm you passed a series of test homes and a multiple choice exam training through Earth Advantage. Recommended for those without experience in on-line simulation training modules. Estimated cost: Free (unguided) or $100 (guided) Estimated timeframe: 12+ hours, usually over a few weeks (unguided) or 12-16 hours over 1.5 to 2 days (guided)

STEP 3: Earth Advantage will email you the approved ODOE – Home Energy Assessor Training Certification Form from Step 1. Submit this approved Form to CCB, WITH the CCB Home Energy Assessor Certification Application. Upon approval, CCB will mail you a certificate and CCB number. Email this information to PDXHES@earthadvantage.org. Note: In order to qualify for this certification, you must have a CCB residential contractor license (16-hour contractror pre-licensing course required), residential specialty contractor license, or residential restricted Home Energy Performance Score Contractor license – see CCB Endorsements Form for descriptions. Estimated cost: $100 Application Fee + $100 One-Year Certification Fee. The ongoing annual renewal fee is $100. Estimated time frame: 5-7 business days

STEP 4: Complete the home energy assessor participation agreement. (Download form HERE). Submit agreement to Earth Advantage at PDXHES@earthadvantage.org. Estimated cost: None. Estimated time frame: 1-2 business days to process. Step 5: Contact Earth Advantage to register for the mandatory orientation. Learn about specific local program requirements and messaging to homeowners about the home energy report. Upon completion, Earth Advantage will send an introductory email with next steps to start generating scores. Estimated cost: $75 Estimated time frame: 2 hr. Orientation session.

Step 5: Contact Earth Advantage to register for the mandatory orientation. Learn about specific local program requirements and messaging to homeowners about the home energy report. Upon completion, Earth Advantage will send an introductory email with next steps to start generating scores. Estimated cost: $75 Estimated time frame: 2 hr. Orientation session.

STEP 6: As required by US DOE, you must schedule and score your first home accompanied by a mentor designated by Earth Advantage (unless you already completed this as part of a guided in-person simulation training – see Step 3). Estimated cost: $150. Estimated time frame: 2 hr. field visit + energy modeling. STEP 7: You are now authorized to conduct City of Portland Home Energy Score assessments and generate the home energy report! Estimated cost: $25/score quality assurance fee. Estimated time frame: 1.5 hr./home – field assessment, energy modeling, home energy report generation

STEP 7: You are now authorized to conduct City of Portland Home Energy Score assessments and generate the home energy report! Estimated cost: $25/score quality assurance fee. Estimated time frame: 1.5 hr./home – field assessment, energy modeling, home energy report generation

Beyond the use of the US DOE Home Energy Score modeling tool, a number of other third-party software providers have successfully integrated with the Home Energy Score API to allow home energy assessors to produce the home energy report along with the other outputs the software produces. Click HERE and scroll to Compatible Software section for list of approved third-party software providers. Licensing may be required between the home energy assessor and software provider. Estimated cost: Varies. US DOE’s Home Energy Score software tool is free. Other third-party software providers may charge licensing fees for use.

While the Home Energy Assessor certification belongs to a person, that certification must be associated with a CCB license in order to be active. The CCB license it’s associated with can be one that already exists, or it can be a new CCB license that the Home Energy Assessor is applying for. If energy scoring is the only service the business is conducting, then the Home Energy Assessor can apply for the Home Energy Performance Score Contractor license. No pre-license training or testing is required to obtain this license, but absolutely no other construction activities may be performed.

Those in need of an Oregon CCB license can get the 16-hour online prerequisite training from OnlineEd for only $68 plus $3.50 shipping* (*shipping may vary slightly depending on location).

If you have further questions related to becoming an authorized home energy assessor for the City of Portland Home Energy Score program, review the Oregon Revised Statutes  or contact : MacKenzie Winchel, Program Manager / Quality Assurance, Email: PDXHES@earthadvantage.org.  Phone: 503-468-3482.

If you need the education to become an Oregon licensed contractor, contact an education specialist for information about Oregon’s OnlineEd CCB training 16-hour online training program: Telephone 503.670.9278, Email: Mail@OnlineEd.com, or just click here to read more about the online training program.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Contractor, Real Estate

CFPB Orders Meridian Title to Pay up to Pay up to $1.25 million & Disclose its Interests in Future Transactions

CFPB Takes Action Against Settlement Services Provider for Steering Consumers to Affiliated Business

By Jeff Sorg, OnlineEd Blog

(October 2, 2017)

canstockphoto24908732consumer protectionThe Consumer Financial Protection Bureau (CFPB) took action against real estate settlement services provider Meridian Title Corporation for steering consumers to a title insurer owned in part by several of its executives without making disclosures about the businesses’ affiliation. The CFPB found that Meridian failed to disclose its relationship with the title insurer and illegally benefitted from the referrals for title insurance—which is usually required in real estate purchases involving a mortgage loan. Under today’s consent order, the CFPB is ordering Meridian to ensure that it ceases the illegal practice, provide disclosures whenever it makes a covered referral, and pay up to $1.25 million in redress to consumers.

“Meridian Title illegally steered consumers into purchasing a product from an affiliated company to add to its bottom line,” said CFPB Director Richard Cordray. “We’re ordering it to halt this practice and pay up to $1.25 million to consumers who were harmed.”

Meridian Title Corporation is a real estate settlement agent and title insurance agency headquartered in South Bend, Indiana. As a settlement agent, Meridian provides real estate settlement services and conducts loan closings in connection with residential real estate transactions. Lenders normally require title insurance to protect their interests when providing a mortgage loan in the event someone else can collect on a lien or there are back taxes owed on the property. Consumers are normally able to select the title insurance provider during the home-buying process, as long as the title insurance policy complies with lender requirements. As a title insurance agent, Meridian receives orders for title insurance policies from lenders and real estate agents, and in some cases directly from consumers, and assigns those orders to title insurance underwriters.

The CFPB found that Meridian routinely selected Arsenal Insurance Corporation, a company owned in part by three of Meridian’s own executives, as the title insurance underwriter for its customers. When it selected Arsenal, the CFPB found that Meridian was able to keep extra money beyond the commission it would normally have been entitled to collect, based on an understanding that Meridian would select Arsenal as underwriter. A company like Meridian that receives anything of value pursuant to an agreement or understanding that business will be referred to an affiliated business like Arsenal must generally disclose its relationship to the consumer in question, among other conditions, in order to avoid a violation of the Real Estate Settlement Procedures Act. In its investigation, the CFPB found that Meridian failed to make the necessary disclosures to more than 7,000 consumers when it selected Arsenal to provide title insurance and also did not satisfy other conditions for avoiding a violation of the law.

Enforcement Action
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions or individuals violating consumer financial laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB’s order requires Meridian to:

  • Pay up to $1.25 million to harmed consumers: Under the order, Meridian is required to pay up to $1.25 million in redress to consumers who were referred to and purchased title insurance from Arsenal but did not receive appropriate disclosures.
  • Stop violating the law and start providing disclosures: Meridian must not violate the Real Estate Settlement Procedures Act and must implement policies and procedures to ensure it properly discloses to consumers whenever it makes an applicable referral.

A copy of the consent order filed today is available at: http://files.consumerfinance.gov/f/documents/201709_cfpb_meridian-title-corp_consent-order.pdf

[Source: CFPB press release]

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Millennials Going Over Budget to Buy – Generation Z Enters the Market as Renters

Report explores affordability challenges facing renters and a first look at Generation Z’s housing patterns

By Jeff Sorg, OnlineEd Blog

(September 27, 2017)

canstockphoto6991152 first timersSEATTLE, Sept. 27, 2017 /PRNewswire/ — Millennials poured some $514 billion into the U.S. housing market over the last year as the largest generation of home buyers. But new survey data shows their homeownership aspirations are stymied by affordability issues, frustration with the buying and selling process, and a cutthroat housing market.

More than half of young buyers (53 percent) make multiple offers to buy their first home, and only two in five Millennials (39 percent) are able to make the recommended 20 percent or more down payment.

Today, the results of the Zillow® Group Report on Consumer Housing Trends 2017 show how the nation’s highly competitive housing market is changing the way a new generation approaches buying a home. The second annual report is the largest and most comprehensive survey of real estate consumers ever conducted.

More than half of millennials (62 percent) shop for a rental while they’re looking to buy a home, indicating they accept the fact that buying a home is not a sure thing. They are more likely to say they struggled to find a home in their price range and on their time frame, and over one-third (37 percent) of millennial buyers say they went over their budget, compared to 29 percent of all buyers.

Coming up with a down payment is one of the biggest hurdles young buyers face, and the Zillow Group Report sheds light on previously unknown statistics about how millennials are pulling together enough cash. Less than half (39 percent) of millennials put down the recommended 20 percent or more on their home purchase, while one in four (21 percent) put down the bare minimum –5 percent or less — to secure a home loan.

One in three (29 percent) millennial buyers now gets financial help from friends or family to make a down payment, and one in three (31 percent) millennial buyers cobbles together a down payment from multiple sources.

“In many cities across the US, the housing market is extremely competitive, especially for first-time buyers who are looking to purchase a starter home,” said Zillow Chief Economist Dr. Svenja Gudell. “Young buyers often start their careers in fast-growing cities in which the market is particularly tough – and they’re trying to save for a down payment while making record-high rent payments. The Zillow Group Report gives us a behind-the-scenes look at how young buyers, in particular, are finding resourceful ways to cope with high home prices and fierce competition. Whether it’s searching for a rental as a Plan B, looking outside their preferred neighborhood, or cobbling together a down payment from multiple sources, these buyers are willing to try every trick in the book to find a place to call home.”

Renters can’t afford to stay, can’t afford to move

Homeownership is simply out of reach for many Americans, including many families. In today’s hot housing market, more Americans are renting than at any time in recent history. Forty percent of families with children at home are renters.

Renters typically face higher monthly payments than homeowners, and 79 percent of renters who moved in the last year said their rent increased before they moved. More than half — 57 percent of renters who moved in the last year — said a rent increase is the reason they moved. And to find their new affordable rental, a quarter (25 percent) of renters had to look beyond the area they initially considered moving.

More than a third (37 percent) of renters who have not moved in the past year say they can’t afford to move elsewhere. Nearly half (48 percent) of renters who make less than $25,000 a year say they can’t afford to move.

Generation Z

Gen Z — those born between 1995 and 2010 — already makes up more than 21 percent of the U.S. population and is the most ethnically and racially diverse generation in U.S. history. They are beginning to enter the housing market as renters. The Zillow Group Report reveals that those in Gen Z are just as likely as those in older generations to say owning a home is a key component of the American Dream; 57 percent say they considered buying a home when they looked for their last rental. Generation Z renters work hard to win a home and end up submitting more rental applications than any other generation (3.1 applications compared to 2.5 for all renters), yet they also move quickly through the process, spending the least amount of time searching (less than one month, compared to 26 percent of all renters).

“It’s encouraging to see that Generation Z is inheriting the same notion of what home means as their parents and Millennial siblings,” said Jeremy Wacksman, Zillow Group chief marketing officer. “These tech-savvy, yet risk adverse renters are bringing their social personalities home, desiring communal amenities geared toward bringing people together. They prefer living with others to living alone, and they put their vast social networks to work during every step of the rental search process. As they mature and look toward homeownership, it will be interesting to see how their aspirations and preferences will shape the housing market.”

The 2017 Zillow Group Report is the 2nd annual largest-ever survey of U.S. home buyers, sellers, owners and renters, and asked more than 13,000 U.S. residents aged 18 to 75 about their homes – how they search for them, pay for them, maintain and improve them, and what frustrations and aspirations color their decisions. The full report is available for free to the public at www.zillow.com/report.

[SOURCE Zillow Group]

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered Trademark

Categories: Mortgage, Real Estate

Financial Crimes Enforcement Targets Shell Companies Purchasing Luxury Properties

Geographic Targeting Orders expanded to include Honolulu, Hawaii 

OnlineEd Blog

(August 23, 2017)

canstockphoto5735968- luxury building(WASHINGTON, Aug. 22, 2017/FinCEN) The Financial Crimes Enforcement Network (FinCEN) today announced the issuance of revised Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used to pay for high-end residential real estate in seven metropolitan areas.  Following the recent enactment of the Countering America’s Adversaries through Sanctions Act, FinCEN is revising the GTOs to capture a broader range of transactions and include transactions involving wire transfers.  FinCEN also expanded the GTOs to include transactions conducted in the City and County of Honolulu, Hawaii.

In addition, FinCEN today published an Advisory to provide financial institutions and the real estate industry with information on the money laundering risks associated with real estate transactions, including those involving luxury property purchased through shell companies, particularly when conducted without traditional financing.  Such transactions are vulnerable to abuse by criminals seeking to launder illegal proceeds and mask their identities.  The Advisory provides information on how to detect and report these transactions to FinCEN.

“Through this advisory and other outreach to the private sector, FinCEN, industry, and law enforcement will be better positioned to protect the real estate markets from serving as a vehicle to launder illicit proceeds,” said FinCEN Acting Director Jamal El-Hindi.  “FinCEN also thanks Congress for its modification of the Geographic Targeting Order authority, the first use of which will enable FinCEN to collect further information to combat the potential misuse of shell companies to purchase luxury real estate.”

In January 2016, FinCEN issued GTOs to require U.S. title insurance companies to report beneficial ownership information on legal entities, including shell companies, used to purchase certain luxury residential real estate in Manhattan and Miami—specifically, luxury residential property purchased by a shell company without a bank loan and made at least in part using a cashier’s check or similar instrument.  In July 2016 and February 2017, FinCEN reissued the original GTOs and extended coverage to all boroughs of New York City, two additional counties in the Miami metropolitan area, five counties in California (including Los Angeles, San Francisco, and San Diego), and the Texas county that includes San Antonio.

Within this narrow scope of real estate transactions covered by the GTOs, FinCEN data indicate that about 30 percent of reported transactions involve a beneficial owner or purchaser representative that was also the subject of a previous suspicious activity report.  This corroborates FinCEN’s concerns about this small segment of the market in which shell companies are used to buy luxury real estate in “all-cash” transactions.  In addition, feedback from law enforcement indicates that the reporting has advanced criminal investigations.  The expanded GTOs will further help law enforcement and inform FinCEN’s future efforts to assess and combat the money laundering risks associated with luxury residential real estate purchases.

FinCEN appreciates the continued assistance and cooperation of the title insurance companies and the American Land Title Association in protecting the real estate markets from abuse by illicit actors.

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