Hillsborough Title Welcomes Kim Martin

Kim Martin Welcome Flyer

Kim Martin, Marketing – Originally from the suburbs of Chicago, Kim has lived in the Bay Area for the past 7 years. She received her Bachelor’s degree in Finance from Miami University located in Oxford, OH. Kim has worked in the Title industry for more than 2 years, and prior to that, worked in the Mortgage/Real Estate industry for 15 years.  She is a true team player with a “whatever it takes” philosophy. Kim will represent Hillsborough Title as Marketing Representative for the New Tampa branch. Outside of work, Kim enjoys golfing, reading, cheering on the Bears, or spending time with family and friends at the beach.

Fla. Pushing Ex-owners to Apply for Lawsuit Money

 If you know of homeowners who lost their homes to foreclosure between Jan. 1, 2008, and Dec. 31, 2011, Florida Attorney General Pam Bondi asks that you provide them with this website address – nationalmortgagesettlement.com – and tell them to act now.

Part of the $32 billion national mortgage fraud settlement with Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo included a $1.5 billion fund to compensate borrowers who were foreclosed on after Jan. 1, 2008.

Approximately $170 million is available for cash payments to Florida borrowers. As of last Thursday, 51 percent of eligible homeowners had applied for assistance. Many others have not responded to multiple mailers and live operator calls informing them they may be eligible for modified loans and reduced mortgages.

“This week, I’m going around the state to find these individuals,” Bondi told Realtors attending the Florida Realtors Mid-winter Meetings last week in Orlando. “If I have to, I’ll stand on the steps of every city hall in the state and beg people who deserve their money to come forward.”

Borrowers who submit a claim online will see a deadline notice of Jan. 18, 2013. However a spokesperson for the Attorney General’s office says claims administrators will accept claims forms through Feb. 15, 2013. The form must be filled out completely and properly or the claim will not be paid.

Individuals who have questions or need help filing their claims can contact the settlement administrator, toll-free, at 866-430-8358, or send questions by email to administrator@nationalmortgagesettlement.com.

Source: Florida Realtors

Hillsborough Title Welcomes Kimberly Wilson

Kim Wilson Welcome

Kim Wilson, Manager/Closer  Kim originally hails from Atlanta, but has called the Bay Area home since ’87. After getting her start in the Title industry, more than 24 years ago, working as a receptionist/warehouser, Kim worked her way up the ranks and was eventually promoted to closer. Thanks to her entrepreneurial spirit and dedication, Kim owned her own title agency for over 4 years, and still runs a number of other business ventures. Outside of work, Kim enjoys spending time with her young son, expressing her creative wit through her painting and graphic artistry, or volunteering within the Tampa Bay community.

CFPB Launches National Mortgage Servicing Rules

An outright dual-tracking ban and serious consideration of loan modification requests are just two provisions in a series of national servicing standards rolled out by the Consumer Financial Protection Bureau late Wednesday.

The CFPB’s official servicing rules, which take effect Jan. 2014, create a baseline set of standards for all U.S. servicers to follow.

The guidelines apply to all mortgage servicers, except for smaller servicing shops that deal with 5,000 or fewer loans. 


The CFPB’s official mortgage servicing guidelines released Wednesday forbid dual-tracking, or from starting a foreclosure if a borrower already submitted a completed application for a loan mod or foreclosure alternative.

To give borrowers time to submit loan-mod applications, the CFBP rule prevents servicers from making a first foreclosure notice or filing until a mortgage is at least 120 days delinquent.

Furthermore, servicers must inform a borrower of all loss mitigation options after the homeowner has missed two consecutive mortgage payments. This requirement forces servicers to provide a written notice with examples of options that could be available to troubled borrowers.

The CFPB servicing rule also mirrors guidelines outlined in the national foreclosure settlement and by prudential regulators last year. The new CFPB rule says servicers must deploy policies and procedures that provide delinquent borrowers with direct, easy and continuous access to servicing employees who can assist with loan issues.

In addition, these servicing employees are responsible for alerting borrowers who miss information on loan modification applications and for ensuring documents reach the right personnel for processing. The contacts also have to provide continuous updates to the borrower on loan modifications.


Mortgage servicers must deploy a fair review process that considers all foreclosure alternatives available from either the investors or mortgage owners.

Servicing shops are no longer allowed to steer borrowers to options that are most financially favorable to the servicing shop.

Furthermore, if an application for a loan modification arrives at least 37 days before a scheduled foreclosure sale, servicers must consider and respond to the borrower’s request.

In addition, if the servicer offers a foreclosure alternative, the borrower must be given time to accept the offer before the servicer can move for foreclosure judgment or sale. The CFPB added that servicers cannot foreclose if a borrower reaches a loss mitigation agreement, unless the borrower fails to perform their part of the deal.


The servicing guidelines from CFPB require servicers to offer borrowers regular and clear monthly statements, showing the amount owed and due date of the next payment. These statements should also break down payments by principal, interest, fees, escrow and include recent transaction data.

If a mortgage rate is about to adjust for the first time on an adjustable-rate mortgage, servicers have to provide the borrower with a disclosure.

The CFPB says borrowers can no longer be surprised by forced-placed insurance policies attached to their accounts. If such a transaction is required, the servicer must provide advance notice and pricing information before charging consumers. In addition, a servicer has to have a reasonable basis for concluding a borrower lacks this type of insurance before acquiring a policy. When servicers do buy insurance and find out it was not needed, the policy must be terminated within 15 days with all premiums refunded.  


The CFPB guidelines also require servicers to promptly credit a consumer’s account on the day that a payment is received. If partial payments are put in a suspense account, the account must be credited to the borrower’s account as soon as the suspense account includes an amount equal to a full payment.

When receiving a request for payoff balances on mortgages, servicers must provide a response within seven business days of receiving the written request.

Servicers must quickly respond to borrowers who point out account errors. Servicers have to acknowledge receipt of written notices and must do the following within 30 days: correct the error and provide the information requested; lead a reasonable investigation and inform the borrower of why the error did not occur; or inform the borrower that the information asked for is not available.

Servicers also are required to store borrower information in a manner that makes it easily accessible. This means having policies and procedures in place to ensure information is passed on to borrowers, investors and the courts in a timely fashion.


Officials with the CFPB said Wednesday that loss mitigation issues are only enforceable through the bureau and enforcement agencies, not the borrower. However, a consumer not receiving the benefits of the CFPB’s outlined servicing processes – such as an end to dual tracking – can go to court to stop the rule violation.

CFPB director Richard Cordray sees the creation of national servicing standards as a direct result of the housing meltdown, which led to obscene foreclosure levels and a dramatic increase in processing issues.

“Servicers were unprepared to work with borrowers that needed help to deal with their individual problems,” he wrote. “People did not get the help or support they needed, such as timely and accurate information about their options for saving their homes.  Servicers failed to answer phone calls, routinely lost paperwork, and mishandled accounts.”

The CFPB said half of the complaints reported to the bureau in the second half of 2012 related to loan modifications, collections and foreclosure issues on mortgages.

A summary of the rule can be accessed here. The final rule will be available on the CFPB’s website Thursday.

By: By Kerri Ann Panchuk, HousingWire

The QM Announcement and What It Means to Real Estate

Locking Your Loan400

For over a year, we have been reporting on the impact that the new regulations being created for the Qualified Mortgage (QM) and the Qualified Residential Mortgage (QRM) would have on the housing market. Last week, the Consumer Finance Financial Protection Bureau (CFPB) announced its rules for a qualified mortgage. Let’s take a look at what it will mean to housing.

Let’s Begin with ‘Simplified’ Definitions

The idea of a QM is to assure the “ability to pay” — what standards a bank must follow to make sure a borrower has the ability to make the mortgage payments before offering a loan. An over-simplified explanation would be “the things a bank can’t do”.

The idea at the center of QRM is to determine the standards that a buyer must meet before getting a mortgage. An over-simplified explanation would be “the things a buyer must do”.

What Happened Last Week?

The CFPB issued their QM rules which will be effective January 10, 2014. The rules determine the limits on the loan types which can be offered by banks, the fee structures which can be charged by banks and other such issues. (For more details, you can download the 7 page summary  or the 804 page full document issued by the CFPB).

The biggest news impacting a potential mortgage applicant is that the allowable back-end-debt ratio was set at 43% which is more lenient than the discussed 36% limit. The back-end-ratio is explained by Investopedia as:

“A ratio that indicates what portion of a person’s monthly income goes toward paying debts. Total monthly debt includes expenses such as mortgage payments (made up of PITI), credit-card payments, child support and other loan payments. Lenders use this ratio in conjunction with the front-end ratio to approve mortgages.”

This will result in more buyers still being able to qualify for a mortgage.

What DID NOT Happen Last Week?

The QRM rules were NOT released. The QRM rules will be set by several different Federal agencies, such as the FDIC, Federal Reserve Board, FHFA, HUD, and OCC. These rules will be announced later this year and may include:

  • A maximum “front-end” monthly debt-to-income ratio (which looks at only the consumer’s mortgage payment relative to income, but not at other debts) of 28 percent;
  • A possible 20 percent down payment requirement in the case of a purchase transaction
  • New minimum FICO scores established

These QRM rules will also have a big impact on future lending. We will try our best to keep you abreast of any updates.

By: The KCM Crew, KCM Blog

CFPB Releases Long-Awaited Qualified Mortgage Rule

After many long months of waiting, the Consumer Financial Protection Bureau (CFPB) has finally issued its finalized qualified mortgage (QM) rule designed to protect both consumers and responsible lenders.

One of the biggest provisions of the QM rule is the newly set Ability-to-Repay rule, which demands that all new mortgages comply with basic requirements to protect consumers from taking on loans they can’t repay.

The rule does away with so-called “no doc” and “low doc” mortgages, requiring that all of a borrower’s pertinent financial information must be supplied and verified, including: employment status, income and assets, current debt obligations, credit history, and monthly payments on the mortgage, among other information. Based on that information, the lender must be able to make a fair judgment on whether or not the borrower can really take on more debt.

The Ability-to-Repay rule also stipulates that lenders base their evaluation of a consumer’s ability to pay on long-term views, discounting “teaser” or “starter” rates typically used in the introductory period.

CFPB director Richard Cordray explained the Ability-to-Repay rule is a common-sense answer to curb the borrowing and lending behavior that led to the financial crash.

“When consumers sit down at the closing table, they shouldn’t be set up to fail with mortgages they can’t afford,” Cordray said. “Our Ability-to-Repay rule protects borrowers from the kinds of risky lending practices that resulted in so many families losing their homes. This common-sense rule ensures responsible borrowers get responsible loans.”

The rule will go into effect January 2014, according to theCFPB. Exceptions to the rule would apply for consumers trying to refinance from a risky mortgage to a more stable loan.

The CFPB also announced it is considering proposed amendments to the Ability-to-Repay rule. These amendments would, among other things, exempt certain nonprofit creditors that work with low- and moderate-income consumers. They would also provide QM status for certain loans made and held in portfolio by small creditors such as community banks and credit unions. If adopted, the proposed amendments would be finalized this spring and would go into effect at the same time as the Ability-to-Repay rule.

The bureau also announced other features of a QM beyond the Ability-to-Repay criteria. In order to meet QM requirements, a mortgage loan must limit points and fees (including those used to compensate originators) and have no toxic or risky loan features, such as interest-only payments or terms that exceed 30 years.

There is also a 43 percent cap on the acceptable debt-to-income ratio, though there will be a transitional period during which non-qualifying loans that meet other affordability standards will be considered QMs.

In addition, the CFPB explained there are two kinds of QMs that have different protective features for consumers and legal consequences for lenders.

The first kind, QMs with a rebuttable presumption, are higher-priced loans given to consumers with insufficient or weak credit history. Legally speaking, the lenders who give these are presumed to have determined that the borrower has the ability to repay. Consumers can challenge the presumption by proving that they did not actually have the income to repay the mortgage and other living expenses.

The second type of QMs are those that have a safe harbor status—generally lower-priced prime loans given to low-risk consumers. They offer lenders the greatest legal certainty that they are complying with the Ability-to-Repay rule, and consumers can only legally challenge their lender if they believe the loan does not fit the criteria of a QM.

While QM status does not grant a lender complete immunity from borrower challenges, Cordray said in prepared remarks he believes the CFPB has “limited the opportunities for unnecessary litigation” by setting up clear guidelines.

Mike Calhoun, president of the Center for Responsible Lending, said in a response that the new rules “strike a balanced, reasonable approach to mortgage lending—for the most part.”

“But the rules also leave a pivotal issue unresolved: How the fees that lenders pay to mortgage brokers will be counted when it comes to defining a qualified mortgage. The CFPB should not create a loophole that allows high-fee loans to count as a qualified mortgage under Dodd-Frank,” Calhoun said. “If the broker payment issue is appropriately resolved, the rules will be—all in all—good for consumers, investors and the economy.”

Debra Still, chairman of the Mortgage Bankers Association, expressed her own reservations, but said the organization applauds the approach and effort given.

“This is a very complex rule. We remain concerned that certain aspects of it could curb competition, increase costs and tighten credit availability for borrowers. In particular, the 3 percent cap on points and fees appears to be overly inclusive as it relates to compensation and affiliates,” Still said.

“Additionally, we will be looking carefully at whether the interest rate threshold for the safe harbor, which is set at 150 basis points above the benchmark rate, will adversely impact too many borrowers,” she continued. “Ultimately, the final verdict on this rule will be made by the market.”

By: Tory Barringer, DSNews

Number of Improving Markets Spikes in January, Hits 242

The National Association of Home Builders (NAHB)/ First American Improving Markets Index (IMI) continued its trend of marked monthly improvements in January, according to a release from the NAHB.

The index rose for the fifth consecutive month in January to reach 242, once again achieving a record high. The index measured 201 in December.

The IMI measures the relative growth (from their respective troughs) of markets across the country, using employment, housing permits, and home prices as a gauge. Markets showing at least six straight months of improvement make the list.

According to the NAHB, the list of improving markets now includes entrants from 48 states and the District of Columbia. The only states not represented are Kansas and New Mexico.

Forty-seven new metros were added to January’s list, while six were dropped. New entries include Los Angeles, California; Auburn, Alabama; Des Moines, Iowa; Richmond, Virginia; and Cleveland, Ohio.

“We created the improving markets list in September of 2011 to spotlight individual metros where—contrary to the national headlines—housing markets were on the mend,” said NAHBchairman Barry Rutenberg. “Today, 242 out of 361 metros nationwide appear on that list, including representatives from almost every state in the country. The story is no longer about exceptions to the rule, but about the growing breadth of the housing recovery even as overly strict mortgage requirements hold back the pace of improvement.”

While the IMI has shown remarkable growth since its inception—reaching approximately 20 times its starting total—NAHBchief economist David Crowe warns that the list might slip in coming months as winter sales data comes in.

“The IMI has almost doubled in the past two months as stronger demand during prime home buying season boosted prices across a broader number of metropolitan areas,” Crowe said. “Similar home price gains, and hence the IMI, may be tempered in the future as we see data from typically slower months for home sales.”

10 Biggest Issues for New Construction in 2013

The Top Ten Issues that will impact new construction in 2013.

  1. Impact of Political Decisions
  2. Energy Efficiency
  3. Rebounding Prices
  4. Startups and Startovers
  5. Need for Land
  6. Demand for Multifamily Housing
  7. Foreclosures and Rentals
  8. Need for Labor
  9. Desire for the Micro House
  10. Loss of Some Industry Leaders
Source: The KCM Blog
Read on for more on the trends effecting new construction in 2013.

Builders are likely to remember 2012 as the year when their industry finally arose from the hospital bed it’s been laying in for five years, and walked around again without a discernible limp or the use of a cane.

The survivors of the past recession stepped up their construction activities and were even able to get some price appreciation from customers who, while still somewhat hesitant because the job market is still uncertain, at least showed a willingness to consider buying and selling houses.

Market watchers expect housing’s growth to continue through at least the next two years. But the industry faces challenges that include a still-shaky economy, a potentially tougher regulatory climate, and already-noticeable shortages in labor, finished lots, and building materials that would impede growth if they get worse.

The following series of articles rounds up the key news topics of 2012, with an eye toward the future and how they are likely to play out and affect the housing and real estate sectors.

1. Political Thrust and Parry

Does the re-election of President Barack Obama, with Republicans holding onto their vote lead in the House of Representatives, augur four more years of paralyzed federal governance? Certainly the seemingly (at least through mid-December) endless and implacable arguments over preventing the so-called fiscal cliff from triggering deep spending cuts and tax increases on January 1 hasn’t inspired confidence that Washington is entering a new era of consensus.

For builders, a government at political loggerheads will make arriving at solutions to big issues that fundamentally affect housing markets and customers harder to achieve. The future of America’s secondary mortgage market—specifically the fates of Fannie Mae and Freddie Mac—could takes years to sort out, even under ideal legislative conditions. Retaining the mortgage interest deduction (MID), which builders and Realtors keep insisting is essential to industry and economic growth, will become a tougher sell if lawmakers ultimately lean toward a budget-cutting formula that favors limiting entitlements rather than enhancing revenues.  (You know the MID could be imperiled when one of housing’s best friends in Congress, Georgia Sen. Johnny Isakson, said he’d be willing to trade MID for lower corporate tax rates.) 

Builders are also watching which way the political winds blow on various regulatory fronts. Ongoing rhetorical skirmishes over the EPA’s power to dictate water and air quality standards on states, and OSHA’s ability to mandate stricter workplace rules, could get fiercer and possibly even litigious. And as more consumers express concerns about the environment, builders will wonder just how far the Department of Energy is willing to push the envelope on efficiency standards for residential and commercial construction.

2. Energy Efficiency Takes Flight 

In December, a Houston-based startup called Houze Advanced Building Science launched an affordable zero-energy home that Houze claims can produce on-site electricity and thermal heat from a natural-gas power cell, and whose building envelope acts like a thermos.

To back up its claims, Houze offers buyers a warranty that guarantees no gas or electric payments for the first 10 years of homeownership when themicro-cogeneration power cell and advanced heating and cooling technologies are included in the construction.

Sound too good to be true? Maybe. But Houze’s branding partners include AT&T Digital, the American Gas Association, Carrier, James Hardie, and Pella. And Houze is talking about building and selling homes in 35 markets over the next two years.

Energy efficiency is a battleground where builders now win or lose customers. Meritage Homes, Ideal Homes in Oklahoma, KB Home, Wathen Castanos Hybrid Homes, Fulton Homes, K. Hovnanian, and myriad other builders are putting performance front and center in their construction and marketing. 

Some builders still wonder just how many home buyers are willing to pay for energy efficiency, and how widespread demand actually is. And there’s still some voodoo out there, as manifested by the Federal Trade Commission’s recent crackdown on exaggerated performance claims by five replacement window manufacturers.

Skepticism, though, isn’t keeping a growing number of builders from riding this bandwagon. “Net-zero, carbon-zero homes are available today and cost effective,” C.R. Herro, Meritage’s vice president of energy efficiency and sustainability, told EcoHome magazine, Builder‘s sister publication, last March. “It’s no longer a technical challenge. That’s all done. All that’s left now is the average consumer choosing better.”

Last year Meritage announced its first net-zero home, as well as the first EPA triple-certified home. Energy Star’s 3.0 certification, which went into effect in January 2012, gives builders looking for a competitive edge another goal to shoot for. Indeed, builders and contractors report that achieving compliance with Energy Star’s Qualified Home Program and the 2012 International Energy Conservation Code is driving significant changes in the size, efficiency, and installation of HVAC systems.

The growing market for high-performance homes is creating opportunities for startups. In Maryland, Nexus EnergyHomes claims its product can achieve close to net-zero consumption from an existing power grid. An energy management system called NexusVision monitors consumption and allows the owner to adjust that usage via a proprietary, smart-grid–compliant electrical distribution panel. Users can also monitor their houses’ energy consumption through iPads and iPhones.

Nexus’s homes range from $264,000 to $1.5 million. Earlier this year, CEO Paul Zanecki said his company was planning to build up to 400 homes by the end of 2013.

3. Prices Bounce Back

Throughout 2012 builders around the country finally managed to raise prices for their houses. Any increases are stunning turnaround from the past several years, when builders regularly scrounged for business by enticing reluctant buyers demanding bargains with generous incentives and giveaways on everything from options to closing costs.

Now, builders are becoming more like Pinnacle Homes in Michigan, whose sales team’s goals include selling more houses without offering discounts, says this builder’s managing director Howard Fingeroot. Even hard-hit Atlanta, whose housing market was in a deep hole throughout most of the recession, is hopeful that gains the market enjoyed in existing-home prices during the second half of 2012 will have forward momentum.  

Builders’ optimism about house-price appreciation is partly based on a reasonable assumption that the sparse supply of completed and under-construction new homes (about six months’ worth nationally, according to Hanley Wood Market Intelligence) will drive prices higher until construction catches up. Builders also like the trends in house prices they’ve been seeing lately in house-price indices generated by Federal Housing Finance Agency (FHFA); Case-Shiller, which tracks 20 metros; the National Association of Realtors, which looks at 149 markets; and CoreLogic, which estimated in October that year-over-year prices rose by 6.3%.

A quick scan of headlines around the U.S. in early- and mid-December shows house prices on a positive trajectory: “Sacramento-area home prices continue upward trend”; “Phoenix-area home prices up 34% in a year, new-home sales up 85%”; “and “Home prices will rise in 2013, but local markets will vary.”

That last headline and story, posted online by the Home Buying Institute, quotes Freddie Mac, which predicts that its house-price index will rise by 2% to 3% next year. The National Association of Business Economists, extrapolating FHFA data, forecasts that home prices will increase by 2.8% in 2013.

More aggressive projections came from JPMorgan Chase, which earlier this month suggested that home prices in 2013 could rise by as much as 9.7% if investors decide to take a bigger stake in the housing sector; and Standard & Poor’s, which predicts a 5% price jump next year.

4. Startups and Startovers

When Paradise Homes in Lakewood Ranch, Fla., filed court papers to liquidate its operations last October, with 233 creditors and 30 home buyers left dangling in the wind, the housing industry got one more reminder that while business conditions are improving, there are still companies out there holding on by a thread.

Nearly 90 builders went bankrupt or closed their doors during the past economic recession, according to the website Implode-O-Meter, which tracks this activity (and that number is probably conservative). And builders like American West Development, which thought it could get through the bankruptcy process quickly and relatively intact, found that extricating oneself from debt obligations is easier said than done.

But as the saying goes, Nature fills a void, and where some builders disappeared, others took their places, with clean slates and unencumbered by expensive legacy real estate.

Atlanta-based Acadia Homes & Neighborhoods launched in 2011 and has used a focused marketing approach and its relationship with three local brokers to sell from 13 communities. Acadia was hoping to triple its closings this year. Last June, two veterans of Marmol Radziner Prefab broke away to start Connect:Home, a Los Angeles–based modular manufacturer whose claim to fame is its economical solution for shipping modules long distances.

When Nebraska’s HearthStone Homes filed for court protection from creditors last February, after failing to find a buyer, two of HearthStone’s key managers left that builder to form The Home Company, which positions itself as a production builder offering more of a custom look than competitors in and around Omaha. The Home Company partners with Boyer Young Development, which is feeding finished lots to the new builder.

Bankruptcy doesn’t have to be a death sentence, as some builders are proving. After coming out of Chapter 11 a few years ago, WCI Communities shifted its business model away from building high-rises to master-planned communities that cater to move-up, active-adult, and second-home buyers. WCI expects to show big gains in closings and revenue in 2012. 

Since emerging from bankruptcy last February, Wm. Lyon Homes aggressively made up for lost time by taking hundreds of new orders in its markets in California, Arizona, and Nevada. In December, Wm. Lyon entered Colorado by acquiring Village Homes.

Pennsylvania-based DeLuca Enterprises relinquished virtually all of its assets when it went bankrupt in 2010. But the family who owned the company started over as DeLuca Homes, which expected to close around 60 homes this year. They also made remodeling a “core” of DeLuca’s operations by adding a division called Signature that offers architectural services.

5. Grasping for Land

“Finished lot shortage could boost new-home prices.” Sound familiar? It should—that headline ran over a story that the St. Louis Business Journal published on March 8, 1993. 

That history keeps repeating itself should come as no surprise to housing industry veterans who have watched their markets soar and plummet several times over the past 25 years.

The question, once again, is whether an industry that hardly developed any land for residential construction during the past recession is coming up seriously short of finished lots now that demand for housing is finally returning. And if they do come up short, how many builders are willing to develop raw dirt on their own, something they’ve been allergic to in recent years?

For the most part, builders have focused almost entirely on controlling finished lots, and many of the industry’s largest companies have been acquiring competitors to gain access to their land portfolios or have been scooping up finished lots with a vengeance, including giants like D.R. Horton, which controls more than 60,000 finished lots; and PulteGroup, which owns or controls 122,000, and recently disclosed its intention to spend another $1 billion on land development and acquisition.

As business improved in 2012, builders and developers spoke openly about the dwindling supply of lots in “A” locations, and worried that shortages, at some point, might impede the pace of the housing recovery. “By 2014, we may not be able to deliver enough finished lots to meet consumer demand for housing,” Will White, who manages Land Advisors Organization’s office in Tucson, Ariz., told Inside Tucson Business last September. “There is a substantial amount of platted lots, but who is going to build those? The owners don’t want to shell out that kind of money.”

That same situation appears to exist in many other markets, most noticeably in Greater Atlanta, where builders commonly lament only about 10% to 15% of the roughly 140,000 finished lots available are worth building on. And prices for choice lots everywhere aren’t getting any cheaper.

It would appear, then, that builders that have forged relationships with land owners, developers, and redevelopers; or that aren’t afraid of developing raw land on their own—such as Minto Communities in Florida or The Corky McMillin Cos. in California—could be positioned better to expand over the next several years.

6. Multifamily Mania

A growing number of builders and developers now target buyers who are looking for urban and lower-maintenance living choices. Consequently, multifamily construction has been setting the pace for a housing industry getting back on its feet.

As of November, starts of structures of five or more units were running at an annualized rate of 285,000, or 19.2% ahead of the same month a year earlier, according to Census Bureau estimates. More to the point, the ratio of single-family to multifamily construction over these months was only roughly 2 to 1. 

In a report it published on Nov. 15, John Burns Real Estate Consulting estimated that 44 metro markets at least doubled the number of permits they issued for multifamily construction (including apartments and for-sale condos) in 2012, led by Durham, N.C. (up 403%), and West Palm Beach, Fla. (up 248%).

“There is now more multifamily construction than single-family construction in 36 of the 183 MSAs we forecast,” wrote Leslie Deutch, a vice president with the consulting firm. West Palm’s multifamily permits, however, were still only 19% of that municipality’s peak year, which was also the case for several other metros such as Fort Worth, Texas (11%), and Atlanta (21%).

What’s spurring a lot of this permitting and construction activity is demand for rental apartments (see “Foreclosures and Rentals”) and the relative shortage of available rental housing. In November, Massachusetts Gov. Deval Patrick revealed a plan to produce 10,000 multifamily housing units per year through 2020, an initiative that includes a program called Compact Neighborhoods that will encourage the creation of housing near job centers.

For the time being at least, shortages across the nation have led to rising rents that keep homeownership in the running as a viable option, even for cash-strapped younger buyers.

7. Foreclosures and Rentals

In November, the number of homes entering the foreclosure process fell 28% to its lowest level in six years, according to RealtyTrac. Foreclosures as a percentage of total home sales were 17.6% in October, down from 26.7% at the beginning of 2012 or 23.5% in October 2011, according to the FNC Residential Price Index. The federal government has stepped up its efforts to keep distressed owners in their homes.

But as usual, the foreclosure picture remains complicated, as home repossessions in November rose to a nine-month high. Roughly one million homes are in some stage of foreclosure, and another 11 million mortgages remain underwater, so it’s anyone’s guess how many owners will ultimately lose or walk away from their houses.

One thing’s for certain, though. Foreclosures during this recessionary period (since September 2008 through October 2012, 3.9 million foreclosures have been completed, according to CoreLogic) are adding much-needed rental housing at a time when demand has grown and a segment of potential buyers question the value of homeownership.

Trulia’s “American Dream” survey for 2012 found that 72% of the nearly 2,100 consumers polled still place a high value on ownership. But that’s down from 77% in 2010. And while 93% of younger Americans say they would purchase a house “someday,” any action probably hinges on employment improving and how fast rents rise.

Consequently, more builders are trying to tap into the rental market. Maryland-based Bozzuto Construction, for one, in December announced four new projects with 822 for-sale and rental units. What concerns builders, though, is how quickly existing foreclosed and bank-owned properties will rebound onto the market as rentals, and what impact that potential avalanche might have on home prices.

Investors have been striking while the rental fire is hot. In 2012, Blackstone Group invested an estimated $1.5 billion to acquire 6,500 foreclosed single-family homes. Los Angeles-based Colony Capital Group gobbled up 4,000 foreclosed homes. The New York Times quotes an analyst at Keefe Bruyette & Woods who estimates that private equity investors and hedge funds had raised more than $8 billion for the purpose of buying foreclosed homes from banks and the federal government, with the primary intention of putting them back onto the market as rentals.

That includes Silver Bay Realty Trust, a Minnesota-based startup that recently raised $245.1 million in an initial public offering in December to buy foreclosed homes.

Even former builders are getting into the act, like Jim Previti, whose Frontier Enterprises since May 2009 has bought, renovated, and resold more than 1,500 homes in California, Arizona, and Georgia.

8. Laboring to Meet Demand

 One of the bitter ironies of the housing recovery is that rising demand is creating shortages in available field labor, which has dwindled over the past five years. 

The commercial and residential construction sectors lost an estimated two million workers during the recession, and relatively few have come back into this field. While the problem is still anecdotal, builders around the country are worrying about their ability to complete projects—especially if business really starts picking up—if they don’t have enough subcontractors available.

Bloomberg quoted government estimates that builders in October had the most job openings while at the same time broke ground on more homes than at any time in four years. Labor shortages are leading some builders to raid each other’s jobsites for workers, reports USA Today, which quotes Labor Department data showing that the jobless rate in the construction sector is down to 11.4%, from 17.3% two years ago, only because 320,000 construction laborers stopped working or looking for work.

“Where there has been a fundamental pop in sales volume, it has been big enough and sustained enough to start maxing out the base” of labor supply, observes Jody Kahn, a vice president at John Burns Real Estate Consulting in Irvine, Calif. She points specifically to markets like Phoenix and certain metros of Florida where labor shortages have become palpable on builders’ jobsites.

Consequently, rosy projections for housing starts “would be pie in the sky” if the industry comes up seriously short of labor, predicts Bob Curran, Fitch Ratings’ home building analyst.

9. The Micro House Looms Larger

In Northeast Washington, D.C., homes with only 150 to 200 square feet of living space are being built and sold for between $20,000 and $50,000, less than the downpayment for a two-bedroom condo in some neighborhoods, according to the Washington Post, which ran a photo essay on this project last month.

The trend toward micro houses, which have been around for a while in Europe and Asia, is catching on in urban areas in the U.S. as a way of providing affordable housing nearer to job centers. Infill projects in San Francisco, Boston, Portland, and New York will feature for-sale and rental hosuing that typically won’t get much bigger than 400 square feet. New York’s adAPT NYC micro-apartment pilot program, for example, is integrated into that city’s broader affordable housing initiative that has been aiming to add or preserve 165,000 housing units by 2014.

In San Francisco, modular manufacturer Zeta Communities drew interest in its 65-foot modules that were used to construct an 11,775-square-foot four-story wood-framed building squeezed onto a 3,750-square-foot lot in this city’s South of Market Street (SoMa) district. Another designer, Aaron (Zhibin) Chengof Bar Architects in San Francisco, even devised a micro apartment complex that converts into a parking deck during the day.

Jay Shafer, one of the progenitors of America’s “tiny house” movement, was profiled this month in National Geographic, which reported that one of Shafer’s enterprises—Four Lights Tiny House Company—is selling house kits for 106-square-foot abodes. Price tag: $15,000.

In February, Simmons College in Boston will conduct a two-day seminar about building these microscopic homes. Simmons is partnering in this event with Tumbleweed Tiny House Company, which markets “houses” that range from a minuscule 65 square feet to 874 square feet. 

10. Turn, Turn, Turn

The housing industry lost several prominent builders in 2012. Some will be remembered locally, and two had national stature:  

•Walter Stefanowicz, 74, a retired builder who died on Nov. 17 from cardiac arrest while recovering from knee surgery, worked on the financial side of his family’s residential construction business, which built homes in several Maryland counties.

•Henry (Hank) Allen Morris, 92, died on Nov. 30. Morris built houses in Houston for 40 years and was a former director of the Texas Home Builders Association.

•Stephen Gidus, 50, died on Oct. 8 from cancer. He began his career as a carpenter, and eventually ran PSG Construction, a builder and remodeler in Orlando, with his brother. An avid marathoner, Gidus also worked with Rebuilding Together Orlando, a nonprofit organization that rehabilitates homes free of charge for low-income homeowners who are disabled, veterans, or elderly.

•Ed Ryan, 88, died on June 1 from a stroke. Ryan founded Ryan Homes in 1948, from which he retired in 1973. That business was acquired by NV Homes in 1987, a year after NV went public. The merged companies became NVR, now the industry’s fourth-largest builder. NVR’s chairman Dwight Schar got his start working for Ryan Homes in the 1960s. 

Ryan also owned harness racing horses, and co-owned (with 84 Lumber’s patriarch Joe Hardy) The Meadows Racetrack, where he introduced computerized betting, televised racing, and telephone wagering. Ryan was inducted into the Harness Racing Hall of Fame. He was also a major supporter of the March of Dimes.

•Barry Alan Berkus, 77, died form leukemia November 30. A renowned architect and founder and president of B3 Architect in Santa Barbara, Calif., Berkus designed more than 600,000 residences from 10,000 designs.

One of his first big clients was William Levitt, the real estate developer often called the father of American suburbia. Berkus’s designs were primarily for production housing. Readers of Residential Architect selected Berkus as one of the 10 most significant figures of the 20th century. In 1999, Builder counted Berkus among the 100 most influential individuals of the past century of American housing.Architectural Digest named him one of its top 100 builders in 1991.

In his spare time, Berkus was an art collector, athlete, philanthropist, author, and lecturer.

Source: John Caulfield, Builder Magazine