Monday Morning Cup of Coffee: Real estate crowdfunding and FHA update

Also, jumbo mortgages from the bank of mom and dad

Monday Morning Cup of Coffee takes a look at news coming across HousingWire’s weekend desk, with more to come on bigger issues, such as the case with the FHA.

But first!

An end to one more symbol of the great recession!

Who here remembers Northern Rock? That bank in the United Kingdom symbolized the heightened concerns of humanity towards the banking sector.

If you’ll recall, once rumors on the bank’s health began circulating, a real-life bank run occurred. Depositors waited for hours to pull out their savings until Her Majesty’s government stepped in.

Here’s the latest, from the New York Times and maybe, just maybe this could be the end to that mournful saga:

The British government said on Friday that it had sold a portfolio of mortgages it acquired during the financial crisis to affiliates of the investment firm Cerberus Capital Management for 13 billion pounds, or nearly $20 billion.

The mortgages were originally owned by Northern Rock, a British bank that was nationalized during the financial crisis.

The sale followed a competitive bidding process that lasted six months, and it is the largest ever financial-asset sale by a government in Europe, the British government said.

Need help getting a mortgage for a million-dollar property?

Why not ask the parents?

Sounds crazy (probably because this really is) but some lenders are willing to lend jumbo mortgages, as long as parents co-sign.

However, the article states, the practice is not exactly widespread:

It’s one thing to ask mom and dad to co-sign a car loan. Getting them to co-sign a jumbo mortgage is a tougher sell all around.

The practice is rare, but a few lenders will allow parents to help their adult children qualify for jumbo mortgages, which exceed conforming-loan limits of $417,000 in most places and $625,500 in high-price areas such as San Francisco. A typical scenario: a first-time home buyer whose salary has a strong upward trajectory but who hasn’t been on the job long enough to meet income requirements to buy property in a pricey locale, such as New York, says Ray Rodriguez, regional mortgage sales manager for Cherry Hill, N.J.-based TD Bank, which lends in 15 East Coast states.

Let’s be clear, I’m not worried about the lender here, I’m worried about the parents.

Do they fully appreciate what they’re putting on the line?

Crowdfunding is a big buzzword in the real estate space right now.

But, there are question about whether or not it can work.

And, right now, Realtors are showing a big interest as this blog denotes:

How viable is crowdfunding as a capital source? Last year is was viable enough to generate $16 billion to small businesses. When you consider all venture capital funding in the U.S. last year was about $45 billion, according to some estimates, $16 billion stands up pretty well. In any case, analysts predict crowdfunding to get quite a bit bigger once the SEC rule takes effect. And, in some respects, there’s no downside, because individuals who invest money though a crowdfunding platform are not necessarily the same investors who put money into more typical Wall Street and other investment opportunities. If that’s true, crowdfunding helps create a bigger pie, not a re-proportioning of the pie.

It’s true. Crowdfunding will only get bigger.
And there is no downside, that is until the Consumer Financial Protection Bureau puts crowdfunding on its radar.
Today at 9:30am, U.S. Department of Housing and Urban Development Secretary Julián Castro will deliver an economic and housing policy speech at New York University Stern School of Business.

As part of his remarks, Secretary Castro will discuss the overall housing market recovery under the Obama Administration and highlights of the Federal Housing Administration’s 2015 Annual Report to Congress.

Following his remarks, Secretary Castro and Ed Golding, principal deputy assistant secretary for HUD’s Office of Housing, will brief reporters and take questions regarding the FHA 2015 Annual Report to Congress during a media call.

HousingWire will be on that call and update our readers as necessary.

Thinking of moving to Portland but still have questions?

Well, here’s an answer: forget it.

According to this article in the Press Herald, housing is so bad in the capital of Oregon (it’s the capital, right?) that it’s nearly impossible to find decent rentals.

Apartment vacancy rates have been near zero this year in Portland, the result of years of a stagnant supply of rental housing and a rising demand. A Maine Sunday Telegram/Portland Press Herald analysis found that asking rents for a two-bedroom in Portland have jumped 40 percent in the past five years, even as renters’ median incomes have dropped, creating a wide affordability gap that is pushing much of the market out of reach for many workers.

The Federal Deposit Insurance Corp. closed no banks over the weekend.

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