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CHICAGO (April 22, 2015) — The National Association of Realtors®’ strategic investment arm, Second Century Ventures, has unveiled the seven organizations chosen for the 2015 class of REach®, a growth technology accelerator program. The 2015 class officially kicks off this week.
“This year’s REach class is made up of truly phenomenal organizations that are innovating both within and beyond the real estate space,” said Dale Stinton, president of SCV and NAR CEO. “The entrepreneurial spirit and energy that this class embodies will resonate greatly with the NAR community. We are looking forward to introducing the new class to NAR’s 1 million members while providing the companies with access to experts and influencers in the real estate, insurance, mortgage and financial services industries.”
The REach program differs from other accelerators in both its vertical focus within real estate and related industries and in the growth stage at which most companies enter the program. The seven companies range from seed stage to well-capitalized startups backed by world-renowned investors; in aggregate, the class has raised over $35 million in previous financings and total valuation exceeds $125 million. The REach program aims to move these organizations rapidly forward beyond their initial successes through education, mentorship and market exposure.
The companies chosen for the 2015 class:
- Asset Avenue (Los Angeles): An online peer-to-peer lending platform for the commercial real estate industry, it provides borrowers and brokers with quick and reliable access to competitively priced loans financed by accredited and institutional investors who lend up to $25 million for any single property.
- BoostUp (Detroit): Helps people save for a down payment on their next car or home by offering a dollar-for-dollar match on their savings from brand partners, family and friends.
- Guard Llama (Chicago): A mobile personal security system that expedites the 9-1-1 dispatching process when dialing 9-1-1 is not possible.
- Loop & Tie (Austin, Texas and New York): Simplifies personalized gifting for businesses to help promote brands, win business and build goodwill.
- NotaryCam (Newport Beach, Calif.): Provides companies and individuals with the ability to have documents notarized online from anywhere in the world, at any time, by a network of certified, licensed notaries.
- Pro.com (Seattle): A home services marketplace that helps homeowners price out projects and matches them with a certified “pro” in their area that can get the job done.
- TermScout (Denver): An intelligence application for business-to-business sales professionals.
“While these seven companies have a broad range of products and services – from home services and personal security to commercial real estate lending – they have one thing in common: exceptional leadership and vision. They are seizing an opportunity for rapid growth within the real estate, finance and home services via REach, which will ultimately help them expand into other vertical marketplaces,” said Constance Freedman, managing director of Second Century Ventures and REach. “This is one of the aspects of the REach program that is so unique and fascinating. We help companies build credibility in our key sectors of focus to use as a base for expanding into other relevant markets as well.”
Hundreds of companies applied to REach this year, more than double the applicants in 2014. Those chosen proved to have solid business models, executable business plans and significant potential to impact the real estate space and beyond. The seven organizations can expect significant results, as past classes have doubled, on average, their customer base and collectively raised over $34 million in financing both during and after completing the program.
Second Century Ventures is an early-stage technology fund, backed by the National Association of Realtors®, that leverages the association’s 1 million members and an unparalleled network of executives within real estate and adjacent industries. SCV systematically launches its portfolio companies into the world’s largest industries including real estate, financial services, banking, home services, and insurance. SCV seeks to define and deliver the future of the world’s largest industries by being a catalyst for new technologies, new opportunities, and new talent.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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Read more: Second Century Ventures Announces 2015 REach® Accelerator Class
NAR Immediate Past President Steve Brown joins American Nobel Laureate Dr. Robert Shiller at an economic and policy forum today to appraise the state of the U.S. housing market.
WASHINGTON (April 21, 2015) – The nation’s leading housing economists spoke today at an economic and policy forum to appraise the state of the U.S. housing market. The event, held by the National Association of Realtors®, National Association of Home Builders, and McGraw Hill Financial Global Institute, drew more than 80 attendees representing industry analysts, congressional staff, and members of the media.
“Realtors® support legislative and regulatory efforts to protect homebuyers from the risky and predatory lending practices that contributed to the nation’s financial crisis nearly a decade ago,” said NAR Immediate Past President Steve Brown, broker/owner of Irongate, Inc. Realtors® in Dayton, Ohio during his opening remarks. “In some cases though, well-intentioned but overly-corrective policies are hampering access to credit and holding back the housing market from a full recovery. We need to strike a balance.”
During two panel discussions and a featured keynote speech by American Nobel Laureate Dr. Robert Shiller, presenters offered a variety of historical and forward-looking perspectives on the factors driving the real estate market.
Dr. Shiller shared insights into the current housing market trends, including the residential and condo markets, and offered his outlook for the future of homeownership, which is currently well below its historical norm.
“Although the homeownership rate is down, renters still have a desire to own a home. But, there needs to be something done to improve mobility so people can be closer to where they work,” Shiller said, noting that 55 percent of renters believe that owning a home is a part of the American Dream.
The first panel discussion, moderated by Wall Street Journal economics reporter Nick Timiraos, examined local market conditions, whether current inventory levels are meeting consumer demand and what it all means for home prices.
“The combination of low interest rates and strong consumer confidence, based on job growth, cheap oil and low inflation, should further increase home prices,” said S&P Dow Jones Indices Managing Director Dr. David Blitzer.
“But, despite price gains, the housing market faces some difficulties. Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a setback. Home building and new home sales are soft and residential construction is still below its pre-crisis peak; before 2008, any time that housing starts were as low as the current rate of roughly one million, the economy was in a recession,” said Blitzer.
Dr. Anthony Sanders, a distinguished professor of finance at George Mason University, echoed Blitzer’s concern that stagnant wage growth is one of the underlying problems impacting the housing market. “Demand for buying is not reaching its potential because households aren’t seeing meaningful increases in their incomes,” he said.
NAR Chief Economist Dr. Lawrence Yun agreed that low housing inventory is driving up prices, but remained optimistic about the future of the market. “I do expect first-time buyers to slightly pick up this year as the economy and job market continues to stabilize,” he said. Yun added that a combination of new home construction and a responsible increase in credit access would create more opportunities for first-time and move-up buyers to enter the market.
On the issue of increasing home prices, Dr. David Crowe, NAHB chief economist, added that new home prices are on the rise because builders are targeting move-up buyers who generally buy larger homes.
“We can have reasonable confidence that the housing market is healthy and will continue to expand as the overall economy grows,” he said. “The fundamental housing indicators are in good shape, and we’re seeing low interest rates, affordable prices and plenty of pent-up demand.”
The second panel discussion, moderated by Jon Prior, politics reporter for Politico, examined whether tight credit conditions are delaying a full market recovery. The panelists all agreed that restrictive credit is an obstacle to homeownership.
Julia Gordon, the senior director of housing and consumer finance at Center for American Progress explained some of the hurdles to loosening overly restrictive credit conditions. “Part of it is psychological,” she said. “The American public is still upset that heads did not roll after the housing crisis. Having failed to pursue anything meaningful on the criminal side, there’s a feeling of angst and a sense we need to do something on the enforcement side. The public still does not feel like anybody was made to pay for the massive public suffering of the financial crash. That’s certainly a factor right now.”
Gordon also commented on a missed opportunity by the director of the Federal Housing Finance Agency, who last week announced that FHFA would not be reducing the guarantee fees charged by the government-sponsored enterprises. She remarked that a decrease would stimulate market entry for people with slow income growth.
Joe Nery, 2015 president-elect of the National Association of Hispanic Real Estate Professionals answered an important question from Antoine Thompson, executive director of the National Association of Real Estate Brokers regarding the reasons for lower homeownership rates among African Americans and communities of color.
Nery said that credit policies are the biggest barriers to homeownership for communities of color. “When the average credit score is 750 it’s a significant hurdle to get over for borrowers with thinner histories. We hope that the agencies will consider alternative scoring that looks at additional factors when calculating scores. Fortunately, the secretary of Housing and Urban Development told us recently that the Federal Housing Administration is considering new credit models that look at the full picture of a borrower,” said Nery.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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WASHINGTON (April 20, 2015) – Nearly a decade since the start of the foreclosure crisis, formerly distressed homeowners with restored credit are re-entering the housing market, but damaged credit profiles and lender overlays will greatly restrict the overall share of those eligible to buy, according to new research from the National Association of Realtors®. California, Florida and Arizona are expected to see the largest share of return buyers within the next decade.
NAR analyzed the nearly 9.3 million homeowners that underwent a foreclosure, received a deed-in-lieu of foreclosure, or short sold between 2006 and 2014 to estimate the amount of creditworthy borrowers expected to re-enter the housing market as a return buyer in upcoming years.
The findings reveal nearly a million of these former owners have likely already purchased a home again, and an additional 1.5 million are likely to become eligible and purchase over the next five years, representing an additional source of buyer demand for the housing market. However, because of low credit quality, millions more will not be able to re-enter in the coming decade.
Lawrence Yun, NAR chief economist, says there were two waves of defaults during the housing crisis: from subprime and then prime borrowers. “While loose lending standards in the mid-2000’s led to the rise in subprime buyers who ultimately became distressed owners, falling home prices and rising unemployment resulted in a large share of prime borrowers also defaulting or going through a short sale,” he said. “Now fueled by a gradually improving economy and the strong rebound in home prices, some of these former distressed owners have returned to the market, and more will likely become eligible in coming years.”
Several important factors were taken into account in NAR’s study, including the time necessary to repair a distressed seller’s credit, whether the distressed seller’s credit profile (at the time of purchase) fell below historic standards, if it met sound underwriting standards and whether they would meet credit overlays in the current stringent environment.
The findings show that roughly 950,000 former distressed owners of prime quality have become re-eligible for Federal Housing Administration or similar financing programs and have likely purchased again by restoring their credit to pre distress levels. Furthermore, 1.5 million formerly distressed owners will likely buy again over the next five years as they become eligible, with California, Florida and Arizona seeing the largest share of return buyers.
Despite the new source of housing demand from these return buyers, Yun says the considerable impact a distressed sale has on a borrower’s credit score will severely limit the overall number of those returning. “The extended time needed to repair credit scores or save for a downpayment, combined with other overlapping post-distress factors on credit quality such as missed auto loan or credit card payments, will limit the ability for many to buy in the current credit environment,” he said.
Looking ahead, because of the time that has elapsed and the fact that many distressed owners likely rented and paid utility bills in recent years, Yun says the use of new credit scoring models such as Vantage Score 3.0 and FICO 9 can help improve the ability of these buyers to become homeowners again while helping lenders further examine their credit risk to ensure safety and soundness in the market.
“The deep wounds inflicted on the housing market during the downturn are finally beginning to heal as distressed sales continue to decline and home prices in some parts of the country have bounced back to their near-peak levels,” adds Yun. “Borrowers with restored credit will likely have the ability and desire to own again, encouraged by the long-term benefits homeownership provides in a stronger economy and more stable job market.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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Read more: NAR Study: Return Buyers Expected to Boost Housing Demand in Coming Years
WASHINGTON (April 16, 2015) – Unnecessary regulatory burdens are preventing qualified, credit-worthy borrowers from obtaining the American Dream of homeownership. That’s according to testimony today from the National Association of Realtors® before the U.S. Senate Banking, Housing and Urban Affairs Committee.
“Realtors® support strong underwriting standards to protect consumers from the risky lending practices of the past, but we are concerned that the pendulum has swung too far. In some cases, well-intentioned, but over-corrective policies are severely hampering the ability of millions of qualified buyers to purchase a home. I believe, and our members believe, that we have yet to strike the right balance between regulation and opportunity,” said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark.
Despite historically low mortgage rates, the number of first-time buyers entering the market is at the lowest point since 1987 and the nation’s homeownership rate has almost fallen to levels last seen in 1990. Today, the number of homes purchased annually remains less than 70 percent of what was purchased prior to the real estate bubble and subsequent collapse.
“No one wants to see a return to the unscrupulous, predatory lending practices that caused the Great Recession, but some modifications to existing regulations would help restore the homeownership rate to pre-bubble levels,” said Polychron.
In his testimony, Polychron proposed adjustments to a range of regulations that would provide consumers with valuable protections and safe access to mortgage credit. He recommended changes to restrictive condominium polices from the Federal Housing Administration and the Government-Sponsored Enterprises, which limit opportunities for buyers to own condos. Condos often represent the most affordable buying options for first-time homebuyers and minorities.
Polychron called on the Consumer Financial Protection Bureau to encourage more lending from responsible community banks and also provide more flexibility for lending in small specialty markets such as rural communities.
He cautioned the CFPB to anticipate the potential for problems and issues to be uncovered during the implementation of the Real Estate Settlement and Procedures Act and Truth in Lending Act changes. The rule changes take effect on August 1, the busiest transaction time of the year. While NAR is supportive of the new harmonization, Polychron suggested a restrained approach to initial enforcement efforts by the CFPB.
During his discussion of the CFPB, Polychron pressed for the U.S. Senate to pass the Mortgage Choice Act, bipartisan legislation that importantly redefines a provision in the Ability-to-Repay rules that limits mortgage fees and points to 3 percent in order for home loans to be considered Qualified Mortgages.
As they are currently written, the rules unfairly prevent consumers from obtaining QM loans through certain affiliated lenders whose joint venture services are collectively counted against the cap, while individual services from large retail financial institutions are each capped separately.
The discrimination in the calculation of fees and points is being felt by consumers, including lower-end buyers, who are seeing reduced choices and added obstacles in their transactions.
Polychron also raised concerns that high guarantee fees and loan level pricing adjustments charged by the GSEs are negatively impacting the housing recovery. Instead of luring private capital into the market, increasing fees will only raise the cost of homeownership or redirect more mortgage loans to FHA without a private sector return.
NAR will continue to work with Congress and the administration to develop balanced housing policies that protect borrowers while supporting a robust housing market.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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Read more: Realtors® Call on Congress to Ease Regulatory Burdens Curbing Access to Mortgage Credit