WHY PEOPLE MOVE
Among those who moved between 2009 and 2010, Census said almost 44% of them (16.4m) did so for housing-related reasons, such as the desire to live in a new or better home or apartment. Thirty percent moved for family reasons (including marital status), and 16% for employment. In 2010, 37.5m people 1 year and older changed residences in the U.S., which is 12.5% of our population. This was the same in 2009. Of those 2010 movers, almost 70% stayed in the same county.
The folks at ING Direct USA will soon have a new boss: Capital One Financial. You know, the guys with the Viking ads on TV? Capital One was prominently mentioned in Michael Lewis’s “The Big Short,” and bought North Fork Bancorp in 2006 (which owned GreenPoint Mortgage and resulted in a $860 million charge off), Hibernia in 2005, and Chevy Chase in 2008. ING Direct is being purchased for $9 billion: $6.2 billion in cash, $2.8 billion in stock.
REVERSE MORTGAGE AVERSION
Wells Fargo announced that it will no longer originate reverse mortgages because of unpredictable home values and restrictions on those loans. Back in February Bank of America did the same thing, and in March Wells took reverse mortgages away from wholesale (brokers) and has been originating them only through its own branches.
In 2010, reverse mortgages totaled roughly 2.2% of the bank’s $392.5 billion mortgage volume – perhaps a lot of legal exposure without much profit contribution. Wells said it will continue to service existing reverse mortgages, but new rules made it difficult to determine a seniors’ ability to meet the obligations of the loan, such as making property tax payments and homeowners’ insurance. Is this another “unintended consequence” of government regulation, or the preference of staying away from having the Gray Panthers picketing the home office appearing on the Channel 5 news?
The 2011 Harvard Housing Study says that the number of senior households will increase 35% by 2020, so there’s certainly a reverse mortgage market out there. It’s a matter of when.