Learn how the DPR IDX feature can educate consumers and capture prospects

If Down Payment Resource is already integrated in your market’s MLS, listen up. We’ve seen some impressive results from Realtors and brokers using the DPR IDX feature. In fact, it’s becoming one of the most popular (and capable) features of DPR. And, did you know it’s free to use? It’s provided as part of your MLS membership.

Here’s how it works: Your website vendor can help you set up the DPR icon/link so homebuyers visiting your website and searching for homes will see which homes may be eligible for down payment assistance. The homebuyer can also answer a few simple questions to determine if they may also be eligible for assistance. If so, the homebuyer can enter their contact information and you get an email with all the details for direct follow up. These are valuable incremental leads and all DPR leads on IDX sites go back to the IDX site owner.

You can find the setup instructions and graphics on the DPR/IDX Setup Page within DPR. Just send the instructions to your IDX vendor and you’ll be up and running in no time!

DPR has been installed on hundreds of IDX sites across the country now, and the success rates are eye-catching:

  • The most visited IDX site with DPR installed gets an average of 2,500 clicks on the DPR icon per month, and in better months has seen over 3,000 clicks on the DPR icon.  That’s not total website traffic, that’s just how many people click the DPR icon to access the DPR Eligibility Form.
  • One IDX website gets an average of 110 new leads from DPR monthly. That means a homebuyer visited the site, saw DPR, clicked on the DPR icon, completed the search, and submitted their contact information to ask for assistance taking the next step toward homeownership.
  • Across all IDX sites using DPR, the average lead conversion rate is 5.7% — compare that to other online lead sources!
  • We’ve identified one IDX website that installed DPR several months ago and has a running average conversion rate of over 19%. Pretty impressive!
  • DPR’s IDX feature is being used in mega markets like Chicago and central Florida, as well as in smaller markets like Tucson, Reno, and Asheville.  And it’s working everywhere.

Ready to learn more? Check out our three-minute video on setting up the IDX feature. And feel free to contact us at info@workforce-resource.com if you need setup assistance or help with your IDX vendor.

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Single family loans financed by state housing finance agencies prove to be sound investments

New data compiled by Bloomberg shows that bonds that finance single-family mortgages are doing much better than the rest of the municipal market. These mortgage loans are made to “first-time buyers earning less than the local median income” and funded by state housing finance agencies. Why are they delivering stellar investment returns?

One reason is that they are performing better than most investors’ expectations, many of whom bought into the myth that “affordable” loans were the cause of the housing meltdown. Many steered away from these bonds and those with appetites for greater risk–or simply better educated on the strong lending practices of state HFAs­– demanded a greater return. Happily, these homeowners are making more timely payments and suffering fewer foreclosures than that of the conventional market. Another key reason for the success of these loans is that these homeowners are buying homes to live in, not for the short term or to flip. For investors, that means less risk of prepayment which would devalue their investment.

Unfortunately, these homeowners are also making house payments higher than warranted by their willingness and ability to pay. We look forward to sharing more data that will correct the misperceptions and bias that cause this imbalance in today’s market.

By the way, you may be wondering, how is it that a bond backed by an approximate 4% mortgage rate can earn 10.37%?

Mortgages are packaged or securitized into bonds. The bond is priced daily based on the relationship between its underlying interest rate and current rates for similar securities. So there is an inverse relationship between the price of the bond and current interest rates. If rates go down, the price of the bond goes up and vice versa.

http://sfgate.bloomberg.com/SFChronicle/Story?docId=1376-LZUQMT1A1I4H01-03QQMRD31GOKF6US92G8LE3G5S

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What Fannie and Freddie did and didn’t do

Mark Zandi’s recent piece “Fannie and Freddie don’t deserve blame for bubble” in the Washington Post is well worth reading.

To be sure, there are some very real reasons why Fannie and Freddie aren’t drawing many supporters these days, but they have been pilloried for at least one thing they didn’t do. As Mr. Zandi explains, the agencies weren’t the cause for house prices to increase at an unsustainable, record pace and then rapidly fall resulting in our current housing crisis.

In sharing this article with friends, one was good enough to rebut with examples of the current conventional wisdom (and, in our view, misperceptions) that generates such vehemence. Sometimes it’s a simple case of remembering which came first, the chicken or the egg.

“There seems to be a tendency in these types of articles to kind of re-write history by demonizing the mortgage companies for making the loans and criticizing Wall Street for securitizing the loans….but not scrutinizing the underwriting standards set by Fannie/Freddie used in originating most of those loans. I do still truly believe that this relaxation of those underwriting standards is the real genesis of the financial debacle.”

In other words, our friend believes that Wall Street and subprime lenders were merely responding to a relaxation of credit standards by Fannie and Freddie.

However, that’s not how it happened. Wall Street figured out how to securitize and sell loans in the private market without Fannie and Freddie’s seal of approval. Therefore, mortgage lenders accustomed to underwriting to agencies’ guidelines could throw caution to the wind with no recourse. In fact, as Mr. Zandi points out, the agencies actually lost significant market share during the boom.

When Wall Street securitized financial products, it became addicted to the revenue generated. The risk was spread all over the world at huge profit. But when the natural demand for housing diminished, lending standards evaporated to create more homebuyers and keep the party going. Unfortunately, their ability to pay was not sustainable. These were not legitimate affordable housing initiatives.

With that argument settled, we heard a common refrain:

“But I still thought Presidents Bush and Clinton were the two guys that originated the ideas of lowered lending standards and increased homeownership. I guess I am confused on the timeline as well as the impetus for lowering the lending standards.”

True. There is, however, a huge difference between safe and sustainable affordable housing programs that were designed for these initiatives and the over the top excesses of No-doc liar loans and toxic Option ARMs that fueled the boom. We’ve made that case in earlier blogs backed with research from solid sources. [Read more]

While this issue is sure to continue to get play during the presidential debates, we’d prefer to look ahead to long term solutions to improve housing.

In our humble opinion, there is a legitimate role that the government should play in providing liquidity to the housing market and regulation to ensure housing finance is stable and secure. We favor the proposals that depict a few smaller institutions possibly modeled like utilities with lenders as shareholders. Whether our government can do this adequately is another story, but we had a system that worked fine for 50 years and the private market has proven that laissez faire is not the answer.

 

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