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Sharestates Wins Landmark Decision Enforcing Mortgage Integrity

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Sharestates, an originator and servicer in the private lending and loan syndication industry, announced a landmark legal victory in a case at the heart of mortgage enforcement and lending industry business practices. The case is considered a landmark victory with wider industry implications because the court’s ruling underscores the principle that if a party takes out a mortgage and receives its benefits, the mortgage will be deemed valid, and parties who accept the benefits of a transaction cannot later contest its validity to gain an unfair advantage. The plaintiffs, Cassaforte and FRF 348 Quincy, began the case in October 2019 and asserted that the defendants Sharestates, Amtrust, Atlantis, Pourtavoosi had breached contractual and fiduciary duties by refinancing three Brooklyn properties without authorization, resulting in debt incurred on behalf of the plaintiff without their consent. They sought to void the mortgages held and serviced by Sharestates and Toorak. The court ruled in favor of Sharestates based on two important legal principles: Sharestates’ defense of equitable estoppel was based on documentary evidence showing that the plaintiffs received the loan proceeds and that their representative, Aaron Johnson, had the authority to enter into the loan agreements. The court ruled that since the plaintiffs received the loan benefits and did not offer to return any part of the proceeds, they were estopped from contesting the validity of the mortgages. The plaintiff attempted to have the case heard by the Supreme Court, Appellate Division, but that motion was denied, concluding the case in favor of Sharestates in March 2024. Colin Kaufman and Courtney Lerias of Adam Lietman Bailey led the legal defense in this precedent-setting case. Sharestates has also recently had some other notable successes with precedent-setting cases. To subverge appraisal fraud and appraisal negligence, Sharestates brought several suits against inflated or negligent appraisals and had favorable outcomes with value being returned to investors. To remedy inequities in the business purpose lending space and bolster the enforcement of its mortgages, Sharestates has made compelling arguments about mortgage validity in unique situations. In another recent case, the Housing Trust Fund Corporation (HTFC) attempted to void a Sharestates mortgage due to reversionary rights it had in the historical chain of title. The Judge ruled that indemnification language in the reversionary clause evidenced the HTFC clearly contemplated that the properties would be mortgaged and such mortgages should remain on the properties after “automatic reversion”, ultimately enforcing the Sharestates mortgage. Sharestates General Counsel Amy Doshi stated, “These victories underscore Sharestates’ commitment to upholding the legal integrity of its paper, reducing exposure to fraud, and protecting the interests of its investors. Additionally, in the commercial business purpose space that is not heavily regulated, we are committed to enhancing our underwriting and originating standards to move and grow with the ever-evolving industry norms. We have been spending a considerable amount of time and effort on exploring and implementing smarter and more efficient tools to enhance our credit quality and originations to result in consistent returns and lower-risk investments.” “During the recent market slowdown, Sharestates capitalized on the opportunity to bolster its operations infrastructure and talent pool, dedicating resources to enhance its underwriting and servicing standards by integrating advanced technologies into its operations,” added Richard Wisniewski, Chief Investment Officer. Specifically, Sharestates has integrated new robust risk management protocols with the inclusion of Lexis Nexis Smartlinx reports, Fraud Guard reports, and Prudent AI for bank fraud detection, among others. Sharestates also completed onboarding to the MERS settlement system. This move not only streamlines processes but also enhances transparency and efficiency in loan servicing operations. Additionally, implementing enhanced loan recovery methods on defaulted loans, such as credit reporting of defaults and foreclosures to personal guarantors’ credit, alongside traditional foreclosure and workout options, underscores Sharestates’ dedication to maximizing investor returns while mitigating risks. Tina DelDonna, Chief Financial officer, emphasized that “This strategic re-focusing has positioned the firm for accelerated growth as interest rates stabilize.” About Sharestates Sharestates is a national private lender focused on non-owner-occupied residential and commercial properties. The company creates customized lending solutions for real estate developers and has successfully funded over $3.5 billion in projects nationwide. Since its founding in 2013, Sharestates has been an important source of private capital to real estate investors nationwide seeking short-term bridge financing for rehabilitation projects and long-term DSCR loans for rental properties. Sharestates funds loans from $100,000 to $10,000,000 on residential (SFR 1-4), multifamily, mixed-use, and commercial properties. Its loan programs include residential bridge, fix & flip, new construction, portfolio, and rental loans. As a partner to its developers, Sharestates manages the servicing of loans it originates through successful repayment to ensure the needs of its developers are met throughout the loan lifecycle. Sharestates’ technology platform allows the Company to more efficiently source and qualify investment opportunities on real estate projects nationwide and create investment products that are resold to institutional and accredited retail investors. Sharestates’ end-to-end approach to technology and vertical integration allows the Company to capture higher margins and leverage its expertise. Sharestates was founded by real estate veterans and its success is attributed to a strong leadership team, an easy-to-use platform, sensible underwriting practices, and a relationship-focused lending strategy. Sharestates partners with direct borrowers and brokers. To learn more visit www.sharestates.com. Author admin View all posts

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Nationally, the week of April 14 will have the best mix of market conditions for sellers, who could get $34,000 more for their home than at the start of the year Those looking to sell their home this year should start to get ready now, as the best week to sell a home is April 14-20, 2024, according to a new analysis from Realtor.com®. Nationwide, sellers listing during that week are likely to see the best conditions for listing prices, buyer demand and sales pace, as well as lower chances of price reductions and competition from other sellers. A recent survey from Realtor.com® found that the majority (53%) of home sellers took one month or less to get their home ready to list, so the time to start prepping is now. “Spring is generally the high season for home sales, and buyers tend to be more plentiful earlier in the year,” said Realtor.com® Chief Economist Danielle Hale. “Because listing a home is a process, sellers should start preparing now so they can list their home at a time when conditions are likely to be most favorable, giving them the best chance of selling their home quickly and at a competitive price.” Why is April 14-20 the best time to sell in 2024?While some home buyers are waiting for mortgage rates to fall further before entering the housing market, it’s still a good time for homeowners to sell as buyers continue to be in need of more for-sale options, with inventory still almost 40% below pre-pandemic levels. Those looking to take advantage of seasonal market trends should consider getting ready to list April 14-20 for the best mix of market conditions for sellers, including: Key factors for the 2024 housing market and tips for getting readyThe 2024 housing market is expected to behave according to typical seasonality, but will likely offer slightly better conditions than in 2023. According to Realtor.com®‘s survey, it took most recent sellers (72%) between 2 weeks and 3 months to prepare their home for sale, with the sweet spot being between two weeks and a month (37%). For almost half (48%), it took less time than expected to list their home, while 11% said it took more time than they expected. Here are some market and other factors for sellers and buyers to keep an eye on as they navigate the spring housing market and beyond: SOURCE Realtor.com Author admin View all posts

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Flipping Activity by Investors Declines at Fastest Pace in 15 Years; Investment Returns on Flips Sink to Lowest Level Since 2007; Two-Thirds of Flipped Homes Still Purchased with Cash ATTOM, a leading curator of land, property, and real estate data, released its year-end 2023 U.S. Home Flipping Report, which shows that 308,922 single-family homes and condos in the United States were flipped in 2023. That was down 29.3 percent from 436,807 in 2022 – the largest annual drop since 2008. The report further reveals that as the number of homes flipped by investors declined, so did flips as a portion of all home sales, from 8.6 percent in 2022 to 8.1 percent last year. In yet another sign of down times for the home-flipping industry, profits and profit margins also sank on quick buy-renovate-and-resell projects. Gross profits on typical home flips in 2023 dropped to $66,000 nationwide (the difference between the median sales price and the median amount originally paid by investors). That was down from $70,100 in 2022 and translated into just a 27.5 percent return on investment compared to the original acquisition price. The latest nationwide ROI (before accounting for mortgage interest, property taxes, renovation expenses and other holding costs) was down from 28.1 percent in 2022 and 35.7 percent in 2021, hitting the worst level since 2007. Investors saw their profit margins decrease for the sixth time in the past seven years as the median price of the homes they flipped dipped slightly faster than the median price they had paid to purchase properties – 4.4 percent versus 4 percent. “In 2023, the landscape for home flipping across the U.S. became increasingly challenging,” remarked Rob Barber, CEO at ATTOM. “Whether the overall market has soared or seen just modest gains in recent years, investors have missed out on the action.” He added that “the sharp decline in the number of home flips likely reflected a combination of a tight supply of homes for sale as well as dwindling returns. Either way, it will take some significant reworking of the financials for home flipping fortunes to turn back around.” The latest drop-off in home-flipping profits came during a year when the nation’s decade-long home-price runup began to stall, leading to the weakest annual price gains since 2012 and a slight dip in profits for sellers of all kinds. But margins for home flippers had already been declining during earlier years when the broader housing market was booming. As that happened, the profit gap between investors and all sellers gradually widened. Typical returns in 2023 remained at levels that could easily be wiped out by the carrying costs during the renovation and repair process, which usually consume 20 to 33 percent of the resale price. Home flipping rates fall in most housing markets, with biggest decreases in the South and West Home flips as a portion of all home sales decreased from 2022 to 2023 in 112 of the 212 metropolitan statistical areas analyzed in the report (53 percent). The top 25 largest decreases in annual flipping rates all were in the South and West. They were led by Gainesville, GA (rate down from 15.1 percent in 2022 to 9.9 percent in 2023); Phoenix, AZ (down from 16.3 percent to 11.9 percent); Prescott, AZ (down from 9.8 percent to 6 percent); Charlotte, NC (down from 14.2 percent to 10.6 percent) and Provo, UT (down from 10.9 percent to 7.5 percent). Aside from Phoenix and Charlotte, the biggest decreases in flipping rates from 2022 to 2023 in metro areas with a population of 1 million or more were in Las Vegas, NV (rate down from 12.2 percent to 8.9 percent); Sacramento, CA (down from 9.9 percent to 6.9 percent) and Tucson, AZ (down from 14.6 percent to 11.8 percent). Metro areas where home flipping rates increased from 2022 to 2023 were led by Macon, GA (rate up from 12.1 percent to 17 percent); Gulfport, MS (up from 3.9 percent to 7.7 percent); Jackson, MS (up from 5.8 percent to 8.4 percent); Columbus, GA (up from 10.9 percent to 13.5 percent) and Dayton, OH (up from 10 percent to 12.4 percent). Home flips purchased with financing tick upward Nationally, the percentage of flipped homes originally purchased by investors with financing increased in 2023 to 36.5 percent, up from 35.7 percent in 2022 and from 36.2 percent in 2021. U.S. Home Flipping Financing Trends Meanwhile, 63.5 percent of homes flipped in 2023 were originally bought with cash only, down from 64.3 percent in 2022 and from 63.8 percent two years earlier. Among metropolitan areas with a population of 1 million or more and sufficient data to analyze, those with the highest percentage of flipped homes purchased by investors with financing in 2023 included San Diego, CA (56.4 percent); Seattle, WA (56.1 percent); Fresno, CA (52.2 percent); Providence, RI (49.2 percent) and Boston, MA (48.6 percent). In that same group, the metro areas with the highest percentage of flips purchased with all cash included Detroit, MI (81.6 percent); Cleveland, OH (76.3 percent); Buffalo, NY (75.5 percent); Pittsburgh, PA (71.1 percent) and Birmingham, AL (70.2 percent). Typical gross profits on home flips decline in nearly two-thirds of nation Homes flipped in 2023 were sold for a median price nationwide of $306,000, generating a gross flipping profit of $66,000 above the median original purchase price paid by investors of $240,000. That national gross-profit figure was down from $70,100 in 2022 and from $75,000 in 2021, which was the highest level this century. U.S. Home Flipping Gross Profits Among the 56 metro areas in the U.S. with a population of 1 million or more, those with the largest gross flipping profits on median-priced transactions in 2023 were San Jose, CA ($275,250); San Francisco, CA ($170,000); Boston, MA ($158,000); New York, NY ($154,750) and San Diego, CA ($153,000). The weakest gross flipping profits among metro areas with a population of at least 1 million in 2023 were in Austin, TX ($18,640 loss); San Antonio, TX ($12,289 profit);

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Property managers’ race to woo tenants eases, signaling a tighter market for renters this spring After a winter that saw nearly a third of rental listings offering tenants tempting concessions such as free months of rent or free parking, Zillow’s latest data reveals the share of rentals offering perks may have hit its peak. The good news for renters is that the market is friendlier than it was a year ago, with the share of rentals offering a concession rising 5.6 percentage points. As spring approaches, February data show 32.2% of rental listings on Zillow offered a concession, down slightly from December and up 5.6 percentage points from a year earlier. That marks the slowest annual growth pace since last June. After seven months of consecutive monthly increases to end 2023, the share of rentals offering concessions fell to 31.9% in January before a slight uptick last month. If past seasonal trends continue to hold, renters looking to secure a new lease in the upcoming spring or summer may encounter fewer incentives and increased competition. “The rental market always ebbs and flows with the seasons, so it’s no shock that we’re seeing concessions start to level off as we move into the warmer months,” said Anushna Prakash, an economic research data scientist at Zillow. “It looks like we’re beginning to see the market balance the ongoing high demand from renters with a competitive environment for property managers and landlords. While concessions are beginning to dip, they are more common than they were a year ago, helped by new buildings that have opened their doors.” While the expected seasonal shift accounts for the stabilization of concessions, the pace of rent growth and vacancy levels offer deeper insights. Recently, rents haven’t been going up as quickly as they did before the pandemic, and it looks like supply and demand are starting to balance out. The share of rental housing units that were vacant was at 6.6% in the fourth quarter of 2023, which is just a bit higher than the nearly forty-year low seen at the end of 2021. This indicates there are enough eager renters, nudging the market toward stability. The Metros Leading the Concession Charge Despite the national trend toward stabilization, certain markets continue to lead with high shares of concessions. These metros exemplify the diversity within the rental market, with strategies varying widely across regions to attract tenants. 10 Metro Areas with the Largest Share of Rental Concessions Metro Share of Rentalsw/ Concessions Year over Year(YoY) Change inShare ofConcessions Typical Rent inZillow ObservedRent Index (ZORI) YoY Change inZORI Salt Lake City, UT 60.3 % + 22.9 percentage points $1,656 1.6 % Austin, TX 55.0 % + 17.9 pp $1,735 -3.0 % Charlotte, NC 53.5 % + 19.0 pp $1,775 1.7 % Dallas, TX 50.7 % + 13.5 pp $1,747 0.5 % Raleigh, NC 50.6 % + 13.4 pp $1,747 1.2 % Nashville, TN 49.9 % + 9.9 pp $1,874 0.7 % Washington, DC 49.4 % – 2.9 pp $2,273 5.1 % Minneapolis, MN 49.4 % + 4.3 pp $1,615 2.9 % Phoenix, AZ 48.8 % + 8.6 pp $1,846 1.4 % Denver, CO 48.1 % + 8.5 pp $2,007 3.1 % United States 32.2 % + 5.6 pp $1,959 3.5 % In nine of the ten metros where the share of rental concessions is highest, rents are growing more slowly than the nationwide 3.5% annual rate, and they are outright falling in Austin. This could mean there are more apartments available than there are people looking to rent them. On the other hand, areas where there are fewer of these kinds of deals available, such as Providence, R.I. (12.3% of rentals offered concessions in February), Hartford, Conn. (16.3%), and Cincinnati, Ohio (18.9%), are seeing some of the fastest rent increases. In Providence, typical rents have jumped by 8.1% since last year. Hartford and Cincinnati both saw rents increase by 6.4%. Zillow provides a user-friendly platform for housing providers to share concessions information with prospective renters. Property managers can easily list concessions for their properties, and renters can find all available offers under the “Special Offers” tab on participating building detail pages, enabling them to make well-informed housing decisions. Author admin View all posts

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Market leaders join forces to create expanded network with extensive service offerings for preserving and maintaining communities nationwide MCS, the national property services company founded in 1986, announced it has acquired property preservation company Five Brothers Asset Management Solutions (“Five Brothers”),bringing two of the country’s leading property preservation and maintenance services companies together. MCS’s acquisition of Five Brothers creates a national property preservation and services market leader that combines complimentary business offerings to serve an extensive network of clients in the mortgage services and single-family rental sectors. Five Brothers will be integrated within MCS as the combined entity will offer superior property preservation, maintenance and renovation services throughout the country. “MCS has provided the highest standard of property preservation and related services for nearly 40 years, and the addition of Five Brothers elevates our capabilities and expands our resources even further,” said Craig Torrance, Chief Executive Officer of MCS. “With a 50-plus year history of delivering property preservation services, Five Brothers brings its own extensive track record of delivering outstanding service, solutions and technology that compliments the MCS services platform. We’re excited to bring together two strong company cultures centered around shared values and exceptional client servicing, along with a united commitment towards maintaining and beautifying neighborhoods across the country.” Headquartered in Warren, MI, Five Brothers has offered a variety of regulatory-compliant default, rental and REO residential and commercial property preservation services for over five decades, including services for the reverse mortgage industry which will be a new market for MCS. The family-owned company has built a nationwide network of field professionals delivering services designed to maximize asset value and returns for owners, while leveraging technology to ensure compliant and efficient service delivery. Nickalene Badalamenti-Kalas, President and CEO of Five Brothers, is very excited for Five Brothers to be joining forces with MCS to continue providing necessary and valuable nationwide field services, advanced technologies and unrivaled REVERSE/Home Equity Conversion Mortgage (HECM) expertise to its clients. “We are bringing together two purpose-driven organizations with common goals and synergies that will continue delivering superior value to clients, while improving communities across the country,” she noted. “Five Brothers is proud to join forces with the talented group of professionals within the MCS organization as we are well aligned in our business philosophy and culture. Our clients, field service partners and internal teams will greatly benefit from our collective experience and shared resources to provide reliably superior service.” MCS delivers its suite of property preservation and related services to clients through a hybrid service model featuring 25 self-performing markets, 30,000+ service partners and an industry-leading technology platform. The Five Brothers service provider network and technology solution, FiveOnline®, will be integrated with MCS, while Five Brothers’ clients will benefit from MCS’s local, boots-on-the-ground capabilities in strategic markets. “We look forward to integrating the Five Brothers team of property preservation experts as we deliver the same outstanding customer experience their clients have enjoyed for decades,” added Chad Mosley, President, Mortgage Services at MCS. “The immediate focus of our combined teams is ensuring continuity for those clients by leveraging existing technology and providing ongoing operational support.” About MCSMCS is an award-winning leading property services provider working across Commercial Properties, Single-Family Rentals, and the Property Preservation industry. For over 35 years, MCS has been committed to responsive care, industry-leading service standards, leveraging technology, and end-to-end transparency to protect, preserve and serve communities across the country. Some of the largest and most respected mortgage servicers, real estate owners and operators, and corporations trust MCS to perform property inspections, preservation, maintenance, renovations, and other property-related services. Learn how MCS is Making Communities Shine at MCS360.com. Author admin View all posts

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As businesses grapple with new SEC climate risk disclosures, rising insurance rates, and increasing losses from climate risk, AreaHub provides actionable environmental intelligence – efficiently and affordably. Amid the recent SEC climate risk disclosure rules, a changing insurance landscape, and increasing climate-related losses for businesses, AreaHub announced an Enterprise version of its climate and environmental intelligence platform for U.S. businesses and organizations. Last week, the SEC released its final climate disclosure rules, requiring large U.S. public companies to reveal information about their material climate risks and emissions to the public. According to USI’s 2024 Property & Casualty Market Outlook, natural catastrophe losses continue to increase by 5% to 7% annually. Additionally, as insurance rates rise and insurance companies scale back coverage in certain areas, property owners take on additional risk – leaving businesses exposed to increasing losses. The rise in insurance costs also correlates with the frequency of U.S. billion-dollar disasters. In 2023, the U.S. experienced a record-setting 28 billion-dollar climate and weather disasters, with damages costing over $92.9 billion, according to NOAA. “Climate and environmental risks are affecting businesses’ bottom line,” said AreaHub Co-Founder and CEO Alison Gregory. “Businesses need to incorporate environmental risk information into their strategies, decision making, and investments to prepare for and reduce the increasing effects of climate change on their finances and operations.” AreaHub Enterprise provides clear, synthesized, and localized climate environmental information (such as climate risks, nearby contaminated sites, infrastructure, and more) to help businesses make more informed decisions about any of their U.S. locations. By aggregating over 30 topics from credible, science-based sources, the platform offers enterprise clients address-specific information to proactively manage their locations and make informed decisions. AreaHub Enterprise services include: As public awareness and stakeholder pressure grows, businesses must align their governance and strategies with evolving climate and environmental expectations. “AreaHub Enterprise is ideal for businesses looking to identify the local climate and environmental factors that can impact their investments, finances, operations, and people,” continued Gregory. “Our data-driven platform enables clients to inform investments, mitigate exposures, and increase resiliency by leveraging the environmental risk profile of their locations to inform their operational planning or management strategies.” AreaHub also offers consumer plans catering to relocators, homeowners, or parents. The Basic plan provides limited free reports of select major U.S. cities, while AreaHub Pro’s extensive address-specific one-time paid reports include additional topics and access to expanded details, such as specific hazard locations and risk indicators. About AreaHub AreaHub is an environmental risk management platform that offers localized climate and environmental hazard information by aggregating credible, science-based data about climate risks, industrial hazards, pollution and other issues that can impact finances, operations, or health and safety. By leveraging their prior managerial, data processing, and startup experience, the co-founders built AreaHub to help businesses and individuals make healthier and wiser decisions with clearly presented, scientific, and locally relevant information. For more information, visit AreaHub.com or follow AreaHub on LinkedIn and Instagram. Contacts Media:Isabella Armas-Leonisabella@areahub.com Author admin View all posts