In a move that aims to lighten up the lending standards for national lenders and banks, Melvin Watt, the new director of the Federal Housing Finance Agency (FHFA) has authorized 3 changes in the FHFA rules pertaining to the purchase and buyback of loans on the open market.  These rules are aimed at reducing the risk to banks and lending institutions as listed below:

  1. Banks will not be responsible for mortgages paid by borrowers consistently on a monthly basis after a 3-year time period even if borrowers are late twice on payments during that time period.
  2. Lending institutions who undergo the new underwriting spot checks will likewise be off the hook for liability on these mortgages.
  3. Lenders will not be expected to cover the cost of a bad loan, if the mortgage insurer instantly denies the mortgage insurance claim.

With high hopes, Watt went on to claim that he expected the relaxation in these crucial rules should increase home sales and new homes sales by 5% in 2014.  Economic analysts also adjusted their home sales numbers from $4.96 million to $5.21 million which will exceed 2013’s sales numbers of %5.07 million by 2.8%.

The reason that the implementation of the new rules is so critical to the recovery of the real estate market in the United States is because the cost to “buy back” all of the bad loans made on subprime mortgages from 2001 – 2007 was the reason for the government bailout of the major banks on Wall Street.  This caused banks and lenders to tighten up their own credit standards in addition to new Federal standards for credit for buyers of new homes.  The banks and lenders now use what are called overlays to “overlay” the Federal credit standards for programs such as FHA loans, which are backed by Fannie Mae and Freddie Mac.  In fact, the money given to these two lenders to bail them out has helped these organizations reach record sales during the real estate recovery.

The overlays that lenders and banks have put in place require buyers to not only qualify for the loan for their new home with proof of consistent income in the form of check stubs and income taxes, but also, they cannot have a debt-to-income ratio that exceeds 36%.  The relaxed credit standards for Fannie Mae and Freddie Mac will allow an FHA-backed loan of up to 43% debt-to-income ratio.

“It means a restart for the real estate recovery,” said Mark Zandi, chief economist of Moody’s Analytics Inc. “We’re not going to get back on track until we start making credit more available to potential buyers.” He said he expects Watt’s moves to spur “meaningful” sales growth.

Another bit of good news from this meeting is that unlike his predecessor, Edward Demarco, Melvin Watt has committed himself to working with banks and lenders, keeping an open line of communication, and even hoping to ease some of the regulatory practices of the previous administration.  This along with steady interest rates and less liability to lenders and banks, which will be implemented on July 1, 2014, should help to convince the lenders and banks to loosen up slightly on the almost impossible credit standards now required of new home buyers and home buyers as well as those existing homeowners who are interested in refinancing.

Ron Lee Homes, a new home builder in St. Tammany Parish has been in the real estate business in the Greater New Orleans area for over 20 years.  We have relationships with our local banks, lenders, and title companies, and we would be happy to direct you to a few banks and lenders that could help you get pre-qualified for your new home purchase.  Call 985-626-7619 or E-mail for more information.


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It seems that all of the speakers at the recent bi-annual Construction Forecast Webinar could agree on one thing – without the growth of the economy and employment, the housing market would not be doing as well as it is right now.  The growth is slow and sometimes hard to see as it speeds up and slows down over each quarter of the year.  It seems that Wall Street waits with bated breath to find out which sectors of the market are performing, which, of course, affects the psychological ups and downs of trading.  However, economic growth and a lowered unemployment rate have bode well for today’s real estate market.

One of the speakers of the webinar expressed optimism that there soon may be a slight easement of credit requirements from banks and lenders.  This shift would cause a positive chain reaction of events that would help new home buyers, especially those right out of college and graduates who have been living with their parents or relatives to be able to set up their own households.  There is already a lower risk associated with lending in certain financial markets, and an institution’s willingness to lend will contribute to job growth as business can increase their holdings, take on new property and contracts, and be able to do more business with more access to financial resources.  Job growth will spur the economy which will encourage economic growth.  This cyclical effect is what “normal” market conditions look like and what was lost with the crash right before the Recession.

An extremely harsh winter slightly dampened the numbers and statistics coming out of the National Association of Home Builders’ (NAHB) economic news sector, but the NAHB was able to report a rise of 6% in single-family home starts in the month of March, 2014.  This showed a 2.8% increase month-over-month from February, 2014 nationwide.  Here at Ron Lee Homes, in St. Tammany Parish, there has been an exponential increase in the demand for proposals for both floorplan design as well as custom new home building projects.  We are currently working with close to 20 clients on plans and designs for their new home.

Ron Lee Homes also built a gorgeous new custom home for sale for the St. Tammany Home Builders Association Parade of Homes.  Come by to see what new innovative and green techniques that we use in each and every home we build.  You won’t find a better example of energy efficiency and craftsmanship than in a home built by Ron Lee.  Call 985-626-7619 or e-mail for more information.


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In order to promote business in Old Mandeville and unincorporated Mandeville in St. Tammany Parish, the St. Tammany Parish Council amended a zoning designation from 2009 which originally gave a block on both sides of Highway 59 the NC-4 (Neighborhood Institutional District) zoning.  This zoning allowed small commercial businesses to establish locations in these areas.  These types of businesses included dance and music studios, weight loss studios, learning centers, churches and day care centers.  While these types of businesses have popped up all around Highway 59, and business is booming, the problem began with new home buyers and home sellers trying to conduct “residential business” in this same area.  Highway 59 from Lake Pontchartrain to Abita Springs has always featured a mix of residential and commercial properties.  So, when the real estate market in St. Tammany Parish began to become active again, home buyers and sellers alike were stymied by their mortgage companies and banks who would not issue a loan on the land that was zoned NC-4.

The reason for the lack of lending was because of the zoning.  A bank would not lend money to a residential location in the NC-4

zoning because it had a commercial designation.  Because of this, the residential property in this area became essentially worthless.  The St. Tammany Parish Council amended this detrimental mistake in a quick and efficient vote on March 6, 2014, without any discussion.  They voted to approve the new language describing the NC-4 zoning to include residential properties in this zoning.  This would make it so that a zoning of NC-4 would include residential properties as well as commercial properties.  Normally a measure approved by the Council takes 15 days to become active, however, the Council waived the waiting period and made the measure immediately active.  Banks, lenders, buyers, and sellers will now be able to immediately push through any loans that were outstanding before the Council put it to a vote.

Even though the immediate cause for concern for the vote by the St. Tammany Parish Council was the area around Lafitte St. south of Florida Street on Hwy. 59 in Mandeville, Louisiana, apparently, the problem exists for the NC-4 zoning in many other parts of St. Tammany Parish as well.  This vote was crucial to freeing up the commerce of residential buying and selling all throughout St. Tammany Parish.  Hopefully with this vote, residential real estate will once more thrive in St. Tammany Parish.


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D.R. Horton, one of the nation’s largest home builders reported an 86% increase in quarterly earnings at the end of the 4th quarter of 2013.  Since the beginning of the Recession, builders have been struggling to see the very far light at the end of the tunnel, and new-homes-1the end may be in sight for most of the nation’s builders.  The January jobs report stunned many economists by showing an increase of 48,000 jobs in the construction sector of the country.  These jobs had dipped by 22,000 in December, 2013, but they were not lost in residential construction, just commercial construction.  The residential construction employment market has increased by over 200,000 since those jobs were lost during the fall of the real estate market during the Recession.  This pace has had small surges here and there as indicated by the January, 2014 jobs reports, but for the most part, the growth has been consistent and steadily ticking upwards.

The National Association of Home Builders (NAHB) has consistently claimed that construction leads to jobs, and jobs lead to economic growth…which leads to more construction.  This theory has very few flaws in it as numbers for the final quarter of 2013 showed that housing’s share of gross domestic product (GDP) was 15.3%, with home building yielding 3.1 percentage points of that total.  Builder confidence has been on the rise despite the government shutdown in October, and builders now have a “good worry” to consider when quoting a timeline for completion of a new or custom home – contractors to actually perform the work.

The latest trend in the recovery of the housing market is that builders cannot find enough contractors and sub-contractors to complete the work on their new home projects in a timely fashion.  The reason for this is that the demand for these contractors has doubled and even tripled in some markets, and there are simply not enough working contractors anymore to do the building.

Many of these companies went out of business or suspended their businesses due to the inactivity of builders during the Recession.  In order to pay the bills, they had to stop what they were doing and start doing something else.  As a result, when builders are going to start their new homes, they are coming up short on the hands needed to build their homes.

The increase of 48,000 jobs in the construction sector shows that contractor and sub-contractor confidence is on the rise as people are once again being employed by the construction industry and residential and commercial builders.  In fact, employment in other sectors of the economy are also going to be important for the complete recovery of the residential new home building market.  The reason for this is the first-time home buyer market.  Many first time home buyers are in the 25 – 34 age range.  Because there is no longer a “guarantee” that a college graduate will be able to find a job, many young people in this age range are without employment.  In fact, close to 20% are unemployed and are living with friends or relatives and do not have the income or credit to be able to buy their first home.  However, the good news is that only 12 percent of 25-34-year-olds who have jobs live with friends or relatives.

“If one is looking for a positive sign for home buying later this year as well as for autos, this is the most powerful one,” wrote Steve Blitz, the chief economist at ITG Investment Research.

Robert Denk, an economist for the NAHB, also reported that the labor force is expanding and that even hourly rates for construction workers has gone up.  Ron Lee Homes in St. Tammany Parish in Covington, Louisiana has maintained a rate of building throughout all of the past years.  We specialize in building new, semi-custom and custom homes all throughout the northshore of the Greater New Orleans area.  We have been fortunate to keep a working relationship with all of our vendors, suppliers, and contractors.  Because of this, we are completely prepared with an efficient staff to be able to build your new home either on your lot or on one of our existing homesites in the many subdivisions and neighborhoods throughout St. Tammany Parish.  To learn more about building a new home in St. Tammany Parish with Ron Lee Homes, Contact Us at 985-626-7619 or e-mail


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Known to have one of the most established, networked clientele in the Gulf Coast Region, NOLA Lending Group, LLC will bring to

the table a massive portfolio of consumers, real estates professionals, and experienced sales & marketing staff to its purchase by Fidelity Homestead Savings Bank.  In the last 2 years alone NOLA Lending Group did $1.25 billion in mortgage loans for purchases and refinances in Louisiana, Mississippi, Tennessee, Florida, and Alabama.

On the northshore, NOLA Lending Group, LLC has corporate headquarters off of the West Causeway Approach in Mandeville, Louisiana in St. Tammany Parish.  As a win-win move for both companies, Fidelity Homestead Savings Bank will be opening their business doors to the opportunity to be able to sell their new home loans and sales purchase loans, as well as their refinancing loans on the secondary market.  In the past, the bank has taken a a very traditional approach to mortgages by managing their loans and processing payments for mortgages in-house.  With the purchase of NOLA Lending Group, Fidelity Homestead will now be able to start selling some of its existing portfolio on the secondary market.

“It’s a situation where two organizations can come together and match up expertise and strengths to complement each other,” McRee said. “Two solid organizations running different business models but combining forces.”

The reason for the purchase, according to McRee, was because of a 100-year-old model for Fidelity Homestead that was completely

shaken to its foundation with the dramatic decrease in interest rates earlier this year.  Long-time customers whose loans were being serviced in-house by the bank quickly moved to other loan companies both in-state and out-of-state to refinance their loans for these historically low rates.  Fidelity held $308.8 million in single-family to four-family mortgages as of Sept. 30, 2013, down from $518.7 million in loans total at the end of 2008.

In addition to instantly having access to the secondary market, Fidelity mentioned that one improvement that they will be looking to implement in the loan application process for NOLA Lending Group will be to focus on new customers that will have loans that are attractive to secondary market buyers who are looking for low-debt-to-income ratio customers.  Richard LaNasa and Ashton Noel, managing partners at NOLA Lending, will continue to oversee the operation as executive vice presidents and will serve on Fidelity’s senior management committee. The bird’s eye view of the purchase shows two established, strong companies joining together to complement each others strengths to cover more territory and successfully service more customers across the entire southern region of the U.S. including the Greater New Orleans area.

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Visitors from all over see the lights from I-12 as they drive through St. Tammany Parish, a seemingly 20’ – 30’ “Christmas Tree” which is constructed by lights hanging from the top of a structure in the St. Tammany Parish government complex off of Koop

Drive in Mandeville, Louisiana.  This is the northshore’s version of the Celebration in the Oaks, which is an annual display of Christmas lights and lighted sculptures in City Park in New Orleans, LA which can be walked or driven by visitors in the week leading up to Christmas Day.

The light show on the north shore is called The Holiday of Lights and is paid for and sponsored by the Tammany Trace Foundation and the St. Tammany Parish Government.  The event, which will be lit up on December 6th and 7th and December 13th and 14th from 6pm – 8:30pm, offers a full-featured light display, as well as theatrical and musical events featuring local drama troupes and artists from the Greater New Orleans area.  The light display will be available for viewing by all visitors from 5pm – 8pm in the weeks before and during the holidays.

Entertainment performances are planned for the following dates:

  • December 6, 2013: Mandeville Show Choir, Marigny Elementary School, Mary Dees Dance Studio and Mandeville High Choir.
  • December 7, 2013: Northlake Academy of Music Choir, Fifth Ward Junior High, and Woodlake Elementary School.
  • December 13, 2013: Abita Springs Children’s Academie, Abita Springs Elementary Third-grade Choir; Abita Middle School Warrior Band; and Creative Arts of St. Tammany.
  •  December 14, 2013: Covington High Talented Theatre, Mother Goose’s Christmas Cooking Spectacular; The Singstions, and Fontainebleau High Talented Music.

A cause for celebration this year, which is also being promoted by the Holiday of Lights show sponsors is the commencement of the new construction of Kids’ Town, which is being described by the Tammany Trace Foundation and the St. Tammany Parish Government as a historical experience through the eyes of a child. This construction for Kids’ Town is scheduled to begin early 2014.

If you are looking for something to do over the holidays in Mandeville, Louisiana, come out and view the Holiday of Lights with your family in St. Tammany Parish.


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One of the first 200’ tall buildings in St. Tammany Parish will find its home at the interchange of I-12 and 1088 in Mandeville, Louisiana according to the St. Tammany Zoning Commission in a meeting on November 11, 2013.  The 161-acre plot of land owned jointly by the Azby Fund and Wadsworth Estates LLC originally received permit approval for a mixed-use Planned Unit Development which was going to include both business and commercial structures as well as a residential community.


Issues after Hurricane Katrina and the Recession delayed the development’s timeline multiple times, but both development companies are now ready to move forward with their construction.  Some of the proposed buildings will be 200’ tall (which is about 20 stories) amongst commercial and industrial venues as well as light retail that will front I-12.  Nothing in St. Tammany Parish comes close to this height at present but members of the zoning board felt that the I-12 / 1088 location would be the best possible location for such a structure because of its visibility from the Interstate.  The presence of such a prominent building right on the highway would literally “put St. Tammany Parish on the map.”

“Among the possibilities is a warehouse distribution center, such as Federal Express,” said Patrick Fitzmorris, assistant managing director for the Azby Fund. “The total build-out would take at least 10 to 15 years,” he said.  Other industrial components would include corporate headquarters from manufacturing businesses similar to the Folgers corporate location and warehouse that is being built in Lacombe.  The developers hope to attract the same type of industrial warehouse business  at their development.

One of the detractors of the project brought up the position that the development was not built to accommodate the large amount of parking needed for industrial warehouse locations.  However, Warren Treme, one of the principals of Wadsworth Estates, said work would begin right away to make changes to the residential infrastructure that was put in so that it can accommodate commercial uses including the parking needed for the complex.

With the installation of the interstate exit at 1088, traffic on Highway 59 has been reduced because of the “back door” access to all of the new homes and rentals available on Highway 1088.  With the inclusion of light retail at this commercial and industrial development, there may now be places for homeowners to shop as well as new jobs served up by those businesses that will lease commercially.

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According to the National Association of Home Builders’ (NAHB’s) Fall Construction Forecast Webinar (CFW) which featured three renowned industry experts: NAHB Chief Economist David Crowe, Mark Zandi, Chief Economist at Moody’s Analytics, and NAHB Senior Economist Robert Denk; the net Gross Domestic Product (GDP) is predicted to increase from 1.5% in 2013 to as much as 4% at the end of 2015.  The Webinar, a new addition to the dissemination of information to the real estate industry nationwide, was held to present views on the outlook for the US economy and the housing market more specifically.

All three participants had some of the same basic views on the economy and housing market in general.  In addition the GDP being on the rise, private corporations are showing phenomenal job growth and hiring and are starting, once again to operate in the black.  This factor along with the housing supply being more than the demand, “upside-down houses” regaining their value, and banks paying back the money from the bailout are all good news for the real estate industry.

On a psychological level, consumer confidence and builder confidence has increased to records highs not seen since 2007 in the 1st 2 quarters of the year.  Also, the tight-fisted approach of American households throughout the Recession has eased as there is, for the first time in 6 years, an increase in the purchase of durable goods – cars, furniture, “big purchases.”  These expenditures go hand-in-hand with consumer confidence.  Even though the growth is extremely slow, across the board, there has been an increase in employment as well.

Trying to get back to “business as usual,” builders are getting aggressive about starting new inventory and custom homes.  They are running into obstacles not seen in the last 20 or so years during the housing bust – a shortage of labor, increase materials cost, unavailable materials (no one is keeping any inventory in stock), and, of all things, a shortage of lots.  Still, overall, the good news is that the reason for these challenges is because builders are in need of a supply that will have to increase to meet the demand, which will mean an increase of business and profit for vendors and sub-contractors alike.

Robert Denk pointed out the discrepancies of statistics from state to state.  Not all housing markets in all states were affected “equally,” so in some regions, stronger and significantly weaker housing market growths skewed the statistics unevenly.  Here in Louisiana, the real estate industry slowed noticeably for 2 – 3 years while in other markets, real estate has still not made a full recovery.  2013 has been a particularly strong year in real estate in St. Tammany Parish with sales and homes on the market increasing even from the 1st quarter to the 2nd quarter.

The only constant deterrant to a full recovery of the real estate industry is the problem of loan qualification for any buyer.  The loan process can be arduous and painful for home buyers as well as those looking to refinance.  Since federal regulations were put in place, the process for lenders, trying to adhere to the new rules, has been bogged down and full of obstacles.  Until credit restrictions and loan qualifying rules are “figured out” or eased, home buyers will still struggle somewhat on getting financing for their new home purchase.

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While the housing market is “bouncing off of the bottom” and now heading rapidly back up, home pricing continues to soar since it really had no other place to go but up after the market crashed in 2008.  According to the S&P/Case-Shiller home price index, home prices recorded their biggest gain since February of 2006.  Home pricing was also 12.4% higher in July than in July, 2012.

Article after article has been written regarding how current home pricing, home sales, new home sales, building permits, and new home construction are seeing numbers they have not seen since before the Recession.  And the record dates to which they are referring are now going back to 2006 and 2007 when the real estate market was thriving and stable.  To finally see these numbers which are on the rise compared to normal real estate market trends has home buyers and builders both breathing huge sighs of relief.  Even cities with the biggest losses during the Recession are seeing a bounce back in home pricing this past year: Las Vegas prices: 27.5% growth; Los Angeles prices: 20% growth; San Francisco prices: 20% growth; San Diego prices: 20% growth; and Phoenix prices: 18.9% growth.

The NAHB (National Association of Home Builders) reported a steep increase in builder confidence in June, 2013, rising 8 points to top out at 52.  Any number higher than 50 means that builders think the market is doing well; any number below that indicates a poor market (according to builders). As with other statistics which have been reported lately, this is the highest level of builder confidence since April, 2006.

Another number which is really good for the housing market is that 2.5 million Americans’ homes are now, no longer “underwater.”  This significant number is good for the US economy because it means that with the sale or stabilization of equity of and in these homes, consumers will now have their money “freed up” to put back into the economy in the form of spending.

As of the latest quarterly economic report, US job growth has included a huge growth of jobs in the construction sector.  Putting builders, contractors, and sub-contractors back to work will also stimulate spending in the economy, not only in the form of spending with builder vendors but also in retail spending.  These numbers and figures as well as economic growth are just in time for holiday spending in the 4th quarter.

Despite the slow pace of economic growth, consumer confidence is on the rise, and our society in general seems to be grateful for the slightest signs of improvement after having our sometimes lavish and luxurious lifestyles put on a tight leash because of the Recession. Any signs of life will help stimulate the US economy.

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The Gross Domestic Product (GDP) is a measurement of all goods and services produced in the United States.  Each quarter, economists and Washington D.C. measure the GDP comparitive to changes in the growth of the GDP each quarter.  These changes are assigned a percentage and reported to the market.  Much of the changes consumers see in investments come from these reports. After a dismal standing of only 1.1% growth in the first quarter of 2013, the GDP grew more than double that amount at 2.5% during the second quarter.  Initial estimates of a growth of 1.7% was offset by a lower amount of imports into the United States and a higher-than-expeted rate of exports of products.

All eyes are on a September 18th meeting of The Fed to determine if this quarterly growth is expected to continue.  The Fed has been buying up “Treasuries” (Treasury bonds) and mortgage-backed securities in order to boost the stagnant economy and keep interest rates low.  The plan was always that once the economy was “back on its feet,” the Fed would cut back and eventually stop the bond buying letting capitalism take over to create a normal, healthy market.  Since this is the first quarter to show growth since the Recession ended, many fear that scaling back on the bond purchases may be jumping the gun on predicting the resurrection of a healthy market.

Meanwhile, business seem to be pulling out of their hiring freezes, even if it is mostly part-time positions that are being filled.  Housing prices are going up, and construction spending grew at an annual rate of 12.9%, in its 4th consecutive quarter of double-digit growth.  Interest rates also have climbed slightly, but they are still much lower than they have been over a 10-year period.  AND, new home sales reports have shown an increase in new home sales over the past 6 months.

Government spending shrank almost 1% in the second quarter, and state governments spending also went down .5%.  However, the US economy overall is showing some signs of life, and this is good news for home buyers and consumers alike.

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