BTC Newsletter - March 2014

To: Realtors AND Loan Officers            

From: John M. Brennan, Attorney - President, Brennan Title Company



AS THE FIRST QUARTER OF 2014 COMES TO A CLOSE, this newsletter comes to you with the hope and belief that we are in the beginning of a winter thaw in our markets. Weather, interest rates and a seesaw economy have taken their toll on our market, but, I believe, we are in the incubation stages of what will be and become a slowly accelerating demand for housing that will be well controlled and well supported by a consistent and slowly growing economy.


THE QUANTITATIVE EASING WE HAVE SEEN FROM THE FEDERAL RESERVE will be over shortly, followed by an incremental INCREASE IN INTEREST RATES OVER THE NEXT TWO YEARS. By Incremental, I expect to see rates approaching 5% by years' end and in the mid-5's to 6% by the end of 2015. Notwithstanding this increase, this will NOT be an impediment to home purchasing, as many have suggested in our markets, because of pent up demand, job stability, and growth (particularly in the private sector) and unwinding of inventory properties by lenders. In addition, I expect to see listings increase significantly as the weather improves, particularly in areas that have suffered from a lack of inventory! The decline in home purchases in the Mid Atlantic region is primarily a factor of inventory and weather!! Better times are ahead!!


THE CONSUMER FINANCE PROTECTION BUREAU (CFPB) has issued its final rules. Please note that while the initial CFPB memo of 2012 (making lenders responsible for compliance with consumer finance laws for all downstream vendors such as title companies) has received little reaction from the industry, we have been contacted by one Major Mortgage Lender and Bank inquiring about our readiness to conform to certain practices; we expect that ALL lenders will soon follow suit. We will soon see the disappearance of the HUD-1 we have come to like!! The new Closing Disclosure and Loan Estimate will replace the TIL, Good Faith Estimate and the HUD-1 In addition, the new rules come with rigid time requirements affecting disclosure to the borrower and the closing date. If you would like to see what the new documents will look like, send me an e-mail to and I will see that it gets to you!! Although the new disclosure and closing documents are not required until August of 2015, I expect lenders to begin requiring the use of these documents far in advance of this date, perhaps as early as January 2015. You may recall that when the present HUD was rolled out, many lenders started using them well in advance of the required date!! 

LOAN OFFICERS HAVE SEEN A SERIOUS DECLINE IN NEW LOAN APPLICATIONS over the winter. Of course the refi slow down and the slower winter sales pace has contributed to this; however, another factor is the large number of all-cash buyers. According to one statistic, over 30% of the homes sold in the DC Metropolitan areas were purchased by all-cash buyers! It seems that more people are opting to put their money in their home rather than settle for the anemic rates banks are paying, or risk loss in the volatile stock market!! What a dramatic shift from the days of over-leveraging!!

IF YOU ARE THINKING ABOUT STARTING YOUR OWN REAL ESTATE OR MORTGAGE OPERATION, you might be interested to learn that fewer than 18% of applications for small business loans have been approved by Big Banks in the past 12 months; small banks have approved almost 50% and Alternate Lenders (private, higher cost lenders) almost 65%!! YOU MIGHT WANT TO CONSIDER YOUR CREDIT UNION, AS THEIR APPROVALS AVERAGE ABOUT 45%!!

THE PENT UP DEMAND FOR RENTAL UNITS OVER THE PAST SEVERAL YEARS has led to a significant increase in rental rates, even in apartments classified as Class B apartments. The 2013 average monthly rental rate for these lesser than prime apartments now stands at $1543 and vacancy rates are still only 5%! This would seem to present real estate agents with a significant marketing opportunity, since mortgage rates are still very low by historical standards and payments for homes could COMPETE with these rental rates!

FOR THOSE OF YOU WHO HAVE CLIENTS INTERESED IN PURCHASING a condominium in the Suburban Maryland, Washington, DC or Northern Virginia market, note that there are currently over 3300 condominium units on the market!! A substantial increase from the same period last year, when the number of available units was just under 2600 units-almost 25% more units!! This may present the first buying opportunity in several years in these markets from a price perspective.

A REMINDER THAT BRENNAN TITLE COMPANY HAS OFFICES THROUGHOUT the State of Maryland, Northern Virginia, Washington, D.C., Delaware and West Virginia. We have attorneys admitted in all of these areas who are happy to be of service to you and to your clients! In addition, we offer commercial closing service, and we provide investors with 1031 TAX DEFERRED REAL ESTATE EXCHANGE SERVICES through our affiliate, Brennan Real Estate Exchange Corporation.

If you would like more information about our exchange intermediary services, please call John M. Brennan, Attorney (301-261-8177) or Susan Chartier, Attorney (202-537-5378) 
AS ALWAYS, WE AT BRENNAN TITLE ARE HAPPY TO ASSIST YOU in any way we can to get your transactions to the table and help you to be more successful! Our fees are competitive and our service is "second to none". We welcome the opportunity to be of service to you and will match any fee quote that you may receive! I believe that we will see a much more active market this spring and hope we can begin to work with you!!!

I WELCOME YOUR COMMENTS AND CALLS! I can be reached on my direct line at

301-261-8177 and by e-mail at



John M. Brennan



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