For years, the Mortgage Bankers Association has tracked home-buying rates and activity throughout the U.S., allowing mortgage brokers to use national data for comparative purposes. But the trade group doesn’t break out more local markets, and that makes a difference in New York.
Brokers in Manhattan don’t have local mortgage market data, and that’s an issue in a city where purchasing property poses unique challenges.
Marcia Kaufman, president and COO of Preferred Empire Mortgage in Manhattan, says there just isn’t an easy way to track mortgage activity in the city. “You have the New York State Department of Banking, but they would only track activity relative to the state,” Kaufman says.
Data is also available as a result of the Home Mortgage Disclosure Act, which requires lending institutions to report public loan data to determine whether they are serving the housing needs of their communities and identify possible discriminatory lending patterns. Even that doesn’t single out Manhattan.
“They have data on volume of operations, but it’s not specific to any area,” says Kaufman. “That can make it very hard.”
“I think a lot of the reason for the lack of citywide mortgage data has to do with the fact that many of the mortgages in New York are not saleable loans but are co-ops and condos,” says Melissa Cohn, president of Manhattan Mortgage Company.
Jonathan Miller, president and CEO of Miller Samuel, a Manhattan appraisal firm, agrees.
“Even though co-op sales have become public record as of early August and are starting to be released into the public domain,” he says, “it still doesn’t help you understand what mortgages were taken. You could see data for a lot of mortgages filed in one block, but what if it’s just one big co-op that has all those mortgages? So the data is very dirty. In this market, anyway, it’s very difficult.”
Because the Manhattan real estate market “does not follow the national market, is not representative of it, and operates essentially in its own bubble,” city-specific data would be valuable, Cohn says.
With very little local data broken down, she says that brokers really do not show property investors or homeowners much in terms of Manhattan-specific mortgage data. Instead, they tend to counsel them with more general data on volume or where rates are going.
“And we just show them where things have been historically and we look at the fundamentals of the economy on a day-to-day level and advise our clients on that basis,” Cohn says.
Kaufman contends that, “I’m sure if they drill down into the data, they can break through [and provide regional mortgage figures]. But if I have an office on 42nd Street and I have a customer buying not only a co-op in Manhattan but also a second home in the Hamptons, it all comes under volume generated by the office on 42nd Street. Now, if I want to break it down by ZIP code to pinpoint the mortgage activity, it’s possible to do that, but there’s not a real reason to do so, either.”
There does not appear to be any move afoot to compile comprehensive data on mortgage activity in Manhattan.
“There is absolutely nothing being done to do that,” says Cohn.
One potential advantage of having such data, Miller argues, “would be that it might help to identify which markets aren’t being served. And it would help to make sure that lending institutions can show no bias when they are audited by regulators.”
Miller suggests that brokers and clients would use the data if it were available.
“I think if that mortgage activity were available,” he said, “and it were reasonably priced, people would use it. But no one out there seems interested in initiating it. There are a lot of mortgages out there in this market. But you just wonder if data collection could be more efficient.”