MBA - MBA Chairman Robbins Testifies on Behalf of FHA Reform (4-19-07)

“MBA strongly supports the FHA and believes that it still plays a critical role in today’s marketplace. Most of FHA’s business is directed toward low- and moderate-income and minority borrowers – the very strata that is most challenged to be part of the American Dream.

At the same time, we have watched with growing concern as FHA has steadily lost market share over the past decade, potentially threatening its long-term ability to help underserved borrowers. As the market continues to evolve around FHA, the great fear is that many aspiring homeowners will either be left behind or forced into higher-cost alternatives.

MBA applauds the introduction of FHA reform bills: H.R. 1852 and H.R. 1752, and starting the reform effort early in the 110th Congress. MBA strongly supports changes to FHA’s single-family and multifamily loan limits, and downpayment flexibility and requirements, including the elimination of the complicated downpayment formula.

FHA has an important role to play in the market in expanding affordable homeownership opportunities for the underserved and addressing the homeownership gap. For low and moderate income families, FHA should be the financing considered first because it has the lowest rate and provides the borrower the best opportunity to become a successful homeowner.

Recent unrest in the mortgage industry has led to a number of lenders either significantly tightening underwriting standards or leaving the business altogether. MBA believes the individuals who will be most directly impacted by these events are the consumers that FHA was created to serve: first-time homebuyers, low-income families, and those with less than perfect credit histories. Congress can empower FHA with the authority it needs to provide these consumers with affordable, viable lending options needed to help them achieve and maintain homeownership.

I urge Congress to enact legislation to reform FHA to increase its availability to homebuyers, promote consumer choice, and ensure its ability to continue serving American families. MBA stands ready to work with you on this important issue.”

Reuters - "Horton cuts jobs and sees less risky loans" (4-19-07)

"D.R. Horton Inc.,the largest U.S. home builder, on Thursday said it has cut 10,000 jobs since last spring and now has a staff of about 7,300. Horton also said it has seem some increased defaults on relatively new loans -- but also said that more customers are shying away from what are seen as riskier loans and are opting for mortgages that require full documentation of income and assets."

Reuters - "Housing market bottom hoped for, not expected" (4-19-07)

"Investors hope the next round of results from U.S. home builders, starting on Thursday, will show that the slump in the housing market is abating, but realistically they expect no sign of a bottom yet. In fact, many investors and analysts expect the market downturn -- caused by a glut of homes for sale, tighter lending standards and weak demand -- to worsen until at least the second half of this year."

Bloomberg - "Housing Bust Meets the Equity Blues: Gene Sperling" (4-19-07)

"While the subprime and exotic mortgage fallout has been grabbing recent housing headlines, another potential story for 2007 may be in the wings: as Americans withdraw less equity from their homes will it mean a big or little hit for growth and consumer spending? The connection between housing and consumption isn't a new story. Economists have long assumed that there is a so-called wealth effect from rising home prices: for each dollar of housing wealth accumulated, people spend anywhere from 4 cents (as conventional economic models predict) to 9 cents, as Johns Hopkins economist Christopher Carroll found in a December study. "

CNN - "Stocks vs. Real Estate" (4-19-07)

"Both real estate and stocks have had their day, but the question you need answered is this: Which contender is the superior long-term bet today?"

Daily News - "California foreclosures nearly twice U.S. rate" (4-19-07)

"California was hit hard by rising foreclosure numbers in March, although the higher rates weren't all that out of line with historical standards."


Sign On San Diego - "GE's WMC Mortgage to lay off half of staff" (4-19-07)

"General Electric Co.'s WMC Mortgage subprime lending unit plans to lay off 771 workers, about half of its staff, a spokeswoman said Thursday. The layoffs will include the closing of facilities in Costa Mesa and San Ramon, California, as well as Addison, Texas. Following the cuts, WMC will employ about 700 people, spokeswoman Brandie Young told Reuters. "

Bloomberg - "GMAC, GE Will Cut 1,400 Job Cuts on Subprime Decline" (4-19-07)

"GMAC LLC's Residential Capital home- lending unit and General Electric Co.'s WMC Mortgage division announced more than 1,400 job reductions as losses mount in the U.S. subprime loan industry. WMC Mortgage, part of the GE Money consumer-finance unit, today slashed 771 jobs and closed three centers. WMC, based in Burbank, California, has cut more than half its workforce this year. Between 600 and 700 workers at GMAC's Minneapolis-based Residential Capital, known as ResCap, will lose their jobs by midyear, and at least 300 vacant positions won't be filled. "

Yahoo! - "Footing the Bill for the Subprime Fiasco" (4-19-07)

"Last week, Sen. Charles Schumer (D-N.Y.) proposed that the federal government spend hundreds of millions of dollars to help bail out subprime mortgage borrowers who are defaulting on their loans. A report by the Joint Economic Committee of Congress, which Schumer chairs, estimates that the average cost of a foreclosure -- to the homeowner, lender, local government, and neighbors (whose homes decline in value) -- is $78,000. By contrast, preventing the foreclosure would cost $3,300 per home on average."