Thursday, May 31, 2007

NAR - "REALTORS® Under 30 Remake Real Estate Services" (5-31-07)

"In its annual '30 under 30' awards, REALTOR® Magazine recently recognized Realtors® who are using technology and other innovations to remake today’s real estate services. They also demonstrate that building community and client relationships is as important as ever to their success in the real estate industry."

CBIA - "Housing Production Forecast Adjusted Downward" (5-31-07)

"A larger-than-expected decline in single-family housing production in the Inland Empire and Central Valley this year, caused in part by record-high gasoline prices, has caused the state’s leading trade association for homebuilders to reduce its production forecast for 2007. But Alan Nevin, Chief Economist for the California Building Industry Association, still forecasts that the market for new homes will begin to gradually accelerate throughout the summer."

Bloomberg - "Subprime Fiasco Exposes Manipulation by Mortgage Brokerages" (5-31-07)

"After years of easy profits, a chain reaction of delinquency, default and foreclosure has ripped through the subprime mortgage industry, which originated $722 billion of loans last year. Since the beginning of 2006, more than 50 U.S. mortgage companies have put themselves up for sale, closed or declared bankruptcy, according to data compiled by Bloomberg."

Bloomberg - "Fed Sees Housing Damping Growth Longer Than Expected" (5-31-07)

"Federal Reserve officials acknowledged they underestimated the U.S. housing recession, while continuing to view inflation as the biggest risk to the economy. 'The correction of the housing sector was likely to continue to weigh heavily on economic activity through most of this year -- somewhat longer than previously expected,' the central bank said in minutes of the May 9 Federal Open Market Committee meeting released today in Washington."

CNN - "Wow, I could've had a prime mortgage" (5-31-07)

"Imagine you're a homeowner, and you discover that instead of the expensive subprime mortgage loan you signed on for, you actually qualified for a prime mortgage with much lower interest rates. Subprime loans are usually designed for borrowers with damaged or sketchy credit histories. Lenders charge higher rates to these customers to offset the extra risks they take on. Prime loans are usually granted to borrowers with credit scores of 650 or higher."

The Wall Street Journal - "'Subprime' Aftermath: Losing the Family Home" (5-31-07)

"For decades, the 5100 block of West Outer Drive in Detroit has been a model of middle-class home ownership, part of an urban enclave of well-kept Colonial residences and manicured lawns. But on a recent spring day, locals saw something disturbing: dandelions growing wild on several properties."

The Honolulu Advertiser - "Refinance — and get bombarded" (5-31-07)

"As a former mortgage broker, Adryenn Ashley thought she knew what to expect when she refinanced her house in March. Yet Ashley was unprepared for one twist she encountered: a barrage of phone calls and e-mails from rival lenders vying to sell her a better mortgage."

Ludwig von Mises Institute - "The Subprime Mortgage "Crisis" Will Fix Itself" (5-31-07)

"Hardly a day goes by without someone's proposing how to make the bad situation in subprime mortgage lending even worse. Legislators at all levels of government are contending for ownership of the most destructive idea. (One example of a thousand) Finalists in this legislative race to the bottom include punitively stiff lending standards, foreclosure holidays and taxpayer-financed bailouts. I would like to propose a far simpler, fairer and effective course of action: let free people sort it out for themselves."

St. Petersburg Times - "Renters, too, face mortgage fallout" (5-31-07)

"Two months ago, Nikki DuFore and her husband paid the owner $3,000 and settled into the house with their three boys. But their stay may be short-lived. On May 19, they were served with notice that the bank seeks to foreclose because the owner is months behind in his mortgage payments."

Reuters - "Centex, DR Horton, Pulte may bust bond terms" (5-31-07)

"At least three major U.S. home builders suffering from the housing slump may soon violate contracts meant to protect payments on some $11 billion in debt, Standard & Poor's analysts said on Tuesday."

The Washington Post - "An ATM That's Out of Money" (5-31-07)

"For a long time, Paul and Amy Woodhull's house on Capitol Hill was a honey pot. Through multiple refinancings over nearly a decade, they pulled out money to fix it up, buy a car, pay down credit cards, buy three other properties and improve them, too. Now the pot is dry. The Woodhulls are feeling squeezed by bills, but with interest rates up and home prices down, they're reluctant to touch their home equity again. They called their six children into a family meeting recently, and Amy laid down new rules: No more impulse purchases or frivolous shopping trips. 'We're going to have to save our pennies,' she declared."

Wednesday, May 30, 2007

Bloomberg - "Immigrants May Be First to Feel Housing Slump's Impact on Jobs" (5-30-07)

"The slump in homebuilding, the deepest since 1990, has so far taken only a modest toll on the U.S. job market. Workers like Francisco Leon may be part of the explanation. Two years ago, Leon, an undocumented immigrant from Guatemala, had little trouble finding construction work five days a week in northern Virginia. Nowadays, the 22-year-old mainly does odd jobs, often only two days a week."

Yahoo - "Homebuilder Pulte to Cut 1,900 Jobs" (5-30-07)

"Facing a grim housing market, Pulte Homes Inc. said Tuesday that it is cutting about 16 percent of its work force, or about 1,900 jobs, as part of a restructuring. Pulte, one of the nation's leading homebuilders, said the restructuring will save an estimated $200 million a year before taxes."

Yahoo - "Mortgage Brokers: Friends or Foes?" (5-30-07)

"The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me? Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients."

Dr. Housing Bubble - "Summer and Housing in the Garden of Eden" (5-30-07)

"As spring enters its final days and May kisses us goodbye, the air smells of summer. The warmth of the sun caressing your face, the smell of salt at the beach, and sellers getting ready for the Battle of Housing Waterloo. The moment of truth has arrived. Will housing show continued resilience and live eternally in the Garden of Eden? Or will the housing bears be vindicated as inventory numbers begin to pile on top of one another like an Ultimate Fighting Championship? When I say housing will soar I am using this term like Stephen Colbert and referring to housing soaring like the Hindenburg. Let me give you another three reasons why all of us are jumping into this hydrogen powered housing bonanza only to come down in a fiery mess."

CoStar Group - "Mortgage Fraud Jumps 30%" (5-30-07)

"Mortgage fraud is a burgeoning crime that is affecting more and more companies and communities, according to a new report from the Mortgage Bankers Association (MBA). In its ninth annual report, the Mortgage Asset Research Institute (MARI), a service to MBA members, illustrates just how quickly the problem is growing. Suspicious activity reports (SARs) related to mortgage fraud have risen from more than 3,515 in fiscal year 2000 to more than 28,000 in fiscal year 2006, representing estimated losses of about $1 billion."

Yahoo - "Foreclosure risk rises with ARM teaser rates" (5-30-07)

"The borrowers who are in the most danger have two strikes against them. First, they are (or will be) underwater -- owing more than the house is worth. Second, they have adjustable-rate mortgages, or ARMs, with low "teaser rates." Eventually, after anywhere from one month to five years, the ARM enters its rate-adjustment period and the loan is reset with a higher rate."
MBA - "Fed Plans Public Hearing HOEPA" (5-29-07)

"The Federal Reserve Board on Tuesday announced the discussion topics for its June 14 public hearing under the Home Ownership and Equity Protection Act (HOEPA). The purpose of the hearing is to gather information about how the Board might use its rulemaking authority to curb abusive lending practices in the home mortgage market, including the subprime sector, in a way that preserves incentives for responsible lenders to provide credit to borrowers."

Bloomberg - "U.S. Home Prices Drop for the First Time in 16 Years" (5-29-07)

"Home prices in the U.S. dropped last quarter for the first time in almost 16 years, as 13 out of 20 cities reported declines in March. The value of a house dropped 1.4 percent in the first three months of the year from the same period in 2006, according to a report today by S&P/Case-Shiller. Prices last fell during the third quarter of 1991."

Bloomberg - "U.S. Home Construction Bust May Last Until 2011" (5-29-07)

"New home construction in the U.S. may take until 2011 to return to last year's level, said David Seiders, chief economist for the National Association of Home Builders in Washington. Monthly construction starts would need to jump by 21 percent to reach Seiders's benchmark for full recovery, which is 1.85 million. There were 1.53 million in April, the Commerce Department said. At the height of the five-year housing boom in January 2006, construction began on 2.29 million homes."

MSNBC - "April's Blue-Light Housing Sale" (5-29-07)

"Real estate investors got a swift smack back to reality May 25 with news that existing home sales fell to a four-year low and inventories reached a 15-year high, defying a surge in new home sales reported the previous day. Instead of a projected 2.1% increase, existing home sales dropped 2.6% to an annual rate of 5.99 million units in April from an upwardly revised 6.15 million units in March."

Bloomberg - "Property Taxes Spur Revolts" (5-29-07)

"When it comes to property taxes in the U.S., often you are blessed and cursed. In a rising market, the local assessor will raise his estimate of your home's worth, which usually results in a higher real-estate tax bill. Your property taxes, particularly in a high-growth area, then pay for new schools, fire and police stations and other public services."

Reuters - "Centex, DR Horton, Pulte may bust bond terms" (5-29-07)

"At least three major U.S. home builders suffering from the housing slump may soon violate contracts meant to protect payments on some $11 billion in debt, Standard & Poor's analysts said on Tuesday."

The Call - "2.2 Million Mortgages Will End In Foreclosure" (5-29-07)

"A recent report released by the Center for Responsible Lending predict that 2.2 million subprime loans issued in the U.S. will end in foreclosure. Those 2.2 million foreclosures will flood the housing market -- causing homeowners who received the mortgages between 1998 and 2006 to lose a combined total of $164 billion in home equity. According to the report, the subprime mortgage industry has experienced a rise in consumer activity -- increasing profits from $35 to $665 billion since 1994."

Real Estate Journal - "Are They Friends or Foes for Borrowers?" (5-29-07)

"The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me? Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients."

The New York Times - "As Condos Rise in South Florida, Nervous Investors Try to Flee" (5-29-07)

"As dozens of condominium towers conceived during Florida’s real estate boom near completion, investors who snatched up units in the preconstruction phase in hopes of turning a quick profit are increasingly trying to break contracts, even walking away from fat deposits." - "The California Housing Report: Details In the Data Show A Broad-based Price Decline" (5-29-07)

"Headline: 'C.A.R. [California Association of Realtors] reports sales decrease 27.8 percent in April, median price of a home in California at $597,640, up 6.2 percent from year ago.' Then we also read, 'Throughout the state inventory levels have increased to their highest levels in recent years…' Price increase in the climate of declining sales and rising inventory? Something doesn’t add up." - "New Home Sales Fall 11 Percent, Prices Plummet" (5-29-07)

"According to the numbers released by the U.S. Census Bureau and the Department of Housing and Urban Development, April of 2007 was another housing market debacle. New home sales fell an astounding 11 percent in a year over year comparison. The decline would have been much worse if it would have not been for the market performance in the Northeast, where sales increased by (an almost unbelievable) 43.1 percent*. New home sales fell in every other region"

Tuesday, May 29, 2007

The Miami Herald - "Banks asked to aid rescue of homeowners" (5-28-07)

"Fearing that a spike in foreclosures will lower property values, Miramar is exploring ways for the city to help homeowners in distress. City officials have asked local banks to hold seminars for residents about mortgage practices and to bankroll an emergency fund for homeowners."

North County Times - "Mortgage fraud on rise in California" (5-28-07)

"Mortgage fraud is on the rise in California, according to recent reports, and analysts say the cooling housing market is helping to reveal more suspicious mortgage transactions. According to the U.S. Department of Treasury's Financial Crimes Enforcement Network, in 2006, California had more than one-third of the nation's suspicious loan activity at federally insured lenders. And the state's share of the suspected fraudulent activity is growing, according to the agency."


"To paraphrase Clint Eastwood's gunslinger character who steps over corpses of bad guys and then spits - 'Even vultures gotta eat.' In the case of the collapsing housing market, vultures are circling for an economic feast, but they aren't necessarily the bad guys."

Bloomberg - "Credit Suisse Sued Over Losses on Subprime-Loan Bonds" (5-28-07)

"Credit Suisse Group was sued by a Florida insurer that says it lost money on investment-grade bonds backed by subprime mortgages sold by the bank. The suit, filed in Florida by Bankers Life Insurance Co., is ``one of three to five in the pipeline'' involving securitizations by Credit Suisse, Switzerland's second-largest bank, said Dale Ledbetter of Ledbetter & Associates P.A., one of two law firms representing the Bankers Financial Corp. unit."

CoStar Group - "Link Between Falling U.S. Home Prices & Rising Subprime Defaults" (5-28-07)

"In recent years, double-digit home price inflation (HPI) has helped keep subprime defaults to very low levels, according to Fitch Ratings in a new report. Conversely, now, home price deflation is driving higher defaults of recently originated subprime mortgages. Fitch analyzed the default rates, defined as the sum of 90 day+ delinquency, foreclosure, REO and bankruptcy rates, of loans originated in 2002 through 2006 and the cumulative housing price inflation rate following origination."

Real Estate Journal - "Developers, Cities Duel Over Gated Green Space" (5-28-07)

"Residents of Asheville, N.C., have 54 public parks to choose from. But for years, many jogged and picnicked on the sprawling grounds of the 83-acre Thoms Estate, with the permission of the owner. So when a developer's plan to build a gated community on the property became public, opposition was fierce. "There hasn't been the sense that 'This is my land; stay off,' " says Susan Sihler, a clinical social worker who lives nearby and attended a raucous hearing on the matter last February."
The San Diego Union-Tribune - "Foreclosure viewpoint: It'll get worse" (5-27-07)

"Economists from Wall Street to the Federal Reserve are scratching their heads trying to parse the future of housing in light of worsening default and foreclosure rates. But they might have saved themselves some trouble if they had consulted Robert Gertz, a 21-year-old senior at the University of California San Diego."

Denver Post - "Shelter in a storm" (5-27-07)

"Although Colorado's economy is improving overall, the housing market continues to suffer. While the state's employment grew 2.2 percent and the average 30-year fixed-rate mortgage remained virtually unchanged at 6.32 percent during the first quarter, new-home sales were down 39 percent over the same period last year, according to a report released Thursday by the Genesis Group."

Journal Sentinel Online - "Subprime lending abuse hurts poor families most" (5-27-07)

"Lost amidst the widespread debate over subprime lending abuse is the critical role of what economist Lester Thurow described many years ago as a 'surge in inequality.' That surge led to what BusinessWeek referred to as a two-tiered financial services market. Middle-income and wealthy households obtain prime loans along with savings and checking accounts from conventional banks. Working families increasingly get subprime loans and utilize the services of check cashers, payday lenders and other fringe bankers."

Orange County Register - "O.C. office and industrial projects" (5-27-07)

"Orange County currently has four million square feet of office space under construction and is building nearly 900,000 square feet of industrial space. In addition, developers plan to add about three million square feet of new retail space over the next three years, much of it in mixed-use high-rise buildings with retail downstairs and offices above."

Los Angeles Times - "Shoot -- it's for the Web" (5-27-07)

"A picture may be worth a mere 1,000 words in other circles, but in real estate, it enters the realm of deal or no deal. With an estimated 80% of home buyers starting their search on the Internet, photos are to home sales today what curb appeal used to be: the place where first impressions are made. According to a National Assn. of Realtors survey of the Web features that buyers found 'very useful,' 83% mentioned photos, 81% liked detailed property information and 60% named virtual tours."

Los Angeles Times - "A 'silent second' is deception, pure and simple" (5-27-07)

"The term "silent second" is used to describe self-serving or perhaps fraudulent schemes in which house sellers accept second mortgages as part of a sale transaction, without the full knowledge of the first mortgage lender. The "silence" refers to the absence of full disclosure to the first mortgage lender. The smaller of the frauds arises when the second mortgage replaces part or all of a down payment. For example, the buyer and seller agree on a price of $200,000; the buyer has a commitment for a first mortgage loan of $180,000 but doesn't have the $20,000 required for the down payment. To make the deal work, the seller agrees to accept a silent second mortgage for $15,000. As far as the first mortgage lender knows, the down payment is $20,000, but in fact, it is only $5,000."
The San Diego Union-Tribune - "Realtors also post ominous signs" (5-26-07)

"By all measures, April was a bad month for anyone with a “for sale” sign in their front yard. Sales of previously owned homes declined last month as the supply of unsold properties on the market ballooned and prices declined compared with those a year earlier."

CAR - "C.A.R. reports sales decrease 27.8 percent in April, median price of a home in California at $597,640, up 6.2 percent from year ago" (5-26-07)

"Home sales decreased 27.8 percent in April in California compared with the same period a year ago, while the median price of an existing home increased 6.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. 'April sales fell in part because of tighter credit standards and growing concerns about the impact of subprime loans on the market,' said C.A.R. President Colleen Badagliacco. 'Throughout the state inventory levels have increased to their highest levels in recent years, giving buyers more time to view a greater variety of homes and sellers who set realistic prices an edge in the market.'"

Orange County Register - "Homeowners with mortgage problems head for bankruptcy court" (5-26-07)

"Subprime mortgage problems first showed up last year as an increase in defaults and foreclosures, but more recently experts say the financial difficulties are being seen on a new front – bankruptcies. Consumer bankruptcy filings dropped dramatically after a surge in 2005 by people who wanted to beat tougher rules that took effect that October."

Bloomberg - "Fannie, Freddie Bill May Fail Over Portfolio Issue, Baker Says" (5-26-07)

"Legislation strengthening regulation of Fannie Mae and Freddie Mac could collapse because of a limit on the ability to cut the companies' combined $1.4 trillion in mortgage assets, Representative Richard Baker said. The House of Representative passed legislation on May 22 creating a stronger regulator for Fannie Mae and Freddie Mac that removed constraints sought by the Bush administration."

Friday, May 25, 2007

NAR - "Tighter Lending Standards Affect April Existing-Home Sales" (5-25-07)

"Total existing-home sales including single-family, townhomes, condominiums and co-ops fell 2.6 percent to a seasonally adjusted annual rate1 of 5.99 million units in April from an upwardly revised level of 6.15 million in March, and are 10.7 percent lower than the 6.71 million-unit pace in April 2006. Lawrence Yun, NAR senior economist, isn’t surprised. 'We’ve been anticipating slower home sales because many subprime loan products are no longer available,' he said. 'In addition, increased scrutiny by lenders is stopping risky mortgage origination, which is good for both consumers and the lending community. Fortunately, a wide availability of conventional mortgage products and the 4.5 million jobs created over the past 24 months will help to stabilize the market going forward.'"

Orange County Register - "Cheaper homes seem to sell slower" (5-25-07)

"Housing's no longer 'cooling' or 'in a lull' or 'returning to normal.' The start of Orange County real estate's 2007 has been a major disappointment, at best. Hopes had circled that buyers would shed last year's indifference and get their shopping patterns reinvigorated by the generous selection of homes for sale, a growing flock of somewhat motivated sellers and relatively affordable financing. Instead, buyers are increasingly saying 'No, thank you.'"

Dr. Housing Bubble - "Lifestyles of the Poor and Notorious. 10 Southern California Homes that Prove a Gargantuan Housing Bubble." (5-25-07)

"We have folks making chump change being able to find access to millions of dollars in credit simply because they have a pulse and are able to fog the mirror on their leased Lexus. Even though I’ve featured over 24 homes in Real Homes of Genius, I still get people in the delusional state thinking that there is no housing bubble. 'Dr. Housing Bubble, you cherry pick homes and what does that prove?' they say in a condescending manner. Aside from the fact that the median value of homes is outrageously priced in every county in Southern California (and the median is derived from an aggregate of homes) I’m simply making the story more tangible for the readers who still have doubts."

CNN - "Speed of subprime bust surprises lenders" (5-25-07)

"The subprime mortgage meltdown has been a shock to industry insiders, but now they say it's hitting harder and faster than expected - even to those who predicted the crisis in the first place. That was the message Monday from a panel of leading industry executives on the state of the mortgage lending industry at the Mortgage Bankers Association's National Secondary Market Conference & Expo in New York."

Chicago Tribune - "Trump trumpeting condos for sale" (5-25-07)

"For developer Donald Trump, a press conference may not solve every problem, but it's worth a try. In an effort to turn around a slowdown in sales of units in his luxury tower being built along the Chicago River, Trump on Thursday will meet with reporters to deliver a message: He's got a sale going on. 'We're pricing to sell,' Trump said in an interview Wednesday about his 825-unit Trump International Hotel and Tower now under construction. 'People think we're sold out but we're not.'"

Seeking Alpha - "Subprime Derivatives Say Bernanke Will Be Wrong" (5-25-07)

"U.S. mortgages in foreclosure rose in April 62% from a year ago, according to RealtyTrac Inc. Folks are increasingly losing their homes as we warned last October. Attempting to allay fears, Federal Reserve Chairman Ben Bernanke spoke last Thursday: We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."

Realty Times - "Mortgage Sector Shaking Economic Foundation" (5-25-07)

"More evidence reveals the growing chasm between those who can have home loans and those who can't as lenders tighten standards for subprime loans but not prime. Meanwhile, fallout from the mortgage market and other housing market woes finds experts second guessing initial forecasts that the economy is safe from turmoil in the housing market."

BBC News - "US home sales up as prices slump" (5-25-07)

"The number of new builds sold leapt 16.2%, ahead of forecasts and making an annual rate of 981,000 units. But analysts warned against reading too much into the numbers, noting the heavy incentives homebuilders were offering buyers to shift stock."

Orange County Register - "Grubb merger will give Santa Ana firm more exposure" (5-25-07)

"Merging with Grubb & Ellis Co. will give NNN Realty Advisors' investment deals greater exposure, particularly to a growing number of aging baby boomers, the CEO of the Santa Ana-based investment firm said today during a conference call on the proposed joining of the two companies. NNN Realty, the parent company of Triple Net Properties, offers investment opportunities through apartment and office real estate investment trusts and by pooling investor money in the joint purchase of commercial properties."

Orange County Register - "Mortgage rates spike" (5-25-07)

"Mortgage rates in Orange County spiked this week, at exactly the wrong time for a sluggish housing market. The average rate on a 30-year fixed loan with a one-point fee hit 6.107 percent for the week ended Thursday – its highest level in seven months. Fixed rates peaked at 6.616 percent in July 2006, according to National Financial News Services."

Los Angeles Times - "Stocks fall on housing data" (5-25-07)

"Wall Street slumped Thursday after upbeat economic reports damped hopes that the Federal Reserve might cut interest rates this year. The Dow Jones industrials fell for a fourth day, their longest losing streak since February."

Real Estate Journal - "Mortgage Brokers: Are They Friends or Foes for Borrowers?" (5-25-07)

"The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me? Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients."

Thursday, May 24, 2007

NAHB - "Builders Urge Reforms To Spur Rental Housing Opportunities" (5-24-07)

"The National Association of Home Builders (NAHB) today called on Congress to enact several reforms to the Low Income Housing Tax Credit (LIHTC) program to enable more builders to invest in affordable rental housing. Testifying on behalf of NAHB before the House Ways and Means Subcommittee on Select Revenue Measures, Steve Lawson, a home builder from Virginia Beach, Va., said that the LIHTC has facilitated the construction or preservation of nearly 1.4 million homes in the past 20 years, making it the foremost tool for the production and rehabilitation of affordable housing."

Yahoo - "Home Sales Soar by Record Amount" (5-24-07)

"Sales of new homes surged in April by the biggest amount in 14 years, but the median price of a new home dropped by the largest amount on record. The mixed signals left no clear picture of whether the worst of the nation's housing slump is over. The Commerce Department reported that sales of new single-family homes jumped by 16.2 percent in April to a seasonally adjusted annual rate of 981,000 units. That was far better than the tiny 0.2 percent gain that economists had been expecting."

Yahoo - "Toll Brothers Posts Lower 2Q Profit" (5-24-07)

"Luxury homebuilder Toll Brothers Inc. said Thursday its fiscal second-quarter profit fell sharply, as the company took hefty charges to write down property values amid continued weakness in the housing market. For the three months ended April 30, net income dropped to $36.7 million, or 22 cents per share, from $174.9 million, or $1.06 per share, a year ago. The latest quarter includes writedowns of $72.9 million, or 44 cents per share, compared with just $7.3 million, or 4 cents per share in the prior-year period."

Market Watch - "Income checks needed for loans, regulator says" (5-24-07)

"Banks need to know a potential borrower's real -- not stated -- income when a subprime loan is applied for, a top U.S. banking regulator said Wednesday, as problems in the subprime mortgage market persist. 'What we need to make clear,' said Comptroller of the Currency John Dugan, 'is the principle that a lender, in underwriting a mortgage loan, must assess not just a borrower's will to make timely payments on the loan, but also his or her capacity to do so.'"

Reuters - "Ex-subprime loan officers eye booming senior market" (5-24-07)

"Jobless subprime mortgage specialists are looking for employment in the booming market for loans to senior citizens, mortgage market executives said on Tuesday. Between 12,000 to 15,000 displaced mortgage lenders may begin to seek employment in the growing market for reverse mortgages, an increasingly popular home equity loan for homeowners who are 62 years old or older, Goldman, Sachs & Co. (GS.N: Quote, Profile, Research and Wells Fargo Home Mortgage executives said at a mortgage conference."

Yahoo - "American Express to let cardholders charge mortgage payments" (5-24-07)

"You pay hundreds, sometimes thousands, of dollars on your mortgage every month. Just imagine how many rewards points that could earn on your plastic. Now, American Express is aiming to make that a reality for its cardholders. In what is considered to be a first for the credit card and mortgage industries, American Express on Wednesday said it will now allow cardholders with any of its charge or credit cards and a prime loan from American Home Mortgage to charge their mortgage payments and earn reward points for doing so."

American Chronicle - "Economic Tsunami Warning" (5-24-07)

"More than anecdotal evidence now points to an economic tsunami forming from the sub-prime mortgage meltdown “ripples” which began to register on financial seismometers 18 months ago. It's an instructive image, how a seemingly small, inconsequential thing can later, unexpectedly manifest itself in a big, deadly, destructive way."

South Florida Business Journal - "Law firm starts practice to address real estate problems" (5-24-07)

"Shutts & Bowen LLP has launched a complex loan workout practice group to focus on clients who are grappling with the effects of a slowdown in the real estate market. For the new group, the law firm said it will use lawyers from its South Florida, Tampa and Orlando offices who are experienced in the fields of bankruptcy, creditors' rights, real estate, receiverships, taxation and litigation." - "Housing slowdown leads to job cuts" (5-24-07)

"The housing slowdown has led to thousands of job cuts, with more to come, the Mortgage Bankers Association said this week. Construction has been hit hardest, with a loss of 45,000 jobs nationwide during 2006, according to 'Trends in Housing-Related Employment,' the group's report." - "NetBank Funding Exiting Wholesale Mortgage Business" (5-24-07)

"Suspension of New Registrations and Rate Locks Effective immediately, NetBank will cease accepting registrations and rate locks on new loans and rate locks on existing registered loans that are in a float status. Relocks, changes to existing locks, or extensions will not be granted."

USA Today - "Ex-FBI Director Freeh joins Fannie Mae board" (5-24-07)

"Fannie Mae (FNM), the largest U.S. mortgage finance company, said Wednesday that former FBI Director Louis Freeh will join its board of directors. Freeh will work on the board's compliance and compensation committees. He becomes the eighth new director elected to Fannie's board since 2004. Freeh was director of the Federal Bureau of Investigation from 1993 to 2001."

Bloomberg - "New York Subpoenas First American Appraisal Unit" (5-24-07)

"New York Attorney General Andrew Cuomo issued a subpoena to the real estate appraisal unit of First American Corp. in his investigation of whether mortgage brokers pressured appraisers to inflate property values. First American's eAppraiseIT LLC, which values up to 15,000 homes a year in New York, was asked for information about appraisals performed throughout the state, President Anthony Merlo Jr., said in an interview today."

Orange County Register - "Stock of Grubb & Ellis rises on news of takeover" (5-24-07)

"The stock price for Grubb & Ellis Co. jumped by more than 10 percent today on the news that a Santa Ana-based real estate investment firm will take over the commercial brokerage in a proposed merger set to close next fall. NNN Realty Advisors Inc., owner of the investment firm Triple Net Properties of Santa Ana, will end up owning 59 percent of the newly merged company and will move Grubb’s headquarters from Chicago to Santa Ana. Triple Net’s founder, Tony Thompson, will be the new board chairman of the combined entity."

Real Estate Journal - "Why a Mortgage May Be Your Best (and Worst) Move" (5-24-07)

"If mortgage debt is good debt, why are so many borrowers having such a bad time? Financial experts often tout the virtues of home loans, arguing mortgages are the cheapest money you will ever borrow. Yet many homeowners are ruing the day they took out a big loan, and some are falling behind on their payments and even losing their homes to foreclosure. As these folks have discovered, mortgages are a double-edged sword. The leverage can magnify your gains -- but it can also leave you in a nasty bind."

Wednesday, May 23, 2007

The Library of Congress - "H.R.1427: Federal Housing Finance Reform Act of 2007"

The Washington Post - "IRS Kicks Homeowners While They Are Down" (5-23-07)

"For homeowners who are seriously delinquent on their mortgages and hoping for relief, the Internal Revenue Service has bad news: If your lender agrees to modify your loan and forgive any of your debt, you could owe federal income tax on the amount forgiven."

NAHB - "Long-Term Viability Of Affordable Housing Threatened" (5-23-07)

"Significantly increasing operating costs are putting in financial jeopardy hundreds of affordable apartment communities across the country that were built using Low Income Housing Tax Credits (LIHTC), according to a new study by the National Association of Home Builders (NAHB). Adding to the threat is a recent change in the data used by the U.S. Department of Housing and Urban Development (HUD) to calculate income limits. This change in data methods has artificially frozen both the maximum income limit requirements of eligible residents and the rents that can be charged in a large number of areas across the county. In these areas, it’s impossible to offset rising costs though increases in rents that would normally occur as the result of ordinary inflation."

CAR - "Court of Appeal rules against attorney David Barry, says claims against C.A.R. were 'fatally defective'" (5-23-07)

"The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today announced that the Court of Appeal, Fourth Appellate District, Division One has again ruled in favor of C.A.R. in its malicious prosecution complaint against attorney David Barry and plaintiff Arleen Freeman."

MBA - "Mortgage Applications Increase in Latest MBA Survey" (5-23-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 18, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 686.2, an increase of 1.6 percent on a seasonally adjusted basis from 675.5 one week earlier. On an unadjusted basis, the Index increased 1.4 percent compared with the previous week and was up 23 percent compared with the same week one year earlier."

The Washington Post - "House Tightens Reins on Fannie, Freddie" (5-23-07)

"Legislation to tighten federal oversight of the two biggest buyers of home mortgages, Fannie Mae and Freddie Mac, cleared the House yesterday. However, the bill could lose the support of the Bush administration because of a new provision trimming the authority of federal regulators."

CNN - "Speed of subprime bust surprises lenders" (5-23-07)

"The subprime mortgage meltdown has been a shock to industry insiders, but now they say it's hitting harder and faster than expected - even to those who predicted the crisis in the first place. That was the message Monday from a panel of leading industry executives on the state of the mortgage lending industry at the Mortgage Bankers Association's National Secondary Market Conference & Expo in New York."

MSNBC - "When it comes to houses, more are living large" (5-23-07)

"McMansions are sprouting in the suburbs of Washington and Atlanta, in southern Connecticut and out West in Utah as an appetite for bigger homes just keeps on growing. One in five American houses had at least four bedrooms in 2005. That's up from one in six in 1990, despite shrinking families and increasing costs for construction and energy."

Yahoo - "Shares of Homebuilders Jump After Treasury Secretary Says Housing Slump Mostly Over" (5-23-07)

"Shares of the nation's largest homebuilders rose Tuesday after U.S. Treasury Secretary Henry Paulson said the housing slump is near its end. In an interview on CNBC, U.S. Treasury Secretary Henry Paulson said the housing slowdown is 'largely' over and 'contained,' according to a report from Dow Jones Newswires."

MSNBC - "Brokers, bankers play subprime blame game" (5-23-07)

"The heads of trade groups representing mortgage bankers and brokers traded barbs Tuesday over who's to blame for the housing market's woes. The head of the mortgage banking industry's trade group claimed brokers profited from a home loan boom but didn't do enough to examine whether borrowers could repay."

CNBC - "Hate Writing the Mortgage Check? Charge It!!" (5-23-07)

"I love plastic. I know, I know, the petroleum issues. But today I learned one more reason to love plastic: I can pay for my mortgage with it. Yes, American Express is breaking new ground, allowing its card members to pay their monthly mortgage bills on the card. I know what you're thinking, but hold on... Amex is requiring that these be prime loans only, so you can forget that whole subprime mortgage implosion issue. And of course, they'll be charging you $395 to enroll in the program."

Palm Beach Post - "Toughen rules, say mortgage bankers" (5-23-07)

"The subprime mortgage market was spoiled by bad guys who tried to make a quick buck in an otherwise reputable business, John Robbins, president of the Mortgage Bankers Association, said Tuesday. Robbins made his comments in a speech at the National Press Club, where he called for tougher licensing standards." - "Economist says housing problems are not over" (5-23-07)

"Troubles in the housing industry are not over, although things are better in Florida than in many other markets, according to a leading economist with the mortgage agency Freddie Mac. Amy Crews Cutts, deputy chief economist with Freddie Mac, said the big problems in the industry now are the continued large supply of homes on the market and the overuse in the past year of riskier "subprime" mortgages, a good number of which went to homebuyers who shouldn't have received them in the first place."

CNN - "Retirement interrupted" (5-23-07)

"Walking along a pier in Daytona Beach with their youngest grandson on a recent Saturday afternoon, Steve and Carol Daimler stopped to see what fish the locals were catching. The fishermen wowed 10-year-old David with a big flounder they'd just landed and photos of a 500-pound, nine-foot shark they'd once caught. After a day spent playing miniature golf, eating homemade ice cream and splashing around in his grandparents' in-ground pool, David declared, 'This is the best day of my life.'" - "Housing activists tour homes" (5-23-07)

"On Saturday, a few dozen protesters swept into Sorrento to remind developers about the wants and needs of those who cannot afford their half- million-dollar homes. Lennar Corporation, in partnership with AKT Development Corporation, developed the 1,015-acre Anatolia community. It comprises 14 'villages.' A sales office opened in February 2005. Prices for the village residencies range from $300,000 to $600,000. Most are sold out."

Chicago Business - "USG to cut 10 percent of salaried workforce" (5-23-07)

"Building products maker USG Corp. said Monday it is eliminating 500 jobs, or 10% of its salaried work force worldwide, as demand for its products is reduced by the housing slump. The company's employees were told about the action last week, according to a filing with the Securities and Exchange Commission."

Orange County Register - "Nearly half polled agree with Immel" (5-23-07)

"Orange County real estate broker Phil Immel recently told the Lansner on real Estate blog that 'In my opinion, only one-third of sellers are serious; one-third are testing the market; and one-third are delusional.' Here's what visitors to that blog thought of that comment, in an unscientific online poll:"

Tuesday, May 22, 2007

Seeking Alpha - "Housing Is Tumbling Even Faster Than Reported" (5-22-07)

"Real Estate Consultant John Burns has looked at the housing data and reached a rather interesting conclusion: 'The housing market has softened much more than is being reported.' Given all the negative news coverage, that's almost hard to believe. But John does a good job dissecting the data, and he is now concerned that both the publicly disseminated New and Existing Home Sales information is misleading. Even worse, he fears, is that policy makers are relying on this bad data to conclude that the housing market correction has not been too severe."

Yahoo - "Robert Shiller: Mr. Worst-case scenario" (5-22-07)

"Robert Shiller is worried about your home's value, and that's not good. A finance and economics professor at Yale, Shiller proved he could see a crash coming with his book "Irrational Exuberance," which forecast the end of the 1990s stock bubble and hit bookstores in March 2000 - almost to the day the Nasdaq started to collapse. Today, Shiller believes homes are roughly as overvalued as stocks were then and, once again, he's worth listening to."

Bloomberg - "Fremont Sells Commercial Lending Unit, Replaces CEO" (5-22-07)

"Fremont General Corp., whose loans to risky borrowers helped trigger the subprime mortgage crisis, agreed to sell its commercial real-estate unit for $1.9 billion and replaced its top three executives. IStar Financial Inc. will buy the commercial lending business, which has about 166 employees, said Daniel Hilley, a spokesman for Santa Monica, California-based Fremont. Shares of the company surged as much as 46 percent, and subprime lenders including NovaStar Financial Inc. also gained."

Yahoo - "Stocks Can't Fall? Check Out REITs' Retreat" (5-22-07)

"Back in early February, the real estate investment trust sector was the cat's meow -- it could do no wrong. Despite my pooh-poohing the sector's seemingly ridiculous popularity (and valuations) on Street Insight and even in a Barron's editorial, the group marched ever higher. Premiums to net asset value were at all-time record highs, dividend yields were at all-time lows (seemingly disconnected from the level of interest rates), multiples to funds from operations hit historically high levels -- and the entire sector was seen as takeover fodder."

Dr. Housing Bubble - "Housing Corruption and Greed: The Broken Windows Theory and Fundamental Attribution Error." (5-22-07)

"Have you ever wondered why many mortgage brokers and real estate agents try to hard sell you on a property or a unique mortgage? Those with dogmatic views usually try to convince themselves as much as they try to convince other people; they have a vested interest in believing that nothing negative can ever happen to real estate. And with this, you create a business culture where anything goes and financial prudence is thrown out the window. And speaking of windows, this brings us to the Broken Window Theory and how it applies to the current housing market."

The News-Press - "Bad loans saddle area banks" (5-22-07)

"Area banks are racking up millions of dollars in bad debt, thanks to the softening real estate market in Southwest Florida. Five Southwest Florida banks had a combined $57.5 million in outstanding construction and land loans that weren't being paid, according to records from the Federal Deposit Insurance Corp. for the first quarter of 2007."

Seeking Alpha - "San Bernardino County Not Recession-Proof: Wishful Thinking Won't Work" (5-22-07)

"I read an article Thursday in which the manager of Tarbell Realtors in Upland, CA was quoted as saying "At this point, at least, San Bernardino County housing is recession-proof." - Bill Velto. This is so wrong, it flies in the face of ALL the housing data. Resale prices have been going down in the County and in Upland for over a year, double digit in some areas. Oversupply conditions exist in most markets with some having over a 3-year supply."

Monday, May 21, 2007

NAHB - "NAHB Remodelers Offer Tips For Making Your Bathroom Green" (5-21-07)

"Celebrate May is Remodeling Month and green up your bathroom with energy efficient and sustainable products. The National Association of Home Builders (NAHB) Remodelers offers this guide of typical appliances and fixtures -- and their lifespans -- so you can make smart choices for that next bathroom project. 'Homeowners can easily transform their bathrooms with these simple energy and water efficient upgrades,' said NAHB Remodelers Chair Mike Nagel, CGR, CAPS, a remodeler from Chicago. 'Whether it’s simply swapping out a shower head or completely gutting the room, it makes a lot of sense to go green when remodeling a bathroom.'"

NAR - "First Quarter Commercial Real Estate Index Rises Again, But Decelerating" (5-21-07)

"The Commercial Leading Indicator for Brokerage Activity,* a forward-looking index for the commercial real estate market, rose slightly in the first quarter to the highest level on record but the rate of growth has decelerated over the past year, according to the National Association of Realtors. The Commercial Leading Indicator for Brokerage Activity increased 0.2 percent to an index of 120.3 in the first quarter from a reading of 120.1 in the fourth quarter, and is 0.8 percent higher than the first quarter of 2006 when it stood at 119.3. NAR’s track of the index dates back to 1990."

Reuters - "Housing to weigh more than expected on growth" (5-21-07)

"Troubles in the housing market will weigh on economic growth this year even more than earlier estimated, according to a forecast of economists released on Monday. Real gross domestic product, the government's broadest measure of economic output, is expected to advance 2.3 percent in 2007. That is down from an earlier estimate in February for 2.8 percent growth, a survey conducted by the National Association for Business Economics found."

Market Watch - "Gloom settles over housing market" (5-21-07)

"At the beginning of the year, there was hope that housing had turned the corner. But these expectations seem to have faded away. 'We were seeing signs of recovery last year, but a lot of that reflected warmer than usual weather,' Guatieri said. Economists say housing is bumping down near the bottom. 'We think the housing market will remain weak right through this year. It probably won't be until early next year that we see a stabilization and some recovery,' he added."

MSNBC - "Mortgage-firm layoffs spread across industry" (5-21-07)

"Subprime mortgage lending's deep freeze has sent a chill over the rest of the mortgage industry as layoffs spread to those who lend to the more creditworthy. But even as smaller players shed staff, the industry's largest players such as Wells Fargo and Countrywide Financial are stepping up their hiring as they seek to grab marketshare amid the carnage."

Reuters - "Countrywide chief decries subprime regulation" (5-21-07)

"Countrywide Financial Corp. Chief Executive Angelo Mozilo on Monday said regulation in the subprime mortgage industry will help crooks while hurting lenders and the housing market. 'It's better for the crooks,' Mozilo told Reuters before speaking at a Mortgage Bankers Association conference in Manhattan. 'It's only the good people who have to comply. Regulation, in my opinion, has caused part of the problem. When they attacked the pay option and interest- only loans, that really put a dent in a lot of the product, which is perfectly good product.'"

The Motley Fool - "The Worst Investment Ever" (5-21-07)

"My fellow Fool John Rosevear considers a house to be the best investment ever. I disagree. A house is a place to live, not a road to riches. Think about it for a minute. What characteristics do Fools look for in a great investment? Positive cash flow, low expense ratios, low transaction fees, and historically proven returns. Using these criteria, the average house falls well short of the all-time best."

Forbes - "America's most overpriced home markets" (5-21-07)

"No matter the locale, denizens almost always gripe about the stiff cost of living, housing and doing business. But in some places the financial pain is clearly more acute than others."

San Francisco Chronicle - "Crucial real estate decisions await at the end of the line" (5-21-07)

"Like death itself, end-of-life real estate is a universe of transactions that few of us want to contemplate. Since I began writing this column seven years ago, I've heard all kinds of sad stories of bitter feuds and convoluted laws, but the worst ones always involve that moment when the ephemeral nature of real estate becomes painfully clear: No matter how long we have owned our homes, no matter how much we depended on the house as a security against bad times, no matter how lovingly we remodeled that guest bedroom, one day we die and our homes don't go with us. And what's more, there are often a number of interests vying for control of the place called home."

Orange County Register - "How O.C. homes did since 2005" (5-21-07)

"For the first four months of 2007 compared with same period in 2005, sales for all types of Orange County home sales decreased 37.7 percent. The median sales price decreased 10.9 percent. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change."

The Union-Tribune - "Cut-rate or cut-throat?" (5-20-07)

"When it came time for José Viesca, 26, to buy a home closer to his commercial loan job in Escondido, he didn't turn to Coldwell Banker, Century 21 or any of the other traditional real estate brokerages. He turned to Redfin, a Seattle-based online brokerage whose sole San Diego agent, Erik van Joosten, works out of his Del Mar home."

Orange County Register - "High roller of home loans" (5-20-07)

"Quick Loan has been accused of predatory lending, deceptive underwriting and fraud in at least eight lawsuits. In addition, Department of Corporations records show 33 complaints against Quick Loan, most alleging unfair business practices. Most of the lawsuits were settled out of court. And state regulators have never disciplined Quick Loan."

Ventura County Star - "Home foreclosure auction draws county bidders" (5-20-07)

"Roxie Bajwa had an exciting Saturday. The Porterville resident made a trip to the Los Angeles Convention Center for an auction of foreclosed homes. She left with a new home in Port Hueneme. 'I'm excited nervous and excited,' she said just after placing the winning bid of $465,000 for the three-bedroom, two-bathroom house."

Orange County Register - "Cheaper homes seem to sell slower" (5-20-07)

"DataQuick stats show 10,661 O.C. homes of all stripes sold in the first four months of this year. That's down 21 percent from 2006 after a 21 percent year-over-year drop in 2005. That puts 2007's buying pace 22 percent behind the 1988-2007 average. This is not some small statistical sliver. We're talking about one third of an entire year here. And this year's sales pace is so sluggish that only two years – 1993 and 1995 – started any slower for homebuying in DataQuick's two decades of O.C. sales history."

Los Angeles Times - "Basking in rustic refinement" (5-20-07)

"A hunting lodge in the middle of Los Angeles seems a fanciful folly today. But in 1929, foxes, cougars and deer roamed freely in the hills of Los Feliz. At the age of 69 and widowed, Leona P. Wood commissioned this half-timbered, Norman-style hunting lodge. It took at least five years to complete."
The Arizona Republic - "Economist: Home prices unlikely to rebound soon" (5-19-07)

"Anyone looking for a quick rebound in housing prices probably is in for a disappointment, said an economist speaking in Phoenix this week. 'We think real estate prices will move sideways or slightly lower for several years,' said Thomas Higgins, of Los Angeles investment firm Payden & Rygel."

Orange County Register - "Blog This House? You Better Not If You Are A Realtor" (5-19-07)

"Should Realtors blog about houses? Is blogging the same thing as advertising? A fascinating story evolving in Seattle raises these issues, specifically: Can Realtors publish blogs with comments about houses listed by other Realtors? The answer from the MLS in Seattle appears to be 'No way.'" - "American nightmare" (5-19-07)

"Now that some of the dire fears about adjustable-rate mortgages and sub- prime loans are proving true, lenders and nonprofit groups are rushing to come up with ways to slow down the defaults and foreclosures. Institutions behind these assistance programs say that a lot of home buyers were duped or deceived into signing bad loans. The main goal, they say, should be to keep people in their homes."

The Press Enterprise - "Investors in foreclosure rally in Temecula" (5-19-07)

"Families stood shoulder to shoulder at a busy Temecula intersection Saturday to warn passersby that they are facing financial ruin because of an ongoing investment mortgage scheme and to call for authorities to shut down and arrest the culprits. 'We want them put out of business,' said Mory Simmons, a 63-year-old insurance agent from San Diego. Simmons, like most of the approximately 40 people at the rally, said they have homes in foreclosure because investment counselors persuaded them to take on far more mortgage debt than they can afford to pay."

Friday, May 18, 2007 - "San Francisco Chronicle Headline Lies About Housing Prices" (5-18-07)

"The San Francisco Chronicle today reported "Bay Area's housing prices buck national trend", but that is just not true. In fact, it's an outright lie. With a 3% decline in asking prices, Bay Area housing prices fell more than the national decline of about 2% over the last year. That is absolutely not "bucking" the trend downward. It makes you wonder just how much realtor advertising money it took to get the Chronicle to spin the headline that way. I think the Chronicle sold its integrity way too cheaply."

Orange County Register - "OC starter homes a little more affordable" (5-18-07)

"More Orange County residents could afford a starter home here during the first three months of 2007, a time when home prices fell to early 2006 levels while incomes rose slightly, the California Association of Realtors reported today. Statewide, the picture was just the opposite, with slightly fewer California residents able to afford a California starter home than a year earlier."

The Wall Street Journal - "Bernanke Plays Down Threat From Subprime Defaults" (5-18-07)

"Federal Reserve Chairman Ben Bernanke said Thursday that the financial system can withstand the fallout from the subprime-mortgage market "without serious problems." 'We have spent a bit of time evaluating the financial implications of the subprime issues, tried to assess the magnitude of losses, and tried to determine how concentrated they are,' Mr. Bernanke said in response to a question following a speech here. 'There is a sense that, although there is always a possibility for some kind of disruption ..., the financial system will absorb the losses from the subprime mortgage problems without serious problems.'"
Inman News - "How to Sell Your Home in 5 Days" (5-17-07)

"I had a conversation today that made me rethink how homes get sold in slower markets. We know there are areas where Realtors are scratching their heads, wondering how to get homes sold. And, we know from this week's round of statistics that more sellers are listing their homes, sales are slowing and prices are dropping even more slowly than number of sales is slowing down." - "Bay Area home sales drop, prices up" (5-17-07)

"Bay Area homes sold at the slowest pace in 12 years last month, the result of a continued buyer-seller standoff as well as very slow sales in some lower-cost neighborhoods in the East Bay. Prices increased for the third month in a row to a new record, a real estate information service reported. A total of 7,447 new and resale houses and condos were sold in the nine-county Bay Area last month. That was down 10.5 percent from 8,317 in March, and down 18.4 percent from 9,129 for April last year, according to DataQuick Information Systems."

The Californian - "Home prices fall locally, nationally" (5-17-07)

"Home prices in Riverside County fell in April for the first time in a decade as buyers continued to gain market power from large numbers of unsold houses, a research firm reported Tuesday. New and existing homes in the county sold for a median $409,000 last month, down 1 percent from April 2006, DataQuick Information Systems reported. Just 2,987 escrows closed, making April's pace barely half that of a year earlier and slower than any month in more than three years, according to DataQuick."

The Washington Post - "The Bad News On Condos" (5-17-07)

"Two years ago, during the giddy real estate frenzy, some investors bought 300-plus garden-style apartment units in Fairfax County to convert to condominiums. Yesterday, a California bank foreclosed on the group's loan and bought the property -- minus about 45 units that had been sold -- for $60 million, outbidding a suitor from suburban Chicago at an auction on the front steps of the Fairfax County Judicial Center. The bank, Fremont Investment and Loan, said it hoped to resell the property."

The News & Advance - "A matter of denial: The housing market" (5-17-07)

"Changes in the mortgage market are starting to affect the Lynchburg real estate market. By the end of March, local real estate agents had placed 991 homes under contract so far this year, about 47 more homes than in 2006, according to the Virginia Association of Realtors."

CNBC - "Subprime Worries Persist Despite Views of Bernanke, Paulson" (5-17-07)

"Testimony by the two top U.S. economic officials on Wednesday raised fresh concerns in financial markets about the deteriorating housing market, despite their view that subprime mortgage problems are 'contained.' The practices of lenders in the $1 trillion subprime sector have drawn scrutiny from regulators and law enforcement officials who believe some borrowers have been fraudulently induced to take on more debt than they can handle."

The Market Oracle - "US Housing Sector is Crashing, False Housing and Jobs statistics to eventually benefit Gold" (5-17-07)

"The newest deceptions are with jobs and housing. Each is much worse than reported. The housing decline might be as much as 15% worse than reported, which leads to much bigger job loss than is reported. Most of the home construction job loss is under the table, to people not on state jobless insurance programs, and to immigrant workers paid in cash. Both fall through the statistical cracks in those home frames and plywood floors underlayments. A quick preface on the two biggest corrupted statistics first, since of paramount importance."

Orange County Register - "No government aid for foreclosures, poll says" (5-17-07)

"There's much talk about various ways the government could get financial help to certain homeowners, primarily lower-income households, who can't meet their mortgage payments. We asked visitors to the Lansner on Real Estate blog if any homeowners facing foreclosure should get government aid. And the results from 870 votes cast online in what's an unscientific sample of public sentiment were stark"

Voice of San Diego - "What Could Save the Housing Market" (5-17-07)

"The speculative housing bubble that launched San Diego home prices so high is now in the process of deflating. Prices have been on the decline for over a year, but they remain well above the levels that would be justified by the economic fundamentals now that the bubble-era forces of rampant buyer optimism and unsustainably lax lending are disappearing before our eyes."

Providence Business News - "Mass. foreclosure auctions quadruple in April" (5-17-07)

"As the housing market in Massachusetts continued to weaken, foreclosure auctions rose 355 percent in April to the highest level in years, according to The Warren Group. The Boston real estate and research firm said 1,172 such auctions were advertised in the Bay State last month, compared with 376 in April 2006."

Ludwig von Mises Institute - "The Dark Side of the Credit Boom" (5-17-07)

"Under today's government-controlled paper-money standards, the world's major economies have embarked upon an unprecedented expansion of credit, starting in the early 1980s.[1] As credit growth has been outstripping economies' rise in output, total debt levels in percent of gross domestic product (GDP) have increased strongly. Take, for instance, the US. Figure 1 (a) depicts total debt and its constituent components in percent of GDP for the period 1960-Q1 to 2006-Q4. Total debt rose from 142% at the beginning of the 1960s to nearly 331% at the end of 2006. Excluding the domestic financial sector — which expanded from 5.6% to 105% — the debt ratio increased from 136% to 226%."

Wednesday, May 16, 2007

MBA - "Mortgage Applications Decrease Slightly in Latest MBA Survey" (5-16-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 11, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 675.5, a decrease of 0.8 percent on a seasonally adjusted basis from 680.7 one week earlier. On an unadjusted basis, the Index decreased 0.6 percent compared with the previous week and was up 13.8 percent compared with the same week one year earlier. The Refinance Index increased slightly to 2115.5 from 2115.2 the previous week and the seasonally adjusted Purchase Index decreased 1.4 percent to 432.3 from 438.3 one week earlier. The seasonally adjusted Conventional Index decreased 0.5 percent to 997.6 from 1003.1 the previous week, and the seasonally adjusted Government Index decreased 3.2 percent to 138.6 from 143.2 the previous week."

Dr. Housing Bubble - "Why Did the Housing Phenomenon Spread?" (5-16-07)

"We can learn a lot from the social sciences especially in analyzing the current housing bubble. Many may see very little connection between housing and social science but behavioral economics and marketing have much to do and say regarding our current environment. This is particularly relevant in analyzing the current housing market because we are in a bubble; and by definition something in a bubble does not follow conventional rules. First, we must ask ourselves how can a relatively stable investment such as housing, become the topic de jour in all investing circles for the past 7 years. Next, we need to ask why housing became such an overnight phenomenon and spread like a blistering hot wildfire. Not only did housing spread into every imaginable aspect of the American psyche, it also contributed to 30% of all employment since the start of the millennium."

CVBT - "Central Valley cities lead the nation in foreclosures" (5-16-07)

"The Central Valley city of Stockton has the nation’s highest foreclosure rate -- one foreclosure filing for every 131 households, nearly six times the national average -- according to figures compiled by RealtyTrac Inc., an Irvine-based publisher of a national database of pre-foreclosure, foreclosure, For Sale By Owner, resale and new homes. Other California cities with foreclosure rates in the top 10 include Vallejo-Fairfield at No. 2, Riverside-San Bernardino at No. 4, Modesto at No. 6, Sacramento at No. 7, and Merced at No. 8."

Bloomberg - "Mortgage Defaults Rise 62 Percent" (5-16-07)

"Mortgages in foreclosure rose 62 percent in April and the number of Americans falling behind on home loans will climb this year as home prices fall and lending standards are tightened, RealtyTrac Inc. said. There were 147,708 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio, the Irvine, California-based seller of foreclosure data said today. The median U.S. home price fell 1.8 percent in the fourth quarter, according to a separate report by the National Association of Realtors."

Mish's Global Economic Trend Analysis - "Squeeze on Wage Earners Accelerates" (5-16-07)

"Real average weekly earnings fell by 0.5 percent from March to April after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. A 0.3 percent decline in average weekly hours and a 0.5 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers were partially offset by a 0.2 percent rise in average hourly earnings."

Los Angeles Times - "Home sales hint at longer slump ahead" (5-16-07)

"Southern California home sales plunged to a 12-year low in April, suggesting that the region's real estate slump is far from over. Prices were up overall, rising 6.1% from a year earlier to a median of $505,000, according to data released Tuesday. But that increase was largely driven by an uptick in Los Angeles County, masking declines in Riverside, San Diego and Ventura counties."

Bloomberg - "Most U.S. Stocks Fall on Home Depot Earnings" (5-16-07)

"Most U.S. stocks fell a second day after Home Depot Inc.'s profit dropped more than forecast, housing prices tumbled and foreclosures rose, heightening concern the real-estate slump may worsen. Home Depot, the world's biggest home-improvement retailer, and Apple Inc., the maker of the iPod music player, led the Standard & Poor's 500 Index to its third decline in four days. Shares of Amgen Inc., the world's biggest biotechnology company, dragged the Nasdaq Composite Index to a two-week low, while the Dow Jones Industrial Index climbed to its 22nd record this year, buoyed by General Motors Corp."

The Wall Street Journal - "Lenders Get Tougher" (5-16-07)

"As the number of delinquent mortgages climbs, lenders have tightened their standards for issuing loans, including such well-publicized moves as raising minimum credit scores and cutting back on 100% financing and low-documentation loans. Now, some lenders are probing more intently would-be borrowers' finances. They are taking a tougher look at how much the property a borrower wants to buy is worth. They are peering further into clients' pasts for credit problems and requiring more in-depth reviews of borrowers who say they are self-employed. Some lenders are taking a harder stance when it comes to whose credit score a couple can use when applying for a mortgage, rather than simply allowing them to use the higher of the two scores." - "60 Percent of Liar Loan Applicants Exaggerate Income" (5-16-07)

"The use of stated income loans, or liar loans as they are known throughout the industry, has increased exponentially over the last few years. Analysts at Credit Suisse Group say that liar loans account for 46 percent of the subprime mortgage loans being granted to borrowers. Liar loans do not require borrowers to prove their income to qualify for a mortgage loan; borrowers merely state what they do and how much they earn doing it on the application."

Reuters - "Mortgage brokers cashed in on U.S. housing bounty" (5-16-07)

"Money may not grow on trees but for a while it seemed to grow on houses, and Colleen Moorhead knew exactly where to turn when she needed to harvest some cash. With a few phone calls, broker Joyce DeAngelo could put Moorhead and her husband into a new mortgage and cut them a check. They used more than $100,000 in cash they netted from the refinancing for living expenses and renovations."

Orange County Register - "No government aid for foreclosures, poll says" (5-16-07)

"There's much talk about various ways the government could get financial help to certain homeowners, primarily lower-income households, who can't meet their mortgage payments. We asked visitors to the Lansner on Real Estate blog if any homeowners facing foreclosure should get government aid. And the results from 870 votes cast online in what's an unscientific sample of public sentiment were stark"

Los Angeles Times - "Panel urges rent control expansion" (5-16-07)

"In an action intended to close a loophole and protect middle-income tenants, a Los Angeles City Council committee moved Tuesday to expand rent control to apartments that are built to replace torn-down units. If approved by the full council and the mayor, the measure would add another aspect to the city's rent control law, which now applies only to buildings constructed prior to 1979."