"Wall Street is on edge, scrambling to buck up Bear Stearns and avert a domino-effect debacle "
Miami Herald - Straw Buyer Cartoon
MSNBC - "Thousands of Arizonans in danger of losing homes" (6-28-07)
"Statewide, 5,918 properties entered some stage of foreclosure last month, a nearly 200 percent increase from May 2006, said RealtyTrac, which tracks the national foreclosure market."
NAR - "NAR Hails Bank Regulator Statement on Subprime Mortgage Lending" (6-29-07)
The National Association of Realtors® welcomes today’s statement issued by the federal regulators of banks, thrifts and credit unions that prescribes strong underwriting and consumer protection standards in connection with certain subprime adjustable rate mortgages (ARMs). Those mortgages can impose an unaffordable “payment shock” on borrowers when the interest rate resets. They include “2/28” mortgages that have a two-year “teaser rate” that adjusts as often as every six months based on a high margin.
Bloomberg - "S&P, Moody's Mask $200 Billion of Subprime Bond Risk (Update2)" (6-29-07)
"Standard & Poor's, Moody's Investors Service and Fitch Ratings are masking burgeoning losses in the market for subprime mortgage bonds by failing to cut the credit ratings on about $200 billion of securities backed by home loans. The highest default rates on home loans in a decade have reduced prices of some bonds backed by mortgages to people with poor or limited credit by more than 50 cents on the dollar and forced New York-based Bear Stearns Cos. to offer $3.2 billion to bail out a money-losing hedge fund. Almost 65 percent of the bonds in indexes that track subprime mortgage debt don't meet the ratings criteria in place when they were sold, according to data compiled by Bloomberg. "
MSN - "Deepening debt crisis hits close to home" (6-29-07)
"Who's likely to get badly hurt as the subprime lending crunch assaults various pools of high-risk debt? Pension funds, mutual funds and other victims shockingly close to your wallet."
Daily Press - "KB Homes building smaller, more affordable homes" (6-29-07)
"KB Home is discovering that less could be more when it comes to luring skittish buyers in a housing slump. In recent months, the company has rolled out a new line of smaller, more affordable homes that it hopes will jump-start sagging sales, including at the company’s Las Haciendas master-planned community in Victorville. Currently, KB Home is building single-family homes ranging in size from 1,800 to 3,700 square feet. Now that those larger units are almost sold out, the company plans to build smaller units ranging from 1,300 to 2,400 square feet."
Reuters - "Benchmark subprime ABX indexes close at record lows" (6-29-07)
"Benchmark subprime mortgage ABX indexes closed at record new lows on Friday as concerns over subprime mortgages intensified, traders said. The ABX 07-1 "BBB-" index, which is tied to subprime mortgage loans made in last year's second half, fell to 54.54, below the 56.16 record low close set earlier this week, according to Markit.com. The index has tumbled by 42 percent since January."
CNN - "Subprime loans get new standards" (6-29-07)
"U.S. bank regulators issued new standards for subprime mortgage lending Friday that includes several new consumer protections. Subprime borrowers should not be penalized for refinancing out of a mortgage before the interest rate resets to a higher level, according to a statement of principles issued by the regulators. Lenders should only offer loans to borrowers with little proof of assets and income if there is other evidence that they can repay, the statement says."
Business Week - "Housing's New Risks For The Economy" (6-29-07)
" As 2007 began, one overarching question hung in the minds of everyone from investors to economists to policymakers: Will the housing recession sink the economy? The housing boom and bust is easily the defining feature of this business cycle. The slump is unique in that no housing downturn of this size has ever occurred outside of a general economic recession. This time the market collapsed under its own weight from past overbuilding, speculation, and soaring prices, not because of the classic triggers, such as prohibitive mortgage rates, tight credit, and rising unemployment. So far, the economy has absorbed the blow, but it has not been painless."
"Sacramento's owner-occupied housing market -- one of the most troubled major housing markets in the nation -- has become a big challenge for the market's rental sector. Troubling oversupplies and dwindling numbers of qualified rental applicants are exacerbating conditions for property owners and management companies alike. "
Inman - "Residential construction spending drops for 15th straight month" (6-29-07)
The residential construction spending rate dropped 17.6 percent in May compared to the same month last year, the U.S. Census Bureau announced today, falling for the 15th consecutive month and reaching its lowest level since April 2004. Residential construction spending fell to a seasonally adjusted annual rate of $549 million in May, compared to $665.9 million in May 2006, according to the report. This rate is a projection of a monthly total over a 12-month period, adjusted for seasonal variations in construction activity. The adjusted annual rate of spending for all types of construction reached $1.18 trillion in May, down 2.8 percent compared to the May 2006 estimate of $1.21 trillion.
OC Register - "Single-family construction no longer king in O.C." (6-29-07)
"Building permits for apartments and condominiums hit a 16-year high so far this year, while permits for single-family homes fell to a 20-year low, a research group reported this week."
OC Register - "Orange County home prices and sales" (6-29-07)
"For the 22 business days ending June 18, sales for all types of Orange County home sales decreased 29.4 percent. The median sales price decreased .2 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."
Real Estate Journal - "Give 'Flipper' His Due If You Want the House He Bought" (6-29-07)" As an investor, when I look at a potential property, I compare the claimed square footage against what is in the tax records. If the numbers are different, I want to know why. For example, it could be that the seller is simply misinformed, is lying or that he did an addition without a building permit. In any event, it's a red flag. Abe Wishnia."