Monday, July 30, 2007

NAR - "NAR Study Confirms: They Come To America – To Buy Homes" (7-30-07)

"Nearly one in five Realtors® has sold a home to an international client in the past year, according to new research by the National Association of Realtors®. The 2007 NAR Profile of International Home Buying Activity is the most comprehensive research that NAR has ever conducted to explore the characteristics of second-home purchases in the United States made by international clients. An international client is a foreign citizen living abroad who has legally entered the United States to purchase a home."

NAHB - "NAHB's Newly Updated Warranty Book Helps Builders And Remodelers Avoid Costly Mistakes" (7-30-07)

"The subject of builder and remodeler warranties is one of the most important issues affecting the construction industry today. Customers expect warranties, and building professionals depend on them to demonstrate their confidence in their work. In the National Association of Home Builders’ (NAHB) recent release Warranties for Builders and Remodelers, Second Edition, builders and remodelers will find expert advice on how to use warranties properly and avoid costly mistakes."

CNN - "Cash woes pound American Home Mortgage" (7-30-07)

"American Home Mortgage Investment Corp. shares sank on Monday after the home loan provider announced 'major' writedowns, delayed a dividend and said lenders were demanding it put up more cash. Shares of American Home were down 39 percent, falling in pre-market trading to $6.39 from Friday's close of $10.47. On Friday the shares hit their lowest level since April 2003. Trading on Monday was halted for news pending."

CNN - "Credit default swaps sharply wider" (7-30-07)

"The U.S. credit markets opened with an "extremely negative tone" on Monday, with credit default swaps sharply wider amid fears that fallout from subprime mortgage losses is spreading, according to Barclays. The main index of investment-grade credit default swaps was 20 basis points wider at 98 basis points, while the high-volatility index was also 20 basis points wider at 210." - "U.S. mortgage foreclosures rise 30%, Ariz. up 74%" (7-30-07)

"U.S. foreclosures rose 58 percent in the first half of 2007 from a year earlier, led by California and Florida, as more homeowners fell behind on their monthly mortgage payments, RealtyTrac Inc. said. Arizona ranked No. 8 in the country, with 27,515 foreclosure fillings in the first six months of the year, according to RealtyTrac. That figure is a 74 percent increase on the previous six months and represents one foreclosure filing for every 92 Arizona households."

CNN - "Fund manager's fun sailing away" (7-30-07)

"A hedge fund manager whose fund ran into trouble from the sell-off in securities backed by subprime mortgages is having to put his huge yacht up for sale, seeking $23.5 million. John Devaney, the CEO of United Capital Markets, a fund that specializes in buying and selling bonds that are backed by the mortgage payments, particularly adjustable rate subprime mortgages, has put his 142-foot yacht 'Positive Carry' up for sale, according to a yacht broker's Web site."

Bloomberg - "Five Signs That Subprime Infection Is Worsening" (7-30-07)

"The collapse in subprime mortgages doesn't pose 'any threat to the overall economy,' U.S. Treasury Secretary Henry Paulson said last week. He would, wouldn't he? He's hardly going to advocate we all stock up on tinned food and bottled water in our basements. The tremors from the subprime debacle are vibrating throughout the interconnected web of modern global financial markets. Derivatives, corporate debt, loans and bank stocks are all getting trashed. Here are five reasons to expect the turmoil to worsen."

Bloomberg - "Corporate Bond Risk Surges by Record as Subprime Losses Spread" (7-30-07)

"The risk of owning corporate bonds surged by a record as losses on U.S. subprime mortgages at Germany's IKB Deutsche Industriebank AG triggered concerns of global market contagion. Contracts on 10 million euros ($13.8 million) of debt included in the iTraxx Crossover Series 7 Index of 50 European companies increased as much as 60,000 euros to 504,000 euros, according to JPMorgan Chase & Co. The CDX North American Investment-Grade Index rose $16,000 to $97,000, Deutsche Bank AG prices show."
The San Diego Union Tribune - "Seller financing has many caveats" (7-29-07)

"Variously known as 'taking back a mortgage' or 'holding the paper,' private financing is often heralded as the easiest and fastest way to sell a house, especially in a slow market. Of course, if you need the proceeds from the sale of one house to purchase another, assisting with financing may not be the way to go. But even in that scenario, it may be worth considering, especially if you can line up an investor to take the note off your hands."

The San Diego Union Tribune - "A disquieting loss" (7-29-07)

"For some home sellers, putting up a for-sale sign is getting to be a costly exercise. In its latest price report, DataQuick Information Systems found nearly 17 percent of homes sold in the county last month closed escrow at a price less than the previous sale. That's way up from 2.7 percent a year ago. The median difference in price was $61,000."

The Press Enterprise - "Foreclosures flood Inland housing market" (7-29-07)

"Mortgage default notices in the Inland region have almost tripled since last year. Home foreclosures have increased almost eightfold. And home sales last month were the worst in a decade. Real-estate experts and economists say today's housing woes might be just the beginning of trouble. In the past six months, almost 22,000 Inland homeowners received notices of default, the first step a lender takes to foreclose on a property. During those same months, 6,367 homes were taken through foreclosure."
Los Angeles Times - "Builders balk in the OC" (7-28-07)

"We were accused of sensationalism last week for jumping on that 799% increase in LA homes lost to foreclosure. If that kind of reporting is sensationalism, we'll plead guilty every time. Here's another one, from today's LATimes: 'Housing starts were practically nonexistent last month in Orange County, where the number of permits obtained by builders plunged 85% from a year earlier, data released Friday showed.'"

Orange County Register - "Q&A on a radical proposal to fix subprime lending" (7-28-07)

"Fredde and Fannie, often called government sponsored enterprises or GSEs, aren’t allowed to directly buy subprime loans. (They can buy a limited amount of securities that are backed by subprime loans.) Bostic, however, found that when they were aggressive about buying loans in a certain market, they tended to crowd out subprime lenders. In other words, when the GSEs went after more borrowers on the margin of their credit limitations, they essentially expanded the market of prime borrowers."
CBIA - "Total Housing Starts Dip 14% in June, CBIA Reports" (7-27-07)

"California’s total housing starts in June fell by nearly 14 percent when compared to production levels in May, the California Building Industry Association announced today. According to housing permit data supplied by the Construction Industry Research Board, both single-family and multifamily units saw a decline in permits being pulled for the month and had also fallen behind when compared to production levels for the first half of 2006. In June, permits were pulled for 6,533 single-family homes statewide, down 11 percent from the previous month and 50 percent below the number in June 2006, while multifamily housing starts — condos and apartments — totaled 3,003, down 18 percent from the previous month and down 54 percent when compared to June 2006."

Market Watch - "Subprime Surprise" (7-27-07)

"Thursday's market plunge was the worst since the 416-point drop in late February. The February drop, of course, was blamed on a drop in the Chinese stock market, which is why some commentators blamed the drop on Wall Street on what they called the 'Shanghai Surprise.' It's too early to know what the commentators will name the cause of Thursday's drop. But since the culprit is assumed to be continued weakness in the subprime lending market, I'll call it the 'Subprime Surprise.'"

Market Watch - "Around the globe, rout in credit markets accelerates" (7-27-07)

"America's era of easy money is going out with a bang - and on a global scale. Investors around the world on Thursday got a painful reminder of the fallout. Behind the latest sell-off in the Dow Jones Industrial Average was an erosion in credit-market confidence that has plunged international corporate bonds along with emerging-market debt into an accelerated retrenchment, analysts said."

Yahoo - "No Housing Turnaround for Two Years?" (7-27-07)

"First, it was the second half of 2007. Then it was 2008. Now analysts are saying the national housing market may not rebound until 2009. On July 25, the National Association of Realtors reported that sales of existing homes fell 3.8% in June to a seasonally adjusted annual rate of 5.75 million units, contributing to the bleak-and-getting-bleaker outlook."

Bloomberg - "Franco Is Still Dead, and Housing Is Still Bust" (7-27-07)

"The latest round of housing statistics -- sales, starts, homebuilders' outlook surveys and earnings reports -- offered little hope that residential real estate would be back on its feet anytime soon. 'Housing is bust, and wishful thinking cannot unbust it anytime soon,' says Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York."

Time - "California's Real-Estate Tailspin" (7-27-07)

"If Wall Street wants to get even more worried about the real estate market, it need look no further than southern California. There, the culprits aren't just the bad-credit borrowers whom banks and lenders loaded up with ballooning debt to purchase their dream homes. The well-to-do have partaken of those treacherous loans as well. And now everyone is hard-pressed to pay as interest rates rise."

Forbes - "Standard Pacific Joins The Pack" (7-27-07)

"Another homebuilder, another big loss. Like other builders that posted earnings this week, Standard Pacific racked up hefty charges as it reduced the value of its real estate holdings on its balance sheet. Standard Pacific (nyse: SPF - news - people ) said Friday morning that it swung to a second-quarter loss of $165.9 million, or $2.56 per share, from a profit of $96.5 million, or $1.44 per share, a year ago. Analysts polled by Thomson Financial were expecting a loss of 34 cents per share."

Market Watch - "Fannie, Freddie seen facing subprime losses" (7-27-07)

"Fannie Mae and Freddie Mac could have $4.7 billion in unrealized losses from the deterioration in subprime mortgages, Citigroup's fixed-income strategy team estimated on Friday. The bank's strategists said that probably won't be a big problem and argued that recent moves in the credit-derivatives market suggesting Fannie and Freddie are more risky have been overdone. The estimated $4.7 billion in losses represent about 6% of the equity capital of the government-sponsored mortgage-finance giants, the strategists noted, adding that Fannie and Freddie's retained portfolios contain roughly $182 billion of subprime bonds, most of which are rated AAA."

Orange County Register - "Orange County home prices and sales" (7-27-07)

"For the 22 business days ending July 12, sales for all types of Orange County home sales decreased 26.1 percent. The median sales price increased .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."

Los Angeles Times - "New-home sales fall 6.6% in June" (7-27-07)

"Sales of new U.S. homes dropped more than expected in June, while orders for long-lasting U.S.-made goods were weaker than analysts forecast, according to reports Thursday that raised fresh concerns about the economy. 'The U.S. business sector may not be providing as much of a sturdy offset to the weak housing sector as expected,' said Sherry Cooper, chief economist at BMO Capital Markets. Orders for U.S.-made durable goods rose 1.4% in June, the Commerce Department reported, but they were less than Wall Street expectations for a 1.8% gain, and a measure of business spending in the data fell unexpectedly."

Los Angeles Times - "Irvine to sue government group over housing demand" (7-27-07)

"Irvine announced Thursday that it would sue a regional government group that had demanded that the city plan for 35,660 new homes in the next seven years to accommodate regional growth. Many of the homes would be designated low- and moderate-income housing. City leaders say Irvine lacks the land to meet the goals that had been mandated in a housing plan that was approved this month by the Southern California Assn. of Governments."

Los Angeles Times - "It was investors' last straw" (7-27-07)

"Wall Street finally caved Thursday. For months, investors had looked past a series of warning signs: major U.S. banks reporting losses from portfolios of sub-prime loans amid a slowing housing market, private equity funds not being able to attract investors on junk bond deals as they had just weeks before, and hedge funds going belly up on soured investments linked to the sub-prime market. The proverbial last straw came Thursday, with the Commerce Department's report that new-home sales fell 6.6% last month, more than triple what had been expected. Investors decided that it was time to sell."

Thursday, July 26, 2007

Market Watch - "Subprime could create global crisis, economist says" (8-2-07)

"The problems in the U.S. subprime mortgage market could spiral out of control into a global financial crisis, economist Mark Zandi said Thursday. With a "high level of angst" in the financial markets about who will take the losses from more than $1 trillion in risky mortgages, we could be just one hedge-fund collapse away from a global liquidity crisis, said Zandi, chief economist for Moody's A global meltdown is not likely, but the risks are growing, Zandi emphasized in a conference call with reporters following the release of a new study on subprime debt that concludes that the housing crisis could be deeper and last longer than investors now believe. Read the latest data on home sales."

Big Builder Online - "NAHB: No Return to Normal Before 2010" (8-2-07)

"Demand for new housing is still declining and won't start to rebound until 2008, the chief economist of the National Association of Home Builders said Wednesday. 'The big question is: Is this ball still rolling downhill? I think it is,' said the economist, David Seiders, in his midyear forecast for the home-construction industry. 'We're dealing with some major problems out there.'"

NAHB - "New-Home Sales Slide 6.6 Percent In June As Home Buyer Demand Remains Slack" (7-26-07)

"Sales of new single-family homes slipped 6.6 percent in June to a seasonally adjusted annual rate of 834,000 units as home buyer demand continued to weaken, according to figures released by the U.S. Commerce Department today. The June sales pace was 22.3 percent below a year earlier, and down 40 percent from the housing market peak in mid-2005. 'The ongoing contraction in home sales is consistent with NAHB’s surveys of single-family builders. Our Housing Market Index now is down to the lowest level since January 2001, when the national economy was in recession,' said Brian Catalde, president of the National Association of Home Builders (NAHB) and a home builder from El Segundo, Calif."

Palm Beach Post - "County sees first sizable dip in home prices" (7-26-07)

"Sales of existing homes in Palm Beach County declined in June, but not as much as in many other parts of the state, according to a Florida Association of Realtors report released Wednesday. Still, sales of existing single-family homes fell 19 percent when compared with June 2006, and the median price took a tumble to $377,900 from $405,500. It was the first significant drop - 7 percent - in home prices since the market started cooling off from its unprecedented run-up two years ago."

Washington Post - "Easy Money, Lifeblood Of Economy, Is Drying Up" (7-26-07)

"In just a few days, shares of Internet travel company Expedia lost 12 percent of their value, one of the highest-flying executives on Wall Street watched his fortune shrink and the nation's largest mortgage lender said many Americans with good credit were in danger of losing their homes. At the root of those seemingly unrelated events is a single new reality, one that could portend trouble for the broader U.S. economy: The era of cheap money appears to be ending."

Washington Post - "Home Sales on a 'Staircase to the Basement'" (7-26-07)

"Sales of existing homes fell in June for the fourth straight month as problems in the mortgage industry continued to hurt the housing market. The National Association of Realtors reported yesterday that sales of previously owned homes dropped 3.8 percent from May to a seasonally adjusted rate of 5.75 million units, the slowest pace in more than four years. It was also 11.4 percent less than the number of units sold in June 2006."

Bloomberg - "Goldman Sachs, Bear Stearns Bond Risk Surges, Credit Swaps Show" (7-26-07)

"The risk of owning bonds of Wall Street firms surged as concerns escalated that investment banks will be hurt by rising losses from subprime mortgages and a freeze in demand for corporate debt. Credit-default swaps on $10 million of Goldman Sachs Group Inc. bonds jumped as much as $18,000 to a record $85,000, according to broker Phoenix Partners Group in New York. Bear Stearns Cos. credit swaps surged as much as $29,000 to $110,000, also a new high. Lehman Brothers Holdings Inc. climbed as much as $24,000 to $104,000."

Bloomberg - "Absolute Capital Hedge Fund Suspends Withdrawals" (7-26-07)

"Absolute Capital Group Ltd., an Australian hedge fund that invests in collateralized debt obligations, suspended withdrawals from two of its funds after forecasting losses amid a rout in U.S. subprime mortgages. The firm froze its Yield Strategies Fund and Yield Strategies Fund NZD, which together have about A$200 million ($177 million) under management, Chief Investment Officer Bill Entwistle said in an interview today. The Sydney-based company is 50 percent owned by ABN Amro Holding NV's Australian unit"

Yahoo - "Wells Fargo shuts nonprime mortgage unit, cuts jobs" (7-26-07)

"Wells Fargo & Co. (NYSE:WFC - News), the second-largest U.S. mortgage lender, said on Thursday it will close its nonprime wholesale lending business, which processes and funds loans for third-party brokers, citing turmoil in the market for riskier home loans. The company will shut operations in Baton Rouge, Louisiana, resulting in a loss of 170 jobs, and in Des Moines, Iowa, where it will seek other positions for 67 affected workers. Wells Fargo's home mortgage unit is based in Des Moines, while the parent is based in San Francisco."

Yahoo - "Beazer Homes Swings to 3Q Loss" (7-26-07)

"Beazer Homes USA Inc. said Thursday it swung to a loss in the fiscal third-quarter after the homebuilder cut prices to spur sales and took major charges to write down the value of unsold inventory. For the three months ended June 30, the company posted a loss of $123 million, or $3.20 per share, compared to a year ago when it earned $102.6 million, or $2.37 per share."

Yahoo - "D.R. Horton Swings to 3Q Loss" (7-26-07)

"D.R. Horton Inc., posted a third-quarter loss Thursday as one of the nation's largest homebuilders wrote-down the value of unused land and warned there was no recovery in sight for the troubled housing industry. Shares of Horton tumbled to a 52-week low, losing 88 cents, or 5 percent, to $16.60 in late-morning trading."

Los Angeles Times - "Optimists win in volatile day on Wall Street" (7-26-07)

"Stocks rebounded somewhat Wednesday on some strong earnings and new takeover deals, but not without a struggle as mounting signs of a tougher lending climate again dogged investors. Share prices seesawed throughout the session a day after the Dow Jones industrial average tumbled 226 points. Ultimately, the market drew confidence from better-than-expected earnings at and Boeing and from acquisitions involving German engineering company Siemens and maker Merck."

Los Angeles Times - "Industry's foundations get shakier" (7-26-07)

"Three major home builders reported quarterly losses Wednesday, and a real estate trade group said that nationwide sales of existing homes fell to their lowest level in nearly five years. The fresh data came one day after the nation's biggest mortgage lender reported more delinquencies among even its better customers, and a market research firm said California foreclosures were soaring."

Real Estate Journal - "Tips for How to Invest In a Foreclosed Home" (7-26-07)

"Investing in foreclosed homes can be profitable, but novices need to tread carefully. Generally, you can't inspect homes prior to auction -- a home in need of major repairs could negate a bargain purchase. Some may come with hidden liens or utility bills to pay. State and local rules vary, so understand the process before bidding and know the existing homeowner's rights. Investors can find foreclosure listings at the county court clerk's office or sheriff's department. For a fee, and provide up-to-the minute listings. A title-search company can help determine if there are any outstanding liens on a home. Also, consider negotiating directly with lenders to buy bank-owned homes. Countrywide, among other lenders, lists online homes it's selling."

Wednesday, July 25, 2007

NAR - "Prices Rise, Existing-Home Sales Decline in June" (7-25-07)

"Sales of existing homes fell in June with some potential buyers staying on the sidelines, but prices rose modestly as inventories eased, according to the National Association of Realtors®. Total existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3.8 percent to a seasonally adjusted annual rate1 of 5.75 million units in June from a downwardly revised level of 5.98 million in May, and are 11.4 percent below the 6.49 million-unit pace in June 2006."

MBA - "Fannie Mae Update Master Form and Short Form Mortgage/Deed of Trust Documents" (7-25-07)

"Fannie Mae and Freddie Mac have jointly developed uniform master and short form security instruments for first mortgage loans. In states with statutes that allow for the use of master and short form security instruments, recording the new short form mortgage or deed of trust (“Short Form”), which can be one quarter the length of the current security instruments, can result in significant savings in closing costs. The new uniform master form mortgage or deed of trust (“Master Form”) and Short Form documents have been placed on Lenders may elect to deliver first mortgage loans to Fannie Mae using the approved Master Form and Short Form documents in lieu of the current version of the Fannie Mae/Freddie Mac uniform first mortgage security instruments."

MBA - "Education is the Key to Owning a Home, it's that Simple" (7-25-07)

"The Mortgage Bankers Association (MBA) is committed to helping first time home buyers learn about the mortgage process and is also working to keep current homeowners in their homes. To that end, MBA has enhanced its bilingual consumer education website,, with a comprehensive guide and an accompanying online calculator that were created to demystify the mortgage process. The Simple Facts provides valuable information that helps prospective homebuyers identify the pros and cons of each type of mortgage and choose the best product for their own personal situation. The Simple Calculator is a tool that estimates the payments for each product, not just today but throughout the mortgage, and compares payments under different types of loans."

MBA - "Mortgage Applications Decrease in Latest MBA Weekly Survey" (7-25-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 20, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 609.0, a decrease of 3.6 percent on a seasonally adjusted basis from 631.6 one week earlier. On an unadjusted basis, the Index decreased 3.5 percent compared with the previous week and was up 13.1 percent compared with the same week one year earlier."

MBA - "VA Unveils New VA Loan Electronic Reporting Interface Page" (7-25-07)

"The U.S. Department of Veterans Affairs (VA) completed a project where we redesigned virtually all of our loan servicing regulations, processes, and reporting requirements. The new regulatory environment is being implemented through process changes, organizational changes, and a new application service that replaces our current loan servicing system. The new application service is called the VA Loan Electronic Reporting Interface"

The San Diego Union Tribune - "County foreclosures leap higher" (7-25-07)

"Home foreclosures in San Diego County continued a troublesome climb into record territory in June, but analysts say the number has yet to reach a threshold that creates a drag on real estate prices or the economy. DataQuick Information Systems reported yesterday that during the first half of 2007, San Diego County had 2,896 foreclosures compared with 445 during the first half of 2006, a 551 percent increase."

The San Diego Union Tribune - "Top lender describes a widening housing slump" (7-25-07)

"Countrywide Financial, America's largest mortgage lender, said yesterday that more borrowers with good credit were falling behind on their loans and that the housing market might not begin recovering until 2009 because of a decline in house prices that goes beyond anything experienced in decades. The news from Countrywide, widely seen as a bellwether for the mortgage market, initiated a sell-off in the stock market, which is at its most volatile in more than a year. The Standard & Poor's 500-stock index fell 30.53 points, or 2 percent, to 1,511.04, its biggest one-day drop in nearly five months. The dollar dropped to a new low against the euro, edging closer to $1.40-to-1 euro."

Bloomberg - "Subprime Mess Fueled by Crack Cocaine Accounting" (7-25-07)

"Back in 1998, as the subprime- lending industry imploded, critics blasted the loose rules that allowed profits to be booked under 'gain-on-sale' accounting - - the financial world's equivalent of crack cocaine. While the rules got a few patches, they stayed largely intact, and most investors forgot the whole mess. Nine years later, the subprime world is imploding again. One difference now: The folks who write U.S. accounting standards say they want to redo the rules, insisting that their desire predates the current debacle. Whatever the impetus, it's about time."


"Profits tumbled yesterday for the nation's largest home mortgage firm - Countrywide Financial - even as its chief Angelo Mozilo was quietly cashing out a $118.2 million options windfall ahead of its new troubles. The company reported a 33 percent drop in profits, and expects deep losses across the industry in the wake of housing's thundering crash that's sending cracks this summer throughout the financial services landscape."

CAR - "C.A.R. reports sales decrease 24.7 percent in June, median price of a home in California at $594,260, up 3.2 percent from year ago" (7-25-07)

"Home sales decreased 24.7 percent in June in California compared with the same period a year ago, while the median price of an existing home increased 3.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. 'The focus on foreclosures and subprime lending is ongoing and, coupled with higher inventories of homes for sale, is prompting many would-be buyers to play a ‘wait-and-see’ role,' said C.A.R. President Colleen Badagliacco. 'However, well-maintained homes with curb appeal that are priced for today’s market continue to sell. It’s often a matter of counseling buyers and sellers to set realistic expectations on both sides of the transaction.'"

Yahoo - "Existing Home Sales Drop for 4th Month" (7-25-07)

"Sales of existing homes fell in June for a fourth consecutive month, further evidence that housing troubles are far from over. The National Association of Realtors reported Wednesday that sales of existing homes dropped by 3.8 percent in June to a seasonally adjusted annual rate of 5.75 million units. That is the slowest sales pace since November 2002 and the decline was about twice what had been expected."

Orange County Register - "O.C. cities lag in revenue from new homes" (7-25-07)

"Orange County cities get less revenue from new home construction than any other metro area in the state, a study released Tuesday shows. The construction of a typical house here nets local cities $287 a year in taxes, the Blue Sky Consulting Group reported in a study commissioned by the California Building Industry Association. That compares to a statewide average of $771."

Orange County Register - "Building permits at 14-year low" (7-25-07)

"Building permits for single-family homes fell to their lowest level this year in at least two decades, Orange County construction data released Tuesday show. It's the first time since 2000 that Orange County building permits for condos and apartments outpaced permits for houses, according to the Burbank-based Construction Industry Research Board."

Real Estate Journal - "Getting the Best Apartment Without Blowing Your Budget" (7-25-07)

"Apartment dwellers are prone to stretching their financial resources to make their monthly lease payments, and with rents moving up in many markets more are likely to find themselves facing a pinch. A recent survey by, a site that lists classifieds of available apartments nationwide, found that about 60% of participants spent more than 30% of their income on rent -- a percentage personal-finance experts say should be the maximum. Twenty percent said they spend more than half of their monthly income on rent."

Tuesday, July 24, 2007

Bloomberg - "Countrywide's Net Declines 33 Percent on Home Equity" (7-24-07)

"Countrywide Financial Corp., the biggest U.S. mortgage lender, reported a third straight quarterly earnings decline and reduced its 2007 forecast as a growing number of consumers fell behind on home-equity loan payments. Second-quarter net income tumbled 33 percent to $485.1 million, or 81 cents a share, from $722.2 million, or $1.15, a year earlier, the Calabasas, California-based company said in a statement today. Analysts estimated Countrywide would earn 91 cents. Revenue fell 15 percent to $2.55 billion."

Bloomberg - "KKR, Homeowners Face Funding Drain as CDO Sales Slow" (7-24-07)

"The Wall Street money-machine known as collateralized debt obligations is grinding to a halt, imperiling $8.6 billion in annual underwriting fees and reducing credit for everyone from buyout king Henry Kravis to homeowners. Sales of the securities -- used to pool bonds, loans and their derivatives into new debt -- dwindled to $9.1 billion in the U.S. this month from $42 billion in June, analysts at New York-based JPMorgan Chase & Co. said in a report yesterday. The market, which was 'virtually shut' earlier this month, is showing 'signs of life,' the bank said."

Bloomberg - "Dollar Falls to Record Against Euro as Credit Concern Spreads" (7-24-07)

"The dollar declined to a record against the euro and weakened to a 26-year low versus the pound on speculation the rout in subprime mortgages is spreading, slowing U.S. growth. The currency's drop accelerated after Countrywide Financial Corp., the biggest U.S. mortgage lender, reported a third straight quarterly earnings decline as more consumers fell behind on home equity loan payments. The yen gained versus all but one of the 16 most actively traded currencies as U.S. stocks fell and traders pared carry trades in which they borrow in the yen to invest in higher-yielding assets."

CNN - "Subprime loan alternatives" (7-24-07)

"After the subprime mortgage market collapsed, many products that were widely available have disappeared from the scene. More than a score of subprime lending specialists have closed their doors. And many banks like Washington Mutual (Charts, Fortune 500) and Wells Fargo (Charts, Fortune 500) have cut back on or eliminated subprimes, leaving many credit-damaged home buyers scrambling to find a loan. But now that the collapse has shaken out some of the sketchier players, some familiar and more reliable alternatives to subprime are making a comeback -- but they do require some work."

Mish's Global Economic Trend Analysis - "Class Warfare" (7-24-07)

"Bernanke was grilled by Congressmen Ron Paul, Luiz Gutierrez, and Barney Frank at the Fed's semi-annual report to Congress. Caroline Baum was discussing this in Congress Draws Bernanke Out on Class Struggle. Just when you thought increased transparency on the part of the Federal Reserve was contributing to enhanced sophistication on the part of the public, along comes evidence to the contrary. "I believe economic inequality is a product of monetary policy choices on the part of the Fed," said Congressman Luiz Gutierrez, Democrat of Illinois, at yesterday's monetary policy hearing before the House Financial Services Committee."

Real Estate Journal - "Southern California Home Sales Hit Slowest Pace in 14 Years" (7-24-07)

Real Estate Journal - "States Aim to Stem Tide Of Home Foreclosures" (7-24-07)

"Hoping to slow the quickening pace of home foreclosures, about a half-dozen states are setting up funds to help homeowners with high-risk subprime mortgages refinance to more-affordable loans. The states -- which include Maryland, Massachusetts, New Jersey, New York, Ohio and Pennsylvania -- are expected to invest a total of more than $500 million in the effort. That isn't much, given the size of the problem, but state officials hope it will be enough to keep some vulnerable low- and moderate-income neighborhoods from sliding into decline."

Monday, July 23, 2007

NAHB - "Media Advisory: NAHB Chief Economist To Discuss Mid-Year Housing Outlook" (7-23-07)

"The U.S. housing market continues to suffer through a downswing. When will we begin to see a recovery? What are builders doing to ride out these turbulent times? What regions of the country are still experiencing growth and which can expect further decline? How are tightening lending standards and the subprime market affecting housing? NAHB Chief Economist, David Seiders will discuss the answers to these questions and more during his mid-year economic teleconference. Seiders will provide a year-to-date analysis of the housing and mortgage markets, and his forecast for the rest of 2007 and beyond."

Market Watch - "Gold to test $720?" (7-23-07)

"Gold closed at $683.50 an ounce Friday, after a strong close to the week. And it is not just the gold price chart that is cheering gold's friends. The major gold stocks have suddenly started out performing gold--for the first time in well over a year. This month, the Phlx Gold Silver Index index is up 16% and the Amex Gold Bugs Index 14%. Gold itself is up just over 5%."

Business Week - "The Subprime Mess: "It's Just Going To Get Worse" (7-23-07)

"The subprime storm isn't blowing over. On July 10, credit-rating agencies Moody's Investors Service and Standard & Poor's (like BusinessWeek, a unit of The McGraw-Hill Companies (MHP )) warned of greater-than-expected losses for bonds backed by subprime loans--news that helped send stocks tumbling. The ratings changes were small. S&P put $7.4 billion worth of mortgage-backed securities, just 1.3% of the total issued from late 2005 through 2006, on watch for downgrades, while Moody's cut its ratings on just $5.2 billion worth. (S&P originally said the total was $12 billion worth of mortgage-backed securities, but later lowered the figure.) S&P also said mortgage fraud is a bigger problem than it had foreseen and that it's tightening its rating practices."

Bloomberg - "CEOs See `No Clear Signs' of Crisis as Woes Intensify" (7-23-07)

"On Wall Street, where the most lucrative credit markets are barely limping thanks to the worst housing slump in a decade, there isn't a chief executive officer who will tell you there is a crisis. A few weeks after Merrill Lynch & Co. CEO Stanley O'Neal said he saw ``no clear signs'' that rising delinquencies on subprime U.S. mortgages were hurting the rest of the debt markets, borrowing costs for non-investment grade companies rose to the highest in nine months. ServiceMaster Co., US Foodservice and 19 other companies have canceled bond sales because nobody wants to buy them."

CNN - "Most ruthless foreclosure states" (7-23-07)

"In Alabama, late-paying homeowners can lose their properties to foreclosure at breathtaking speed - as little as 30 days after a delinquency notice is published. In New York State, the process can drag on for well more than a year. With foreclosures spiking around the nation, homeowners should learn the foreclosure laws in their states - what you don't know can hurt you."

Los Angeles Times - "Home sales data, earnings reports could set mood" (7-23-07)

"Wall Street faces home sales data and more earnings reports this week, as it decides whether growth is strong enough to justify pushing the Dow Jones industrial average back above 14,000. Although most major companies have been meeting or exceeding Street expectations in their quarterly earnings reports, a few misses and warnings about future performance have rattled investors. This week, six of the 30 companies that make up the Dow release financial results, as do a slew of home builders. More troubling earnings surprises could give the market a jolt."

Real Estate Journal - "Mortgage Delinquencies Climbed in Second Quarter" (7-23-07)

"Mortgage delinquencies continued to climb in the second quarter, new data show. The map below shows how delinquency rates have increased in those metro areas as the housing market has slowed. The pickup in delinquencies has been particularly notable in parts of Florida and California. Nationwide, delinquency rates climbed to 3.15% in the second quarter, compared with 2.87% in the first quarter."
The Boston Globe - "The mortgage mess" (7-22-07)

"STUPID LENDERS making stupid loans to stupid borrowers. You might think this sums up what the surge in mortgage foreclosures means to you. You would be mistaken. That so many homeowners are having such trouble meeting their mortgage payments could very well mean your own home's value has dropped, that you may not be able to get a home-equity loan, or that your retirement savings will grow more slowly than you planned. Conceivably, it could even mean that the global financial system -- and by extension the economy and even your job -- is threatened."

The San Diego Union Tribune - "Fannie, Freddie deepen involvement in subprime loan market" (7-22-07)

"Fannie Mae and Freddie Mac are riding to the rescue of the subprime lending market. The two large housing finance agencies are beefing up their business of guaranteeing subprime loans at a time when slack lending standards and falling home prices have translated into rising delinquencies and foreclosures among subprime borrowers."

The San Diego Union Tribune - "Subprime losses called bumps on road" (7-22-07)

"Wall Street shuddered when two hedge funds managed by Bear Stearns Cos. buckled from exposure to subprime loans, but economists say investors' reaction might be overblown. At first, the news this past week seemed alarming. Shareholders of Bear Stearns found out Tuesday that two of its hedge funds were rendered practically worthless by wrong-way bets in complicated mortgage securities. Then, a few days later, several top U.S. banks said they've added to reserves to withstand loan defaults expected in the second half of the year."

Los Angeles Times - "Drop anchor, you're home" (7-22-07)

"There are few issues in a marina more likely to rock the boats than the topic of live-aboards -- people or families who live full time on board. For some, it's the fulfillment of a fantasy lifestyle -- the freedom to pick up anchor on a whim, living unburdened by possessions beyond one's true needs. But the reality is that people choose to live on the water for a number of practical reasons as well."

Los Angeles Times - "Is 5% the new no-money-down?" (7-22-07)

"We were asked recently in a radio interview if the LA housing market is reverting to traditional financing, with buyers making 20% downpayments. Um, we said articulately, we don't think so -- LA is just not a 20% downpayment market. There aren't enough buyers with $100,000 in the bank. This personal finance profile in today's LATimes sheds more light on that issue. It profiles a couple with $13,000 in savings, and contains the following advice from a financial planner: don't buy a house until you've saved enough for a 5% or 10% downpayment."
The San Diego Union Tribune - "Real estate, construction woes slow Calif. job growth to a crawl" (7-21-07)

"Hiring in California was hit by a bad case of June gloom last month as the effects of the real estate slowdown seeped into the job market, according to data released yesterday by the California Employment Development Department. Statewide, employers added only 400 jobs in June, after adjusting for seasonal fluctuations, compared with a jump of 29,700 in June 2006. Sharp declines in home construction and financial activity – such as mortgage lending – put a crimp in last month's job growth."

Orange County Register - "Home prices down in most O.C. neighborhoods" (7-21-07)

"Foothill Ranch and Portola Hills may be bright spots in Orange County's housing market. The median price of a home in the 92610 ZIP code increased 25.5 percent during the first half of the year, according to a mid-year review of home prices by DataQuick Information Systems."

Los Angeles Times - "Force banks to avoid foreclosures?" (7-21-07)

"Paul Leonard, the director of the California office of the Center for Responsible Lending, writes, 'When loans are modified, borrowers should be able to afford their loans over the long term at the so-called fully indexed rate, not just the current payment level. Public agencies should be monitoring and holding lenders accountable for affordability outcomes from foreclosure-avoidance efforts.' If we understand it correctly, this means that lenders would figure out how much the borrower can afford to pay, and then restructure the loan so that the borrower can keep the house by paying that amount."

Friday, July 20, 2007

Bloomberg - "Treasury 10-Year Yield Falls Below 5 Percent on Subprime Crisis" (7-20-07)

"Treasuries rose, pushing the 10-year note's yield to the lowest in six weeks, on speculation rising subprime mortgage defaults will lead to higher interest rates for private borrowers and curb economic growth. Ten-year notes gained the most in more than a week and extended their biggest weekly advance since March as Standard & Poor's lowered 14 ratings on European collateralized debt obligations and gauges of investor appetite for corporate bonds and loans fell."

Yahoo - "Five Reasons to Sell, Sell, Sell" (7-20-07)

"U.S. stocks are at record levels. Earnings season is under way, with many expecting a modest rise in corporate profits. Unemployment is very low. So far problems with housing haven't infected the rest of the economy, which seems poised to bounce back from slow growth in the first quarter. So what is there to worry about? Plenty. No matter how wonderful things look, the good times won't last forever. Even as most market observers remain bullish, we asked them what could derail this bull market. Stocks could keep setting records for months or even years, but it pays for investors to know what dangers are lurking out there. This Five for the Money lists the five biggest threats to the stock market rally."

The Press Democrat - "Overstocked in condos" (7-20-07)

"Greg Levy's hopes for selling condominiums he converted from apartments have been dashed by Sonoma County's housing downturn, forcing him to rent out the units with a turnaround still not in sight. 'We just don't have the demand. We're not going to deal with this market anymore,' he said. Condo sales are slumping alongside houses in the county as the market's decline nears the two-year mark. The typical condo sold for $375,000 in June -- a 4 percent drop from the peak of $390,000 in October 2005."

BBC News - "Fed warns of $100bn credit losses" (7-20-07)

"In a second day of testimony to Congress, Mr Bernanke said credit losses associated with sub-prime mortgage failures were 'significant'. Wall Street is nervous about the exposure of banks and other lenders to the riskier sub-prime market. Earlier this month, Bear Stearns bailed out two sub-prime focused hedge funds. It has since said one of them has 'very little value' and the other is now worthless."

Real Estate Journal - "How to Save by Selling Your House Online" (7-20-07)

"Despite the recent slump in the housing market, many Americans are still paying a walloping 6% commission to real estate brokers. At first blush, 6% may not sound like much, but consider: According to the U.S. Census Bureau, the average price of a home is $313,000, which means the average seller has to pony up nearly $19,000 in broker fees. This is a hefty penalty for selling your own home, one that more and more Americans are unwilling to pay."

Thursday, July 19, 2007

MBA - "MBA Sheds New Light on an Old Problem, Mold" (7-19-07)

"In the two years since the Mortgage Bankers Association (MBA) released Mold: Steps Toward Clarity White Paper, the industry's understanding of mold and its impacts on commercial real estate has progressed on multiple fronts. Accordingly, MBA's Commercial Real Estate/Multifamily Finance Board of Governors (COMBOG) Underwriting and Closing Committee's Mold Working Group has updated the White Paper to reflect the most current information on mold mitigation, standards for conducting mold assessments, legal issues, and insurance issues. The Working Group, made up of MBA members who are industry experts in commercial real estate finance, property inspections and insurance, went to great lengths to provide a comprehensive document that will serve as a guide and reference tool on this important issue."

Bloomberg - "Fed to Cut Rate After Housing Slowdown, McCulley Says" (7-19-07)

"A slowdown in the U.S. housing market and losses in mortgage-linked bonds will lead the Federal Reserve to cut interest rates, said Paul McCulley, a bond fund manager at Pacific Investment Management Co. 'The recession we have in the housing market is going to be a very long, protracted affair,' McCulley said in an interview from Pimco's office in Newport Beach, California. 'That's going to lead the average consumer to recognize that he needs to save more out of current income, which is going to weaken consumption in the economy.'"

Bloomberg - "Bernanke Sets Fed for Longest Rate Freeze in 20 Years" (7-19-07)

"Federal Reserve Chairman Ben S. Bernanke is preparing the ground for the longest freeze in interest rates in two decades. Bernanke, delivering his semiannual economic testimony to Congress yesterday, presented trimmed forecasts for growth this year and next because of the prolonged housing recession. At the same time, he said the 'predominant' concern is that inflation won't recede as forecast."

CNN - "Losing the American dream" (7-19-07)

"The Dow pops into uncharted 14,000-point territory. An economy pummeled by the 9/11 ist attacks has grown for 22 quarters straight. Unemployment stands at 4.5 percent - lower than any average decade from the 1960s through the 1990s. And Treasury Secretary Hank Paulson declares: 'This is far and away the strongest global economy I've seen in my business lifetime.' So why do six out of ten Americans think that the economy was better five years ago and fear that worse economic times are on the horizon, according to the latest USA Today/Gallup poll? 'If it makes you happy,' moans Sheryl Crow, 'then why the hell are you so sad?'"

Bloomberg - "Syron, Chanos, Faber See Losses Growing in Subprime" (7-19-07)

"The worst is yet to come in the market for subprime loans as defaults increase and holders of mortgage-backed bonds are forced to sell as prices fall, Freddie Mac Chief Executive Officer Richard Syron and investors James Chanos and Marc Faber said. 'Unfortunately I don't think we have hit bottom' in defaults, said Syron, whose company is the second-largest source of money for home loans behind Fannie Mae, said in an interview yesterday from McLean, Virginia. 'Things are going to get worse.'"

The San Diego Union Tribune - "Average rent goes up 5.4% in S.D. County" (7-19-07)

"The average monthly rent in San Diego County jumped 5.4 percent to $1,345 during the last quarter compared to a year earlier, reflecting a rental market that is seeing increased demand as home sales slow, foreclosures rise, and condo conversions retreat to rentals. According to a survey released today that culled data from 446 apartment complexes with more than 100 units, San Diego County's average rent ranked sixth among 24 rental markets in the state."

USA Today - "June housing starts up 2.3%, but permits plummet" (7-19-07)

"The pace of home construction rose 2.3% in June, but building permit activity, a sign of future construction plans, sank to its lowest rate in 10 years according to government data on Wednesday, signaling more weakness in the listless housing market. 'The small overall increase in total housing starts does not signal the end of the housing downswing,' said NAHB Chief Economist David Seiders The Commerce Department said housing starts set an annual rate of 1.467 million units in June compared with a revised 1.434 million unit pace in May. Economists had forecast June housing starts to drop to a 1.45 million unit pace from the 1.474 million unit rate originally reported for May last month."

Orange County Register - "Average rents in Orange County" (7-19-07)

"The average rents for 23 Orange County cities that have at least 5 rental communities."

Orange County Register - "O.C. apartment rates head up again" (7-19-07)

"Orange County's biggest apartment landlords continue to raise rents, but they are seeing a few more apartments go vacant. The average rent at large apartment complexes in Orange County hit $1,551 in the second quarter, a 6 percent jump from the same period a year ago, RealFacts reports Thursday. That's the seventh highest rate in the state. San Francisco County is No. 1 at $2,134."

Real Estate Journal - "Investors Left Holding the Bag In a Land Project Gone Wrong" (7-19-07)

"On a crisp fall afternoon in 2002, a crowd gathered under a big tent near the Penland School of Crafts, an artists' colony tucked in the Blue Ridge Mountains. While a harpist played, real-estate developer Tony Porter talked up a plan he promised could bring big financial payoffs to the isolated community and anyone who invested in it."

Wednesday, July 18, 2007

The Press Enterprise - "Report: Buyers in home price vise" (7-17-07)

"As the Inland region's economy starts to adjust to the housing downturn, a leading local economist said prices for new homes in the area have to come down before the market stabilizes. Redlands-based economist John Husing said in his quarterly economic report the median price for new homes in the Inland region during the first three months of this year was $420,069, up about 40 percent from the same period three years earlier."

- "Housing Starts Up Slightly in June but Permits Down Sharply" (7-18-07)

"In the latest indication that the housing market remains in a correction phase, housing starts rose 2.3 percent in June to a seasonally adjusted annual rate of 1.467 million following downward revisions for the previous two months, the Commerce Department reported today. Building permits, which generally are a harbinger of future building activity, were down sharply last month for both single-family and multifamily construction."

MBA - "Mortgage Applications Increase Slightly in Latest MBA Weekly Survey" (7-18-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 13, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 631.6, an increase of 0.9 percent on a seasonally adjusted basis from 626.2 one week earlier. On an unadjusted basis, the Index increased 25.9 percent compared with the previous week, which included the Independence Day holiday, and was up 15.7 percent compared with the same week one year earlier."

Bloomberg - "Bear Stearns Tells Fund Investors `No Value Left'" (7-18-07)

"Bear Stearns Cos. told investors in its two failed hedge funds that they'll get little if any money back after 'unprecedented declines' in the value of securities used to bet on subprime mortgages. 'This is a watershed,' said Sean Egan, managing director of Egan-Jones Ratings Co. in Haverford, Pennsylvania. 'A leading player, which has honed a reputation as a sage investor in mortgage securities, has faltered. It begs the question of how other market participants have fared.'"

The Wall Street Journal - "Subprime Uncertainty Fans Out" (7-18-07)

"Investors in two troubled Bear Stearns Cos. hedge funds that made big bets on subprime mortgages have been practically wiped out, the Wall Street firm said yesterday, in more evidence of the turmoil in this corner of the bond market. Bear said one of its funds was worth nothing and another worth less than a 10th of its value from a few months ago after its subprime trades went bad, according to a letter Bear circulated and to people briefed by the firm. The Wall Street investment bank -- known for its bond-trading savvy -- has had to put up $1.6 billion in rescue financing."

Paper Money - "New Residential Construction Report: June 2007" (7-18-07)

"Today’s New Residential Construction Report continues to indicate significant weakness in the nations housing markets and for residential construction showing substantial declines on a year-over-year basis to single family permits both nationally and across every region. Single family housing permits, the reports most leading of indicators, again suggests extensive weakness in future construction activity dropping 27.5% nationally as compared to June 2006."

Orange County Register - "Most readers see slower growth in O.C." (7-18-07)

"One in seven readers responding to an online poll believe it will take developers less than a decade to build all of 84,000 new homes on the drawing boards for Orange county. But nearly 60 percent believe it'll take 15 years or longer because growth is slowing in Orange County. MarketPointe Realty Advisors recently reported that developers have long-range plans to build just over 84,000 new homes in Orange County, but the San Diego-based consultant gave no time frame for when that construction will take place."

Orange County Register - "Realtors expect market rebound by early 2008" (7-18-07)

"Dana Point The housing market will rebound by the end of this year or the start of next year, with U.S. home prices and sales rising in 2008, the CEO of the National Association of Realtors said during a recent leadership retreat at the Ritz Carlton here. A new association forecast issued last week projected that prices next year will rise by 1.8 percent, but NAR CEO Dale Stinton was even more optimistic, saying he expects prices to go up as much as 4 percent next year."

Los Angeles Times - "Southern California home sales tumble" (7-18-07)

"Home sales plunged in Southern California last month, making it the worst June in 14 years and reflecting an increasingly soft housing market — especially in outlying areas such as the Inland Empire and Antelope Valley. Overall, values are continuing to hold their own — with the median price of a Southland home rising to $502,000, up 2.4% from a year ago. But prices fell in two-thirds of the region's ZIP Codes, reflecting greater weakness in lower-cost housing markets. Riverside County posted a 6% decline in values."

Tuesday, July 17, 2007

The Press Enterprise - "Inland home sales plummet" (7-17-07)

"Inland Southern California's home sales last month were the worst in a decade in Riverside County and the worst on record in San Bernardino County. The slowing market took a toll on sales prices. The median sales price in Riverside County dropped to $400,000, down 5.9 percent from a year earlier. The median sales price flattened to $365,000 in San Bernardino County. It was the first month since May 2000 that San Bernardino's median price failed to register a year-to-year gain."

- "Builder Confidence Falls Further In July" (7-17-07)

"A surplus of unsold homes on the market, combined with ongoing concerns in the subprime mortgage arena and affordability issues associated with tightened lending standards and higher interest rates, continue to take a significant toll on builder confidence, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI declined four points to 24 this month, which is its lowest level since January of 1991."

Bloomberg - "Goldman, JPMorgan Saddled With Debt They Can't Sell" (7-17-07)

"Goldman Sachs Group Inc., JPMorgan Chase & Co. and the rest of Wall Street are stuck with at least $11 billion of loans and bonds they can't readily sell. The banks have had to dig into their own pockets to finance parts of at least five leveraged buyouts over the past month because of the worst bear market in high-yield debt in more than two years, data compiled by Bloomberg show."

Bloomberg - "Derivatives Banks Concerned by Hedge Fund Leverage" (7-17-07)

"Hedge fund borrowing to invest in credit derivatives may magnify volatility in a market slump, according to a Fitch Ratings survey of 65 banks and insurers. A 'dramatic' increase in hedge funds' use of credit derivatives has pushed their share of trading to 60 percent of credit-default swaps, and about 33 percent of collateralized debt obligations, Fitch said in the report today, citing data from Greenwich Associates."

Bloomberg - "Treasuries Rise on Speculation Subprime Losses Are Deepening" (7-17-07)

"U.S. Treasuries rose for a second day on speculation mounting losses in securities backed by subprime mortgage loans will fuel demand for government debt. Indexes based on the value of securities backed by the mortgages fell, with some making new lows. The benchmark 10-year note's yield last week touched a one-month low amid speculation the losses will eventually prompt the Fed to cut interest rates for the first time since 2003."

Real Estate Journal - "Effective Incentives to Woo Buyers and Sell Your Home" (7-17-07)

"Flashy incentives like a new car parked in the driveway or a flat-panel television hanging in the den might sound like a good way for home sellers to woo buyers in a dismal real-estate market. But when it comes to actually enticing someone to buy a home, it's the more practical perks that count, real-estate professionals say. 'Serious buyers are looking for a place to buy a home, not a trip to Tahiti,' says Dave Ledebuhr, owner of Musselman Realty in East Lansing, Mich. Moreover, lenders are leery of gimmicky incentives, fearing that they're built into the price of the home and that loan dollars are being used to pay for that tropical trip, he adds."

Monday, July 16, 2007

NAHB - "Entries Sought For National New-Home Sales and Marketing Awards" (7-16-07)

"New home sales and marketing professionals are encouraged to submit entries for the 2008 National Sales and Marketing Awards, sponsored by the National Association of Home Builders (NAHB) National Sales and Marketing Council. With 57 categories, the awards program, known as 'The Nationals,' rewards professional excellence in residential product design, marketing, interior merchandising, advertising, Web site design and both individual and team sales achievement. New residential projects with homes available for sale between Sept. 1, 2006 and Sept. 1, 2007, and individual and sales and marketing council categories covering the same time period are eligible to enter. Entrants have until Sept. 28 to submit entries. Late entries will be accepted until Oct. 12, with an additional fee."

MBA - "Fannie Mae Offers Gudiance on Collateral Valuation Practices and Declining Markets" (7-16-07)

"An accurate value for the property securing a mortgage loan is important in all markets, but the value becomes difficult to evaluate when the subject subject real estate market is experiencing a decline in property values (“declining market”). Recent trends indicate that certain markets are experiencing a decline in property values. One of the potential problems in a declining market is the overstatement of property values in appraisal reports. This may result in the borrower not having an accurate property valuation, and overvaluation of a property could result in increased loan losses should the mortgage loan subsequently default."

Credit Flux - "Mutual funds are taking on subprime risk, reports WSJ" (7-16-07)

"The Wall Street Journal has reported that mutual funds have been investing in assets affected by the subprime mortgage meltdown. According to the report, a number of funds have bought into high-rated slices of CDOs and other subprime mortgage-backed securities. Some of the biggest holders include the $257 million Franklin Strategic Mortgage Portfolio and $929 million Franklin Total Return Fund, says WSJ. The two funds hold about 19% and 17% of their assets, respectively, in securities tied to subprime mortgages. The $2.4 billion Principal Investors Bond & Mortgage Securites fund and $113 million Schroder Enhanced Income Fund each hold about 15%."

Bloomberg - "KKR Cancels $1.4 Billion Loan to Refinance Maxeda LBO" (7-16-07)

"Kohlberg Kravis Roberts & Co. canceled plans to raise 1 billion euros ($1.4 billion) of loans for Dutch retailer Maxeda BV as investors shun high-yield debt. More than 20 financing deals have been postponed or restructured in the past three weeks as losses from the U.S. subprime mortgage rout rattled investor confidence. New York- based KKR is trying to raise 9 billion pounds ($18 billion) this week to finance its takeover of Nottingham, England-based drugstore chain Alliance Boots Plc."

Bloomberg - "Stocks in U.S. Poised for 10 Percent Drop, Options Bets Show" (7-16-07)

"Bets in the options market against the Standard & Poor's 500 Index have exceeded wagers it will rise by a 2-to-1 margin for a month, the longest since Bloomberg began compiling the data in 1995. That's seen as a warning sign the market is due for a decline of 5 to 10 percent after the S&P 500 rose to two records last week, say managers of almost $1 trillion at Morgan Stanley Global Wealth Management, National City Private Client Group and Russell Investment Group. The Leuthold Group, whose flagship fund has beaten 99 percent of similar funds over the last five years, expects the S&P 500 to slide as much as 19 percent by the end of the year." - "Wave of foreclosures hits homeowners across nation" (7-15-07)

"Those proverbial chickens are coming home to roost in the mortgage market, and the picture isn't a pretty one. The Riverside/San Bernardino metropolitan area ranked fourth in the nation for foreclosures in June 2007, according to a report released Thursday by Realty-Trac, with one of every 134 homes in the two counties in some stage of the foreclosure process."

The San Diego Union-Tribune - "The worst isn't over in mortgage meltdown" (7-15-07)

"When the Standard & Poor's and Moody's ratings services lowered the boom on mortgage-backed securities last week, the second shoe finally dropped on the real estate market. The first shoe dropped earlier this year, when a bevy of mortgage firms went bankrupt after helping far too many unqualified borrowers buy homes. With last week's action, two of Wall Street's most respected firms acknowledged that the problems associated with those “subprime” borrowers will be much worse than they previously thought. S&P and Moody's warned they may cut the credit ratings of more than $12 billion in mortgage-backed bonds issued by such respected names as Citigroup, Lehman Bros. and Merrill Lynch."

Los Angeles Times - "No magic formula" (7-15-07)

"DETERMINING how to price a house for sale is like working a jigsaw puzzle where some of the pieces don't fit. Of course, there are tangibles such as the number of bedrooms, bathrooms and square footage. But what about features that may matter to one person — a swimming pool, for instance — or be meaningless to the next — a professional Viking range for a bachelor who lives on takeout? How do views, zoning for horses or quality schools figure in?"

Los Angeles Times - "The sticks or the city? Well, both" (7-15-07)

"Early Elysian Heights settlers viewed their hilltop community as a place to escape the hubbub of central Los Angeles. Today, though residents can see downtown looming through their windows, the neighborhood and its adjacent park remain a sanctuary."
The Washington Post - "Foreclosure Bargain Hunters Find Their Quarry Elusive" (7-14-07)

"Bargain-hungry house hunters have turned their attention to the growing pool of foreclosures on the region's market. But the sweet deals, if they find them, come with plenty of challenges, in part because many buyers have unrealistic expectations about what it takes to buy a house owned by a lender. Some potential buyers don't find the rock-bottom prices they expect. Others can't get the banks to promptly respond to offers. Many give up before they get that far because they're overwhelmed by the repairs some homes require."

Journal Sentinel Online - "Housing sales may be worse than data show" (7-14-07)

"Here's a scary thought about the housing market: Things may be far worse than what's already being revealed by the troubling government and industry statistics. At issue is what goes into sales price data and what does not. When those numbers are crunched, many of the incentives that sellers are using to lure buyers - including cash rebates - aren't being included. That suggests prices may be falling faster in many markets than is now being reported."

Friday, July 13, 2007

MBA - "Media Alert: Joint Letter Asking Congress to Encourage OFHEO to Withdraw Proposed Guidance Allowing Them to Decrease Conforming Loan Limit" (7-13-07)

"Today the Mortgage Bankers Association (MBA), along with the National Association of Home Builders (NAHB) and the National Association of Realtors (NAR) sent the attached joint letters to the leadership of the House Financial Services Committee and the Senate Banking Committee asking that they encourage the Office of Federal Housing Enterprise Oversight (OFHEO), the regulator of Fannie Mae and Freddie Mac, to withdraw proposed guidance that would allow the regulator to decrease the conforming loan limit."

MBA - "Freddie Mac Revise Underwriting Requirements for Nontraditional Mortgages Consistent" (7-13-07)

"Freddie Mac are implementing changes to our underwriting requirements consistent with the practices referenced in the Interagency Guidance on Nontraditional Mortgage Product Risks ('the Guidance'). The Guidance was issued to address risks associated with Mortgage products that allow Borrowers to defer payment of principal or interest and/or that could result in negative amortization ('nontraditional Mortgages')."

MBA - "Statement by OFHEO Director on Issuance of Letters by GSEs Regarding Nontraditional and Subprime Mortgage Products" (7-13-07)

"Fannie Mae and Freddie Mac today issued letters to their lender customers setting forth a program for assuring the Enterprises purchase mortgages made in conformance with the Interagency Guidance on Nontraditional Mortgage Product Risks. This guidance was promulgated by federal depository institution regulators and adopted by many state financial regulators. OFHEO made this guidance applicable to Fannie Mae and Freddie Mac. The guidance focuses on certain classes of mortgages with unique underwriting criteria, which typically allow borrowers to defer principal and, sometimes, interest. They include loan products that offer low introductory interest rates that later reset to higher rates and/or have flexible payment options with the potential for negative amortization. The Interagency Guidance was designed to ensure consistent application of sound and prudent credit underwriting standards, risk management practices, and protections for the consumer."

MBA - "Fannie Mae Revises Policies inResponse to Interagency Guidance on Nontraditional Mortgage Product Risks" (7-13-07)

"On October 4, 2006 the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the National Credit Union Administration (collectively referred to as the Federal Banking Agencies) jointly issued the Interagency Guidance on Nontraditional Mortgage Product Risks (the Guidance).The Guidance applies to all institutions regulated by the Federal Banking Agencies, and was effective upon publication."

Bloomberg - "U.S. Urges China to Buy Mortgage Securities Amid Subprime Woes" (7-13-07)

"The U.S. is urging China's central bank to buy more mortgage-backed securities after a surge in defaults by risky borrowers in the world's largest economy eroded demand for such instruments. 'It's not a matter whether they're going to do more business in mortgage-backed securities, it's who they're going to business with,' U.S. Department of Housing and Urban Development Secretary Alphonso Jackson told reporters in Beijing. He met with central bank Governor Zhou Xiaochuan and Minister of Construction Wang Guangtao in the nation's capital this week."

Bloomberg - "GE Will Seek Buyer for Subprime Unit After Defaults" (7-13-07)

"General Electric Co. plans to sell WMC Mortgage, the company's three-year-old U.S. subprime mortgage unit, following a surge in defaults by borrowers. 'The mortgage industry has greatly changed since the purchase of WMC,' Laurent Bossard, chief executive officer of the division, said in an e-mail to employees yesterday. 'The current subprime market environment has made a significant negative impact on the business.'"

Bloomberg - "CDOs Lose Marbles; Credit `Kerplunks!'" (7-13-07)

"Investors asking how many beans make four in the market for collateralized-debt obligations are realizing that the likely answer is three if you're lucky, fewer if you're not. Moody's Investors Service cut its ratings on $5.2 billion of bonds backed by subprime home loans this week, and put a further $5 billion of CDOs on review. Standard & Poor's yesterday lowered its assessment of $6.39 billion of debt, after earlier putting the figure at $12 billion (which suggests S&P should spend some of its fees on new beads for the office abacus)."

CNN - "S&P: Whoops! A $5 billion subprime blunder" (7-13-07)

"Standard & Poor's admitted to making a nearly $5 billion blunder in correcting its own estimate for subprime securities it is reviewing for ratings cuts. S&P corrected the volume of residential mortgage-backed securities it placed under review for downgrade on Tuesday to $7.35 billion from $12.1 billion. 'This is obviously sloppy by S&P,' said Mirko Mikelic, a fund manager at Fifth Third Asset Management in Grand Rapids, Michigan. 'I don't think anyone's doing back flips.'"

Orange County Register - "Orange County home prices and sales" (7-13-07)

"For the 22 business days ending June 26, sales for all types of Orange County home sales decreased 29.8 percent. The median sales price increased .6 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."

Orange County Register - "State No. 2 in foreclosures" (7-11-07)

"California homeowners are among the most likely in the nation to lose their home to the bank, according to an industry report released Thursday. In June, the Golden State logged the second highest rate of foreclosure – one filing for every 315 households – in the nation, said RealtyTrac of Irvine. In May it was third highest. Nevada was No. 1."

Los Angeles Times - "State issuing Ameriquest refund forms" (7-13-07)

"Eligible California customers who took out loans with Ameriquest Mortgage Co. from 1999 to 2005 will soon be receiving forms to claim a share of $51 million the company has agreed to pay to settle accusations of predatory lending practices. The forms, which began being mailed Thursday by the state attorney general's office, will go to an estimated 78,000 households that had mortgages with Orange-based Ameriquest."

Real Estate Journal - "Strong Mortgage Data Draw Some Skeptics" (7-13-07)

"A rare piece of positive news about housing is raising some skeptical eyebrows among economists. The Mortgage Bankers Association survey of weekly mortgage applications showed a seasonally adjusted 3.8% increase last week in applications for mortgages to buy homes -- up 7% from the same week last year. Applications have been rising steadily since February, a lone indicator of looming strength in the housing market amid a sea of pessimistic news. Measures of home sales have been sinking."