Friday, August 31, 2007

The Wall Street Journal - "Bush Unveils Plan to Address Mortgage Market 'Excesses'" (8-31-07)

"Addressing worries that a subprime mortgage meltdown could prompt a further wave of defaults and foreclosures in the U.S., President Bush unveiled a host of proposals Friday to help struggling homeowners, but warned that the federal government won't bail out real estate speculators. Flanked by Treasury Secretary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson, Mr. Bush called on lawmakers to reform the Federal Housing Administration, temporarily change a tax provision that's hitting homeowners, and bring better transparency to the often opaque mortgage market."

NAR - "NAR President Issues Statement on Bush's Proposed FHA Changes" (8-31-07)

"Pat V. Combs, 2007 president of the National Association of Realtors®, released the following statement in support of Federal Housing Administration policy changes proposed today by President George W. Bush: 'The National Association of Realtors® strongly commends President Bush for his leadership in proposing a set of policies designed to ease the crisis in the mortgage industry and halt the rapidly increasing rate of foreclosures affecting many American families today.'"

CBIA - "New California Homes More Energy-Efficient Than Ever" (8-31-07)

"As Californians once again face power alerts, California homebuilders remind prospective buyers that today’s new homes use far less energy than homes built 15 to 20 years ago and far less energy than homes being built today in any other part of the nation."

Bloomberg - "Lone Star Cuts Offer for Accredited to $214 Million" (8-31-07)

"Lone Star Funds cut its takeover offer for Accredited Home Lenders Holding Co. by 44 percent to $214 million, after the subprime mortgage company fired 60 percent of its workers and stopped making new loans. Lone Star offered $8.50 a share, 35 percent more than yesterday's closing price, to defuse a legal scuffle that followed its attempt to back out of an earlier acquisition agreement with San Diego-based Accredited."

Herald Tribune - "More cutbacks for Lennar" (8-31-07)

"Lennar Corp., the big Miami home builder that reported a $255 million loss in the most recent quarter, has trimmed more than 60 additional positions from its Southwest Florida division, bringing it to its pre-housing-boom levels, an executive said. The cuts this week included Rob Allegra, the division president of Lennar Sarasota/Manatee, who has been the face of the home builder locally for more than a decade."

The Washington Post - "Forestalling Foreclosures" (8-31-07)

"Considering the projections for the number of home foreclosures in the next couple of years -- estimates now start at 1 million annually and go up from there -- you'd have thought there might be more ideas floating around for dealing with this economic, social and political calamity. We've had lots of brave talk from regulators and politicians about taking steps to make sure this doesn't happen again."

Yahoo - "Fed Chief Vows to Protect the Economy" (8-31-07)

"Federal Reserve Chairman Ben Bernanke vowed Friday to do all that is necessary to protect the national economy from the ill effects of a global credit crunch -- but not to bail out investors and lenders 'from the consequences of their financial decisions.' President Bush confidently predicted the country would safely weather the financial storm."

The Federal Reserve Board - "Remarks by Chairman Ben S. Bernanke" (8-31-07)

"Over the years, Tom Hoenig and his colleagues at the Federal Reserve Bank of Kansas City have done an excellent job of selecting interesting and relevant topics for this annual symposium. I think I can safely say that this year they have outdone themselves. Recently, the subject of housing finance has preoccupied financial-market participants and observers in the United States and around the world. The financial turbulence we have seen had its immediate origins in the problems in the subprime mortgage market, but the effects have been felt in the broader mortgage market and in financial markets more generally, with potential consequences for the performance of the overall economy."

Bloomberg - "Bush Pledges FHA Help for Subprime Borrowers" (8-31-07)

"President George W. Bush today pledged to help people who've fallen behind in their mortgages keep their homes and to tighten safeguards against predatory lending, while rejecting a bailout for 'speculators.' 'I plan to help homeowners, the government's got a role to play,' Bush said in a statement at the White House. But, he said, 'it's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford.'"

The San Diego Union Tribune - "Credit innovation sowed subprime woes, study says" (8-31-07)

"While innovations in mortgage finance expanded home ownership around the world, they also sowed the seeds of the current U.S. subprime mortgage crisis, economists told a Federal Reserve conference on Friday."

Orange County Register - "O.C. home values fell in 2nd quarter" (8-31-07)

"The Office of Federal Housing Enterprise Oversight on Thursday said Orange County home values in the second quarter fell at a 1.62 percent annual rate. That's the first decline in this Orange County index since the first quarter of 1997 and the biggest drop since the second quarter of 1995."

Thursday, August 30, 2007

Broker Universe - "California Resales Fall 22.7%" (8-30-07)

"The sales of existing single-family detached homes in California were down 22.7% in July from the level recorded a year earlier, according to the California Association of Realtors. The seasonally adjusted annualized rate of closed-escrow resales totaled 350,980 in July, down from the 453,980-unit rate recorded in July 2006, CAR reported. The median price of an existing single-family detached home in California totaled $586,030 in July, up 3.2% from a revised $567,860 a year earlier, the association said."

MBA - "OFHEO House Price Index Shows Smallest Quarterly Increase Since 1994" (8-30-07)

"U.S. home prices increased only slightly in the second quarter of 2007 according to the OFHEO House Price Index (HPI). The HPI, which is based on data from sales and refinance transactions, was 0.1 percent higher in the second quarter than in the first quarter of 2007. This is below the revised growth rate of 0.6 percent for the previous quarter and the lowest since the fourth quarter of 1994. Prices in the second quarter of 2007 were 3.2 percent higher than they were in the same quarter of 2006, the lowest annual price change since the 1996-97 period."

MBA - "Ginnie Mae" (8-30-07)

"Ginnie Mae is eliminating the restriction on the size of mortgage loans guaranteed by the Department of Veterans Affairs (VA) that can be pooled in mortgage-backed securities guaranteed by Ginnie Mae. Effective with pools issued on or after September 1, 2007, Ginnie Mae will no longer limit the size of VA loans to the maximum original loan amount for conforming loans. Conforming loans are mortgage loans that meet the purchase criteria of Fannie Mae or Freddie Mac, pursuant to Section 302(b)(2) of the National Housing Act, and Section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act, respectively."

Yahoo - "Bernanke: Looking to help homeowners" (8-30-07)

"Federal Reserve Chairman Ben Bernanke is suggesting that policymakers look for ways to encourage a wider range of mortgages geared for low income and other borrowers who have been hard hit by the housing slump and credit crunch. Bernanke, in a letter to Sen. Charles Schumer, D-N.Y., that was released Wednesday, said the Fed is keeping close tabs on financial markets and is "prepared to act as needed" to ensure spreading credit problems that have rocked Wall Street in recent weeks don't hurt the economy. It's a message the central bank has been sending as the markets have grown more turbulent."

Reuters - "Fed not rushing to bail out investors with rate cut: report" (8-30-07)

"The U.S. Federal Reserve is not rushing to cut benchmark interest rates because it wants to break investors of the view that the central bank is there to bail them out, an article in the Wall Street Journal said on Thursday. Fed watcher Greg Ip, without quoting specific sources, said Fed Chairman Ben Bernanke was keen to draw a distinction between keeping financial markets ticking over and ensuring a sound economy."

Bloomberg - "Commercial Paper Extends Slump on Asset-Backed Woes" (8-30-07)

"The U.S. commercial paper market shrank for a third week, extending the biggest slump in at least seven years and signaling that the Federal Reserve's attempts to lower borrowing costs have had a limited impact so far. Asset-backed commercial paper, which accounted for half the market, tumbled $59.4 billion to $998 billion in the week ended yesterday, the lowest since December, according to the Federal Reserve. Total short-term debt maturing in 270 days or less fell $62.8 billion to a seasonally adjusted $1.98 trillion."

Bloomberg - "Britain's Housing Lenders Tighten Subprime Credit" (8-30-07)

"U.K. lenders responsible for 12 percent of the nation's mortgages are tightening standards for loans on house purchases, withdrawing offers and raising the cost for borrowers with less than perfect credit. Merrill Lynch & Co.'s Mortgages Plc unit said yesterday that it raised its interest rates. Northern Rock Plc, the Newcastle upon Tyne building society that had 8.4 percent of the market last year, and Residential Capital Corp.'s GMAC-RFC unit, with a 3.5 percent share, said they stopped some offers and lifted costs for others. Deutsche Bank AG did the same, while two lenders backed by Investec Plc have stopped all subprime loans."

Bloomberg - "Freddie Mac Net Drops on Provision for Housing Slump" (8-30-07)

"Freddie Mac, the second-biggest U.S. mortgage finance company, reported quarterly profit fell 45 percent after setting aside $320 million for losses as the housing slump deepened. Freddie Mac shares fell the most in more than two years after net income declined to $764 million, or $1.02 a share, from $1.4 billion, or $1.93, a year earlier. Revenue dropped 4.8 percent to $2.26 billion, McLean, Virginia-based Freddie Mac said today in a statement."

Bloomberg - "Thornburg Sells $500 Million of Preferred Shares" (8-30-07)

"Thornburg Mortgage Inc., the jumbo- mortgage specialist that was forced to stop making new loans, sold $500 million of convertible preferred stock to help alleviate a shortage of cash. Proceeds from the sale will help the Santa Fe, New Mexico- based company resume loan origination and the purchase of mortgage-backed securities, Thornburg said in a statement. The sale was completed four hours after it was announced, spurring a rally of as much as 17 percent in Thornburg shares on the New York Stock Exchange."

Bloomberg - "Bernanke May Hear Call for Fed Activism on Regulation" (8-30-07)

"Federal Reserve Chairman Ben S. Bernanke may be urged to consider tighter regulation as he and his counterparts clean up the financial mess from U.S. subprime- mortgage defaults. The central bank's hands-off approach to using interest rates to pop asset bubbles and reluctance to impose new rules will come under scrutiny as policy makers and economists from around the world gather for the annual symposium organized by the Kansas City Fed bank starting today in Jackson Hole, Wyoming."

Market Watch - "Investment homes are major part of defaults" (8-30-07)

"Mortgages for investment properties constitute a major chunk of defaults in four states with the fastest-rising rates of seriously delinquent loans, according to data released Thursday by the Mortgage Bankers Association. Mortgages on non-owner occupied properties in Nevada accounted for 32% of prime mortgage defaults as of June 30 as well as for 24% of subprime loan defaults, the MBA said."

Bloomberg - "H&R Block Loss Doubles on Costs to Fund Mortgage Unit" (8-30-07)

"H&R Block Inc., the biggest U.S. tax- preparer, said first-quarter losses more than doubled on costs to finance its money-losing subprime mortgage unit. The net loss for the fiscal quarter, which ended July 31, was $302.6 million, or 93 cents a share, compared with $131.4 million, or 41 cents, a year earlier, Kansas City, Missouri-based H&R Block said today in a statement. Losses excluding the mortgage unit were 34 cents a share, in line with the 35-cent average of seven analyst estimates compiled by Bloomberg."

CNN - "Flippers fuel foreclosures" (8-30-07)

"Flippers and other speculators investing in single-family homes helped drive up prices in many hot housing markets during the boom. Now they're contributing heavily to mortgage delinquencies in several of those markets. Defaults in non-owner occupied houses are driving defaults in four of the states with the fastest rising default rates in the nation, according to a report released Thursday by the Mortgage Bankers Association."

Real Estate Journal - "Home Prices Slide As Pullback Shows No Signs of Slowing" (8-30-07)

"The decline in U.S. home prices accelerated in the second quarter as a glut of unsold homes and tighter lending standards continued to weigh on the market. Home prices nationwide tumbled an average 3.2% from a year earlier, according to an index compiled by Standard & Poor's Corp. The decline was sharper than the year-to-year decline in the first quarter, when the S&P/Case-Shiller national home-price index dropped 1.6%."

Wednesday, August 29, 2007

NAR - "NAR, Mayors Recognize San Diego For Helping Everyday Heroes Become Homeowners" (8-29-07)

"The National Association of Realtors® and the U.S. Conference of Mayors have designated San Diego a 2007 Ambassador City for its Everyday Heroes program. Everyday Heroes helps San Diego police officers become homeowners, and was created by the San Diego Association of Realtors® Ambassadors Foundation and the San Diego Police Officer's Association."

MBA - "Mortgage Applications Decrease in Latest MBA Weekly Survey" (8-29-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 24, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 615.2, a decrease of 4.0 percent on a seasonally adjusted basis from 641.1 one week earlier. On an unadjusted basis, the Index decreased 5.3 percent compared with the previous week and was up 10.6 percent compared with the same week one year earlier.'

Financial Times - "Obama unveils radical mortgage plan" (8-29-07)

"Unscrupulous lenders who deceptively sold subprime mortgages to millions of Americans should be fined and the proceeds used to help bail out borrowers facing a wave of foreclosures, according to Barack Obama, the Democratic senator running to be his party’s presidential candidate."

Market Watch - "Week-to-week mortgage applications off 4.0%" (8-29-07)

"The number of mortgage applications filed last week slipped 4.0% from the previous week, while the average interest rate on one-year adjustable-rate mortgages shot up, the Mortgage Bankers Association said Wednesday. Also on a seasonally adjusted basis, applications for mortgages to purchase homes were down 4.0% on a week-to-week basis, according to the group's latest survey. And applications for loans to refinance existing mortgages were down 4.2% in the week ended Aug. 24"

CNN - "Subprime Mortgages: State by State" (8-29-07)

A map of the United States, which displays foreclosure statistics

The San Diego Union Tribune - "Nation's home prices plunge" (8-29-07)

"Prices of U.S. homes fell 3.2 percent in the second quarter, the steepest rate of decline since Standard & Poor's began its nationwide housing index in 1987, the research group said yesterday. San Diego's 7.3 percent drop from the second quarter of 2006 ranked it third among metropolitan areas with the biggest price declines, behind Detroit's 11 percent decline and Tampa's 7.7 percent pullback."

Bloomberg - "`Subprime Chuck' Schumer Plays Fool in Crisis" (8-29-07)

"It's bad enough when a company's outside auditor is a pushover for management. Equally galling would be for the auditor to try telling management how to run the company. Yet that's what U.S. Senator Charles Schumer has asked the Big Four accounting firms to do at the subprime lenders they audit, pronto. 'One of the most promising solutions to the anticipated foreclosure crisis is the voluntary modification by lenders of existing unsustainable subprime loans,' Schumer, a New York Democrat, said in an Aug. 23 letter to the firms' top executives."

Reuters - "Subprime inflicts new damage as banks seek cash" (8-29-07)

"New evidence of damage wrought by the U.S. mortgage sector surfaced in the United States and Europe on Wednesday while banks demanded a record amount of cash at a euro zone money market auction. Cheyne Finance, a structured investment vehicle (SIV) managed by hedge fund Cheyne Capital Management, said it was seeking to restructure after being forced to start selling assets to pay down debt."

Seeking Alpha - "Consumer Credit: The Next Bubble?" (8-29-07)

"If there was a Wall St. zodiac, this year would probably be dubbed 'The Year of the Bursting Bubble'. Late 2006/early 2007 saw the markets accepting the end of the housing boom, then we had the subprime crisis followed by Alt-a mortgages and the realization that we had a full-fledged mortgage crisis. On the corporate credit front, we were hit with the credit crunch/liquidity crisis and the end of the buyout boom. Judging by some recent events and the Q2 earnings reports of the retail banks and other major lenders, an overall consumer credit bubble may be next."

Forbes - "Contraction in housing market to be worse than expected in rest of 2007" (8-29-07)

"Fitch Ratings said the contraction in the US housing market is likely to be more severe than anticipated during the rest of 2007, mainly due to tighter mortgage standards and disrupted mortgage markets. The rating agency added it sees 2008 to be another challenging year for the housing sector, as it expects operational and financial pressures not only to persist but to intensify for public homebuilders."

Bloomberg - "Fed Underestimated Debt Impact, Focused on Inflation" (8-29-07)

"Federal Reserve officials, underestimating the impact of credit-market turmoil, focused at their Aug. 7 meeting on inflation and slowing productivity. Minutes of the session released yesterday showed that the Fed was intent on securing credibility as an inflation fighter just 18 months into Chairman Ben S. Bernanke's term. Even though the central bank cut the discount rate on Aug. 17, the emphasis on prices forms the backdrop for deliberations next month."

The Washington Post - "Home Buyers Forced to Change Tactics" (8-29-07)

"Rattled investors have become reluctant to buy loans for more than that amount -- known as jumbo mortgages -- and that in turn has pushed some lenders to raise interest rates. Caught in the middle are potential home buyers who are getting walloped by higher rates or shut out of the market. The phenomenon is particularly significant in Washington, where half the homes sell for more than $417,000. Here, home buyers are figuring out how to adapt to the new circumstances by making larger down payments or splitting their purchase into two loans to dodge higher rates. Others are sitting tight until the rates go down."

Yahoo - "Subprime Mortgage Woes Spreading" (8-29-07)

"The subprime mortgage crisis is spreading to a somewhat unexpected place: homes costing more than $500,000. As lending has rapidly gotten more restrictive for borrowers taking out large loans, sales of expensive homes have fallen sharply around the country during what should be one of the busiest seasons for buyers and sellers, mortgage bankers and real estate agents say."

Tuesday, August 28, 2007

Yahoo - "Home Prices: Steepest Drop in 20 Years" (8-28-07)

"U.S. home prices fell 3.2 percent in the second quarter, the steepest rate of decline since Standard & Poor's began its nationwide housing index in 1987, the research group said Tuesday. The decline in home prices around the nation shows no evidence of a market recovery anytime soon, one of the architects of the index said."

Reuters - "CIT Group closes mortgage unit, takes charge" (8-28-07)

"CIT Group Inc (CIT.N: Quote, Profile, Research), the consumer and commercial finance company, on Tuesday said it has closed its mortgage lending operations, the latest to abandon the sector amid difficult market conditions. The company said it will take a $35 million pretax charge in the third quarter for severance and exit costs. It said its loan collection and customer service activities are unaffected."

The Washington Post - "Ratings Firms Defend Assessment of Loan Securities" (8-28-07)

"For months, securities backed by risky mortgage loans have been in trouble. Now, the credit-rating agencies that once blessed those securities as safe investments are in trouble, too. The stock of Moody's Investors Service, one of the major raters, is down about 40 percent from its 52-week high on heavy trading. Members of Congress are calling for hearings and more oversight of the rating firms. And institutional investors and industry observers have blamed the agencies for being months late in downgrading a slew of residential-mortgage-backed securities that soon imploded, prompting hedge funds to collapse, foreign governments to intervene and mortgage firms to lay off tens of thousands."

Forbes - "Moody's to Review IndyMac Credit Rating" (8-28-07)

"Credit rating agency Moody's Investors Service said Tuesday it is reviewing IndyMac Bancorp Inc. and its thrift subsidiary IndyMac Bank FSB for a possible downgrade because of the company's exposure to the troubled mortgage market. IndyMac is one of the largest alt-A mortgage lenders in the nation. Alt-A mortgages are loans given to customers with minor credit problems or who are unable to fully document their income and assets like a traditional prime borrower."

Forbes - "Moody's Downgrades Fremont Credit Rating" (8-28-07)

"Credit rating agency Moody's Investors Service said Tuesday it downgraded Fremont General Corp.'s senior debt rating to 'Caa2' from 'B3,' due to low capital levels and increased uncertainty that Fremont can meet its obligations. A ratings downgrade generally means it would be more expensive for Fremont to borrow money."

Bloomberg - "Lehman, Bear Stearns, Citigroup Rating Cut by Merrill" (8-28-07)

"Lehman Brothers Holdings Inc., Bear Stearns Cos. and Citigroup Inc. were downgraded by Merrill Lynch & Co. stock analyst Guy Moszkowski because of looming losses on mortgage bonds and leveraged loans, as well as a slowdown in investment banking. Moszkowski, the top-ranked U.S. brokerage analyst in Institutional Investor magazine's survey of money managers, said in a note to clients that New York-based Lehman and Bear Stearns will be hurt because of their dependence on debt markets. He cut earnings estimates for the two securities firms, as well as for Citigroup and JPMorgan Chase & Co., the largest banks based in New York. All four stocks fell in trading today."

Los Angeles Times - "Wall Street slips on housing, growth worries" (8-28-07)

"Wall Street pulled back today, losing momentum from last week's gains after news that sales of existing homes slipped in July for a fifth straight month stirred concerns about the strength of the economy. Sales of existing homes slowed to their most sluggish pace in nearly five years, while home prices fell for a record 12th straight month. The National Association of Realtors reported that existing home sales slipped by 0.2 percent in July to a seasonally adjusted annual rate of 5.75 million units. Inventories rose 5.1 percent to a record 4.59 million units."

Real Estate Journal - "Desperate Home Sellers Try Unconventional Selling Tactics" (8-28-07)

"Tammy Winfield made every effort to depersonalize her home and keep it free of clutter. She even baked cookies before prospective buyers came in for a look, hoping that the homey scents would help persuade them to make an offer. Still, the Truckee, Calif., home that she and her husband, Bill, put on the market in September sat for months without any takers."

Monday, August 27, 2007

MSN - "Developers helped build a bust" (8-26-07)

"Elizabeth and Armando Motto are living a real-estate nightmare with a new breed of monster: the big home builder as lender. In November 2005, the couple, who have four children, agreed to pay $540,000 for a newly built three-bedroom house in suburban Clarksburg, Md., near Washington, D.C. Rather than send them to a bank, the builder, Beazer Homes USA Inc., offered to provide a mortgage itself in an arrangement of the sort that helped fuel the long housing boom across the country."

The San Diego Union Tribune - "Why can't mortgages be more affordable?" (8-26-07)

"Ever since P.T. Barnum imported an elephant named Jumbo to America, the word jumbo (based on an African word for elephant) has been a synonym for gigantic. Huge. Enormous. Except when it comes to home loans. Especially in a place like San Diego. Across the nation, a jumbo mortgage is defined as any loan that is above the “conforming limit,” which is currently set at $417,000." - "Realtor numbers thin during slump" (8-26-07)

"Victoria Rodriguez was not only a thriving real-estate agent in recent years, she was honored as one the area's top-selling real-estate agents four years in a row. That was in the boom time, and that spigot shut down to a trickle nearly two years ago. Today Rodriguez is still in the real-estate field, but she's not working as an agent. As a single mother with four children, she said she simply couldn't pay her bills. This in a residential real-estate market slammed so hard that sales plummeted over the months from nearly 900 in May 2005 to a low of 268 last month - a 70 percent decline in business."

Los Angeles Times - "Property value worries sink Santa Barbara art project" (8-26-07)

"Call it the Santa Barbara meltdown. Two of the city's great preoccupations -- progressive politics and sky-high real estate values -- have collided over the last couple of months, yielding high drama over an art project that was to denote land imperiled by global warming with blue waves painted on downtown intersections."

Orange County Register - "O.C. Foreclosures by ZIP code" (8-26-07)

"In the three months ending on June 30, 2007, the number of foreclosures in Orange County increased to 840 from 101 during the same period last year."

Orange County Register
- "O.C.’s got a year’s worth of home to sell" (8-27-07)

"Jitters in world financial markets helped nudge the inventory of O.C. homes for sale past one year’s worth of current buyers’ demand, says Steve Thomas at Re/Max Real Estate Services in Aliso Viejo. Thomas calculates “market time,” a benchmark of how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. This index shows the inventory-to-selling ratio taking a decided upswing."

NAR - "Existing-Homes Sales Stable In July" (8-27-07)

"Existing-home sales were essentially unchanged in July, with increases in the West and Northeast offset by a decline in the Midwest, according to the National Association of Realtors®. Total existing-home sales – including single-family, townhomes, iniums and co-ops – slipped 0.2 percent to a seasonally adjusted annual rate1 of 5.75 million units in July from an upwardly revised pace of 5.76 million in June, and are 9.0 percent below the 6.32 million-unit level in July 2006."

CBIA - "California Housing Starts Drop Again in July as Buyers Watch and Wait, CBIA Reports" (8-27-07)

"California homebuilders continued to cut back on production in July, as buyers continued to wait and watch, exacerbated by the recent financial turmoil in the credit and lending industries, the California Building Industry Association reported today. Total housing starts in California, as measured by building permits issued, fell by 22 percent in July when compared to the same month a year ago. According to housing permit data supplied by the Construction Industry Research Board, production of single-family homes fell by nearly one third while multifamily units saw a slight increase in permits being pulled when compared to July of 2006."

Yahoo - "Home Sales Hit Slowest Pace in 5 Years" (8-27-07)

"Sales of existing homes dropped for a fifth straight month in July, falling to the slowest pace in nearly five years, while home prices fell for a record 12th consecutive month. The National Association of Realtors reported that sales of existing homes dipped by 0.2 percent last month to a seasonally adjusted annual rate of 5.75 million units."

The Washington Post - "Cutbacks Mount in Real Estate Industry" (8-27-07)

"Washington's real estate industry, already pinched by a slowdown in residential construction, is bracing for further retrenchment after last week's meltdown in the mortgage market. In recent months, companies have begun cutting back in big ways and small. A Prince George's County builder laid off four workers and turned off the spigot for new projects. A four-person title company in Arlington is cutting its staff by one after watching business fall. A Fredericksburg drywaller let his 10 employees go and is struggling to keep the business afloat."

Bloomberg - "U.S. Home Resales Declined in July for a Fifth Month" (8-27-07)

"Sales of previously owned homes in the U.S. fell in July for a fifth consecutive month, adding to the inventory of unsold properties and showing the housing slump that triggered a collapse in credit markets will drag on. Purchases declined 0.2 percent, less than forecast, to an annual rate of 5.75 million, from 5.76 million in June, the National Association of Realtors said today in Washington. That was the slowest pace since November 2002. Sales dropped 9 percent compared with a year earlier."

Bloomberg - "Housing Market Crisis May Already Have Passed: Kevin Hassett" (8-27-07)

"Has the U.S. housing market hit bottom? The market has been in free fall for some time now, with the subprime scare roiling bond and equity markets in a way that has not been seen since the Asian financial crisis of a decade ago."

Los Angeles Times - "Stocks fall following drop in July home sales, spike in inventories" (8-27-07)

"Wall Street retreated today, losing momentum from last week's gains after news that sales of existing homes slipped in July for a fifth straight month stirred concerns about the strength of the economy. Sales of existing homes slowed to their to their most sluggish pace in nearly five years, while home prices fell for a record 12th straight month. The National Association of Realtors reported that existing home sales slipped by 0.2 percent in July to a seasonally adjusted annual rate of 5.75 million units. Inventories rose 5.1 percent to a record 4.59 million units."

Real Estate Journal - "Five Houses Vie to Become Most Expensive Home Sale" (8-27-07)

"It might seem foolish given the recent news from Wall Street, but a group of homeowners is holding firm on an ambitious goal -- to break the record for the most expensive home sale in American history. The price to beat is $103 million. Two years ago, at the peak of the real-estate boom, only a handful of homes in the U.S. had ever been listed for $75 million, let alone $100 million. Even the highest residential sale to date -- investor Ron Baron's $103 million purchase earlier this year of a 40-acre compound in East Hampton, N.Y. -- was never publicly listed. The deal was so secret that the brokers weren't named."

Los Angeles Times - "Stocks fall following drop in July home sales, spike in inventories" (8-27-07)

"Wall Street retreated today, losing momentum from last week's gains after news that sales of existing homes slipped in July for a fifth straight month stirred concerns about the strength of the economy. Sales of existing homes slowed to their to their most sluggish pace in nearly five years, while home prices fell for a record 12th straight month. The National Association of Realtors reported that existing home sales slipped by 0.2 percent in July to a seasonally adjusted annual rate of 5.75 million units. Inventories rose 5.1 percent to a record 4.59 million units."

Los Angeles Times - "Bill would end mortgage tax deduction for 'McMansions'" (8-27-07)

"To add to mortgage meltdown miseries, the credit panic, plunging home sales and rising foreclosures, here's a new worry: a proposed cutoff of mortgage-interest tax deductions for all houses larger than 3,000 square feet. One of Capitol Hill's most experienced and powerful legislators is drafting a 'carbon tax' bill that would do precisely that. Rep. John Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, expects to introduce comprehensive climate change reform legislation once Congress returns next month."

Bloomberg - "
Bear Stearns Judge Delays Ruling Banning U.S. Suits" (8-27-07)

A federal judge refused to grant permanent protection from U.S. lawsuits for Bear Stearns Cos.' two bankrupt hedge funds, questioning whether the Cayman Islands should be the principal site of their liquidation. U.S. Bankruptcy Judge Burton Lifland in New York today said he 'will issue a decision in the next week to 10 days'' on whether Bear Stearns picked the proper jurisdiction for the funds, whose assets are mostly located in New York."
The San Diego Union Tribune - "Mortgage crisis? What crisis?" (8-25-07)

"On this week, Internet-based loan company Lending Tree offered 'bad-credit options' and a $425,000 loan for $1,376 a month. And Countrywide Financial Corp., the nation's largest lender, declared: 'Bad Credit? Call Today. Refinance or Tap Into Your Home's Equity' in an online ad from its Full Spectrum Lending Division."

Bloomberg - "U.S. Bill Yields Rise From Two-Year Low as Credit Concerns Ease" (8-25-07)

"U.S. three-month Treasury bill yields rose from a two-year low as the Federal Reserve's move to cut its discount rate and the prospect of Treasury Department bill sales helped ease demand for the safest government securities. The Treasury will auction $24 billion in three-month and $19 billion in six-month bills on Aug. 27. It will be the biggest three-month sale since at least July 1990, when Bloomberg began compiling the data, and the largest six-month auction since March 2006. Investor appetite for the bills has risen along with concern that companies are having trouble rolling over commercial paper debt."

Los Angeles Times - "Stocks gain to finish a quieter week" (8-25-07)

"Wall Street ended its calmest week in a month with a big advance in stock prices Friday, rising on solid economic readings that countered the bleak sentiment that has blanketed the financial markets. The Dow Jones industrial average rose more than 140 points. Stocks started out flat but jumped after a stronger-than-expected reading on July sales of new homes. Those figures came after the government said that orders for big-ticket goods rose sharply last month."

Los Angeles Times - "July new-home sales, durable goods orders rise" (8-25-07)

"Sales of new single-family U.S. homes unexpectedly rose in July and orders for durable goods posted strong gains that underlined the economy's strength just before a credit crisis socked financial markets. New-home sales rose 2.8% to an 870,000 annual pace last month, reversing two months of declines, and inventories eased, a Commerce Department report showed Friday. Analysts were expecting new home sales to dip to an 820,000 annual sales pace."

Friday, August 24, 2007

NAHB - "July New-Home Sales Rebound Slightly From Weak June" (8-24-07)

"Sales of new single-family homes were up 2.8 percent in July to a seasonally adjusted annual rate of 870,000 units as new-home sales rebounded from weak sales figures in June, the U.S. Commerce Department reported today. The July sales pace was 10.2 percent below a year earlier."

The Washington Post - "Why We Need a Housing Rescue" (8-24-07)

"During times of market turmoil, it helps to get down to basics. Goodness knows it's not easy to understand the maze of financial structures that appear to be unwinding. They were created by wizards of complexity: youthful financial engineers trained to exploit cheap money and leverage and who have, until the past few weeks, never known the sting of the market's lash."

Asia Times - "Central bank impotence and market liquidity" (8-24-07)

"After months of adamant official denial of any potential threat of the subprime mortgage meltdown spreading to the global financial system, the US Federal Reserve (Fed) last Friday, a mere 10 days after declaring market fundamentals as strong and inflation as its main concern, took radical steps to try to halt financial market contagion worldwide that had become undeniable."

Herald Tribune - "Many kinds of pain as housing woes hit all sectors" (8-24-07)

"Sun-soaked Southwest Florida is largely considered an enclave of wealth. Until the downturn in the housing market, its turbo-charged economy was seemingly stifled only by worker shortages and other symptoms of its growing pains. But the last year of suffering in the real estate market has slowly percolated to nearly every industry in the region."

Yahoo - "New-Home Sales Rise, Factory Orders Up" (8-24-07)

"Sales of new homes perked up, while factory orders took off in July, raising hopes that the economy can safely weather financial turmoil that has shaken Wall Street. The Commerce Department reported Friday that new-home sales rose 2.8 percent in July, after falling 4 percent in June. The increase in July lifted sales to a seasonally adjusted annual rate of 870,000 units. A second report showed that orders to factories for big-ticket goods jumped 5.9 percent in July, the most in 10 months."

MSNBC - "What credit mess? Subprime offers roll on" (8-24-07)

"On this week, the Internet-based loan company LendingTree offered 'Bad credit options' and a $425,000 loan for only $1,376 a month. And Countrywide Financial, the nation's largest mortgage lender, declared, 'Bad Credit? Call Today. Refinance or Tap into Your Home's Equity' in an online ad from its Full Spectrum Lending Division. No-money-down mortgages and subprime loans that cater to people with spotty credit are quickly disappearing as lenders tighten their standards in response to a rise in foreclosures. But you wouldn't know that if you looked at the ads that some banks and loan companies have placed on the Internet and in newspapers, including this one, often right next to the very stories chronicling the meltdown in the mortgage industry. So what's with the mixed messages?"

Bloomberg - "It's Time to Meet Subprime Devil We Don't Know" (8-24-07)

"Ever since financial markets went into their summer swoon, economists, analysts and journalists have been trying to explain why a small number of defaults on a small number of home loans morphed into a global liquidity and credit squeeze. How on earth did the subprime mess come to this? It's not easy to comprehend or explain the linkages from loans to bonds to credit derivatives and back to loans (the unwillingness to make new ones of any kind!), which is why I'm taking another stab at it. This time around, I learned that the bigger threat is not what we know about these complex credit derivatives, but what we don't know."

Bloomberg - "New Home Sales in U.S. Probably Fell to 7-Year Low" (8-24-07)

"New home sales probably dropped to the lowest level in seven years in July, showing a deepening housing recession that will drag down U.S. economic growth. Purchases fell to an annual rate of 820,000 last month from 834,000 in June, according to the median forecast of 73 economists surveyed by Bloomberg News. That would be the slowest pace of sales since June 2000."

Bloomberg - "Bear Stearns Ordered to Pay Former Broker $845,000" (8-24-07)

"Bear Stearns Cos., the fifth-biggest U.S. securities firm, was ordered to pay a former managing director $845,000 after he accused the bank of soliciting his clients in violation of a severance agreement. regory Fisher claimed in an arbitration hearing this month that when he left Bear Stearns in April 2005, the firm told him it wouldn't seek business from his clients 'because of increased regulatory burdens imposed by the USA Patriot Act,' his lawyers said in a statement today. The clients were banks and brokerages in the Caribbean and Central America."

Bloomberg - "Subprime Scare Recalls Panic of 1907, Year of Crisis, Contagion" (8-24-07)

"'The Panic of 1907,' a vivid history of a crash 100 years ago, landed on my desk just before the U.S. Federal Reserve lowered the discount rate last week. The timing was right for a book that describes how panics arise -- and what it takes to arrest them. As a mountain of shaky mortgages subsided into a sinkhole this month, I had started counting Bloomberg stories in which market pros uttered the word 'panic.' My tally peaked at 63 the day before the Fed cut, then ticked down to 17 by this Wednesday as credit conditions eased."

Thursday, August 23, 2007

Bloomberg - "Bank of China Holds $9.7 Billion of Subprime Assets" (8-23-07)

"Bank of China Ltd., the nation's second-largest bank, said it holds almost $9.7 billion of securities backed by U.S. subprime loans, the most of any Asian company. The Beijing-based bank set aside 1.15 billion yuan ($152 million) against possible losses on asset-backed securities and collateralized debt obligations backed by loans to borrowers with poor credit histories, it said in a statement today. The bank today announced first-half net income of 29.5 billion yuan."

CNN - "Bernanke: The un-Greenspan" (8-23-07)

"It may be the most important development to emerge from the recent market turbulence: The Federal Reserve, under Chairman Ben Bernanke, is going back to being a central bank. Judging by its cautious and finely-calibrated responses through a very ugly August, the Fed appears keen to put the Alan Greenspan years firmly in the past and take a much more orthodox approach to monetary policy. While the Fed will probably cut interest rates as early as next month, its behavior in August strongly suggests that Bernanke will avoid using interest rates to deliberately spark big increases in lending, the high risk strategy pursued by Greenspan from 2001 to 2004."

The San Diego Union Tribune - "Past-due mortgages swamp banks, thrifts" (8-23-07)

"U.S. banks and thrifts suffered the biggest increase in late loan payments in 17 years as more homeowners fell behind on mortgages, the Federal Deposit Insurance Corp. said yesterday. Loans more than 90 days past due rose 10.6 percent to $66.9 billion in the period ending June 30, the largest quarterly increase since 1990, the FDIC said in its Quarterly Banking Profile."

Charles Hugh Smith - "Two Irresistible Reasons Housing Will Retrace to 1997 Prices" (8-23-07)

"To get started, let's stipulate that the Great Housing Boom of the past decade was not a housing boom--it was a speculative debt-fueled bubble which happened to occur in the asset class known as real estate. As a speculative bubble, it shares the same characteristics as other speculative manias in tulips, stocks, toilet paper, etc. (Note that there is one key difference between worthless stock certificates and toilet paper: the TP has a practical use.)"

Orange County Register - "Housing industry causing ... earthquakes? cancer?" (8-23-07)

"With the current market disruption still in full swing, the media machine generates news stories almost daily about the end of the world being caused by the housing industry. Based on what we’re reading, it’s pretty clear that our industry is the root cause of a stock market crash, the war in Iraq, earthquakes in South America and most forms of cancer. 'While some of those might be true, and the down cycles inherent in the housing market are always painful, all this media coverage seems to be heavy on 'doom and gloom' and a little light on actual analysis.'"

Real Estate Journal - "How FHA Could Help Borrowers Refinance and Avoid Foreclosure" (8-23-07)

"As the subprime-mortgage crisis ripples through the broader housing market, the Bush administration is eyeing an often overlooked federal mortgage insurer to help low- and middle-income homeowners avoid foreclosure. President Bush has balked at allowing mortgage giants Fannie Mae and Freddie Mac to buy more mortgages for their portfolios to ease the credit crunch triggered by rising defaults on home loans to borrowers with poor credit. But he said earlier this month that he supports giving the Federal Housing Administration more flexibility to help those facing foreclosure refinance their homes."

Wednesday, August 22, 2007

The Wall Street Journal - "Bank of America to Invest $2 Billion in Countrywide" (8-22-07)

"Bank of America Corp. is making a $2 billion equity investment in Countrywide Financial Corp., the embattled mortgage giant, according to people familiar with the situation. Bank of America will purchase $2 billion worth of preferred Countrywide stock yielding 7.25%"

MBA - "Q2 2007 Commercial/Multifamily Loan Originations Remain Strong Overall" (8-22-07)

"Commercial and multifamily mortgage bankers' loan originations were once again strong in the second quarter, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. Up from the first quarter, second quarter originations were 40 percent higher than compared to the same period last year. The increase was seen across most property types and investor groups."

MBA - "Mortgage Applications Decrease In Latest MBA Weekly Survey" (8-22-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 17, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 641.1, a decrease of 5.5 percent on a seasonally adjusted basis from 678.7 one week earlier. On an unadjusted basis, the Index decreased 6.5 percent compared with the previous week and was up 14.2 percent compared with the same week one year earlier. The Refinance Index decreased 6.4 percent to 1806.3 from 1929.6 the previous week and the seasonally adjusted Purchase Index decreased 5.0 percent to 441.5 from 464.9 one week earlier. On an unadjusted basis, the Purchase Index decreased 6.6 percent to 467.5 from 500.4 the previous week. The seasonally adjusted Conventional Index decreased 5.7 percent to 932.0 from 987.9 the previous week, and the seasonally adjusted Government Index decreased 4.4 percent to 156.0 from 163.2 the previous week."

Bloomberg - "Wells Fargo Gorges on Mark-to-Make-Believe Gains" (8-22-07)

"There's the kind of earnings investors can take to the bank. And then there's the kind the bank can show to investors. Word to Wells Fargo & Co. investors: Beware the second kind. Last quarter Wells Fargo reported record net income of $2.28 billion, up 9 percent from a year earlier. Read the footnotes to its latest quarterly report, though, and you will see a new term in accounting lingo called 'Level 3' gains. Without these, the financial-services company's earnings would have declined."

Bloomberg - "U.S. Stocks Rally on Takeover Speculation; MGM, Nymex Advance" (8-22-07)

"U.S. stocks climbed for a fifth day on speculation the Federal Reserve's actions to assuage the surge in the cost of credit will lead to a pickup in takeovers. MGM Mirage, the world's second-largest casino company, posted its biggest gain in three months after Dubai agreed to buy a stake. Nymex Holdings Inc. climbed after its chairman said the world's largest energy exchange may be bought."

Bloomberg - "H&R Block Taps Credit Line, Cites `Unstable' Markets" (8-22-07)

"H&R Block Inc., the biggest U.S. tax preparer, tapped bank lines of credit twice in the past week after its usual sources of cash began drying up. The company borrowed $200 million on Aug. 16 because turmoil in credit markets curbed access to commercial paper, used to meet immediate cash needs, H&R Block said today in a statement. The loan was repaid on Aug. 20, when Kansas City, Missouri-based Block drew an additional $850 million."

Bloomberg - "Bernanke's Strategy of Increasing Liquidity Survives" (8-22-07)

"The Federal Reserve's strategy of increasing liquidity rather than resorting to a cut in the benchmark interest rate survived a third day. Yields on Treasury bills rose yesterday after the New York Fed lowered the cost of borrowing securities from its own portfolio to ease a shortage in the market. The action followed a reduction in the Fed's rate on direct loans to banks on Aug. 17, the impact of which officials said they need time to assess."

Bloomberg - "Bonuses on Wall Street Threatened by Credit Crunch" (8-22-07)

"The credit-market freeze that's paralyzing leveraged buyouts, mergers and myriad computer-driven trading strategies may cut Wall Street bonuses for the first time in five years. 'There's a lot of pessimism out there,' said Gary Goldstein, chief executive officer of executive-search firm Whitney Group in New York. 'Looking at the world today as we see it and the impact the crunch is likely to have, it looks like bonus pools will decline.'"

The Wall Street Journal - "Fed Is Hopeful on Steps So Far" (8-22-07)

"Federal Reserve officials are cautiously optimistic that the series of steps they have taken to stabilize markets have started to work. Officials acknowledge conditions are far from calm, and markets could easily take a turn for the worse. But they cite stable stock prices, a pickup in issuance of jumbo mortgages and other factors as evidence that in recent days conditions have improved, though gradually, instead of worsened."

The Wall Street Journal - "How FHA Could Help Borrowers" (8-22-07)

"As the subprime-mortgage crisis ripples through the broader housing market, the Bush administration is eyeing an often overlooked federal mortgage insurer to help low- and middle-income homeowners avoid foreclosure. President Bush has balked at allowing mortgage giants Fannie Mae and Freddie Mac to buy more mortgages for their portfolios to ease the credit crunch triggered by rising defaults on home loans to borrowers with poor credit. But he said earlier this month that he supports giving the Federal Housing Administration more flexibility to help those facing foreclosure refinance their homes."

Yahoo - "3 ways to help borrowers without bailing them out" (8-22-07)

"The July foreclosure numbers that came out Tuesday are a sobering reminder of just how bad the nationwide mortgage crisis is becoming. Fueled in large part by shaky lending to people with less than perfect credit, foreclosure filings nearly doubled from a year ago and are running at an annual rate of more than 2 million."

Yahoo - "Mortgage Lenders Move to Cut Costs" (8-22-07)

"Accredited Home Lenders Holding Co. will slash its work force by more than half and stop accepting new mortgage applications in the U.S. as it struggles to survive in the troubled home lending industry, the company said Wednesday. San Diego-based Accredited, which issued $15.77 billion in home loans last year, said it will cut about 1,600 of its 2,600 positions and close 65 branches."

The San Diego Union Tribune - "Put moratorium on foreclosures, state consumer coalition advises" (8-22-07)

"Consumer advocates yesterday called for a moratorium on home foreclosures, warning that California is facing a tidal wave of foreclosures over the next year as more homeowners are hit with payment increases brought on by subprime loans and risky mortgages. 'The curve is really starting to go up,' said Alan Fisher, executive director of the California Reinvestment Coalition, a group of nonprofit organizations and public agencies that advocate for the poor and minorities. 'We're seeing just the beginning of a problem.'"

eFinanceDirectory - "
Home Foreclosures Rise, a Moratorium on Foreclosures Is Proposed" (8-22-07)

"Some of the increase in foreclosure activity can be attributed to classic factors like job loss, health problems, divorce, etc. This is most evident in Michigan and Ohio, two states that have experienced a wave of job loss in manufacturing sectors. In other states like California, Florida and Georgia, the blame lies with irresponsible borrowing and lending. Over the last few years, homebuyers in these states have stretched their finances to the limit. To get the most house for the money, many borrowers used exotic mortgages like interest only loans and ARMs with low teaser rates. Of course, once the rates and terms change on these loans, it can be very difficult to afford the home."

Tuesday, August 21, 2007

Bloomberg - "Thornburg Sells Securities to Revive Home Lending" (8-20-07)

"Thornburg Mortgage Inc., the jumbo- mortgage specialist that stopped taking loan applications last week because of a cash crunch, sold $20.5 billion of securities at a discount to pay down debt it couldn't refinance. The Santa Fe, New Mexico-based company will record a $930 million loss in the third quarter on the sale of the mortgage- backed bonds, resulting in a probable net loss for the year, President Larry Goldstone said in an interview. Thornburg's shares, which gyrated between $7.49 and $18.35 last week, dropped as much as 13 percent today."

Bloomberg - "Treasury Bill Yields Fall Most Since 1987 on Money Fund Demand" (8-20-07)

"Yields on U.S. Treasury bills fell the most in two decades on demand for the safest securities amid concern over a widening credit crunch. Bill yields have fallen five straight days as money market funds dumped asset-backed commercial paper in favor of the shortest-maturity government debt. Three-month yields dropped the most since the stock market crash of 1987 and more than in the wake of the Sept. 11, 2001, terror attacks in the U.S, as funds shunned assets that may be linked to a weakening mortgage market."

Bloomberg - "Subprime Infects $300 Billion of Money Market Funds, Hikes Risk" (8-20-07)

"Money market funds were invented 37 years ago to offer investors better returns than bank savings accounts while providing a high degree of safety. Most of the $2.5 trillion sitting in these funds is invested in such assets as U.S. Treasury bills, certificates of deposit and short-term commercial debt."

Bloomberg - "Inflation Risks Vanish in Financial Market Haze" (8-20-07)

"It took a fair amount of kicking and screaming from financial markets last week to prod the Federal Reserve into action. But act it did, cutting the discount rate by 0.5 percentage point to 5.75 percent before the New York Stock Exchange opened Friday. The unexpected action had an immediate and positive impact on global stock markets, which reversed earlier losses. It took some of the bloom off the three-month Treasury bill, whose rate had tumbled more than 100 basis points in the span of a week. And it reinforced expectations that the Fed was close to cutting the overnight benchmark rate, now at 5.25 percent, perhaps even before the next meeting on Sept. 18."

Yahoo - "Countrywide Said to Begin Layoffs" (8-20-07)

"Countrywide Financial Corp., the nation's largest mortgage lender, sought to reassure customers Monday that the liquidity problems dogging its mortgage operations were not affecting its banking unit. The assurance came amid a report that Countrywide has started laying off an undisclosed number of employees as it tries to ride out the credit crunch that has rocked the home loan industry."

Market Watch - "Fannie Mae to skip benchmark debt offering in August" (8-20-07)

"Mortgage-buyer Fannie Mae will skip a benchmark debt offering for the first time since May 2006, the company said Monday. "We utilized our option to pass," a spokeswoman said, without elaborating further. Fannie is permitted to pass twice a year on the offerings. On its web site, Action Economics said the move "suggests that demand [for] even high-rated mortgage paper is scant at the moment and impacting funding plans at the agency." Shares of Fannie Mae were recently off 1.1%, at $66.55."

Orange County Register - "O.C. real estate/finance jobs take biggest hits since '93" (8-20-07)

"O.C. real-estate and lending job counts are off 5,200 in the year ended in July, by this blog's math. That is the biggest year-over-year drop in these property-related businesses since June '93. And the state's count does not track the self-employed or the off-the-books workers, which have been hard hit, too. It's worth noting that one year ago, real estate/lending was adding workers at a 7,500-jobs-per-year pace."
The San Diego Union Tribune - "Condo growth slowing down" (8-19-07)

"The ugly side of San Diego's condominium downturn is on display along Fifth Avenue. The bones of what was supposed to be Atmosphere, nearly 80 'luxury live/work units for a life well-designed,' sit open to public view. Naked steel rods and yawning holes are in the earth. The wood and chain-link fence around the site looks like it has been pried open in a couple of places."

The San Diego Union Tribune - "S.D. housing market may only be in eye of storm" (8-19-07)

"The release of the latest real estate figures last week – showing a 2.2 percent decline in the median price of a house in San Diego in July – prompted some observers to express the hope that things can only get better from here. 'Most of the declines in San Diego have happened,' John Karevoll, an analyst with La Jolla's DataQuick Information Systems, said last week. 'Now it appears to be re-establishing a balance we have yet to see for the (Southern California) region.'"

The San Diego Union Tribune - "After foreclosure" (8-19-07)

"Some displaced homeowners are getting a cool reception as the surge in real estate foreclosures sends them back to the rental market in search of shelter. Although landlords welcome the business, they are carefully screening applicants to make sure they remain creditworthy."
Los Angeles Times - "Analyzing the Fed's move" (8-18-07)

"L.A. Times columnist Tom Petruno writes that the Fed bought some time to restore confidence in financial markets: 'However else the decision was dressed up -- Fed supporters say policymakers intervened to protect the economy, while critics say the central bank is simply bailing out major financial companies -- this ultimately was about confidence.' The New York Times' Louis Uchitelle sees a more specific goal -- reviving the suddenly frozen market for jumbo mortgages and other "creditworthy" mortgages: 'Fed policy makers and Treasury officials said that in cutting the discount rate, the Fed’s principal goal was to shore up the market for creditworthy mortgages, including those for more expensive homes.'"

Friday, August 17, 2007

NAHB - "NAHB Applauds Federal Reserve Move To Calm Markets" (8-17-07)

"The National Association of Home Builders (NAHB) applauds the Federal Reserve Board for moving to temporarily reduce the primary credit rate by 50 basis points. NAHB also applauds the Fed’s move to allow the provision of term financing for as long as 30 days, renewable by the borrower, and to accept home mortgages and related assets as collateral for discount window loans to banks. Such changes reflect the Federal Reserve Board’s willingness to act quickly to help restore orderly conditions in financial markets, provide depositories with greater assurance about the cost and availability of funding, and help ease liquidity concerns that are affecting the mortgage market."

DQNews - "California July 2007 Home Sales" (8-17-07)

"A total of 35,185 new and resale houses and condos were sold statewide last month. That's down 8.1 percent from 38,291 for June, and down 21.9 percent from 45,051 for July 2006. Last month's sales made for the slowest July since 1995 when 30,596 homes were sold. July sales from 1988 to 2007 range from the 30,596 in 1995 to 71,186 in 2004. The average is 48,200. On a year-over-year basis, sales have declined the last 22 months."

USA Today - "Mortgage pinch causes domino effect of pain" (8-17-07)

"Matt and Kimberly Brown's contract to buy a new home in Yelm, Wash., will expire at the end of the week. They've lined up a no-money-down loan through the Department of Veterans Affairs, but the Browns haven't been able to sell the town house they live in, so they will have to back out and lose their $1,000 deposit."

The San Diego Union Tribune - "Trade group seeks break for state's home buyers" (8-17-07)

"As the nationwide credit crunch continued to shake Wall Street and the lending industry yesterday, the California Association of Mortgage Brokers urged Congress to give a financial break to the state's home buyers. Leaders of the trade group asked federal lawmakers to declare California a 'high-cost' state and raise the limit on the size of loans that can be purchased or guaranteed by Fannie Mae and Freddie Mac."

Bloomberg - "Bear Stearns Cuts Mortgage Jobs as Share Advance Signals Rescue" (8-17-07)

"Bear Stearns Cos. moved to cut jobs at two home-lending units because of the housing slump even as a 13 percent increase in shares of the fifth-largest U.S. securities firm signaled that it may be close to getting a cash infusion from an investor. Encore Credit, a Bear Stearns subsidiary in Irvine, California, will eliminate 100 positions, a person with direct knowledge of the matter said yesterday. Bear Stearns Residential Mortgage Corp., based in Scottsdale, Arizona, is reducing its workforce by 140, according to the person, who declined to be named because the number of jobs isn't being made public."

Thursday, August 16, 2007

NAHB - "Housing Starts Continue Downward In July" (8-16-07)

"Providing further evidence that the downward correction in the housing market continues, Commerce Department data released today for July indicates that home builders started work on new housing units that month at the slowest pace since January 1997. The government report indicated that total housing starts declined 6.1 percent to a seasonally adjusted annual rate of 1.38 million units in July."

NAR - "Realtor® Award Finalists Are Good Neighbors" (8-16-07)

"Realtors® across the country work hard to give back to their communities, often donating countless hours and dollars to organizations that offer extra help to those in need. The National Association of Realtors® today announced 10 such individuals as finalists for REALTOR® Magazine’s 2007 Good Neighbor Awards. The Good Neighbor Awards program, now in its eighth year, recognizes Realtors® who volunteer countless hours to improve the quality of life for others. This year there were more than 320 entries—an all-time high."

CBIA - "California New Home Sales in June Fall 26% from June 2006, CBIA Announces" (8-16-07)

"June sales levels at California’s major new-home communities continue to lag behind last year’s pace, the California Building Industry Association reported today. The monthly CBIA/Hanley Wood Market Intelligence New Home Sales and Pricing Report showed that sales in June were 26.2 percent below June 2006, continuing a trend that has occurred since the beginning of the year. For the month, 5,585 homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based Hanley Wood Market Intelligence, compared to 7,565 in June 2006. Sales of single family homes dropped by 16.6 percent, sales of townhomes and 'plexes' – duplexes, triplexes, etc. – were down 25.4 percent and sales of condominiums were down 55.3 percent. A large portion of that decline, however, came from the cancellation of a large condo tower complex in downtown Sacramento."

NAR - "Realtors®: NAR Wants You To Show Your Face in the Centennial Celebration" (8-16-07)

"As the National Association of Realtors® approaches its centennial year in 2008, Realtors® are invited to become a part of history by submitting photos of themselves for a new campaign, 'The Face of Real Estate for 100 Years.' The campaign was announced today at NAR’s 2007 Leadership Summit, during which NAR leaders meet with their counterparts from state and local Realtor® associations to discuss industry issues, priorities and goals."

The Washington Post - "Approved Home Loans No Longer Done Deals" (8-16-07)

"'There will be deals that fall through,' Cecala said. 'It's not easy to transfer a loan and all that paperwork. And it's not that easy for one lender to take the other lender's word for everything. In cases, if a lender has gone bankrupt, a lot of people won't want to touch their loans because they think there's shoddy underwriting involved.'"

Reuters - "Global stocks dive as U.S. bonds jump" (8-16-07)

"Fears that tighter credit in the U.S. subprime housing sector will choke off growth in other sectors sent stock markets around the world sharply lower on Thursday while government bonds rallied in a flight to safety. The yen soared against all of the major currencies as investors unwound risky trades financed with borrowed yen."

CNN - "Countrywide forced to turn to banks for help" (8-16-07)

"Embattled Countrywide Financial, the nation's No. 1 mortgage lender, was forced to tap an $11.5 billion line of credit Thursday to run its business during the credit crunch, and said it's toughening underwriting standards on home loans. At the same time, SEC filings show the company's chairman has made a $13 million profit in the past month selling Countrywide stock on the decline."

Bloomberg - "U.S. Housing Starts Dropped 6.1% to 1.381 Million Pace in July" (8-16-07)

"Builders in the U.S. started work on the fewest homes in a decade in July as the industry showed no sign of recovering from the 18-month recession. The greater-than-forecast 6.1 percent decrease to an annual rate of 1.381 million, followed a 1.47 million pace in June, the Commerce Department said today in Washington. Building permits also fell to a 10-year low."

Bloomberg - "Hedge-Fund Guy Atones for His Subprime Bond Sins: Mark Gilbert" (8-16-07)

"Dear investor, we'd like to take this opportunity to update you on the recent performance of our hedge fund, Short-Term Capital Mismanagement LLP. As you know, market selection for the entire fund is guided by a proprietary investing tool we like to call 'a dartboard.' Once the asset classes are decided, individual security selections are generated by digitizing our unique hexagonal cuboid models."

Yahoo - "Credit Anxiety, Countrywide Panic" (8-16-07)

"Stocks around the world continued to slide this morning on the U.S. subprime mortgage mess. (MarketWatch) U.S. Treasury Secretary Henry Paulson conceded that the current turmoil in the market 'will extract a penalty' on U.S. growth, but said the economy was strong enough to avoid a recession. ( Meanwhile, St. Louis Fed President William Poole said that only a 'calamity' would justify an interest rate cut, further depressing investor sentiment. (AP in Yahoo! Finance) 'Blood is hitting the streets,' said Patrick Chang of CIMB-Principal Asset Management. 'Everyone seems to be panicking, and there's reason to panic.' (Los Angeles Times, free registration required)"

Yahoo - "Fed's Poole says no need for emergency rate cut" (8-16-07)

"St. Louis Federal Reserve Bank President William Poole said on Wednesday financial market turmoil had not undermined the U.S. economy and there was no need for the central bank to ride to the rescue with an emergency rate cut. 'It's premature to say that this upset in the market is changing the course of the economy in any fundamental way,' he said in an interview with Bloomberg. 'Obviously, there could be an impact, but we have to rely on some real evidence.'" - "Fannie Mae predicts continued mortgage defaults through 2008 UPDATE" (8-16-07)

"Mortgage giant Fannie Mae said it expects continued mortgage defaults into next year will increase its credit losses to its historical average of 0.04-0.06 pct in 2007, and possibly higher in 2008. 'Downward pressure on home prices in 2006, particularly in parts of the Midwest, led to an increase in credit losses,' Fannie Mae president and CEO Daniel Mudd said in a statement. In a phone call today, Mudd added losses could hit the historical average this year, although Fannie's credit losses through 2007 are only 0.027 pct so far."

Bloomberg - "Countrywide Taps $11.5 Billion Credit Line From Banks" (8-16-07)

"Countrywide Financial Corp., the biggest U.S. mortgage lender, borrowed the entire $11.5 billion available in bank credit lines as the global financial crisis curbed access to short-term financing. Countrywide turned to the emergency loan, which it said was provided by a group of 40 banks, a day after Merrill Lynch & Co. raised the prospect of bankruptcy for the Calabasas, California- based lender. Australia's Rams Home Loans Group Ltd. and Canada's Coventree Inc. also sought emergency funding today."

Bloomberg - "Moody's Warns of Potential LTCM-Scale Fund Collapse" (8-16-07)

"Moody's Investors Service fueled concern that the global credit crisis is worsening by speculating that a hedge fund collapse on the same scale as Long-Term Capital Management LP in 1998 is possible. Hedge funds face potential losses on collateralized debt obligations, securities packaging bonds, loans and other assets, Chris Mahoney, vice chairman of Moody's, said on a conference call today. The funds are unable to agree on prices to sell riskier assets, causing the market to seize up, Mahoney said."

Bloomberg - "H&R Block CEO Says Breeden Sent `Misleading' Message" (8-16-07)

"H&R Block Inc., the U.S. tax preparer facing shareholder pressure to boost performance, said a hedge fund led by Richard Breeden sent investors a 'misleading' message as part of his bid to gain seats on the company's board."

Bloomberg - "Fidelity, Franklin Hit as Real Estate Funds Lose $13 Billion" (8-16-07)

"Fidelity Investments, Franklin Resources Inc. and Kensington Investment Group Inc. are the biggest losers in a decline by U.S. real estate funds that wiped out $13 billion in the past three months. Property funds, the best performers in 2006, slumped 16 percent since May 14, the most of any category tracked by research firm Morningstar Inc. in Chicago. The $5.9 billion Fidelity Real Estate Investment Portfolio, the largest among the group, fell 19.7 percent. The $718 million Franklin Real Estate Securities Fund and the $500 million Kensington Strategic Realty Fund each dropped 20.3 percent, the most among actively managed property funds with more than $100 million in assets."

Forbes - "Countrywide Borrows $11.5B From 40 Banks" (8-16-07)

"The nation's largest mortgage lender borrowed $11.5 billion from a group of 40 banks to fund loans, in a move that shows just how deep the lending crisis has become. Countrywide Financial Corp. said Thursday it made the move amid a credit crunch that has driven a number of its smaller peers to bankruptcy. Shares opened down more than 12 percent."

Los Angeles Times - "Bay Area home sales drop 12%" (8-16-07)

"July home sales in a nine-county swath around San Francisco Bay dropped 12% from the same period last year, but median prices remain stable, a real estate research firm said Wednesday. In all, 7,423 new and resale homes were sold last month in Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo, Solano and Sonoma counties, DataQuick Information Systems said."