Wednesday, October 31, 2007

NAHB - "Energy Efficiency Ranks # 1 In Consumer Green Building Priorities" (10-31-07)

"A new survey conducted for the National Association of Home Builders (NAHB) confirms that a desire for greater energy efficiency drives consumers to choose a green-built home. 'Green building is the home buyer’s best defense against soaring energy costs,' said NAHB President Brian Catalde, a Southern California home builder. 'But it’s up to the nation’s home builders to make sure the cure is not more expensive than the problem itself. The NAHB National Green Building Program paves the way for authentic yet cost-effective green building,' he said"

Mortgage Bankers Association - "Refinance Applications Drive Increase in Latest MBA Weekly Survey" (10-31-07)

"The Mortgage Bankers Association (MBA) today released its weekly Mortgage Applications Survey for the week ending October 26, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 681.7, an increase of 3.8 percent on a seasonally adjusted basis from 656.5 one week earlier. On an unadjusted basis, the Index increased 3.6 percent compared with the previous week and was up 19.5 percent compared with the same week one year earlier."

The Washington Post - "Buffett Testifies That He Saw Early Signs of Freddie Mac's Woes" (10-31-07)

"Billionaire investor Warren E. Buffett sat in front of a video camera in Omaha, spelled his name for the record and minced no words as he testified for the government yesterday in its case against former Freddie Mac chief executive Leland C. Brendsel. Brendsel is accused of presiding over accounting manipulations and running Freddie Mac in a reckless manner. Buffett, one of the most successful and revered investors, sold a huge stake in the mortgage funding company before the manipulations came to light, and the government wanted him to explain why."

Bloomberg - "Defaults on Insured Home Mortgages Rise 22 Percent" (10-31-07)

"Defaults by U.S. homeowners with private mortgage insurance jumped by 22 percent last month after house prices fell the most in at least six years, an industry report said. The number of insured borrowers falling more than 60 days behind on their payments climbed to 54,699 in September from 44,791 a year earlier, according to monthly data from the Washington-based Mortgage Insurance Companies of America. The defaults represented a 4.9 percent increase from a revised August number, while 2.9 percent fewer loans returned to good standing."

Reuters - "Fed cut seen slim help for housing" (10-31-07)

"A Federal Reserve interest rate cut this week won't be enough to save the reeling housing sector, overwhelmed by unsold homes. The ability to access credit in a new age of tighter lending standards has eclipsed affordability worries. A Fed easing 'is a little bit like chicken soup: it's certainly not going to hurt,' says Nicolas Retsinas, director of the joint center for housing studies at Harvard University in Cambridge, Massachusetts."

Bloomberg - "Rogers Bets Against U.S. Investment Banks, Housing" (10-31-07)

"Jim Rogers, co-founder of the Quantum Hedge Fund with billionaire George Soros, boosted his bets against U.S. securities firms because of their salary 'excesses' and money-losing investments. Rogers said he increased his year-old short positions in the past six weeks in U.S. investment banks, using exchange-traded funds and bets against individual companies he declined to name. Stocks in the industry, which pays too much in bonuses, may fall as much as 70 percent in a bear market, he said."

Tuesday, October 30, 2007

Bloomberg - "Paulson Says U.S. Hasn't `Hit Bottom Yet in Housing'" (10-30-07)

"Treasury Secretary Henry Paulson said it's too soon to call an end to the U.S. housing slump, as the Federal Reserve meets to discuss cutting interest rates in the world's biggest economy. 'We haven't hit the bottom yet in housing,' Paulson said today at a conference in New Delhi. Still, he added 'there is enough strength in the economy that we can grow through this.'"

CNN - "The $915B bomb in consumers' wallets" (10-30-07)

"This past summer's subprime meltdown involved about $900 billion in now-suspect securitized debt, reckless lending, and consumers who buckled under the weight of loans they couldn't afford. Now another link in the consumer debt chain - credit cards - is starting to show signs of strain. And the fear that the $915 billion in U.S. credit card debt (an uncannily similar figure) may blow up has major financial institutions like Citigroup, American Express, and Bank of America strapping on their Kevlar vests."

Reuters - "Fires out, California housing still burns" (10-30-07)

"The fires that scorched California may be out, but a bigger man-made disaster, the housing market, burns away, threatening the U.S. economy and holders of billions of dollars of debt backed by homes. The housing conflagration is fed by its own 100 mile-an-hour winds; impossibly high housing prices - the legacy of a binge of irresponsible borrowing - a credit crunch and rising repossessions."

Yahoo - "America's Big, Fat Housing Inventory" (10-30-07)

"Houston, you have a problem -- with housing inventory. And as the number of homes for sale in the country continues to creep upward thanks to waning demand, many other major U.S. cities are dealing with the same issue. At the current existing-home sales rate of 5.04 million units a year, it would take a full 10.5 months to sell the 4.4 million existing homes now on the market, according to data released by the National Association of Realtors (NAR) on Oct. 24. The supply of existing single-family homes was at 10.2 months in September -- the highest since February, 1988. Compare that with the height of the housing boom in January, 2005, when it reached a record low 3.6 months."

Bloomberg - "U.S. Tosses Lifeline to Lenders Using Home Loan Banks" (10-30-07)

"Banks shut out of the market for short-term loans are finding salvation in a government lending program set up to revive housing during the Great Depression. Countrywide Financial Corp., Washington Mutual Inc., Hudson City Bancorp Inc. and hundreds of other lenders borrowed a record $163 billion from the 12 Federal Home Loan Banks in August and September as interest rates on asset-backed commercial paper rose as high as 5.6 percent. The government-sponsored companies were able to make loans at about 4.9 percent, saving the private banks about $1 billion in annual interest."

Bloomberg - "Goldman CEO Sees Regulatory Action on Subprime Crisis" (10-30-07)

"Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said he's concerned about the potential regulatory response to the U.S. subprime mortgage crisis and cautioned against policies that discourage home ownership. 'My concern is the backlash to subprime,' Blankfein, who heads the world's most profitable securities firm, told reporters in New Delhi today.'Housing is one of the U.S.'s great institutions, so when the pendulum swings, don't kill home ownership.'"

Reuters - "Greenspan says home prices could fall further" (10-30-07)

"Home prices have further to drop as builders become increasingly concerned about turning over their inventory, former Federal Reserve Chairman Alan Greenspan said on Tuesday. Two years into the slump in the U.S. housing market, which has weighed heavily on financial markets and raised concerns of the United States possibly facing a recession, there is more pain yet to be felt, the former central banker said."

Monday, October 29, 2007

MBA - "Former Chairman of the Mortgage Bankers Association Addresses the Commonwealth Club of California" (10-29-07)

"Late last month Alan Greenspan said he would trade all of his econometrics on any subject for a graph that shows fear in relation to euphoria. He said it was a far greater predictor of any event than the hard numbers, because fear and euphoria are primordial aspects of humankind. The good news is that we can, we must, take advantage of the lessons learned this year, lessons that run the gamut from economic and market realities to human frailty. We must integrate what’s been learned into behavior that prevents so many people from ever again losing their homes."

MSNBC - "Which is worse: foreclosure or bankruptcy?" (10-29-07)

"Based on our mail, the financial squeeze that’s left millions of Americans falling behind on their mortgage payments doesn’t seem to be letting up. For some, that presents a stark choice: is it better to lose your house to foreclosure or file for bankruptcy protection? Neither option is going to be easy. Generally, a foreclosure will remain on your credit report for 7 years, while a bankruptcy remains for 10 years. But that doesn’t mean foreclosure is necessarily the better option, according to Ray Hooper, Education and Housing Director for the Consumer Credit Counseling Service of Greater Dallas, a non-profit agency that tries to help people facing foreclosure keep their homes."

Bloomberg - "O'Neal Ouster Makes Mess of Maternal Merrill Lynch" (10-29-07)

"Losing a lot of money for shareholders is the surest way to end a career on Wall Street, as Merrill Lynch & Co.'s Stan O'Neal found out this month after the embattled chief executive officer delivered the worst news in the firm's 93-year history. The third-quarter loss of $2.24 billion, or $2.82 a share, was about six times more than O'Neal acknowledged on Oct. 5 and derived from $8.4 billion of writedowns for the subprime mortgages, asset-backed bonds and loans gone bad under his watch."

Los Angeles Times - "Habitat to build 30 town houses in 5 days" (10-29-07)

"According to Habitat International, 1.6 billion people need affordable housing worldwide, including 6 million in the United States. In Los Angeles County, about a quarter of all families of four earn $20,000 to $40,000 a year. In a market where the median home price is about $535,000, that income level puts owning a home out of reach."

Los Angeles Times - "Lessons learned? Lenders still pitching refinancing" (10-29-07)

"One of the reasons this real estate downturn threatens to do unusually widespread damage to the overall economy is the refinancing boom. Even some buyers who bought their houses a decade ago, and should in theory be sitting on a small mountain of equity, are finding themselves in default and foreclosure. Why? Where did their cushion, that mountain of equity, go? They borrowed against it. Again, and again, and again. The refinancing boom has had distorted economic activity in ways policy-makers seem to be ignoring: in the recent past, it pumped up economic activity with spending growth that could not be justified based on income growth; and now, not only is much of that extra economic activity drying up, but refinancing has put at risk homeowners who should in theory have a cushion against a housing downturn."

Los Angeles Times - "Will lenders freeze ARMs?" (10-29-07)

"After arguing the economy needs to be 'rescued' from the mortgage crisis, the Times writes, 'Fortunately, the Federal Deposit Insurance Corporation has come up with such a solution. It has made a compelling case for freezing the introductory rates, typically 7 percent or 8 percent, on the most default-prone adjustable-rate loans. To qualify, a borrower would need to live in the home, be current in monthly payments and not yet have faced an increase in the loan’s rate. The plan would remove up to 1.75 million people from the ranks of future defaulters.'"

Bloomberg - "Simon Property's Third-Quarter Profit Rises on Rents" (10-30-07)

"Simon Property Group Inc., the largest U.S. shopping-mall owner, said third-quarter profit rose 59 percent on increases in store rents and revenue from new shopping centers. Net income jumped to $179.2 million, or 74 cents a share, from $113 million, or 43 cents, a year earlier. Revenue climbed 11 percent to $907.1 million, the Indianapolis-based company said today in a statement. Funds from operations rose to $1.46 a share from $1.30 a year earlier, exceeding analysts' estimates."

Bloomberg - "Mortgage Bankers Ex-Chair Sees Fewer Foreclosures" (10-30-07)

"About 1 million U.S. households will lose their homes to foreclosure in the next two years, half the number predicted by a congressional report, said John Robbins, former chairman of the Mortgage Bankers Association of America. The Joint Economic Committee in Washington on Oct. 25 predicted 2 million subprime borrowers will lose their homes to foreclosure through 2009 if housing prices drop 20 percent, with California, Florida, Ohio, New York and Texas the hardest-hit states. New foreclosures rose to a record in the third quarter, led by defaults in adjustable-rate loans to people with tainted or limited credit histories, according to the Mortgage Bankers Association."

Bloomberg - "California Home Sales to `Stay Tough,' KB Chief Says" (10-30-07)

"California's housing market, suffering from a slump in single-family home and inium sales, will 'stay tough for quite some time,' KB Home Chief Executive Officer Jeffrey Mezger said. 'I think it's going to take quite some time for the inventory to clear,' said Mezger, whose Los Angeles-based company is the fifth largest U.S. homebuilder by sales. He spoke today during a panel discussion at the Milken Institute State of the State Conference in Beverly Hills, California."
Orange County Register - "Banks rethink relationships with mortgage brokers" (10-28-07)

"As loan defaults and foreclosures rise, politicians and consumer groups have directed many of their attacks toward mortgage brokers. They say some brokers steered consumers into loans they couldn't afford to earn a bigger commission. California's Department of Real Estate is encouraging consumers to report abusive practices by brokers, and at least two members of Congress have introduced separate bills that would expand broker regulation."

Bloomberg - "Merrill's Former Chief Tully Calls Losses `Sickening'" (10-28-07)

"Daniel Tully, who tripled Merrill Lynch & Co.'s stock price during his tenure as chief executive officer in the 1990s, became the first former head of the brokerage to castigate CEO Stan O'Neal, calling the firm's record third-quarter loss 'sickening.' Tully, who served as chairman for four years before retiring a decade ago, said in an interview yesterday that he has spoken with current and former employees of New York-based Merrill who share his views. He declined to comment on whether O'Neal should be replaced, saying the board must decide. The Wall Street Journal, citing a person briefed on the discussions, said on its Web site today that O'Neal has decided to leave the firm."

Yahoo - "Reports: Merrill Lynch CEO Close to Exit" (10-28-07)

"Stan O'Neal, the beleaguered chief executive of Merrill Lynch & Co., was reportedly close to resigning Sunday amid broad criticism for leading the world's largest brokerage to its biggest quarterly loss since it was founded 93 years ago." - "County's ailing housing market: How low will it go?" (10-28-07)

"With San Luis Obispo County home sales for September plunging to their lowest level in 18 years and the median price dipping below $ 500,000 last month, economists and local real estate experts say it may be several years until the housing market begins to gain strength."

"Foreclosures shot to record highs in Sonoma County this summer, the latest sign that more people are struggling to hold onto their homes as their mortgage payments rise. Lenders began foreclosure proceedings against 749 homeowners in the third quarter, up from 462 in the second quarter and more than triple the number from a year ago, according to a report issued Friday by DataQuick Information Systems, a real estate market research company."

Yahoo - "Mortgage Industry Facing More Troubles" (10-27-07)

"In all phases of the mortgage industry this week, from the people who make the loans to the people who insure them, the news was bad -- and most of them expect it to get worse. Things have gotten so tough, title insurer Stewart Information Services Corp. said it could not cut costs fast enough in August and September to keep up with the plummeting market. The company has already made "significant reductions" in its work force in October. Its insurance reimburses a homeowner or a lender if there is an error in the deed transferring property."

Saturday, October 27, 2007

DQNews - "Record California Foreclosure Activity" (10-26-07)

"Lenders started formal foreclosure proceedings on a record number of California homeowners last quarter, the result of declining home prices, sluggish sales and subprime mortgage distress, a real estate information service reported. A total of 72,571 Notices of Default (NoDs) were filed during the July-to-September period, up 34.5 percent from 53,943 during the previous quarter, and up 166.6 percent from 27,218 in third-quarter 2006, according to DataQuick Information Systems of La Jolla."

NAHB - "Housing Economists Expect Market Turnaround To Begin In 2008" (10-26-07)

"Though there appears to be no let-up to the current housing downswing, economists participating in the National Association of Home Builders Fall Construction Forecast Conference on Oct. 24 said they expect the industry to bottom out and to start turning around in 2008. Acknowledging that there is definitely downward momentum in the market at this time, with starts, sales, prices and permits off, and problems in the subprime and Alt-A mortgage markets, NAHB Chief Economist David Seiders said that housing should nevertheless begin a modest recovery next year."

CBIA - "Housing Production Continues Decline in California, CBIA Announces" (10-26-07)

"Home production in California continued to decline in September as homebuilders continued to sell off existing inventory and looked for signs of a balancing market, the California Building Industry Association reported today."

CNN - "Countrywide: $1.2B loss now, but profit soon" (10-26-07)

"Countrywide Financial, the nation's leading mortgage lender, reported a staggering $1.2 billion third-quarter loss Friday that was much larger than Wall Street expected, but predicted it would quickly return to profitability. Countrywide's net loss came to $2.85 a share, or $2.12 a share excluding certain items. Analysts surveyed by earnings tracker Thomson First Call had forecast a loss of $1.28 a share, compared to the net income of $648 million, or $1.03 a share, it reported a year earlier."

Times Online - "Henry Paulson presses for aid to sub-prime lenders" (10-26-07)

"Henry Paulson, the US Treasury Secretary, is seeking to persuade the White House to offer financial compensation to American mortgage lenders that try to help troubled homeowners by renegotiating the terms of their loans. The Times has learnt that Mr Paulson is lobbying President Bush to provide funds so that mortgage lenders can reduce the loss that they would incur from either reducing the rate of an adjustable home loan or extending the life of the mortgage to make it cheaper for the property owner."

New York Post - "STILL FALLING" (10-26-07)

"Ailing mortgage giant Countrywide Financial is set to report shockingly dismal third-quarter results today that could send the broader stock market down and raise fears that the global credit crunch is far from over. Shares of Countrywide, which have plummeted 67 percent this year, dropped 5.50 percent yesterday on investor fears that the company will report much weaker than expected results."

CNN - "For sale: 2 million empty homes" (10-26-07)

"The number of vacant homes for sale rose in the third quarter, according to the latest government reading that casts new harsh light on the weakness of the housing market. The Census Bureau report puts the number of vacant homes for sale at 2.07 million in the period, up about 2 percent from the second quarter, and 7 percent above year ago levels."

Real Estate Journal - "When Will the Housing Market Finally Hit the Bottom?" (10-26-07)

"Builders have almost no confidence. The home builders' index fell to a record low in October (the index dates back to 1985). New construction on single-family homes has plunged 31% in the past year, but still the inventory of new homes on the market, after adjusting for cancellations, is at the highest level since the early 1990s. As if the fundamental sickness in the housing market weren't enough, a secondary infection has developed. The credit crisis in the mortgage market that erupted in the summer has left huge numbers of potential buyers without any access to mortgages. The subprime sector has essentially died, with the newly reinvigorated Federal Housing Administration able to replace only a tiny segment of what was once a huge market of home buyers."

Real Estate Journal - "Home Sellers: Don't 'Scare Away' Buyers This Halloween" (10-26-07)

"A broker for Prudential Douglas Elliman, Ms. Teplitzky mostly sells homes in Manhattan's high-end market. This particular apartment had been listed since the end of August, and she had convinced her Upper East Side clients to clear out excess furniture in the 1,200-square-foot, two-bedroom and two-bathroom unit to make it more appealing to buyers. When she walked in, Ms. Teplitzky expected to see less clutter. Instead she found fake witches, cadavers and pumpkins on the floor, as well as "things that make noise and surprise you," scattered around, she says. Every room in the apartment -- including the kitchen and bathrooms -- oozed Halloween decorations."

Thursday, October 25, 2007

NAHB - "New-Home Sales Rise 4.8 Percent In September" (10-25-07)

"Sales of new single-family homes rose 4.8 percent in September, recovering a portion of the substantial ground they lost in the previous month, according to data released by the U.S. Commerce Department today. Sales reached a seasonally adjusted annual rate of 770,000 units following major downward revisions to figures for the previous three months."

NAR - "Nearly 30 Percent of Realtors® Lack Health Insurance" (10-25-07)

"The National Association of Realtors® testified at the Senate Finance Committee hearing today that the current individual health insurance market does not serve the needs of its self-employed members. Nearly 30 percent of NAR members lack health insurance, and cost is the primary reason – 84 percent of Realtors® who do not have coverage say they can’t afford it."

NAR - "NAR, SGA Find Americans Prefer to Spend More on Mass Transit and Highway Maintenance, Less on New Roads" (10-25-07)

"Three-fourths of Americans surveyed believe that either being smarter about development or improving public transportation are both better long-term solutions for reducing traffic congestion than building new roads, according to a survey sponsored by the National Association of Realtors® and Smart Growth America."

Bloomberg - "Merrill Lynch May Write Down $4 Billion More, CIBC Analyst Says" (10-25-07)

"Merrill Lynch & Co., the largest brokerage firm, may have to write down another $4 billion in the fourth quarter as the value of subprime assets continues to drop, according to CIBC World Markets. 'Thus far, Merrill has taken the largest writedown of its financial peers, but unfortunately, we believe in aggregate it will only get larger,' CIBC analyst Meredith Whitney said in a report released yesterday. She kept her recommendation at 'sector performer' while cutting her fourth quarter earnings estimate to a 50-cent per share loss."

Bloomberg - "O'Neal's Subprime Shakeout Shows Peril of SIV Bailout" (10-25-07)

"The collapse of confidence in Merrill Lynch & Co. after the world's biggest brokerage lost six times more than it forecast earlier this month helps explain why Treasury Secretary Henry Paulson's attempt to rescue SIVs is troubled. Merrill Chief Executive Officer Stan O'Neal told shareholders yesterday that the New York-based firm had a loss of $2.24 billion, the biggest in its 93-year history, after reducing the value of mortgages and asset-backed bonds. Those are the same hard-to-trade securities owned by structured investment vehicles, or SIVs, that Paulson is attempting to keep afloat with a new $80 billion fund."

Los Angeles Times - "A puzzling poll question" (10-25-07)

"Today's Los Angeles Times/Bloomberg poll on economic issues contains a couple of headlines: Most Americans (65%) believe a recession is likely in the next year, and a lot of Americans (45%) have no opinion on the way Fed Chairman Ben Bernanke is doing his job (we suspect a large portion of those don't know who he is, or what he does)."

Real Estate Journal - "Caution is the Key Word In This Uncertain Market" (10-25-07)

"Like most investors, I'm delighted when markets rise -- even when I can't figure out why. Until last week, that's how I was feeling. Since the market bottomed on Aug. 16, in the midst of a credit meltdown and market turmoil, it soared to new highs. It was as if Federal Reserve Chairman Ben Bernanke had pulled out a magic wand, waved it to produce a half-point rate cut, and poof! The credit crisis was gone."

Wednesday, October 24, 2007 - "US home sales fall to fresh lows, glut of unsold homes rises" (10-24-07)

"US existing home sales fell 8.0 percent in September as a persistent housing slump continued to weigh on the property market and the world's biggest economy, an industry group said Wednesday. The National Association of Realtors (NAR) said in a monthly snapshot that sales of existing homes and apartments tumbled to a seasonally adjusted rate of 5.04 million units in September from 5.48 million in August."

NAR - "Mortgage Availability Improving But Hampered September Existing-Home Sales" (10-24-07)

"Temporary problems in the mortgage market are easing and are expected to free some pent-up demand, but disrupted existing-home sales and distorted prices on sales closed in September, according to the National Association of Realtors®. Even so, prices rose in the Northeast and Midwest."

Mortgage Bankers Association - "CampusMBA Launches Certified Loan Officer Designation" (10-24-07)

"CampusMBA, the award winning education division of the Mortgage Bankers Association (MBA) today launched the Certified Loan Officer (CLO), a new professional designation created exclusively for residential loan officers. The CLO will demonstrate to consumers and the industry alike that the holder is a qualified and proven MBA certified professional."

Mortgage Bankers Association - "Refinance Applications Increase In Latest MBA Weekly Survey" (10-24-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 19, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 656.5, a slight increase on a seasonally adjusted basis from 656.3 one week earlier. On an unadjusted basis, the Index increased 11.2 percent compared with the previous week and was up 11.5 percent compared with the same week one year earlier; these increases are partly due to seasonal effects after the preceding Columbus holiday shortened week."

Bloomberg - "Ambac Posts First Loss as Subprime Bond Prices Drop" (10-24-07)

"Ambac Financial Group Inc., the world's second-largest bond insurer, reported its first quarterly loss after reducing the value of subprime mortgage-linked securities by $743 million. The shares fell the most in 2 1/2 years after New York-based Ambac said it had a third-quarter net loss of $360.6 million, or $3.51 a share, compared with net income of $213 million, or $1.98, a year earlier, according to a company statement."

Bloomberg - "Merrill Lynch Reports Loss on $8.4 Billion Writedown" (10-24-07)

"Merrill Lynch & Co. reported the biggest quarterly loss in its 93-year history after taking $8.4 billion of writedowns, almost double the firm's forecast three weeks ago. The third-quarter loss of $2.24 billion, or $2.82 a share, was about six times deeper than the New York-based company estimated on Oct. 5. Merrill wrote down the value of subprime mortgages, asset-backed bonds and loans to finance leveraged buyouts, and Chief Executive Officer Stanley O'Neal said in a statement today that he is 'working to resolve the remaining impact from our positions.'"

Bloomberg - "Schwarzenegger Discipline Shattered by Subprime Slump" (10-24-07)

"Four years after Arnold Schwarzenegger was elected governor of California, vowing to 'tear up the state's credit card,' the actor and former body- builder is about to charge $7 billion to taxpayers' accounts. California is selling notes tomorrow due in eight months to help pay its bills until tax revenue comes in, the largest short-term loan since Schwarzenegger took office and almost five times more than last year. Debt is increasing after cash receipts fell $777 million below the state's projections during the first three months of the fiscal year that started July 1."

Bloomberg - "U.S. Economy: Existing Home Sales Tumble 8 Percent" (10-24-07)

"The U.S. housing industry plunged deeper into recession last month as the August credit-market collapse made it harder for buyers to obtain loans. Sales of previously owned homes fell 8 percent in September to an annual rate of 5.04 million, the fewest since records began in 1999, the National Association of Realtors said in Washington. The decline was almost twice as steep as economists forecast, while the median price dropped the most in almost a year."

Bloomberg - "Regulators Paved Way for Loan Abuses, Congress Hears" (10-24-07)

"U.S. lawmakers hear testimony today that federal banking regulators opened the door to subprime- mortgage lenders in low-income neighborhoods through lax enforcement of community-investment rules. Banks, required by a 1977 law to provide credit in areas where they take deposits, often concentrated on making loans to the most creditworthy borrowers; that left homebuyers with lower credit scores to lightly regulated finance companies, according to government data on lending patterns."

Tuesday, October 23, 2007

Broker Universe - "What We're Hearing" (10-23-07)

"Over the past 12 months, roughly 200 mortgage banking firms and/or channel platforms have closed, according to estimates made by National Mortgage News. But what about loan brokerage firms? According to current research being done by NMN's staff in Washington, on a sample of firms that were active earlier this year, the closure rate is about 15%. If you apply that to the 53,000 firms that were open in late 2006, that's an ugly number."

NAHB - "Tighter Lending Standards and Subprime Fallout Will Slow, But Not Prevent National Housing Recovery" (10-23-07)

"Tighter lending standards and reduced availability of credit will complicate – but not derail – a national recovery in the housing market, according to the National Association of Home Builders’ (NAHB) state and metro economic forecast, which is available through NAHB’s"

NAHB - "NAHB To Launch National Green Building Program At International Builders' Show" (10-23-07)

"The National Association of Home Builders (NAHB) announced that it will launch the much-anticipated NAHB National Green Building Program Feb. 14 at the 2008 NAHB International Builders’ Show in Orlando. The program launch will be the highlight of a day of green-themed activities at the convention, which last year attracted more than 100,000 building industry professionals."

CNN - "Countrywide offers help for reset shock" (10-23-07)

"Countrywide Financial, the nation's largest mortgage lender, announced a program Tuesday to refinance or modify up to $16 billion of its loans. The program is targeted to 80,000 borrowers who face the risk of default because their current variable rate mortgages would see payments jump to levels they could not afford."

Bloomberg - "Evans Says Fed Must Guard Against 'Cost' of Bigger Housing Drop" (10-23-07)

"Federal Reserve Bank of Chicago President Charles L. Evans said policy makers must shield the economy from ``high cost'' events such a worsening housing slump. 'I do not see this extreme outcome as likely,' Evans said yesterday in his first speech on the economy as a policy maker. Still, 'it is one of those high cost outcomes that we should guard against,' while closely monitoring inflation, he said at the University of Chicago's Graduate School of Business."

Bloomberg - "Bankers' Ranks to Be Thinned By Bloodletting to Come" (10-23-07)

"Some day over the next few weeks, Wall Street executives are going to meet to make some bad decisions. They are going to decide to batten down the hatches, trim away the dead wood, button up for the battle ahead -- use whatever tired cliche you want. They sure will."

Bloomberg - "Fed Signals Support for Paulson Commercial-Paper Plan" (10-23-07)

"The Federal Reserve indicated it supports the plan brokered by Treasury Secretary Henry Paulson to increase liquidity in the market for asset-backed commercial paper. The agreement reached by Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. is well-enough designed that it may help credit markets, a Fed official, who declined to be identified, said late yesterday in Washington. The plan also may help investors establish prices for complex securities that funds purchased with the proceeds of commercial-paper sales, the official said."

Bloomberg - "SIV Shock, Inflation Make U.S. Treasuries Unbeatable" (10-23-07)

"The combination of record U.S. home foreclosures, rising defaults and simmering inflation is making two-year Treasury notes and their equivalents unbeatable in the bond market. Anxiety over the $300 billion owed by structured investment vehicles, or SIVs, is pushing investors into the relative safety of two-year notes sold by the government and the most creditworthy companies at the same time that rising consumer prices reduce the appeal of 10-year securities. The gap in yields between the bonds is getting wider, reminiscent of 2001, when the Federal Reserve began cutting its target interest rate for overnight loans between banks."

Monday, October 22, 2007

Mortgage Bankers Association - "MBA Statement on Frank Anti-Predatory Lending Bill" (10-22-07)

"We welcome a full and open debate on how to best protect consumers from unscrupulous mortgage originators. Buying a home is the largest financial transaction most Americans will ever make, and as such, borrowers deserve a simple and honest process. The debate surrounding this bill will cut to the heart of finding the right balance between shielding consumers from predatory lending practices and protecting their access to affordable credit."

Mortgage Bankers Association - "Mortgage Reform and Anti-Predatory Lending Act Introduced by Rep. Frank" (10-22-07)

"The House Financial Services Committee Chairman Barney Frank (D-MA) introduced the "Mortgage Reform and Anti-Predatory Lending Act of 2007." If enacted, the bill would reform mortgage practices in several areas: establish a federal duty of care; call for licensing of mortgage originators; prohibit steering; create an ability to repay standard; and, would attach limited liability to secondary market securitizers. The Committee issued a press release and a section-by-section analysis of the bill. MBA has concerns with the bill and will continue to examine the legislation's potential impact on the mortgage markets."

Mortgage Bankers Association - "OFHEO Issues Statement on the Conforming Loan Limit for 2008" (10-22-07)

"The Office of Federal Housing Enterprise Oversight is publishing today a Statement on the Conforming Loan Limit for 2008 and issuing for additional public comment a revised version of the Proposed Examination"

Mortgage Bankers Association - "Fannie Mae Updates Condo, Coop and PUD Project Review Process" (10-22-07)

"The purpose of this Lender Letter is to provide an update to lenders about policy changes to Fannie Mae’s Project Review Processes for Condominium, Cooperative and PUDs. In Lender Letter 04-07, Condominium, Cooperative and Planned Unit Development (PUD) Project Review Process, dated August 17, 2007, lenders were informed that Fannie Mae will no longer accept applications for Conditional Project Acceptance (1027) after August 31, 2007. The Lender Letter also advised that we would set a deadline for project submissions and that we would issue a Lender Announcement within 60 days detailing next steps and associated policy and procedural changes."

Bloomberg - "California Homes Are Overvalued by as Much as 40%, Goldman Says" (10-22-07)

"Californian homes are overvalued by as much as 40 percent and stricter lending standards will probably contribute to 'material' price declines, according to analysts at Goldman Sachs. Prices in the state 'have proven surprisingly resilient, given the severe curtailment of credit availability and rising unemployment,' the analysts said in a note to investors. 'However, we believe that a downturn is imminent.'"

Bloomberg - "U.S. Housing Decline Threatens to Last Into 2009" (10-22-07)

"Ivy Zelman's view of the U.S. housing market is gloomy, but it's probably the most realistic. A veteran Wall Street analyst, Zelman, chief executive of the research firm Zelman & Associates, says it's unlikely the U.S. housing market will recover before 2009, adding there's a ``50 to 60 percent chance of a recession,'' as the housing slump curbs consumer spending."

Bloomberg - "Paulson Stakes His Legacy on Subprime Bailout" (10-22-07)

"It is impossible not to have an opinion about Henry Paulson. Some see laudable bipartisanship in Paulson's approach to problem solving and feel he'll go down as a good, if not great, Treasury secretary, destined to sit next to Robert Rubin in the Mount Olympus of Economics. Others, especially conservatives, see a man of small accomplishment with limited devotion to bedrock Republican free-market principles." - "Who's to blame for foreclosure crisis?" (10-21-07)

"Michael Sichenzia has a problem. The former mortgage whiz who spent time in New York state's prison for mortgage fraud knows that bad home loans claimed some victims and fattened bank accounts for others. But telling them apart isn't easy. 'The thing we have the most difficulty doing nowadays is figuring out who has legitimately been taken advantage of, as opposed to who went into the transaction with their eyes open,' says Mr. Sichenzia, now lead investigator for the Deerfield Beach law firm of Glinn Somera & Silva, which handles foreclosure cases."

Yahoo - "Turbulence Impact Limited on Third World" (10-21-07)

"The World Bank said Sunday the impact of recent turbulence in financial markets on developing countries has been limited and global economic growth remains strong. The bank also called on donor governments to meet their commitments to boost aid for development and said countries with fast-growing economies and mounting currency reserves could bring new resources to this effort."

The San Diego Union Tribune - "Builder says discounting new homes does everyone a disservice" (10-21-07)

"In an industry where price cutting of new homes is increasingly taking hold, he remains firmly against using the marketing tactic. 'I'm a big holdout on that front,' said Pattinson, president of privately owned Barratt Homes of Carlsbad. 'My position is something I've developed having witnessed a number of recessions.' He points a finger at Wall Street's investor-owned home builders for leading the price-cutting charge."

The San Diego Union Tribune - "No time out for builders" (10-21-07)

"The fourth quarter of the year had hardly begun Oct. 1 when home builders and industry experts wrote it off as a disappointment and gloomily predicted 2008 won't be much better. However, what's bad news for builders may be good news for savvy buyers."

The San Diego Union Tribune - "Plummeting home prices: a crash or a correction?" (10-21-07)

"There's an economic commentator in town who likes to poke fun at the idea that home prices are crashing. For the past couple of years, his refrain has gone something like this: 'How come if stock prices drop 10 percent, they call it a correction, but if home prices drop 3 percent, they call it a crash?'"

Los Angeles Times - "Frank proposes bill in wake of mortgage debacle" (10-21-07)

"Democrats introduced legislation Monday that would tighten an array of mortgage lending standards and require U.S. regulators to issue new rules ensuring that loans only be made to borrowers who can afford to repay them. The bill, by Rep. Barney Frank (D-Mass.) and two North Carolina colleagues, could set the baseline for the emerging debate over how to prevent a repeat of the mortgage meltdown. But passage is by no means assured, and elements of the bill are likely to draw intense opposition from the lending industry."

Los Angeles Times - "A chance for first-time buyers" (10-21-07)

"TODAY'S roiling mortgage market and still-high prices have made buying an entry-level house in Southern California seem about as likely for struggling first-time buyers as owning a villa at Italy's Lake Como. At least, that's how Christopher and Hedy Maar saw it. Then lightning struck."

Los Angeles Times - "A killer view, but how's the house sit on the lot?" (10-21-07)

"In most new-home communities these days, buyers not only have the opportunity to select among several floor plans and exterior elevations, but they also get to choose on which lot to place their top pick. Typically, buyers select a lot on a combination of three factors -- size, foliage and view. But there's much more to picking a home site than that."
The Washington Post - "Vultures Are Circling Over Distressed Properties" (10-20-07)

Call them grave dancers, vulture funds, turnaround specialists or the more euphemistic 'opportunity investors.' However you identify them, the deal is the same: When hyperactive real estate markets lose their sizzle, or property owners no longer can afford to hang on to their houses, well-capitalized investors smell blood and move in."

Daily News - "
Sorry to be bearer of bad real estate news" (10-20-07)

When the market turned back in 1990, the last big slide, prices also fell. This time, though, two years of depressed sales haven't tugged down prices. For example, when this sales slide started, the median price jumped 27.3percent annually, or $128,500.Even this August, the most recent numbers available, the Valley's median price rose 5.7percent, or $35,000, over the previous year, to $645,000."

Friday, October 19, 2007

Mortgage Bankers Association - "Freddie Mac Makes Several Changes To Seller And Servicing Requirements" (10-19-07)

"Prohibit the sale of adjustable-rate Mortgages (ARMs) with application dates on or after September 13, 2007 that have an Initial Period of three years or less and Margins of 400 basis points or higher, as announced in our September 7, 2007 Single-Family Advisory e-mail"

Mortgage Bankers Association - "MBA Welcomes Introduction of Coleman Delinquency Relief Bill" (10-19-07)

"The Mortgage Bankers Association (MBA) applauded legislation introduced today to assist delinquent mortgage borrowers. S. 2201, The Home Ownership Mortgage Emergency Act, was introduced by U.S. Senator Norm Coleman (R-MN) and would allow troubled borrowers to make penalty-free withdrawals from their retirement accounts in order to bring their home loan current."

Los Angeles Times - "Energy neutral homes urged" (10-19-07)

"California energy regulators Thursday adopted a target that all homes built after 2020 produce at least as much energy as they consume to reduce demand for electricity and cut pollution tied to power generation."

Los Angeles Times - "Bay Area home sales down 40%" (10-19-07)

"September home sales in Northern California sank to their lowest level in two decades as mortgages became harder to get, a real estate research firm said Thursday. A total of 5,014 new and resale homes and iniums were sold last month in nine San Francisco Bay Area counties, a 40.1% drop from the same period a year earlier, according to DataQuick Information Systems."

Reuters - "Bear Stearns in probe over funds" (10-19-07)

"Bear Stearns Cos is being investigated by Massachusetts securities regulators over whether the bank improperly traded with two in-house hedge funds that collapsed last summer, the Wall Street Journal reported on Friday. The paper, citing sources, said state investigators are trying to determine whether the bank traded mortgage-backed securities for its own account with the hedge funds without notifying the fund's independent directors in advance, the paper said." - "Wishful Thinking on the Housing Mess" (10-19-07)

"Just when a majority of strategists thought it was safe to go back in the water the proposed bailout of the SIVs once again threw the spotlight on the fragility of the credit markets. SIVs are the investment vehicles, known as 'conduits' and 'structured investment vehicles" that are designed to operate separately from the banks and off their balance sheets, It’s one thing to learn that that someone is taking action on a dangerous problem that was known for some time. But to suddenly hear that a problem hardly anyone was aware of as recently as two months ago was about to blow up is more likely to raise the question as to what else is out there that we still don’t know about."

The Washington Post - "Capital One Reports Loss From Closing Mortgage Unit" (10-19-07)

"Capital One Financial of McLean posted its first quarterly loss ever, from the expense of shutting down its mortgage lender, and warned of additional challenges in the credit card and auto finance businesses. The company said it lost $81.6 million (21 cents a share) for the three months ended Sept. 30, compared with a profit of $587.8 million ($1.89) in the third quarter last year."

Yahoo - "Powers Vow to Limit Credit Crisis Damage" (10-19-07)

"Finance officials from the world's top economic powers pledged Friday to do all they can to limit damage to the global economy from a jarring credit crisis as Wall Street took another plunge. 'We remained committed to doing our part in sustaining strong global growth,' the finance officials said in a joint statement. While saying the functioning of global financial markets was improving somewhat, they warned that 'uneven conditions are likely to persist for some time and will require close monitoring.'"

CNN - "Delinquency risk rising" (10-19-07)

"As housing markets deteriorated over the summer, and a liquidity squeeze buffeted credit markets, delinquencies and defaults jumped. And now one forecast predicts that these numbers will climb even higher over the next six months. The Core Mortgage Risk Monitor (CMRM), an index of foreclosure risk compiled by First American CoreLogic, increased by 1.6 percent compared with the three months ended June 30."

Bloomberg - "Two-Year Treasuries Rise Most Since Sept. 11 Attacks on Credit" (10-19-07)

"Treasuries rallied and two-year notes posted their biggest weekly increase since the Sept. 11 terrorist attacks as credit-market losses stoked speculation that the Federal Reserve will cut interest rates this month. Bonds rose for a fifth day and stocks tumbled on concern a housing slump and losses from securities linked to subprime loans will deepen. Home foreclosures led three of the biggest U.S. banks to report declines in third-quarter profit, while two structured investment vehicles, or SIVs, said they won't be able to repay all of their debt."

Bloomberg - "Company Debt Risk Rises the Most in Two Months on SIV Concerns" (10-19-07)

"Credit-default swaps rose the most in two months today as a U.S. Treasury-led effort to rescue structured investment vehicles didn't keep two funds from failing to repay maturing debt. Funds run by London-based Cheyne Capital Management Ltd. and IKB Deutsche Industriebank AG defaulted on more than $7 billion of debt after they didn't sell new commercial paper to repay obligations. Former Federal Reserve Chairman Alan Greenspan said a fund initiated by Treasury Secretary Henry Paulson to help SIVs avoid a fire sale of $320 billion of assets may harm investor sentiment, Emerging Markets reported today."
NAHB - "Lead-Safe Remodeling Reduces Risks, NAHB Tells Congress" (10-18-07)

"Appearing before the Senate Environment and Public Works Committee today, Mike Nagel, 2007 Chairman of the National Association of Home Builders (NAHB) Remodelers, testified on the effectiveness of lead-safe renovation and repair practices used by professional remodelers to reduce lead levels in older homes."

DQNews - "Bay Area home sales plummet amid mortgage woes" (10-18-07)

"Bay Area home sales sank to their lowest level in more than two decades in September, the result of a continuing market slowdown and borrowers' increased difficulties in obtaining "jumbo" mortgages, a real estate information service reported. A total of 5,014 new and resale houses and condos were sold in the nine-county Bay Area in September. That was down 31.3 percent from 7,299 in August, and down 40.1 percent from 8,374 for September a year ago, DataQuick Information Systems reported."

Mortgage Bankers Association - "MBA Strongly Opposes HUD’s Increase in Mortgage Insurance Premiums" (10-18-07)

"Recent action by the US Department of Housing and Urban Development (HUD) to increase the mortgage insurance premium (MIP) on most new Federal Housing Administration (FHA) multifamily mortgages drew sharp criticism from the Mortgage Bankers Association (MBA) leadership. According to MBA, the decision by HUD will force many developments to become economically infeasible."

Market Watch - "Bank of America's quarterly profit falls 32%" (10-18-07)

"Bank of America Corp. said Thursday its quarterly profit dropped by almost one-third, as trading losses and a hit from loans related to clients doing corporate takeovers nearly wiped out the company's investment-banking income."

Bloomberg - "CP Fund Adds New Pyramid Scheme Layer: Mark Gilbert" (10-18-07)

"'As long as the music is playing, you've got to get up and dance,' Citigroup Inc. Chief Executive Charles Prince told the Financial Times in July. What happens, though, if the dancehall threatens to collapse before the band strikes up its next tune? This week, the U.S. Treasury bullied Prince and some of his Wall Street buddies into creating a new fund, the snappily named Master Liquidity Enhancement Conduit. M-LEC is designed to keep the Structured Investment Vehicle waltz upright by reviving the asset-backed commercial-paper market, which has shrunk by a quarter in the past 10 weeks amid a buyer's strike."

Reuters - "Weekly jobless claims jump more than expected" (10-18-07)

"The number of U.S. workers filing new claims for jobless aid jumped by 28,000 last week, far more than anticipated and the biggest increase for any week since February, the Labor Department said on Thursday. The higher claims data may increase the chances that the Federal Reserve will further reduce official interest rates to stimulate the economy."

Business Week - "Dangerous Waters for a Bailout" (10-18-07)

"The megafund that the nation's three biggest banks are hoping will resuscitate a chunk of the credit markets was initially greeted with enthusiasm. But it isn't clear how the plan, hashed out in six weeks, will work—a weakness that could undercut its original intent."

CNN - "Homeowners: Sell it yourself" (10-18-07)

"The last time Sabrina Williams sold a home herself, she received a solid offer the first week, got her asking price of $319,000 and saved nearly $9,000 in broker fees in the process. Snap, just like that. So when Williams, 32, a pharmaceutical company manager, and her husband Michael Cunningham, 37, an IT consultant, recently decided to sell the three-bedroom townhouse they own in Germantown, Md., she figured she knew just what they had to do to find a suitable buyer."

Los Angeles Times - "Rents on the rise as home prices slip" (10-18-07)

"While homeowners were being stung by shrinking property values, renters across the state found themselves having to dig deeper into their pocketbooks in the third quarter, according to a report to be released today. The average rent at larger apartment complexes in California increased 5.6% to $1,413 compared with a year earlier, according to a survey by Novato, Calif.-based research firm RealFacts."

Wednesday, October 17, 2007

NAHB - "Builders Oppose Attempts To Federalize The State Building Code Process" (10-17-07)

"The National Association of Home Builders (NAHB) today told Congress that its members are committed to encouraging greater energy efficiency in housing throughout the U.S. and strongly believe that a voluntary, market-driven approach is the best way to address the nation’s residential energy concerns."

NAHB - "Housing Starts Decline 10.2 Percent In September" (10-17-07)

"Nationwide housing starts declined 10.2 percent in September as builders focused on reducing their inventories in the midst of continuing mortgage market travails, according to data released by the U.S. Commerce Department today. The majority of the downward movement was centered in the multifamily sector, where a significant uptick in starts had been registered in the previous month."

CBIA - "California New Home Market Feeling the Credit Crunch, CBIA Announces" (10-17-07)

"The pace of home sales at California new-home communities slowed further in August, the California Building Industry Association reported today, prompting calls for Congress to take action to enact reforms that could increase the availability of credit."

Mortgage Bankers Association - "Mortgage Applications Increase Slightly In Latest MBA Weekly Survey" (10-17-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 12, 2007. This week’s results include an adjustment to account for the Columbus Day holiday. The Market Composite Index, a measure of mortgage loan application volume, was 656.3, an increase of 0.7 percent on a seasonally adjusted basis from 652.0 one week earlier. On an unadjusted basis, the Index decreased 9.3 percent compared with the previous week and was up 0.7 percent compared with the same week one year earlier."

Bloomberg - "CIT Posts Third-Quarter Loss on Home Lending Shutdown" (10-17-07)

"CIT Group Inc., the largest independent commercial finance company in the U.S., reported a third-quarter loss of $38.8 million, dragged down by costs from closing its subprime home-loan unit. The loss of 24 cents a share compared with net income of $298.3 million, or $1.46 a share, a year earlier, the New York- based company said in a statement today. The loss included a $290.5 million charge for lowering the value of its home lending portfolio to reflect market conditions, following a $495.3 million charge in the second quarter."

Bloomberg - "MGIC Posts First Loss, Predicts No Profit Next Year" (10-17-07)

"MGIC Investment Corp., the largest U.S. mortgage insurer, posted its first quarterly loss in 16 years and said it won't be profitable in 2008 as foreclosures increase from record levels. The net loss of $372.5 million, or $4.60 a share, was the worst quarter for the Milwaukee-based company since it went public in 1991. MGIC earned $130 million, or $1.55 a share, a year earlier, the company said today in a statement. MGIC fell to its lowest in more than a decade."

Reuters - "Comerica profit down 10 pct, hurt by soured loans" (10-17-07)

"Comerica Inc, a large U.S. regional bank, said on Wednesday third-quarter profit fell a larger-than-expected 10 percent, hurt by credit-quality problems related to commercial real estate in Michigan and California."

Tuesday, October 16, 2007

Yahoo - "Best Places For Real Estate Deals" (10-8-07)

"Home sales have sunk to their lowest levels since 2001. Investors are jumping ship, foreclosures are mounting and lenders are exercising caution. Still, there are areas of the country where it makes sense for some to buy. That's because, in a market slump, sellers eager to unload their homes often accept less money from buyers. New construction also slows. Both bode well for buyers hoping to score a deal--if the market in which they are buying is expected to experience increased sales."

Impact Real Estate - "The 'Real' State of Real Estate" (10-16-07)

"Gary Watts’ forecast for 2007/2008 marks the 34th year of bringing to the real estate industry his outlook for the resale housing market. More than just forecasting appreciation numbers such as those below, Gary looks into the various factors that effect real estate values and growth. These detailed searches point to various trends in housing. From those trends, he forecasts what is most likely to happen. Although the past two years have left a lot of people wondering about the future of real estate values, Gary sees a pattern (although this one was a little different) and is confident that real estate will once again make a rebound in the very near future."

NAHB - "Builder Confidence Erodes Further In October" (10-16-07)

"Builder confidence in the market for new single-family homes was further shaken in October due to continuing problems in the mortgage market, substantial inventories of unsold units and the perceived effect that negative media coverage is having on potential buyers, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI fell two more points to 18 in October, its lowest point since the series began in January of 1985."

The San Diego Union Tribune - "Fed chief to 'act as needed'" (10-16-07)

"A deepening housing slump probably will be a 'significant drag' on economic growth into next year and it will take time for Wall Street to fully recover from a painful credit crisis, Federal Reserve Chairman Ben Bernanke warned yesterday. Bernanke once again pledged to 'act as needed' to help financial markets – which have endured several months of turbulence – function smoothly and to keep the economy and inflation on an even keel."

CNN - "Junk mortgages under the microscope" (10-16-07)

"It's getting hard to wrap your brain around subprime mortgages, Wall Street's fancy name for junk home loans. There's so much subprime stuff floating around - more than $1.5 trillion of loans, maybe $200 billion of losses, thousands of families facing foreclosure, umpteen politicians yapping - that it's like the federal budget: It's just too big to be understandable."

MSNBC - "Financiers estimate housing will recover in ’10" (10-16-07)

"U.S. housing prices will continue to decline at least through the end of next year and may not begin creeping upward again until 2010, executives from the nation’s biggest mortgage financiers said Monday. Officials with government-sponsored mortgage companies Fannie Mae and Freddie Mac and CEOs from two major mortgage banks told the Mortgage Bankers Association’s annual convention that the continuing spike in foreclosures and a glut of unsold homes will prevent any quick price rebound."

Bloomberg - "Foreigners Sold Record $69.3 Billion in U.S. Assets" (10-16-07)

"International investors sold a record amount of U.S. financial assets in August as tightening access to credit threatened economic growth and spurred an exodus from American stocks. Total holdings of equities, notes and bonds fell a net $69.3 billion after an increase of $19.2 billion in July, the Treasury Department said today in Washington. Including short- term securities such as Treasury bills, foreigners sold a net $163 billion, compared with a gain in the previous month."

Bloomberg - "Bank of America, JPMorgan Profit Curbed by Writedowns" (10-16-07)

"Bank of America Corp., JPMorgan Chase & Co. and Wachovia Corp. may post their first profit declines since 2005, as more than $3.4 billion of writedowns and loan losses dragged third-quarter earnings lower. Bank of America, the second-biggest U.S. bank, may reduce the value of loans used for leveraged buyouts by $700 million, and No. 3 JPMorgan may disclose a $2.1 billion writedown for LBO loans and mortgages, according to estimates by analysts at Sanford C. Bernstein & Co. Wachovia, the fourth-largest, probably will say it wrote down holdings by $670 million after taxes, analysts at New York-based Citigroup Inc. said."

DQNews - "September Southland home sales lowest in more than 20 years" (10-16-07)

"Home sales in Southern California plunged to the lowest level in more than two decades, as financing with 'jumbo' mortgages dropped by half. The median price paid for a home dropped sharply as a result, a real estate information service reported. A total of 12,455 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in September. That was down 29.9 percent from 17,755 for the previous month, and down 48.5 percent from 24,195 for September last year, according to DataQuick Information Systems."

Yahoo - "Homebuilder Outlook Falls to Record Low" (10-16-07)

"Homebuilders are getting gloomier about the slumping housing market, as a 22-year-old index that tracks their sentiment set a new record low Tuesday. The National Association of Home Builders said its housing market index, which tracks builders' perceptions of conditions and expectations for home sales over the next six months, fell two points to 18 in October, the lowest level since the index began in Jan. 1985. It was the eighth straight monthly decline."

Yahoo - "Paulson Urges Action on Housing Crisis" (10-16-07)

"Treasury Secretary Henry Paulson called Tuesday for an aggressive response to deal with an unfolding housing crisis that he said presents a significant risk to the economy. In the administration's most detailed reaction to the steepest housing slump in 16 years, Paulson said that government and the financial industry should provide immediate help for homeowners trying to refinance current mortgages before they reset at much higher rates."

Monday, October 15, 2007

Market Watch - "Fund for credit market seen as modest first step" (10-15-07)

"A plan by big U.S. banks to create a special fund to help guarantee liquidity in the commercial paper markets drew mixed responses Monday, as its backers in the U.S. government said the proposal is a temporary step to help markets get back on their feet."

CNBC - "Surprise! Americans Plan To Spend More This Holiday" (10-15-07)

"Forget the credit crunch, housing recession and slowing economy. Americans plan to open their wallets this holiday season, though maybe not on those cheap Chinese toys. CNBC’s quarterly 'Wealth in America Report' finds that American plan to spend an average of $839 on Christmas gifts, up 17% from November 2006."

Bloomberg - "Treasury Sales May Rise 50% as Deficit Suddenly Grows" (10-15-07)

"Sales of Treasuries may increase for the first time since 2004 as the U.S. federal budget deficit expands, jeopardizing the biggest bond rally in five years. Government auctions of bills, notes and bonds in the fiscal year that started this month may rise more than 50 percent to $220 billion, according to UBS Securities LLC, one of the 21 primary dealers that underwrite Treasury auctions. The first decline in corporate tax revenue since 2003 increased the shortfall by 12 percent to $162.8 billion for the year ended in September, from $144.8 billion in the 12 months through April."

Bloomberg - "Citigroup Net Falls 57 Percent on Fixed-Income Losses" (10-15-07)

"Citigroup Inc., the biggest U.S. bank, said mortgage delinquencies and consumer lending will deteriorate for the rest of the year after earnings fell 57 percent in the third quarter. Citigroup had its biggest drop in more than a month in New York trading after Chief Financial Officer Gary Crittenden on a conference call said borrower defaults are 'accelerating.'"

Washington Post - "Getting Out of the Mortgage Squeeze" (10-15-07)

"Long before the mortgage market fell apart this summer, Friedman Billings Ramsey, Washington's largest investment bank, saw the trouble ahead. In early 2005, the company invested an eye-catching half-billion dollars, a third of what it had available, in the subprime mortgage business, even buying a mortgage lender. The company bet big that these high-risk loans to people with poor credit would return impressive profits."

Real Estate Journal - "Exchange Rates Give Foreigners The Edge in U.S. Housing Market" (10-15-07)

"With the dollar at historic lows against the euro and other currencies, real-estate agents, appraisers and developers say overseas buyers are stepping up their purchases in the U.S. Some are buying vacation homes in Florida, California and Colorado that would previously have been considered out of reach. Others are gambling that properties purchased now will translate into savvy investments down the road, when both the dollar and the U.S. housing market eventually rebound."

Real Estate Journal - "Democrats Propose Measure To Help Subprime Borrowers" (10-15-07)

"Senior Democrats in Congress said they will move to allow Fannie Mae and Freddie Mac to temporarily increase their portfolios to help borrowers with subprime loans refinance into more affordable products. Sen. Charles Schumer, of New York, and Rep. Barney Frank, of Massachusetts, said they will introduce bills in their respective chambers, perhaps as soon as next week, that would allow the housing financiers to expand their loan portfolios by 10% for six months. Such a move could force a confrontation with the Bush administration, which has resisted efforts to allow the government-sponsored enterprises, or GSEs, to grow despite problems in credit markets."
Los Angeles Times - "Stuck in a housing glut" (10-14-07)

"ARE you a homeowner who is having trouble selling your house? National housing experts say you can heap some of the blame on those big builders with their much-ballyhooed sales and the banks that have put too many foreclosed homes on the market. And if that isn't enough to banish those Goliaths to Dante's Ninth Circle, some experts also hold them responsible for dragging down existing homes' sale prices in certain parts of the nation -- including communities in Southern California."

Orange County Register - "Housing recovery expected in 2 to 3 years" (10-14-07)

"Anaheim A recovery in the housing market may start taking hold sometime in the coming two to three years, depending on whom you asked at the California Association of Realtors convention that ended Saturday. An economist on a panel of experts discussing the slump predicted that the market won't hit bottom until mid- to late 2008. 'We've got a good six to 12 months before we hit that trough in the housing market stats,' Frank Nothaft, chief economist for federal mortgage giant Freddie Mac, said on Thursday."

Herald Tribune - "Banks may pool billions to avoid securities sell-off" (10-14-07)

"Several of the world's biggest banks are in talks to put up about $75 billion in a backup fund that could be used to buy risky mortgage securities and other assets, a move designed to ease pressure on a crucial part of the credit markets that threatens the broader economy. Citigroup, Bank of America and JPMorgan Chase, along with several other financial institutions, have been meeting to come up with a plan to create a fund that could prevent a sharp sell-off in securities owned by bank-affiliated investment vehicles."
Bloomberg - "Citigroup, JPMorgan in Market Talks With Treasury" (10-13-07)

"Citigroup Inc. and JPMorgan Chase & Co. are leading a group of banks that are in talks with the U.S. Treasury about a plan to revive the asset-backed commercial paper market. Discussions over the past two weeks addressed structured investment vehicles, units set up by banks to finance purchases of assets including subprime mortgage debt, said a government official and a banker with knowledge of the deliberations. Under one plan being considered by the banks, lenders would establish a fund of as much as $100 billion to buy assets from the SIVs, said two people familiar with the negotiations who declined to be identified because the talks are continuing."

Washington Post - "The O.C. Mortgage Bust" (10-13-07)

"The good times are over for the get-rich-quick industry that grew up in Orange County and thrived in the first half of the decade, when interest rates hit record lows and home prices surged. Four of the six largest and boldest lenders of risky mortgages were based in this Southern California county back then, and all cashed in on what seemed an insatiable appetite for home loans."

The San Diego Union Tribune - "Mortgage crisis has hit Latinos especially hard" (10-13-07)

"California's growing Latino population has been hit especially hard by the meltdown in the real estate market and many now are paying the price for purchasing homes with subprime mortgages that should never have been approved. That was the conclusion reached yesterday by financing experts who addressed a homeownership conference held in Coronado that was sponsored by California's Latino legislators."

Saturday, October 13, 2007

Bloomberg - "Centex to Take $1 Billion in Charges as Slump Worsens" (10-12-07)

"Centex Corp., the fourth-largest U.S. homebuilder, will take a $1 billion writedown on property and said it will generate less cash from sales than forecast. 'The housing market continues to be extremely difficult,' Chief Executive Officer Timothy Eller said today in a statement. 'These adjustments reflect the market's further deterioration over the quarter and the significant effects of the mortgage- market disruptions.'"

Bloomberg - "U.S. Michigan Confidence Index Declined in October" (10-12-07)

"Confidence among U.S. consumers this month fell to the lowest since August 2006 as the outlook for housing worsened. The Reuters/University of Michigan preliminary index of consumer sentiment fell to 82.0 from 83.4 in September. The gauge compares with an average of 89.6 in the first half of 2007."

Los Angeles Times - "United States of Sub-prime" (10-12-07)

"Good morning. A number of commenters pointed out yesterday's excellent Wall Street Journal story exploring the sub-prime mortgage mess. It's a good story, worth a read, and adds a twist to conventional wisdom about sub-prime mortgages, which is this: conventional wisdom says the sub-prime crisis is mainly about low-income borrowers in low-cost areas. The Journal's analysis indicates the problem is more widespread -- that even in affluent suburbs, some borrowers chose high-interest loans so that they could stretch their way into more expensive homes: 'Among borrowers characterized in the data as white with annual income of at least $300,000, the number of high-rate loans jumped 74% last year, the numbers show.'"