Friday, December 21, 2007

Palm Beach Post - "Market won't bottom out until '09, analyst predicts" (12-21-07)

"The housing market won't 'hit bottom' until 2009 - a year later than previously predicted, the chief economist for the National Association of Home Builders said Thursday."

Yahoo - "SEC probing three dozen securitization cases: report" (12-21-07)

"U.S. regulators, led by the Securities and Exchange Commission, are probing how financial firms priced mortgage securities on their books and whether they should have told investors earlier about the declining value of those securities, The Wall Street Journal reported on Friday."

Yahoo - "Tent city in suburbs is cost of home crisis" (12-21-07)

"Between railroad tracks and beneath the roar of departing planes sits 'tent city,' a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California. The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis."

MSNBC - "Bonuses on Wall Street surge 14 percent" (12-21-07)

"This might have been one of Wall Street's most dismal years in a decade, but that hasn't stopped bonus checks from rising an average of 14 percent. Four of the biggest U.S. investment banks — Goldman Sachs Group Inc., Morgan Stanley, Lehman Brothers Holdings Inc. and Bear Stearns Cos. — will pay out about $49.6 billion in compensation this year. Of that, bonuses are traditionally estimated to represent 60 percent, or almost $30 billion."

CBIA - "New-Home Production Continues Decline in November, CBIA Announces" (12-21-07)

"Production of new housing in California declined further in November as homebuilders continued to take steps to reduce inventory before year-end, the California Building Industry Association reported today. Total housing starts in California, as measured by building permits issued, dropped 45 percent in November when compared to the same month a year ago to 5,498, according to housing permit data supplied by the Construction Industry Research Board. Production of single-family homes fell nearly 50 percent while construction of multifamily units decreased 36 percent when compared to November of 2006."

Los Angeles Times - "U.S. probes allegations that WaMu sought inflated appraisals" (12-21-07)

"Federal regulators are looking into allegations that mortgage lender Washington Mutual Inc. pressured First American Corp. of Santa Ana to inflate appraisals of homes nationwide."

Orange County Register - "O.C. rent growth slows, but no big concessions yet" (12-21-07)

"O.C. residential rent increases have slowed dramatically, but not enough to give tenants much negotiating room for give-backs, says the latest market analysis by Dallas-based Axiometrics Inc."

Orange County Register - "Mortgage rates climb in O.C." (12-21-07)

"Three types of local mortgage rates rose for the week ended Thursday, lead by jumbo rates, which are for loans greater than $417,000. The average rate on a 30-year fixed jumbo hit 6.97% with a one-point fee. I checked in with broker Lou Pacific in Mission Viejo who said daily rates were even higher Thursday. He saw jumbos quoted at 7.56% for a 30-year fixed with a one-point fee."

Real Estate Journal - "Foreclosure ActivityMay Have Peaked" (12-21-07)

"Foreclosure filings for November surged 68% from a year ago but dropped 10% from October, another sign that foreclosure activity overall may have peaked for the year, a foreclosure-listing service said. RealtyTrac Inc. Chief Executive James J. Saccacio said that November's 10% drop from October was the first double-digit monthly decrease observed since April 2006."

Thursday, December 20, 2007

The San Diego Union Tribune - "Banks grumbling after Fed auction" (12-20-07)

"Cash-strapped banks took the Federal Reserve up on its offer of $20 billion in short-term loans to help them overcome credit problems, but the interest rate wasn't as low as some had hoped. The central bank said yesterday that it had received bids for $61.6 billion worth of loans, more than three times the amount that was made available. The loans carried an interest rate of 4.65 percent, which is slightly less than the 4.75 percent the Fed charges banks on emergency loans through its “discount” window. Banks have been reluctant to use the Fed's discount window because of the fear that investors will believe they are having trouble getting funds in a normal manner. "

Yahoo - "Bear Stearns Posts 4Q Loss" (12-20-07)

"Bear Stearns Cos. said Thursday a bigger-than-expected writedown in its mortgage portfolio caused the nation's fifth-largest U.S. investment bank to post the first loss in its 84-year history. It took a $1.9 billion writedown in the quarter ended Nov. 30 as its mortgage-backed securities continued to lose value amid the global credit crisis. That was much larger than the $1.2 billion it expected in November."

Newsweek - "A Sequel to the Subprime Mess?" (12-20-07)

"There is a vast gap of perception and language between the real economy of production and jobs and the financial economy of loans and investments. The real economy, though weakening, is hardly in a state of collapse. In 2007, it has grown about 2 percent; since last December, payroll jobs are up by 1.3 million. Even among those economists who expect a recession, the dominant view is that it will be mild. Meanwhile, the financial economy is described in dire terms verging on hysteria. Markets are "in turmoil"; there is a 'credit crisis.'"

Bloomberg - "MBIA Bond Risk Soars on $8.1 Billion CDO Disclosure " (12-20-07)

"MBIA Inc. fell the most since 1987 in New York trading after the world's biggest bond insurer disclosed that it guarantees $8.1 billion of collateralized debt obligations that investors say have a greater chance of losses. 'We are shocked management withheld this information for as long as it did,' Ken Zerbe, an analyst with Morgan Stanley in New York, wrote in a report yesterday. 'MBIA simply did not disclose arguably the riskiest parts of its CDO portfolio to investors.'"

Bloomberg - "Rating Subprime Investment Grade Made `Joke' of Credit Experts" (12-20-07)

"As storm clouds gathered over New York on July 10, Standard & Poor's started a 10 a.m. conference call to discuss why the credit rating company was about to take its most dramatic action in more than two years. S&P analysts said they might cut ratings on $12 billion of the world's worst-performing subprime mortgage bonds, some of them less than a year after they had been given investment-grade designations. Not since 2005, when it downgraded Ford Motor Co. and General Motors Corp., had S&P generated so much attention. "

DQNews - "Bay Area home sales stuck at two-decade low; price picture mixed" (12-20-07)

"The Bay Area's housing market remained in a bit of deep freeze in November, when sluggish demand kept sales at a two-decade low for the third straight month. Prices continued to hold up best in the region's core markets, while some outlying areas posted more double-digit annual declines, a real estate information service reported. A total of 5,127 new and resale houses and condos sold in the Bay Area in November. That was down 6.5 percent from 5,486 in October, and down 36.2 percent from 8,042 in November 2006, DataQuick Information Systems reported."

Los Angeles Times - "Leaving L.A., Leaving California" (12-20-07)

"Now, let me clarify a bit: despite this 'out-migration,' the populations of California, and L.A. County, are both growing. They are growing because of immigration and new births (Yes, the birth rate is generally higher among immigrants, so recent immigration contributes to the birth rate). In California last year, 89,000 people moved out of the state, but 200,000 new state residents either immigrated here or were born here, so the population moved higher."

Real Estate Journal - "How Hidden IncentivesDistort Home Prices" (12-20-07)

"As the housing market slump deepens, disguised discounts are making it harder to tell exactly how much people are paying for homes. Buyers, sellers and other market participants typically monitor fluctuating home values through sale records that legally have to be listed with county clerks. But incentives offered to buyers -- ranging from free cars or furniture to cash rebates -- are making those prices less reliable as a sign of what buyers actually paid, netting out the giveaways. And that may be misleading lenders and people shopping for homes, some real-estate lawyers and appraisers warn."

Real Estate Journal - "Greenspan Says Forcing LendersTo Alter Terms Would 'Tax' Economy" (12-20-07)

"Former Federal Reserve Chairman Alan Greenspan said that compelling lenders to alter mortgage contracts would be a damaging tax on the economy and it would be less harmful to simply give the homeowners money. Mr. Greenspan, clarifying remarks he made on television Sunday, said in an interview with The Wall Street Journal yesterday, 'I'm saying instead of in effect 'taxing' financial institutions and giving the funds to the homeowners, we'd be far better off, as far as the future structure of our financial markets are concerned, to do it strictly with cash. Do it out in the open. Do it cleanly and with transparency, not by hidden processes.'"

Wednesday, December 19, 2007

Yahoo - "US Foreclosure Filings Up 68 Pct in Nov." (12-19-07)

"U.S. homeowners increasingly failed to keep up with their home loan payments in November, as the number of foreclosure filings surged 68 percent nationwide compared with the same month a year ago, according to a mortgage research company. In all, 201,950 foreclosure filings were reported last month, compared with 120,334 in November 2006, Irvine-based RealtyTrac Inc. said Wednesday."

Bloomberg - "Bass Shorted `God I Hope You're Wrong' Wall Street" (12-19-07)

"J. Kyle Bass, a hedge fund manager from Dallas, strode into a New York conference room in August 2006 to pitch his theory about a looming housing market meltdown to senior executives of a Wall Street investment bank. Home prices had been on a five-year tear, rising more than 10 percent annually. Bass conceived a hedge fund that bet on a crash for residential real estate by trading securities based on subprime mortgages to the least credit-worthy borrowers. The investment bank, which Bass declines to identify, owned billions of dollars in mortgage-backed securities."

Yahoo - "Morgan Stanley Posts Loss on Writedown" (12-19-07)

"Morgan Stanley, the No. 2 U.S. investment bank, reported a $9.4 billion writedown on Wednesday from bad bets on mortgage-related debt, leading it to take a $5 billion infusion from an arm of the Chinese government."

Bloomberg - "Trichet Says Inflation Pickup to Be `More Protracted'" (12-19-07)

"European Central Bank President Jean- Claude Trichet said his economy faced a 'more protracted' period of elevated inflation than previously expected, signaling he's not planning to cut interest rates to ease a credit squeeze. 'The risks to price stability over the medium term are clearly on the upside,' Trichet told the European Parliament's economic and monetary affairs committee in Brussels today. 'The ECB's Governing Council stands ready to counter upside risks to price stability.'"

NAR - "Commercial Real Estate Fundamentals Are Sound But Investment Slowing" (12-19-07)

"The fundamentals in commercial real estate remain healthy with only slight increases in vacancy rates expected for the office and industrial sectors during 2008, although credit restrictions have recently slowed overall investment activity, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors®."

Mortgage Bankers Association - "Mortgage Applications Decrease In Latest MBA Weekly Survey" (12-19-07)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 14, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 653.8, a decrease of 19.5 percent on a seasonally adjusted basis from 811.8 one week earlier. On an unadjusted basis, the Index decreased 21.3 percent compared with the previous week and was up 1.7 percent compared with the same week one year earlier. "

Yahoo - "Fed Loans Banks $20 Billion" (12-19-07)

"Cash-strapped banks took the Federal Reserve up on its offer of $20 billion in short-term loans to help them overcome credit problems, but the interest rate wasn't as low as some had hoped. The central bank said Wednesday that it had received bids for $61.6 billion worth of loans, more than three times the amount that was made available. The loans carried an interest rate of 4.65 percent, which is slightly less than the 4.75 percent the Fed charges banks on emergency loans through its "discount" window. Banks have been reluctant to use the Fed's discount window because of the fear that investors will believe they are having trouble getting funds in a normal manner."

Orange County Register Blog - "Beach homes still O.C.’s least-hit ZIPs" (12-19-07)

"My trusty spreadsheet tells me DataQuick identified 337 homes selling in beach cities’ ZIP codes last month, a 24% drop from a year ago. In these 17 ZIPs, last month’s median price change was a 5.2% gain vs. a year ago."

Los Angeles Times - "Fed looks to rein in lenders" (12-19-07)

"The Federal Reserve on Tuesday proposed new mortgage lending rules to protect consumers against fraud and deception, but consumer advocates said lenders would still have the ability to make the kinds of bad loans that triggered the sub-prime lending crisis."

Tuesday, December 18, 2007

NAHB - "Housing Starts Decline 3.7 Percent In November" (12-18-07)

"Nationwide housing starts declined 3.7 percent to a seasonally adjusted annual rate of 1.19 million units in November as home builders wisely continued to put the brakes on new-home production, according to newly released data from the U.S. Commerce Department."

DQNews - "Southland prices fall again; sales perk up" (12-18-07)

"Southern California home sales bucked the seasonal norm in November and rose slightly over October, thanks to bargain shopping and an uptick in new-home sales. But it remained a chilly market by historical standards: Sales were the slowest for a November in at least 20 years and the median sale price posted a record 10.3 percent year-over-year decline, a real estate information service reported."

Yahoo - "Fed Endorses New Home Mortgage Plan" (12-18-07)

"The Federal Reserve endorsed new rules Tuesday that would give people taking out home mortgages new protections against shady lending practices. The proposed rules, approved in a 5-0 vote by the board, are geared to providing safeguards to the riskiest 'subprime' borrowers, already painfully stung by the housing and credit debacles. The proposal is expected to apply to new loans made by all types of lenders, including banks and brokers. The plan could be finalized next year."

The San Diego Union Tribune - "Warnings of subprime market bust were ignored" (12-18-07)

"Until the boom in subprime mortgages turned into a national nightmare this summer, the few people who tried to warn federal banking officials might as well have been talking to themselves. Edward Gramlich, a Federal Reserve governor who died in September, warned nearly seven years ago that a fast-growing new breed of lenders was luring many people into risky mortgages they could not afford."

The Washington Post - "FBI Probes Virginia Mortgage Scam" (12-18-07)

"The sidewalks are still scrubbed and most lawns are neatly trimmed, but now the subdivision of townhouses off Route 1 in Woodbridge is pocked with empty windows and foreclosures. Federal investigators are poking around. Sources with knowledge of the probe at the Villages at Rippon Landing said investigators are examining why a number of townhouses in a five-block area were bought and resold quickly, for a large profit, even as the real estate market was cooling and unsold homes dotted the neighborhood. The new buyers sometimes failed to pay the mortgages, sending homes into foreclosure and hurting lenders. Renters found themselves unexpectedly forced to move."

Yahoo - "Housing Construction Hits 16-Year Low" (12-18-07)

"Housing construction fell in November with single-family activity dropping to the lowest level in more than 16 years. Analysts said the recession in housing showed no signs of a turnaround. The Commerce Department reported Tuesday that construction of new homes and apartments dropped by 3.7 percent last month to a seasonally adjusted annual rate of 1.187 million units."

Bloomberg - "Fed Plans to Tighten U.S. Mortgage Rules After Crisis" (12-18-07)

"The Federal Reserve proposed new rules for subprime mortgages, including a ban on low- documentation loans and limits on penalties for borrowers who prepay their debts. The plans, the Fed's biggest regulatory initiative since Chairman Ben S. Bernanke took office in February 2006, are aimed at curbing lending practices that contributed to record foreclosures. Board members unanimously voted in a hearing today to make lenders responsible for determining whether borrowers can afford their mortgages even after low starter rates expire."

Orange County Register - "Orange County home prices and sales" (12-18-07)

"For the month of November 2007, sales for all types of Orange County home sales decreased 45.3 percent. The median sales price decreased 6.5 percent. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change."

Los Angeles Times - "On a Palmdale street, foreclosure is in the air" (12-18-07)

"Rocked by the sub-prime loan crisis, Palmdale is one of the places that should benefit most from the Bush plan. With less than 3% of Los Angeles County's population, it and neighboring Lancaster account for nearly 20% of the county's foreclosures."

Real Estate Journal - "Beware of Home Sellers Offering Incentives" (12-18-07)

"A home-buyer's market is a beautiful thing when you are eyeing the house of your dreams, your appetite whetted by this year's nationwide drop in home prices. Add to this a free incentive by the seller, such as a finished basement or a flat-screen TV, and you may be tempted to close the deal sooner than you should."

Real Estate Journal - "Investors Considering Retirement Opt for Property Investments" (12-18-07)

"commercial real estate delivers regular income -- whether from rent checks or dividends from a real-estate investment trust, or REIT. And the sector has traditionally kept pace with inflation and provided 'sufficient risk-adjusted returns,' says Grant Conness, a financial adviser at 1031 Alternatives Group, a division of Costa Financial Securities Inc. in Hollywood, Fla."

Monday, December 17, 2007

Reuters - "Subprime Crisis May Spread Further-Swiss Regulator" (12-17-07)

"The subprime crisis is not over yet and could spread to other credit markets, making it important that banks have a strong capital base, a Swiss regulator and prominent member of the Basel Committee said. 'The danger is not over yet. The subprime crisis could spread to other credit markets, such as in the fields of credit cards, consumer credit, car financing, student loans or commercial credit,' Daniel Zuberbuehler, head of the Swiss Banking Authority (EBK), told newspaper NZZ am Sonntag in an interview published on Sunday."

Reuters - "Japan big banks reluctant to pay for subprime fund" (12-17-07)

"Japan's top three banks are expected to resist a request to put up a total of $15 billion for a U.S.-led subprime rescue fund, a move that could further cloud prospects for the bailout plan."

Business Week - "Subprime: A Predictable Surprise" (12-17-07)

"In 2004, my colleague Max Bazerman and I published Predictable Surprises: The Disasters You Should Have Seen Coming and How to Prevent Them. We defined 'predictable surprises' as problems that (1) at least some people are aware of, (2) are getting worse over time, and (3) are likely to explode into a crisis eventually but are not prioritized by key decision-makers or have not elicited a response fast enough to prevent severe damage. We supported our thesis with detailed analyses of the September 11 attacks, the collapse of Enron, and the war in Iraq. While embraced by many, our work on predictable surprises came under predictable attack. 'Hindsight is 20:20' the critics said. In response, Max and I were able to point to specific instances where we had accurately predicted major problems: Max wrote about congressional testimony on conflicts of interest in the auditing of public companies, and I had written about the dire consequences of an invasion of Iraq for me. But some critics remained unmoved."

NAHB - "Builder Confidence Remains Unchanged For Third Consecutive Month" (12-17-07)

"Builder confidence in the market for new single-family homes remained unchanged for a third consecutive month in December as problems in the mortgage market and excess inventory issues continued, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), released today. The HMI held even at 19 this month, its lowest reading since the series began in January 1985."

NAHB - "Senate Approves Bill To Eliminate Taxes On Forgiven Mortgage Debt" (12-17-07)

"In a move to address the subprime lending crisis and to help struggling home loan borrowers, the Senate on Dec. 14 approved legislation that would eliminate any taxes home owners might face when banks renegotiate the terms of a home loan and forgive a portion of the outstanding mortgage debt. The change in the tax law would cap untaxable forgiven mortgage debt at $2 million and apply only to principal residences."

Bloomberg - "Paulson Favors Fannie, Freddie Buying Jumbo Mortgages" (12-17-07)

"Treasury Secretary Henry Paulson said Fannie Mae and Freddie Mac, the largest sources of finance for American mortgages, may help 'jump start' the market for the largest home loans. Paulson said in an interview today that he favors temporarily allowing the two companies to purchase so-called jumbo loans, which exceed $417,000. He said the proposal should be part of a package of legislative changes governing the two government chartered companies."

Bloomberg - "California Pension Votes $29 Billion Shift of Funds" (12-17-07)

"The California Public Employees' Retirement System, the largest U.S. public pension, agreed to shift 11 percent of its $260 billion portfolio into private equity and other investments from stocks and bonds. The fund board agreed in a 9-3 vote to reduce fixed-income investments to 19 percent from 26 percent of assets and to lower stock holdings to 56 percent from 60 percent. The money will be shifted into private equity, real estate and a new asset class of inflation-linked investments."

Bloomberg - "Centro Slumps 76% on Struggles to Refinance Debt" (12-17-07)

"Centro Properties Group, the owner of 700 U.S. shopping malls, slumped 76 percent in Sydney trading after saying it's struggling to refinance debt because of the collapse in the subprime mortgage market. Melbourne-based Centro suspended dividends and said in a statement that it may have to sell assets, after lenders set a Feb. 15 deadline to negotiate maturing debt. Traditional sources of funding are 'shut for business,' Chairman Brian Healey said in the statement."

Los Angeles Times - "Critics question Anaheim's vision of its future" (12-17-07)

"Anaheim city leaders envision the Platinum Triangle as the county's new downtown, with enough commercial office space to rival the Miracle Mile in Los Angeles. But City Council approval last week of expansion plans has drawn criticism from urban experts who say the project is seriously flawed because of an unhealthy jobs-to-housing imbalance -- and the glaring lack of planned low-cost housing among the 18,363 permitted units."

Orange County Register Blog - "O.C. home inventory at 14 months of sales" (12-17-07)

"Every two weeks, market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo 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. By this Thomas logic, it would take 14.05 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 13.49 months two weeks earlier and vs. 6.88 months a year ago."

Real Estate Journal - "What to Do if You Can't Pay Your Mortgage" (12-17-07)

"Question: What do I do when I owe a $450,000 first mortgage, a second at $115,000 and new houses the same as mine are selling for $500,000? I owe two months on the first and two months on the second, and I cannot pay. What do I do?
Answer: Your situation, and that of thousands of other folks like you, is serious. You are, indeed, in dire straights. You are 'under water' by $65,000, not including your selling costs. And you'll probably have to take less than $500,000 to sell quickly or beat the competition."
Orange County Register - "Real estate woes cut deep" (12-16-07)

"After updates and revisions to key data, The Big O's losing streak now stretches back three quarters to last spring. That's the longest drought since recessionary times of 2001. These drops put The Big O down 1.6 percent in a year, the biggest decline since early 2002."

Ventura County Star - "Families finding struggle to stay in pricey state as economy softens" (12-16-07)

"A new state forecast from the UC Santa Barbara Economic Forecast Project finds that California will have to grapple with the shrinking size of its middle class. There's always a flow of people into and out of the state, said Dan Hamilton, director of economics for the Economic Forecast Project. But 'the middle age groups as well as the middle income groups are leaving just a little faster than other income groups,' he said."

Bloomberg - "Greenspan Favors Government Bailout for Homeowners" (12-16-07)

"Former Federal Reserve Chairman Alan Greenspan said he favors spending U.S. government money to bail out mortgage borrowers who risk losing their homes because they can't make payments. Greenspan, speaking on ABC's 'This Week' program aired today, said cash bailouts, while creating a larger budget deficit, have the advantage of helping homeowners without distorting property prices or interest rates on mortgages."

Yahoo - "
Hold tight, the central banks have no plan" (12-16-07)

This has been the year when many deeply held beliefs have been challenged. One such belief was that central banks have the toolkit to sort out any conceivable economic or financial crisis. Last week's co-ordinated liquidity action by five central banks taught us that this is not the case. The idea was that a co-ordinated response would reassure the markets, but it had the opposite effect. It turned out that market participants are not infinitely stupid. They know by now that this is not a liquidity crisis at its core. If it had been, it would be over by now."

Forbes - "
UBS expects further subprime writedowns of 4.5 bln sfr in Q1 - report" (12-16-07)

UBS AG expects further subprime-related writedowns of 4.5 bln sfr in the first quarter of 2008, after announcing a writedown of 10 bln usd earlier this week, Swiss Sunday paper Sonntag reported."
Orange County Register - "Real estate woes cut deep" (12-16-07)

"After updates and revisions to key data, The Big O's losing streak now stretches back three quarters to last spring. That's the longest drought since recessionary times of 2001. These drops put The Big O down 1.6 percent in a year, the biggest decline since early 2002."

Ventura County Star - "Families finding struggle to stay in pricey state as economy softens" (12-16-07)

"A new state forecast from the UC Santa Barbara Economic Forecast Project finds that California will have to grapple with the shrinking size of its middle class. There's always a flow of people into and out of the state, said Dan Hamilton, director of economics for the Economic Forecast Project. But 'the middle age groups as well as the middle income groups are leaving just a little faster than other income groups,' he said."

Bloomberg - "Greenspan Favors Government Bailout for Homeowners" (12-16-07)

"Former Federal Reserve Chairman Alan Greenspan said he favors spending U.S. government money to bail out mortgage borrowers who risk losing their homes because they can't make payments. Greenspan, speaking on ABC's 'This Week' program aired today, said cash bailouts, while creating a larger budget deficit, have the advantage of helping homeowners without distorting property prices or interest rates on mortgages."
Yahoo - "Fed Taking on Abusive Lending Practices" (12-15-07)

"People taking out home mortgages may gain new protections soon against shady lending practices as the Federal Reserve seeks to back even the riskiest borrowers, already hit hardest by the housing and credit crunches. Rules expected to be proposed Tuesday would apply to loans made by all types of lenders, including banks and brokers. The plan from the Fed, which has regulatory powers over the nation's financial system, could be finalized next year. The effective date would be know then."

Bloomberg - "Dollar Rises to 1-Month High Versus Euro, Yen on Inflation, Fed" (12-15-07)

"The dollar rose to the highest levels in more than a month against the euro and yen as accelerating inflation reduced speculation that the Federal Reserve will lower borrowing costs next year. The dollar gained against the 16 most-actively traded currencies this week after consumer and wholesale prices increased last month. The U.S. currency posted the biggest weekly advance against the euro since August. A government report next week is forecast to show a price gauge closely tracked by the central bank gained in November." - "Courthouse-step auctions offer 1,336 properties in foreclosure -- 17 are sold" (12-15-07)

"Another foreclosure record was set in November as 1,336 properties were offered to the highest bidder on the courthouse steps in Modesto, Merced and Stockton. Now here's the real surprise: Only 17 of them sold, despite lenders offering deeply discounted prices."

Los Angeles Times - "Sell that house: Seven steps to success" (12-15-07)

"Avoid prices that end in numbers like 55,000 or 80,000. Round to the nearest $25,000: 'The real estate sites used by home buyers typically filter price in $25,000 or $50,000 increments, so a home selling for $350,000 is likely to be seen significantly more than a home selling for $355,00 because the $355,00 home will be excluded by buyers who set $350,000 as their maximum price.'"

Orange County Register - "O.C. rents squeeze tenants" (12-15-07)

"With average Orange County rents at about $1,600 a month, many tenants are scrambling to make ends meet. Some are downsizing. Some are finding roommates, and some, like Groat, are moving in with family or away completely."
NAHB - "Senate FHA Bill Would Help Ease Subprime Crisis" (12-14-07)

"To help alleviate the current housing downswing and allow the Federal Housing Administration to insure mortgages for more home owners, the Senate today approved legislation that would improve the capacity and flexibility of the FHA to serve the credit needs of subprime and other challenged mortgage borrowers. The bill passed by an overwhelming 93-to-1 margin."

NAR - "FHA Legislation Will Help Homeowners, Economy, Says NAR" (12-14-07)

"The FHA Modernization Act of 2007, passed today by the U.S. Senate, would help protect the interest of America’s current and future homeowners by giving borrowers a safer alternative to riskier mortgage products while also helping many homeowners who may be facing foreclosure, according to the National Association of Realtors®."

CBIA - "California New-Home Sales Decline Continued in October, CBIA Announces" (12-14-07)

"The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that new home sales in October were 46 percent below October 2006, similar to the year-over-year decline seen in September. During the month, 3,292 homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 6,047 in October 2006. Sales of single family homes dropped by 37 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were down 41 percent and sales of condominiums were down 71 percent."

Bloomberg - "Citigroup Rescues SIVs With $58 Billion Debt Bailout" (12-14-07)

"Citigroup Inc. will take over seven troubled investment funds and assume $58 billion of debt to avoid forced asset sales that would further erode confidence in capital markets. Moody's Investors Service lowered the bank's credit ratings. The biggest U.S. bank by assets will rescue the so-called structured investment vehicles, or SIVs, taking responsibility for their $49 billion of assets, the New York-based company said in a statement late yesterday."

Financial Times - "US sees asset-backed market shrink" (12-14-07)

"The size of the US asset-backed commercial paper market has shrunk for an 18th consecutive week, reducing this important source of funding for financial institutions to its lowest level in two years. For the week ending on Wednesday, the amount of outstanding ABCP declined $10.3bn to $791bn."

Reuters - "One in 5 homeowners see house price drop: survey" (12-14-07)

"More than one in five U.S. homeowners expect their home to fall in value in the coming year, a Reuters-University of Michigan consumer survey said on Friday. The survey found 21 percent of the 1,168 surveyed see a fall in prices, with those heavily concentrated in areas that have already seen values decline, the survey's director Richard Curtin said in a statement."

Reuters - "Still not the time to buy housing stocks" (12-14-07)

"Investors looking to profit from U.S. housing stocks will have to be patient. Even though they have sunk to multiyear lows, strategists speaking at the Reuters Investment Outlook 2008 Summit said they still aren't worth the risk."

The Press Enterprise - "Recession concerns rise for Inland region" (12-14-07)

"Plummeting home construction and declining growth in global trade that feeds the cargo industry likely will drive Inland Southern California into a recession next year -- the first in decades -- said two economists who closely watch Riverside and San Bernardino counties"

Los Angeles Times - "2 states probe Countrywide home loans" (12-14-07)

"The nation's No. 1 mortgage lender, Countrywide Financial Corp., is under investigation by California Atty. Gen. Jerry Brown and the attorney general's office in Illinois, the Calabasas company said Thursday. Countrywide said it had received subpoenas for documents from California and Illinois but declined to elaborate, citing company policy. It said it was cooperating in the two probes."

The New York Times - "After the Money’s Gone" (12-14-07)

"On Wednesday, the Federal Reserve announced plans to lend $40 billion to banks. By my count, it’s the fourth high-profile attempt to rescue the financial system since things started falling apart about five months ago. Maybe this one will do the trick, but I wouldn’t count on it."

Sunday, December 16, 2007

NAHB - "Clean Water Act Proposals Go Too Far, NAHB Tells Senate" (12-13-07)

"with a credit crisis exacerbating the housing slowdown, NAHB believes that Congress should focus its limited time and resources on legislation to help home owners and home buyers, rather than pursue legislative ideas that not only will restrict the industry’s ability to recover but also make new homes more costly, he told senators."

Mortgage Bankers Association - "Continued Increase in Q3 Commercial/Multifamily Mortgage Debt Outstanding Produces Record Numbers" (12-13-07)

"The level of commercial/multifamily mortgage debt outstanding grew by 2.8 percent in the third quarter, exceeding $3.2 trillion, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data. The $3.22 trillion in commercial/multifamily mortgage debt outstanding recorded by the Federal Reserve was an increase of $87.7 billion from the second quarter 2007. Multifamily mortgage debt outstanding grew to $813 billion, an increase of $23.5 billion or 3 percent from the second quarter."

Bloomberg - "U.S. Holiday Sales Drop for Second Week, Research Group Says" (12-13-07)

"U.S. retail sales dropped for the second straight week as consumers postponed holiday gift purchases during what may be the worst holiday shopping season in five years. Sales fell 2.7 percent in the seven days through Dec. 8, following a 4.4 percent decline a week earlier, Chicago-based research firm ShopperTrak RCT Corp. said yesterday. About 12 percent fewer shoppers visited stores last week compared with the same period last year, ShopperTrak said."

Yahoo - "Wholesale Inflation Surges, but Sales Up" (12-13-07)

"A record jump in gasoline prices pushed up wholesale inflation in November at the fastest pace in more than three decades, while retail sales showed unexpected strength. The Labor Department said Thursday that wholesale prices rose by 3.2 percent last month, the biggest increase in 34 years. The jump reflected a 34.8 percent surge in gasoline prices. Outside of energy and food, core inflation posted a 0.4 percent jump, double what was expected."

Bloomberg - "Ambac Reinsures $29 Billion Portfolio to Keep Rating" (12-13-07)

"Ambac guarantees $556 billion of securities and the loss of its AAA rating jeopardizes the rankings on that debt as well as threatens the New York-based company's biggest source of revenue. MBIA Inc., the largest bond insurer, agreed to sell as much as $1 billion of stock to Warburg Pincus LLC earlier this week while Moody's Investors Service, Fitch Ratings and Standard & Poor's examine the seven AAA rated insurers' credit quality."

Bloomberg - "CIBC's Big Subprime Secret Might Cost Billions" (12-13-07)

"Canadian Imperial Bank of Commerce has a big skeleton in its vault. And the bank's executives are doing a ham-handed job of trying to keep it there. CIBC's lightly guarded secret is the name of a 'U.S. financial guarantor' that faces a possible downgrade on its A credit rating and is 'not necessarily rated by both Moody's & S&P.' That's how CIBC last week described the company that is insuring $3.47 billion, or about a third, of the collateralized- debt obligations it holds that are tied to U.S. subprime mortgages."

The Washington Post - "Analysts Late to the Alarm" (12-13-07)

"Throughout 2006, T. Rowe Price analyst Susan Troll watched in horror as one risky mortgage deal after another hit the market. She became alarmed by a widening trend: mortgage lenders issuing home loans of poor quality that were then packaged and sold by Wall Street investment banks to investors worldwide. Finally, she could stand it no longer. In e-mails and meetings with money managers, Troll urged T. Rowe Price to sell its portfolio of subprime mortgage securities."

Yahoo - "Greenspan: Odds Rising for a Recession" (12-13-07)

"Former Federal Reserve Chairman Alan Greenspan says the odds the U.S. will fall into a recession are 'clearly rising' and he believes economic growth is 'getting close to stall speed.'"

CNN - "Builders' lobbyist: We made too many homes" (12-13-07)

"Builders deserve some blame for the nation's housing and mortgage problems because some overbuilt, flooding the market with new properties, according to leading advocate for the homebuilders. Jerry Howard, chief executive of the National Association of Home Builders, told that numerous problems caused the sharp slump in the housing and mortgage markets, but he added that overbuilding during the boom years was a contributing factor."

Reuters - "Countrywide loan funding tumbles 40 percent in November" (12-13-07)

"Countrywide Financial Corp the No. 1 U.S. mortgage lender, said on Thursday mortgage loan funding tumbled 40 percent to $23 billion in November, sending its shares down 5 percent as late payments continue to escalate."

Real Estate Journal - "Why Borrowers May Not Benefit From Rate Cut" (12-13-07)

"Not all borrowers are benefiting from the Fed's moves to cut interest rates. The problem: Loans that are tied to a variety of interest-rate benchmarks -- some of which aren't necessarily moving in lockstep with Fed action. Yesterday, the Federal Reserve cut short-term interest rates by a quarter of a percentage point to 4.25% -- the central bank's third rate cut since mid-September -- to help ease the credit crunch and reduce the economy's chances of falling into a recession. The moves have helped some borrowers who have seen interest rates on their credit cards and home-equity lines of credit fall. Interest rates on many fixed-rate mortgages also have dropped amid a decline in Treasury yields as investors sought out safe investments."

Friday, December 14, 2007

NAHB - "NAHB Highlights Green Products, Services At The International Builders' Show" (12-12-07)

"In recognition of the phenomenal growth of green building, the National Association of Home Builders (NAHB) will celebrate 'Green Day' on Thursday, Feb. 14, at the International Builders’ Show® in Orlando, Fla. On Green Day, the association will officially launch the NAHB National Green Building Program and will unveil the new Certified Green Professional educational designation for home builders, remodelers and other industry professionals."

NAHB - "New Guide Helps Builders Navigate Residential Code" (12-12-07)

"A new pocket guide co-published by the National Association of Home Builders (NAHB) and the International Code Council (ICC) provides critical answers to the most frequently asked residential construction jobsite code questions. Available through BuilderBooks, NAHB’s publishing arm, Home Builders’ Jobsite Codes: A Pocket Guide to the 2006 International Residential Code, is a portable guide for home builders, contractors, inspectors, architects, engineers, and other construction professionals. The convenient field guide is a quick reference to the 2006 International Residential Code (IRC), and provides easy-to-read code requirements for every aspect of residential construction."

Mortgage Bankers Association - "MBA's Quinn Cautions on Dodd's Anti-Predatory Lending Bill" (12-12-07)

"The introduction of this bill is an important development as it will jumpstart the debate in the Senate over how to prevent a reoccurrence of the current troubles facing the mortgage market. We are still reviewing the specific language in the bill, but there are several provisions that concern us deeply. Senator Dodd's bill does not provide a uniform national standard to protect consumers from predatory lending, a step we feel is necessary to ensure a smooth and efficient marketplace. Further, we are troubled by the bill's 'duty of care' and assignee liability requirements."

CNN - "House ponders mortgage bankruptcy bill" (12-12-07)

"A House committee is scheduled to vote Wednesday on legislation that would permit judges to shrink the size of home loans for bankrupt homeowners - a mortgage-mess remedy supported by consumer advocates and ardently opposed by the lending industry. Many Democrats say the proposal is a better way to help homeowners than a plan to freeze interest rates announced by the Bush administration last week and negotiated with lenders and investors."

CNN - "Mortgage applications rise" (12-12-07)

"Mortgage application volume increased 2.5 percent for the week ending Dec. 7, according to the trade group Mortgage Bankers Association's weekly application survey. The MBA's weekly application index rose to 811.8 from 791.8 the previous week. Refinance volume increased 4.3 percent, while purchase volume grew 1.7 percent. Refinance applications accounted for 57.6 percent of total mortgage applications during the week ending Dec. 7, compared with 56 percent during the prior week."

Seeking Alpha - "No, Pending Home Sales Index Did Not Rise" (12-12-07)

"'The worst part of the credit crunch' is already reflected in the data, said Lawrence Yun, chief economist for the NAR. Um, no. That is not what their own data suggested (you can always tell when these folks are lying -- the clue will be their lips are moving)." - "The Mirage of the Mortgage Fix" (12-12-07)

"The sea of inflationary credit is the core problem behind the falling dollar, the subprime crisis, the housing meltdown, not to mention the rise in the national debt and a thousand other problems. And how do they deal with it? More credit and more calls for controls. No one in Washington seems to understand the reason for the crisis, much less how to fix it. The markets go for this stuff for a while until it looks like Washington is in panic mode. Even Wall Street is starting to sense that something is very wrong."

New York Times - "The Capital of Slumping Home Sales" (12-12-07)

"Just south of Los Angeles, there is a small city called Paramount where houses have all but stopped selling. It’s a city of bungalows and manicured lawns, far enough from downtown to have long been affordable to working-class families. But as home prices rose ever higher in other parts of Southern California, Paramount became all the more attractive — and prices eventually soared there as well. By last year, the typical house sold for almost $500,000, up from $200,000 in early 2003."

Orange County Register - "Billionaire pays IRS $52 million in back taxes" (12-12-07)

"Billionaire developer Igor Olenicoff pleaded guilty Wednesday to lying on his tax returns and paid $52 million in back taxes, one of the largest individual tax cases in Southern California history."

Real Estate Journal - "Online Sleuthing For Home Buyers" (12-12-07)

"sites allow house hunters to screen prospective neighbors, evaluate school districts and see how members of the community rate a street's Internet connectivity and cellphone service. Shoppers can keep abreast of the news in a neighborhood they're considering, and get alerts when houses list for sale or restaurants open -- or when a registered sex offender moves to the area. Consumers can find energy-efficient homes and compare locations by levels of toxic waste or drought conditions. And both buyers and sellers can join discussions with others who are in the market and real-estate professionals."

Real Estate Journal - "Mortgage Pain Hits Prudent Borrowers" (12-12-07)

"Some of the costs of cleaning up the nation's mortgage crisis are beginning to hit innocent bystanders: people who pay their bills on time and avoid excessive debt. Fannie Mae, the giant government-sponsored mortgage investor, last week raised costs for many borrowers by quietly adding a 0.25% up-front charge on all new mortgages that it buys or guarantees. On a $400,000 mortgage, that would mean an extra $1,000 in fees, almost certain to be passed on to the consumer. Freddie Mac, the other big government-sponsored mortgage investor, is expected to impose a similar fee soon, according to a person familiar with the situation."
NAHB - "Fed Rate Cut Will Help Economy; Congressional Action Also Needed" (12-11-07)

"The Federal Reserve Board’s decision today to cut short-term interest rates by 25 basis points is an important step to ensure that the economy is not derailed by problems in the subprime mortgage market, and it is now up to Congress to do its part, according to the National Association of Home Builders (NAHB)."

Mortgage Bankers Association - "Freddie Mac Applies New Market Condition Postsettlement Delivery Fees to All Mortgages With Settlement Dates On or After March 9, 2008" (12-11-07)

"Due to continued deterioration in the mortgage market, Freddie Mac is announcing that effective for all Mortgages sold under flow Purchase Contracts with Settlement Dates on or after March 9, 2008, including Mortgages sold with recourse and indemnification, we will assess an additional 25 basis point postsettlement delivery fee. The new Market Condition Delivery Fee will enable Freddie Mac to continue fulfilling our important housing mission in the current market environment."

Yahoo - "WaMu Shares Fall on Outlook Worries" (12-11-07)

"Washington Mutual's move to slash staff and launch a massive stock offering to shore up its finances may smack of desperation, analysts said Tuesday as the bank's shares tumbled nearly 12 percent. The stock price of the nation's largest savings and loan fell sharply a day after it said it would close offices, lay off more than 3,000 workers, and cut its dividend. It also worried investors by saying it would set aside up to $1.6 billion for loan losses in the fourth quarter and sell $2.5 billion worth of convertible preferred stock."

CNN - "Americans split on mortgage bailout" (12-11-07)

"Americans are nearly equally divided on whether those facing defaults on their mortgages should get special help, with most believing the borrowers are to blame for their own problems. A poll conducted for CNN by Opinion Research Corp. found that 51 percent of Americans surveyed believed that those at risk of defaulting on their mortgages and losing their homes "should receive special treatment." But 46 percent said there should not be any special treatment afforded to those in trouble."

Yahoo - "Freddie Sees $5.5B-$7.5B More Losses" (12-11-07)

"The chief executive of Freddie Mac estimated Tuesday the mortgage finance company will lose an additional $5.5 billion to $7.5 billion over the next few years as the housing crisis worsens and home-loan defaults rise."

Yahoo - "Fed Lowers Rates, Wall Street Tumbles" (12-11-07)

"The Federal Reserve dropped its most important interest rate to a nearly two-year low on Tuesday and left the door open to additional cuts to prevent a housing and credit meltdown from pushing the economy into a recession."

San Francisco Gate - "Washington Mutual to close 190 offices" (12-11-07)

"Washington Mutual Inc., the nation's largest savings and loan, said Monday that problems in the mortgage and credit markets are forcing it to close offices, lay off more than 3,000 workers and set aside up to $1.6 billion for loan losses in its fourth quarter."

The Motley Fool - "The Impending Destruction of the U.S. Economy: Part 1" (12-11-07)

"The massive account deficit we currently hold with the rest of the world totals some $800 billion per year. Where the heck is all that money coming from? From foreign investors in China, Japan, the Middle East, and nearly every other conceivable corner of the globe. They have no problem lending us the difference, because while we as a country spend more than we make -- we're still incredibly wealthy and good on our word. But like a massive Ponzi scheme, the fun will certainly end. In the past six years, the value of the dollar has taken a serious beating. The euro, worth $0.85 a few years ago, is now worth $1.47. Yikes. But because the average American shops mostly within the borders, this probably isn't too pressing an issue, and so the greenback's plummet doesn't show its full effects."

Youtube - "Peter Schiff on Credit Crisis" (12-11-07)

Los Angeles Times - "Stocks up on housing data" (12-11-07)

"Stocks rallied Monday, led by shares of builders and banks, after a measure of home sales unexpectedly rose and foreign investors agreed to inject billions of dollars into a giant Swiss bank. The Dow Jones industrials gained more than 100 points."

Los Angeles Times - "Gauge of pending home sales climbs" (12-11-07)

"Pending sales of existing U.S. homes rose modestly in October, bucking Wall Street forecasts, but the decline from a year earlier was the third-largest on record, a reminder of how far housing has fallen. The National Assn. of Realtors said Monday that its pending home sales index, based on contracts signed in October, was up 0.6% to 87.2 from an upwardly revised index of 86.7 in September."

Thursday, December 13, 2007

NAR - "Existing-Home Sales to Trend Up in 2008" (12-10-07)

"Existing-home sales are projected to trend up in 2008, with pending home sales showing a slight near-term rise, according to the latest forecast by the National Association of Realtors®. However, a recovery for new-home sales is unlikely before 2009."

Mortgage Bankers Association - "Freddie Mac Announces Operational Changes For Purchasing Delinquent Loans From Mortgage PCs" (12-10-07)

"Freddie Mac (NYSE: FRE) announced today that the company will generally purchase mortgages that are 120 days or more delinquent from pools underlying Mortgage Participation Certificates. Freddie Mac had generally purchased mortgages from PC pools shortly after they reach 120 days delinquency. From time to time, the company reevaluates its delinquent loan purchase practices and alters them if circumstances warrant."

Mortgage Bankers Association - "Fitch Report: U.S. RMBS and SF CDO Rating Actions" (12-10-07)

"In November, Fitch’s U.S. residential mortgage-backed securities group ("RMBS") reviewed more than 350 transactions with over 4,200 classes of debt outstanding. Approximately 88% of these classes were affirmed, while almost all of the remaining classes were downgraded. The downgrades were concentrated in three broad sectors: first-quarter 2007 vintage subprime (226 classes), pre-2006 vintage subprime (185 classes primarily from the 2004 & 2005 vintages) and 2005 & 2006 Alt-A mortgages (77 classes). In addition to the downgrades, 67 classes were placed on Rating Watch Negative; nearly all of these classes were in the subprime sector."

Herald Tribune - "Survey: November housing market disappoints" (12-10-07)

"In a national monthly survey of real estate agents, Bank of America Securities summed up November as 'another quiet month with few buyers swayed by lower prices.' Sarasota, the 45th largest market in the country, was included in the real estate survey released this month. Bank of America found that traffic 'well below' agents' expectations."

Yahoo - "Subprimes Force UBS to Write Down $10B" (12-10-07)

"UBS AG will write off a further $10 billion in losses from the U.S. subprime lending market, the Swiss bank said Monday, and raise billions in capital through share sales to Singapore and an unidentified investor in the Middle East."

Bloomberg - "Bernanke May Risk `Fool in Shower' Label for Economy" (12-10-07)

"Federal Reserve Chairman Ben S. Bernanke may have to risk becoming the proverbial 'fool in the shower' to keep the U.S. economy out of recession. Renewed turbulence in financial markets puts Bernanke, 53, under pressure to open the monetary spigots wider to pump up the economy. Traders in federal funds futures are betting it's a certainty the Fed will cut its benchmark interest rate from 4.5 percent tomorrow, and they see a better-than-even chance the rate will be 3.75 percent or below by April."

Market Watch - "Beware of more 'hidden' subprime losses" (12-10-07)

"The reality of Generally Accepted Accounting Principles, or GAAP, is that they give companies just enough rope to hang themselves and their investors, if they so please. Much of GAAP is so subjective that you could drive side-by-side snow plows through the gray areas. That is something to keep in mind if, with the latest wave of write-offs, you believe it is time to start bargain hunting among the most beaten-down financial-services companies tied to the mortgage blowup. The time may very well be right, but a recent report by Gradient Analytics warns that financial-reporting practices of some of these companies yesterday and today could still come back to bite investors tomorrow."

Bloomberg - "Bank of America to Liquidate $12 Billion Cash Fund" (12-10-07)

"Bank of America Corp. will liquidate a $12 billion cash fund for wealthy clients and institutions, the largest investment of its type to close because of losses tied to the collapse of the subprime-mortgage market. The fund, Columbia Strategic Cash Portfolio, was sold as an alternative to money-market funds, offering a higher yield by taking more risk. It was the biggest so-called enhanced cash fund, with $33 billion in assets two weeks ago before an investor pulled more than $20 billion, said Peter Crane, founder of Crane Data LLC, the Westborough, Massachusetts-based publisher of the Money Fund Intelligence."

Yahoo - "Mortgage Crisis Forces Big Cuts at WaMu" (12-10-07)

"Washington Mutual Inc., the nation's largest savings and loan, said Monday that problems in the mortgage and credit markets are forcing it to close offices, lay off more than 3,000 workers and set aside up to $1.6 billion for loan losses in the fourth quarter."

Business Week - "Even Hot Housing Markets Can Go Cold" - (12-10-07)

"Unlike previous downturns, this housing slump is affecting even areas and properties that should be immune. Prices are rising in some places, but not as much as they were, and the pace of sales is down almost everywhere. The hottest markets have likely already been weakened by tighter loan restrictions in the wake of the subprime mortgage mess."

Orange County Register Blog - "O.C. property tax payments up 8.8% vs. ‘06" (12-10-07)

"If you haven’t made your property tax payment yet, you are not alone. First payments are due today. (See photo of the line at the tax collector’s offices!) Orange County’s tax collector says that as of Dec. 8, the department collected $1.85 billion in property taxes for this billing season. Total amount due when April’s second deadline comes? $4.578 billion!"

Los Angeles Times - "Listing prices flattish" (12-10-07)

"Not budging: Median listing prices in greater LA were essentially flat over the past week -- slipping by $100 -- as inventory continued to run well ahead of year-ago levels, according to Housing Tracker's analysis of MLS listings. Prices: Median listing price was $498,900 for single family homes and condos, down from $499,000 the previous week. Median listing prices are down 9.3% over the past year."

Wednesday, December 12, 2007

The San Diego Union Tribune - "Bush's plan on mortgage problems isn't enough" (12-9-07)

"The White House ambulance belatedly arrived at the scene of the subprime mortgage crash last week, with President Bush and some banking industry paramedics trying to stanch the bleeding of the battered housing market. But Bush's proposed remedy is only a small bandage on a gaping wound. It may lessen or slow but will not halt the economic problems associated with the mortgage crisis. And there's even a chance that it could make matters worse."

Reuters - "UBS stops withdrawals from real estate funds-paper" (12-9-07)

"Swiss bank UBS stopped withdrawals from three real estate funds with a total volume of around 6 billion Swiss francs, Swiss Sunday newspaper Sonntag reported."

The San Diego Union Tribune - "Kickback scheme costs builders $6.4 million" (12-9-07)

"Rigged appraisals, lax underwriting and toxic loan products may dominate the headlines, but they are hardly the only issues causing problems in residential real estate. The federal government and state regulators are targeting other housing-related misdeeds that can cost consumers big money – especially involving under-the-table kickbacks among builders, real estate brokers, loan officers, mortgage bankers and title insurers."

The San Diego Union Tribune - "Santa's bag of home equity filled with coal" (12-9-07)

"The housing downturn that started last year and has accelerated this year has barred the chimney to Santa in many homes, as owners find they no longer have the growing equity that can be tapped again and again to finance spending."

The San Diego Union Tribune - "Foreclosure pattern points to loan fraud, experts say" (12-9-07)

"America's subprime mortgage crisis is partly due to predatory, or aggressive, lenders, hard-sell tactics by mortgage brokers and an easing of underwriting standards in the $10 trillion home-loan industry. But fraud accounts for a sizable share of the bad bets on mortgages, according to many industry experts, and lenders may have been victimized as much as anyone else." - "MORTGAGE MELTDOWN" (12-9-07)

"New proposals to ease our great mortgage meltdown keep rolling in. First the Treasury Department urged the creation of a new fund that would buy risky mortgage bonds as a tactic to hide what those bonds were really worth. (Not much.) Then the idea was to use Fannie Mae and Freddie Mac to buy the risky loans, even if it was clear that U.S. taxpayers would eventually be stuck with the bill. But that plan went south after Fannie suffered a new accounting scandal, and Freddie's existing loan losses shot up more than expected."

Orange County Register - "Tapped-out family's home is at risk" (12-9-07)

"Homeowners like the Coffmans who tapped their equity, as well as those who bought more home than they could afford, are falling behind on their mortgages in increasing numbers. U.S. home loan delinquencies in the third quarter reached the highest level in more than 20 years, according to the Mortgage Bankers Association."

Los Angeles Times - "The foreclosure bargain hunt" (12-9-07)

"IF regular real estate deals are a two-aspirin headache, then foreclosure purchases are a serious migraine. Despite the reported upswing in foreclosures, it actually is not easy to find them. Nor, once you locate one to buy, is the purchase process simple. Even if done right, it can take a while to find and buy a bank-owned property. And the process is fraught with pitfalls."
Youtube - "Its Credit and Its Crunchy" (12-8-07)

Reuters - "Iran stops selling oil in U.S. dollars -report" (12-8-07)

"Iran has completely stopped selling any of its oil for U.S. dollars, an Iranian news agency reported on Saturday, citing the oil minister of the world's fourth-largest crude producer. For nearly two years, OPEC's second biggest producer has been reducing its exposure to the dollar, saying the weak U.S. currency is eroding its purchasing power."

Bloomberg - "Treasuries Post First Weekly Drop Since October on U.S. Rescue" (12-8-07)

"Treasuries posted their first weekly decline since October as the government introduced a plan to freeze some subprime mortgages, reducing the safe-haven appeal of U.S. debt. Yields on 10-year notes rose the most since March 2006 after the Labor Department reported that employers added more jobs last month than forecast, suggesting that the economy is weathering the housing slump. Traders reduced bets that the Federal Reserve will cut borrowing costs a half-percentage point at its meeting next week."

Bloomberg - "Dollar Rises to One-Month High Versus Yen on U.S. Job Growth" (12-8-07)

"The dollar rose to a one-month high against the yen after a U.S. government report showed yesterday that November job growth exceeded forecasts, reducing concern the world's largest economy will head into a recession. The U.S. currency posted a second weekly gain versus the yen as traders pared bets the Federal Reserve will cut borrowing costs by a half-percentage point on Dec. 11. The British pound and the Canadian currency fell against the dollar and euro this week after central banks in the U.K. and Canada reduced interest rates. The European Central Bank kept its rate unchanged."

Los Angeles Times Blog - "You, too can BUY a better credit rating" (12-8-07)

"If your credit is on the shaky side, and it's preventing you from buying the things in life you rightly deserve, don't despair: you can buy a better credit score. In fact, you can probably use your shaky credit to borrow money to buy a better credit score, so that your credit won't be so shaky."

Real Estate Journal - "Dump This House: Unloading Your Property in a Slow Market" (12-8-07)

"Look at the prices of homes getting sold, and the property market's decline seems no worse than a rough day in the stock market. Look at the number of unsold homes, and you realize there's a world of financial pain out there. True, these unsold homes may eventually get bought at decent prices. But in the meantime, the owners are often bleeding money -- and many of them would be smart to slash their asking price and go for the quick sale."

Tuesday, December 11, 2007

Yahoo - "Bush subprime plan limited but a step forward" (12-7-07)

"The Bush administration unveiled a foreclosure relief plan Thursday that the White House said could help 1.2 million distressed homeowners. In separate announcements, President Bush and Treasury Secretary Henry Paulson said the plan will streamline the mortgage modification process for many distressed borrowers. It will offer 'more relief to more homeowners, more quickly,' the president said. And it will include a five-year freeze on interest rates for borrowers current with their monthly payments."

Seeking Alpha - "Why Home Prices Are Important To the U.S. Economy" (12-7-07)

"the bursting of the stock market bubble was really just a little bump in the road - total household assets declined only slightly over those years and, in the last seven years, the value of household real estate has gained more than twice the amount that stocks lost between 2000 and 2002."

Yahoo - "Should I Rent or Buy A Home?" (12-7-07)

"The decision to rent versus buy may be affected by interest rates. Use this calculator to compare costs over the period you choose."

NAHB - "Fannie Mae Plan To Raise Housing Finance Costs Highlights Need For Congressional Action" (12-7-07)

"Fannie Mae’s new fee is a broad tax on homeownership that ultimately will be passed along to consumers. It’s certain to be more difficult for the housing market to regain its footing when steps are being taken to drive up mortgage costs. This is the exact opposite of what needs to be done and underscores the importance of Congress quickly enacting legislation that would strengthen regulatory oversight of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac while also preserving their vital housing mission."

Los Angeles Times - "Mortgage relief program a slap in the face to some" (12-7-07)

"Many people who prudently sat out the housing bubble -- or resisted the urge to cash out their home equity to help finance their standard of living -- share that visceral reaction. In part, they resent on principle the rush to help a segment of society that may not have acted so responsibly. But they also fear that any effort to prevent foreclosures could keep home prices from falling to an affordable level. 'I try to do the right thing, which is to have a down payment and a job and to be fiscally responsible, and it basically looks like it's not going to pan out if this sub-prime bailout goes through,' said Johnson, a 34-year-old biologist at the Salk Institute."

Orange County Register - "Orange County home prices and sales" (12-7-07)

"For the 22 business days ending November 20, sales for all types of Orange County home sales decreased 46.8 percent. The median sales price decreased 8.2 percent. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change."

Los Angeles Times Blog - "Homeowners paying property taxes on time" (12-7-07)

"In San Diego County, Tax Collector Dan McAllister expects a 6.5% increase this fiscal year as compared to the double-digit growth during the last five years. His Ventura County counterpart, Larry Matheney, says his "collection rate is actually up, though not by a statistically significant" amount. "I don't think the county is going to get the big pinch from this until the decline in the real estate market has gone on for maybe another couple of years," he says. Counties need to get used to normal to just below normal growth after a series of phenomenal jumps in the tax base, assessors and tax collectors say. Riverside County Tax Collector Paul McDonnell says assessed value jumped 22% on Jan. 1, 2006 from a year earlier, but grew only 17% the following year. Forecasts are for 8% growth in 2008, 4% in 2009 and 2% each year in 2010 and 2011."

Real Estate Journal - "The Subprime Credit Crunch Hits Local Governments" (12-7-07)

"Thirteen years ago today, Orange County, Calif., sent tremors through financial markets when it filed for bankruptcy. Today, that same county -- and states and counties nationwide with troubled investment funds -- face new worries. This time, they stem from the subprime crisis."
NAHB - "Bush Plan To Ease Foreclosures Supported By Home Builders" (12-6-07)

"A plan put forth today by President Bush to limit foreclosures by working with key mortgage lenders and investment firms to freeze interest rates for five years on certain subprime mortgages is supported by the National Association of Home Builders (NAHB)."

Mortgage Bankers Association - "'Streamlined Loan Modification Process Will Help At Risk Homeowners'" (12-6-07)

"Kieran P. Quinn, CMB, Chairman of the Mortgage Bankers Association (MBA) today applauded an agreement by mortgage loan servicers and investors to streamline the process for modifying the loans of certain homeowners with subprime hybrid adjustable rate mortgages. The agreement was announced today by President Bush, Treasury Secretary Paulson and HUD Secretary Jackson, along with representatives for the loan servicing and investment community."

Mortgage Bankers Association - "Delinquencies and Foreclosures Increase in Latest MBA National Delinquency Survey" (12-6-07)

"The delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 5.59 percent of all loans outstanding in the third quarter of 2007 on a seasonally adjusted (SA) basis, up 47 basis points from the second quarter of 2007, and up 92 basis points from one year ago, according to MBA’s National Delinquency Survey."

Seeking Alpha - "ARM Bailout Unfair to Responsible Borrowers" (12-6-07)

"If we are going to freeze subprime interest rates at their original rate for the next 5 years, I pose the following question: We bought our house one year ago with a 30 year fixed mortgage. Why? We thought rates were going up and the ARM's that were being offered were 3 year ARM's at about a point lower than ours ended up being. Had we gone with the 3 year ARM at the time, we would have saved just under $200 a month."

HomeGuide123 - "New Poll Gauges Public's Opinion of Subprime Rescue Packages" (12-6-07)

"The majority of those surveyed were opposed to a taxpayer-funded bailout of the subprime mortgage market, but there were a surprising number of respondents who either support it or have no opinion."

Charles Hugh Smith - "Exhaustion, Jobs and Housing" (12-6-07)

"The human spirit has limits of endurance, and five years will be plenty long enough to find out just how few people will still believe the 'market is turning up' after five years of declines and false hopes dashed/betrayed. There is nothing new about the current real estate bubble deflation except its size; which brings us to the second type of exhaustion: the physical kind. Back in the early 90s (yes, during the last housing deflation period 1990-1997), there were stories of distant exurbs outside Los Angeles slowly being abandoned by newly-minted homeowners who could no longer maintain the grinding 3-4 hour commutes and the destruction of their family life."

Yahoo - "Home prices may see 3-year fall: M. Stanley" (12-6-07)

"There is a 'substantial' risk that U.S. home prices will slide for the next three years or more, in a downturn that could be unlike anything seen before on a national level, Morgan Stanley said on Thursday in a report. Price levels of the RPX Index, a derivative index based on home prices in 25 U.S. metropolitan residential property markets, indicate an expectation that prices will decline for the next three years, with a recovery likely to occur between three and four years from now, Morgan Stanley said."

Real Estate Journal - "Home Listings Decline In 18 Metro Areas" (12-6-07)

"Total listings of homes in the 18 metro areas at the end of November were down 2.5% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm in Emeryville, Calif. The data cover all listings of single-family homes, condos and town houses on multiple-listing services in those areas, where Zip operates."