NAR - "REALTORS® Under 30 Remake Real Estate Services" (5-31-07)
"In its annual '30 under 30' awards, REALTOR® Magazine recently recognized Realtors® who are using technology and other innovations to remake today’s real estate services. They also demonstrate that building community and client relationships is as important as ever to their success in the real estate industry."
CBIA - "Housing Production Forecast Adjusted Downward" (5-31-07)
"A larger-than-expected decline in single-family housing production in the Inland Empire and Central Valley this year, caused in part by record-high gasoline prices, has caused the state’s leading trade association for homebuilders to reduce its production forecast for 2007. But Alan Nevin, Chief Economist for the California Building Industry Association, still forecasts that the market for new homes will begin to gradually accelerate throughout the summer."
Bloomberg - "Subprime Fiasco Exposes Manipulation by Mortgage Brokerages" (5-31-07)
"After years of easy profits, a chain reaction of delinquency, default and foreclosure has ripped through the subprime mortgage industry, which originated $722 billion of loans last year. Since the beginning of 2006, more than 50 U.S. mortgage companies have put themselves up for sale, closed or declared bankruptcy, according to data compiled by Bloomberg."
Bloomberg - "Fed Sees Housing Damping Growth Longer Than Expected" (5-31-07)
"Federal Reserve officials acknowledged they underestimated the U.S. housing recession, while continuing to view inflation as the biggest risk to the economy. 'The correction of the housing sector was likely to continue to weigh heavily on economic activity through most of this year -- somewhat longer than previously expected,' the central bank said in minutes of the May 9 Federal Open Market Committee meeting released today in Washington."
CNN - "Wow, I could've had a prime mortgage" (5-31-07)
"Imagine you're a homeowner, and you discover that instead of the expensive subprime mortgage loan you signed on for, you actually qualified for a prime mortgage with much lower interest rates. Subprime loans are usually designed for borrowers with damaged or sketchy credit histories. Lenders charge higher rates to these customers to offset the extra risks they take on. Prime loans are usually granted to borrowers with credit scores of 650 or higher."
The Wall Street Journal - "'Subprime' Aftermath: Losing the Family Home" (5-31-07)
"For decades, the 5100 block of West Outer Drive in Detroit has been a model of middle-class home ownership, part of an urban enclave of well-kept Colonial residences and manicured lawns. But on a recent spring day, locals saw something disturbing: dandelions growing wild on several properties."
The Honolulu Advertiser - "Refinance — and get bombarded" (5-31-07)
"As a former mortgage broker, Adryenn Ashley thought she knew what to expect when she refinanced her house in March. Yet Ashley was unprepared for one twist she encountered: a barrage of phone calls and e-mails from rival lenders vying to sell her a better mortgage."
Ludwig von Mises Institute - "The Subprime Mortgage "Crisis" Will Fix Itself" (5-31-07)
"Hardly a day goes by without someone's proposing how to make the bad situation in subprime mortgage lending even worse. Legislators at all levels of government are contending for ownership of the most destructive idea. (One example of a thousand) Finalists in this legislative race to the bottom include punitively stiff lending standards, foreclosure holidays and taxpayer-financed bailouts. I would like to propose a far simpler, fairer and effective course of action: let free people sort it out for themselves."
St. Petersburg Times - "Renters, too, face mortgage fallout" (5-31-07)
"Two months ago, Nikki DuFore and her husband paid the owner $3,000 and settled into the house with their three boys. But their stay may be short-lived. On May 19, they were served with notice that the bank seeks to foreclose because the owner is months behind in his mortgage payments."
Reuters - "Centex, DR Horton, Pulte may bust bond terms" (5-31-07)
"At least three major U.S. home builders suffering from the housing slump may soon violate contracts meant to protect payments on some $11 billion in debt, Standard & Poor's analysts said on Tuesday."
The Washington Post - "An ATM That's Out of Money" (5-31-07)
"For a long time, Paul and Amy Woodhull's house on Capitol Hill was a honey pot. Through multiple refinancings over nearly a decade, they pulled out money to fix it up, buy a car, pay down credit cards, buy three other properties and improve them, too. Now the pot is dry. The Woodhulls are feeling squeezed by bills, but with interest rates up and home prices down, they're reluctant to touch their home equity again. They called their six children into a family meeting recently, and Amy laid down new rules: No more impulse purchases or frivolous shopping trips. 'We're going to have to save our pennies,' she declared."
Thursday, May 31, 2007
Wednesday, May 30, 2007
Bloomberg - "Immigrants May Be First to Feel Housing Slump's Impact on Jobs" (5-30-07)
"The slump in homebuilding, the deepest since 1990, has so far taken only a modest toll on the U.S. job market. Workers like Francisco Leon may be part of the explanation. Two years ago, Leon, an undocumented immigrant from Guatemala, had little trouble finding construction work five days a week in northern Virginia. Nowadays, the 22-year-old mainly does odd jobs, often only two days a week."
Yahoo - "Homebuilder Pulte to Cut 1,900 Jobs" (5-30-07)
"Facing a grim housing market, Pulte Homes Inc. said Tuesday that it is cutting about 16 percent of its work force, or about 1,900 jobs, as part of a restructuring. Pulte, one of the nation's leading homebuilders, said the restructuring will save an estimated $200 million a year before taxes."
Yahoo - "Mortgage Brokers: Friends or Foes?" (5-30-07)
"The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me? Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients."
Dr. Housing Bubble - "Summer and Housing in the Garden of Eden" (5-30-07)
"As spring enters its final days and May kisses us goodbye, the air smells of summer. The warmth of the sun caressing your face, the smell of salt at the beach, and sellers getting ready for the Battle of Housing Waterloo. The moment of truth has arrived. Will housing show continued resilience and live eternally in the Garden of Eden? Or will the housing bears be vindicated as inventory numbers begin to pile on top of one another like an Ultimate Fighting Championship? When I say housing will soar I am using this term like Stephen Colbert and referring to housing soaring like the Hindenburg. Let me give you another three reasons why all of us are jumping into this hydrogen powered housing bonanza only to come down in a fiery mess."
CoStar Group - "Mortgage Fraud Jumps 30%" (5-30-07)
"Mortgage fraud is a burgeoning crime that is affecting more and more companies and communities, according to a new report from the Mortgage Bankers Association (MBA). In its ninth annual report, the Mortgage Asset Research Institute (MARI), a service to MBA members, illustrates just how quickly the problem is growing. Suspicious activity reports (SARs) related to mortgage fraud have risen from more than 3,515 in fiscal year 2000 to more than 28,000 in fiscal year 2006, representing estimated losses of about $1 billion."
Yahoo - "Foreclosure risk rises with ARM teaser rates" (5-30-07)
"The borrowers who are in the most danger have two strikes against them. First, they are (or will be) underwater -- owing more than the house is worth. Second, they have adjustable-rate mortgages, or ARMs, with low "teaser rates." Eventually, after anywhere from one month to five years, the ARM enters its rate-adjustment period and the loan is reset with a higher rate."
"The slump in homebuilding, the deepest since 1990, has so far taken only a modest toll on the U.S. job market. Workers like Francisco Leon may be part of the explanation. Two years ago, Leon, an undocumented immigrant from Guatemala, had little trouble finding construction work five days a week in northern Virginia. Nowadays, the 22-year-old mainly does odd jobs, often only two days a week."
Yahoo - "Homebuilder Pulte to Cut 1,900 Jobs" (5-30-07)
"Facing a grim housing market, Pulte Homes Inc. said Tuesday that it is cutting about 16 percent of its work force, or about 1,900 jobs, as part of a restructuring. Pulte, one of the nation's leading homebuilders, said the restructuring will save an estimated $200 million a year before taxes."
Yahoo - "Mortgage Brokers: Friends or Foes?" (5-30-07)
"The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me? Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients."
Dr. Housing Bubble - "Summer and Housing in the Garden of Eden" (5-30-07)
"As spring enters its final days and May kisses us goodbye, the air smells of summer. The warmth of the sun caressing your face, the smell of salt at the beach, and sellers getting ready for the Battle of Housing Waterloo. The moment of truth has arrived. Will housing show continued resilience and live eternally in the Garden of Eden? Or will the housing bears be vindicated as inventory numbers begin to pile on top of one another like an Ultimate Fighting Championship? When I say housing will soar I am using this term like Stephen Colbert and referring to housing soaring like the Hindenburg. Let me give you another three reasons why all of us are jumping into this hydrogen powered housing bonanza only to come down in a fiery mess."
CoStar Group - "Mortgage Fraud Jumps 30%" (5-30-07)
"Mortgage fraud is a burgeoning crime that is affecting more and more companies and communities, according to a new report from the Mortgage Bankers Association (MBA). In its ninth annual report, the Mortgage Asset Research Institute (MARI), a service to MBA members, illustrates just how quickly the problem is growing. Suspicious activity reports (SARs) related to mortgage fraud have risen from more than 3,515 in fiscal year 2000 to more than 28,000 in fiscal year 2006, representing estimated losses of about $1 billion."
Yahoo - "Foreclosure risk rises with ARM teaser rates" (5-30-07)
"The borrowers who are in the most danger have two strikes against them. First, they are (or will be) underwater -- owing more than the house is worth. Second, they have adjustable-rate mortgages, or ARMs, with low "teaser rates." Eventually, after anywhere from one month to five years, the ARM enters its rate-adjustment period and the loan is reset with a higher rate."
MBA - "Fed Plans Public Hearing HOEPA" (5-29-07)
"The Federal Reserve Board on Tuesday announced the discussion topics for its June 14 public hearing under the Home Ownership and Equity Protection Act (HOEPA). The purpose of the hearing is to gather information about how the Board might use its rulemaking authority to curb abusive lending practices in the home mortgage market, including the subprime sector, in a way that preserves incentives for responsible lenders to provide credit to borrowers."
Bloomberg - "U.S. Home Prices Drop for the First Time in 16 Years" (5-29-07)
"Home prices in the U.S. dropped last quarter for the first time in almost 16 years, as 13 out of 20 cities reported declines in March. The value of a house dropped 1.4 percent in the first three months of the year from the same period in 2006, according to a report today by S&P/Case-Shiller. Prices last fell during the third quarter of 1991."
Bloomberg - "U.S. Home Construction Bust May Last Until 2011" (5-29-07)
"New home construction in the U.S. may take until 2011 to return to last year's level, said David Seiders, chief economist for the National Association of Home Builders in Washington. Monthly construction starts would need to jump by 21 percent to reach Seiders's benchmark for full recovery, which is 1.85 million. There were 1.53 million in April, the Commerce Department said. At the height of the five-year housing boom in January 2006, construction began on 2.29 million homes."
MSNBC - "April's Blue-Light Housing Sale" (5-29-07)
"Real estate investors got a swift smack back to reality May 25 with news that existing home sales fell to a four-year low and inventories reached a 15-year high, defying a surge in new home sales reported the previous day. Instead of a projected 2.1% increase, existing home sales dropped 2.6% to an annual rate of 5.99 million units in April from an upwardly revised 6.15 million units in March."
Bloomberg - "Property Taxes Spur Revolts" (5-29-07)
"When it comes to property taxes in the U.S., often you are blessed and cursed. In a rising market, the local assessor will raise his estimate of your home's worth, which usually results in a higher real-estate tax bill. Your property taxes, particularly in a high-growth area, then pay for new schools, fire and police stations and other public services."
Reuters - "Centex, DR Horton, Pulte may bust bond terms" (5-29-07)
"At least three major U.S. home builders suffering from the housing slump may soon violate contracts meant to protect payments on some $11 billion in debt, Standard & Poor's analysts said on Tuesday."
The Call - "2.2 Million Mortgages Will End In Foreclosure" (5-29-07)
"A recent report released by the Center for Responsible Lending predict that 2.2 million subprime loans issued in the U.S. will end in foreclosure. Those 2.2 million foreclosures will flood the housing market -- causing homeowners who received the mortgages between 1998 and 2006 to lose a combined total of $164 billion in home equity. According to the report, the subprime mortgage industry has experienced a rise in consumer activity -- increasing profits from $35 to $665 billion since 1994."
Real Estate Journal - "Are They Friends or Foes for Borrowers?" (5-29-07)
"The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me? Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients."
The New York Times - "As Condos Rise in South Florida, Nervous Investors Try to Flee" (5-29-07)
"As dozens of condominium towers conceived during Florida’s real estate boom near completion, investors who snatched up units in the preconstruction phase in hopes of turning a quick profit are increasingly trying to break contracts, even walking away from fat deposits."
Patrick.net - "The California Housing Report: Details In the Data Show A Broad-based Price Decline" (5-29-07)
"Headline: 'C.A.R. [California Association of Realtors] reports sales decrease 27.8 percent in April, median price of a home in California at $597,640, up 6.2 percent from year ago.' Then we also read, 'Throughout the state inventory levels have increased to their highest levels in recent years…' Price increase in the climate of declining sales and rising inventory? Something doesn’t add up."
eFinanceDirectory.com - "New Home Sales Fall 11 Percent, Prices Plummet" (5-29-07)
"According to the numbers released by the U.S. Census Bureau and the Department of Housing and Urban Development, April of 2007 was another housing market debacle. New home sales fell an astounding 11 percent in a year over year comparison. The decline would have been much worse if it would have not been for the market performance in the Northeast, where sales increased by (an almost unbelievable) 43.1 percent*. New home sales fell in every other region"
"The Federal Reserve Board on Tuesday announced the discussion topics for its June 14 public hearing under the Home Ownership and Equity Protection Act (HOEPA). The purpose of the hearing is to gather information about how the Board might use its rulemaking authority to curb abusive lending practices in the home mortgage market, including the subprime sector, in a way that preserves incentives for responsible lenders to provide credit to borrowers."
Bloomberg - "U.S. Home Prices Drop for the First Time in 16 Years" (5-29-07)
"Home prices in the U.S. dropped last quarter for the first time in almost 16 years, as 13 out of 20 cities reported declines in March. The value of a house dropped 1.4 percent in the first three months of the year from the same period in 2006, according to a report today by S&P/Case-Shiller. Prices last fell during the third quarter of 1991."
Bloomberg - "U.S. Home Construction Bust May Last Until 2011" (5-29-07)
"New home construction in the U.S. may take until 2011 to return to last year's level, said David Seiders, chief economist for the National Association of Home Builders in Washington. Monthly construction starts would need to jump by 21 percent to reach Seiders's benchmark for full recovery, which is 1.85 million. There were 1.53 million in April, the Commerce Department said. At the height of the five-year housing boom in January 2006, construction began on 2.29 million homes."
MSNBC - "April's Blue-Light Housing Sale" (5-29-07)
"Real estate investors got a swift smack back to reality May 25 with news that existing home sales fell to a four-year low and inventories reached a 15-year high, defying a surge in new home sales reported the previous day. Instead of a projected 2.1% increase, existing home sales dropped 2.6% to an annual rate of 5.99 million units in April from an upwardly revised 6.15 million units in March."
Bloomberg - "Property Taxes Spur Revolts" (5-29-07)
"When it comes to property taxes in the U.S., often you are blessed and cursed. In a rising market, the local assessor will raise his estimate of your home's worth, which usually results in a higher real-estate tax bill. Your property taxes, particularly in a high-growth area, then pay for new schools, fire and police stations and other public services."
Reuters - "Centex, DR Horton, Pulte may bust bond terms" (5-29-07)
"At least three major U.S. home builders suffering from the housing slump may soon violate contracts meant to protect payments on some $11 billion in debt, Standard & Poor's analysts said on Tuesday."
The Call - "2.2 Million Mortgages Will End In Foreclosure" (5-29-07)
"A recent report released by the Center for Responsible Lending predict that 2.2 million subprime loans issued in the U.S. will end in foreclosure. Those 2.2 million foreclosures will flood the housing market -- causing homeowners who received the mortgages between 1998 and 2006 to lose a combined total of $164 billion in home equity. According to the report, the subprime mortgage industry has experienced a rise in consumer activity -- increasing profits from $35 to $665 billion since 1994."
Real Estate Journal - "Are They Friends or Foes for Borrowers?" (5-29-07)
"The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me? Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients."
The New York Times - "As Condos Rise in South Florida, Nervous Investors Try to Flee" (5-29-07)
"As dozens of condominium towers conceived during Florida’s real estate boom near completion, investors who snatched up units in the preconstruction phase in hopes of turning a quick profit are increasingly trying to break contracts, even walking away from fat deposits."
Patrick.net - "The California Housing Report: Details In the Data Show A Broad-based Price Decline" (5-29-07)
"Headline: 'C.A.R. [California Association of Realtors] reports sales decrease 27.8 percent in April, median price of a home in California at $597,640, up 6.2 percent from year ago.' Then we also read, 'Throughout the state inventory levels have increased to their highest levels in recent years…' Price increase in the climate of declining sales and rising inventory? Something doesn’t add up."
eFinanceDirectory.com - "New Home Sales Fall 11 Percent, Prices Plummet" (5-29-07)
"According to the numbers released by the U.S. Census Bureau and the Department of Housing and Urban Development, April of 2007 was another housing market debacle. New home sales fell an astounding 11 percent in a year over year comparison. The decline would have been much worse if it would have not been for the market performance in the Northeast, where sales increased by (an almost unbelievable) 43.1 percent*. New home sales fell in every other region"
Tuesday, May 29, 2007
The Miami Herald - "Banks asked to aid rescue of homeowners" (5-28-07)
"Fearing that a spike in foreclosures will lower property values, Miramar is exploring ways for the city to help homeowners in distress. City officials have asked local banks to hold seminars for residents about mortgage practices and to bankroll an emergency fund for homeowners."
North County Times - "Mortgage fraud on rise in California" (5-28-07)
"Mortgage fraud is on the rise in California, according to recent reports, and analysts say the cooling housing market is helping to reveal more suspicious mortgage transactions. According to the U.S. Department of Treasury's Financial Crimes Enforcement Network, in 2006, California had more than one-third of the nation's suspicious loan activity at federally insured lenders. And the state's share of the suspected fraudulent activity is growing, according to the agency."
New York Post - "HOUSING MARKET COLLAPSE ATTRACTS BARGAIN HUNTERS" (5-28-07)
"To paraphrase Clint Eastwood's gunslinger character who steps over corpses of bad guys and then spits - 'Even vultures gotta eat.' In the case of the collapsing housing market, vultures are circling for an economic feast, but they aren't necessarily the bad guys."
Bloomberg - "Credit Suisse Sued Over Losses on Subprime-Loan Bonds" (5-28-07)
"Credit Suisse Group was sued by a Florida insurer that says it lost money on investment-grade bonds backed by subprime mortgages sold by the bank. The suit, filed in Florida by Bankers Life Insurance Co., is ``one of three to five in the pipeline'' involving securitizations by Credit Suisse, Switzerland's second-largest bank, said Dale Ledbetter of Ledbetter & Associates P.A., one of two law firms representing the Bankers Financial Corp. unit."
CoStar Group - "Link Between Falling U.S. Home Prices & Rising Subprime Defaults" (5-28-07)
"In recent years, double-digit home price inflation (HPI) has helped keep subprime defaults to very low levels, according to Fitch Ratings in a new report. Conversely, now, home price deflation is driving higher defaults of recently originated subprime mortgages. Fitch analyzed the default rates, defined as the sum of 90 day+ delinquency, foreclosure, REO and bankruptcy rates, of loans originated in 2002 through 2006 and the cumulative housing price inflation rate following origination."
Real Estate Journal - "Developers, Cities Duel Over Gated Green Space" (5-28-07)
"Residents of Asheville, N.C., have 54 public parks to choose from. But for years, many jogged and picnicked on the sprawling grounds of the 83-acre Thoms Estate, with the permission of the owner. So when a developer's plan to build a gated community on the property became public, opposition was fierce. "There hasn't been the sense that 'This is my land; stay off,' " says Susan Sihler, a clinical social worker who lives nearby and attended a raucous hearing on the matter last February."
"Fearing that a spike in foreclosures will lower property values, Miramar is exploring ways for the city to help homeowners in distress. City officials have asked local banks to hold seminars for residents about mortgage practices and to bankroll an emergency fund for homeowners."
North County Times - "Mortgage fraud on rise in California" (5-28-07)
"Mortgage fraud is on the rise in California, according to recent reports, and analysts say the cooling housing market is helping to reveal more suspicious mortgage transactions. According to the U.S. Department of Treasury's Financial Crimes Enforcement Network, in 2006, California had more than one-third of the nation's suspicious loan activity at federally insured lenders. And the state's share of the suspected fraudulent activity is growing, according to the agency."
New York Post - "HOUSING MARKET COLLAPSE ATTRACTS BARGAIN HUNTERS" (5-28-07)
"To paraphrase Clint Eastwood's gunslinger character who steps over corpses of bad guys and then spits - 'Even vultures gotta eat.' In the case of the collapsing housing market, vultures are circling for an economic feast, but they aren't necessarily the bad guys."
Bloomberg - "Credit Suisse Sued Over Losses on Subprime-Loan Bonds" (5-28-07)
"Credit Suisse Group was sued by a Florida insurer that says it lost money on investment-grade bonds backed by subprime mortgages sold by the bank. The suit, filed in Florida by Bankers Life Insurance Co., is ``one of three to five in the pipeline'' involving securitizations by Credit Suisse, Switzerland's second-largest bank, said Dale Ledbetter of Ledbetter & Associates P.A., one of two law firms representing the Bankers Financial Corp. unit."
CoStar Group - "Link Between Falling U.S. Home Prices & Rising Subprime Defaults" (5-28-07)
"In recent years, double-digit home price inflation (HPI) has helped keep subprime defaults to very low levels, according to Fitch Ratings in a new report. Conversely, now, home price deflation is driving higher defaults of recently originated subprime mortgages. Fitch analyzed the default rates, defined as the sum of 90 day+ delinquency, foreclosure, REO and bankruptcy rates, of loans originated in 2002 through 2006 and the cumulative housing price inflation rate following origination."
Real Estate Journal - "Developers, Cities Duel Over Gated Green Space" (5-28-07)
"Residents of Asheville, N.C., have 54 public parks to choose from. But for years, many jogged and picnicked on the sprawling grounds of the 83-acre Thoms Estate, with the permission of the owner. So when a developer's plan to build a gated community on the property became public, opposition was fierce. "There hasn't been the sense that 'This is my land; stay off,' " says Susan Sihler, a clinical social worker who lives nearby and attended a raucous hearing on the matter last February."
The San Diego Union-Tribune - "Foreclosure viewpoint: It'll get worse" (5-27-07)
"Economists from Wall Street to the Federal Reserve are scratching their heads trying to parse the future of housing in light of worsening default and foreclosure rates. But they might have saved themselves some trouble if they had consulted Robert Gertz, a 21-year-old senior at the University of California San Diego."
Denver Post - "Shelter in a storm" (5-27-07)
"Although Colorado's economy is improving overall, the housing market continues to suffer. While the state's employment grew 2.2 percent and the average 30-year fixed-rate mortgage remained virtually unchanged at 6.32 percent during the first quarter, new-home sales were down 39 percent over the same period last year, according to a report released Thursday by the Genesis Group."
Journal Sentinel Online - "Subprime lending abuse hurts poor families most" (5-27-07)
"Lost amidst the widespread debate over subprime lending abuse is the critical role of what economist Lester Thurow described many years ago as a 'surge in inequality.' That surge led to what BusinessWeek referred to as a two-tiered financial services market. Middle-income and wealthy households obtain prime loans along with savings and checking accounts from conventional banks. Working families increasingly get subprime loans and utilize the services of check cashers, payday lenders and other fringe bankers."
Orange County Register - "O.C. office and industrial projects" (5-27-07)
"Orange County currently has four million square feet of office space under construction and is building nearly 900,000 square feet of industrial space. In addition, developers plan to add about three million square feet of new retail space over the next three years, much of it in mixed-use high-rise buildings with retail downstairs and offices above."
Los Angeles Times - "Shoot -- it's for the Web" (5-27-07)
"A picture may be worth a mere 1,000 words in other circles, but in real estate, it enters the realm of deal or no deal. With an estimated 80% of home buyers starting their search on the Internet, photos are to home sales today what curb appeal used to be: the place where first impressions are made. According to a National Assn. of Realtors survey of the Web features that buyers found 'very useful,' 83% mentioned photos, 81% liked detailed property information and 60% named virtual tours."
Los Angeles Times - "A 'silent second' is deception, pure and simple" (5-27-07)
"The term "silent second" is used to describe self-serving or perhaps fraudulent schemes in which house sellers accept second mortgages as part of a sale transaction, without the full knowledge of the first mortgage lender. The "silence" refers to the absence of full disclosure to the first mortgage lender. The smaller of the frauds arises when the second mortgage replaces part or all of a down payment. For example, the buyer and seller agree on a price of $200,000; the buyer has a commitment for a first mortgage loan of $180,000 but doesn't have the $20,000 required for the down payment. To make the deal work, the seller agrees to accept a silent second mortgage for $15,000. As far as the first mortgage lender knows, the down payment is $20,000, but in fact, it is only $5,000."
"Economists from Wall Street to the Federal Reserve are scratching their heads trying to parse the future of housing in light of worsening default and foreclosure rates. But they might have saved themselves some trouble if they had consulted Robert Gertz, a 21-year-old senior at the University of California San Diego."
Denver Post - "Shelter in a storm" (5-27-07)
"Although Colorado's economy is improving overall, the housing market continues to suffer. While the state's employment grew 2.2 percent and the average 30-year fixed-rate mortgage remained virtually unchanged at 6.32 percent during the first quarter, new-home sales were down 39 percent over the same period last year, according to a report released Thursday by the Genesis Group."
Journal Sentinel Online - "Subprime lending abuse hurts poor families most" (5-27-07)
"Lost amidst the widespread debate over subprime lending abuse is the critical role of what economist Lester Thurow described many years ago as a 'surge in inequality.' That surge led to what BusinessWeek referred to as a two-tiered financial services market. Middle-income and wealthy households obtain prime loans along with savings and checking accounts from conventional banks. Working families increasingly get subprime loans and utilize the services of check cashers, payday lenders and other fringe bankers."
Orange County Register - "O.C. office and industrial projects" (5-27-07)
"Orange County currently has four million square feet of office space under construction and is building nearly 900,000 square feet of industrial space. In addition, developers plan to add about three million square feet of new retail space over the next three years, much of it in mixed-use high-rise buildings with retail downstairs and offices above."
Los Angeles Times - "Shoot -- it's for the Web" (5-27-07)
"A picture may be worth a mere 1,000 words in other circles, but in real estate, it enters the realm of deal or no deal. With an estimated 80% of home buyers starting their search on the Internet, photos are to home sales today what curb appeal used to be: the place where first impressions are made. According to a National Assn. of Realtors survey of the Web features that buyers found 'very useful,' 83% mentioned photos, 81% liked detailed property information and 60% named virtual tours."
Los Angeles Times - "A 'silent second' is deception, pure and simple" (5-27-07)
"The term "silent second" is used to describe self-serving or perhaps fraudulent schemes in which house sellers accept second mortgages as part of a sale transaction, without the full knowledge of the first mortgage lender. The "silence" refers to the absence of full disclosure to the first mortgage lender. The smaller of the frauds arises when the second mortgage replaces part or all of a down payment. For example, the buyer and seller agree on a price of $200,000; the buyer has a commitment for a first mortgage loan of $180,000 but doesn't have the $20,000 required for the down payment. To make the deal work, the seller agrees to accept a silent second mortgage for $15,000. As far as the first mortgage lender knows, the down payment is $20,000, but in fact, it is only $5,000."
The San Diego Union-Tribune - "Realtors also post ominous signs" (5-26-07)
"By all measures, April was a bad month for anyone with a “for sale” sign in their front yard. Sales of previously owned homes declined last month as the supply of unsold properties on the market ballooned and prices declined compared with those a year earlier."
CAR - "C.A.R. reports sales decrease 27.8 percent in April, median price of a home in California at $597,640, up 6.2 percent from year ago" (5-26-07)
"Home sales decreased 27.8 percent in April in California compared with the same period a year ago, while the median price of an existing home increased 6.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. 'April sales fell in part because of tighter credit standards and growing concerns about the impact of subprime loans on the market,' said C.A.R. President Colleen Badagliacco. 'Throughout the state inventory levels have increased to their highest levels in recent years, giving buyers more time to view a greater variety of homes and sellers who set realistic prices an edge in the market.'"
Orange County Register - "Homeowners with mortgage problems head for bankruptcy court" (5-26-07)
"Subprime mortgage problems first showed up last year as an increase in defaults and foreclosures, but more recently experts say the financial difficulties are being seen on a new front – bankruptcies. Consumer bankruptcy filings dropped dramatically after a surge in 2005 by people who wanted to beat tougher rules that took effect that October."
Bloomberg - "Fannie, Freddie Bill May Fail Over Portfolio Issue, Baker Says" (5-26-07)
"Legislation strengthening regulation of Fannie Mae and Freddie Mac could collapse because of a limit on the ability to cut the companies' combined $1.4 trillion in mortgage assets, Representative Richard Baker said. The House of Representative passed legislation on May 22 creating a stronger regulator for Fannie Mae and Freddie Mac that removed constraints sought by the Bush administration."
"By all measures, April was a bad month for anyone with a “for sale” sign in their front yard. Sales of previously owned homes declined last month as the supply of unsold properties on the market ballooned and prices declined compared with those a year earlier."
CAR - "C.A.R. reports sales decrease 27.8 percent in April, median price of a home in California at $597,640, up 6.2 percent from year ago" (5-26-07)
"Home sales decreased 27.8 percent in April in California compared with the same period a year ago, while the median price of an existing home increased 6.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. 'April sales fell in part because of tighter credit standards and growing concerns about the impact of subprime loans on the market,' said C.A.R. President Colleen Badagliacco. 'Throughout the state inventory levels have increased to their highest levels in recent years, giving buyers more time to view a greater variety of homes and sellers who set realistic prices an edge in the market.'"
Orange County Register - "Homeowners with mortgage problems head for bankruptcy court" (5-26-07)
"Subprime mortgage problems first showed up last year as an increase in defaults and foreclosures, but more recently experts say the financial difficulties are being seen on a new front – bankruptcies. Consumer bankruptcy filings dropped dramatically after a surge in 2005 by people who wanted to beat tougher rules that took effect that October."
Bloomberg - "Fannie, Freddie Bill May Fail Over Portfolio Issue, Baker Says" (5-26-07)
"Legislation strengthening regulation of Fannie Mae and Freddie Mac could collapse because of a limit on the ability to cut the companies' combined $1.4 trillion in mortgage assets, Representative Richard Baker said. The House of Representative passed legislation on May 22 creating a stronger regulator for Fannie Mae and Freddie Mac that removed constraints sought by the Bush administration."
Friday, May 25, 2007
NAR - "Tighter Lending Standards Affect April Existing-Home Sales" (5-25-07)
"Total existing-home sales including single-family, townhomes, condominiums and co-ops fell 2.6 percent to a seasonally adjusted annual rate1 of 5.99 million units in April from an upwardly revised level of 6.15 million in March, and are 10.7 percent lower than the 6.71 million-unit pace in April 2006. Lawrence Yun, NAR senior economist, isn’t surprised. 'We’ve been anticipating slower home sales because many subprime loan products are no longer available,' he said. 'In addition, increased scrutiny by lenders is stopping risky mortgage origination, which is good for both consumers and the lending community. Fortunately, a wide availability of conventional mortgage products and the 4.5 million jobs created over the past 24 months will help to stabilize the market going forward.'"
Orange County Register - "Cheaper homes seem to sell slower" (5-25-07)
"Housing's no longer 'cooling' or 'in a lull' or 'returning to normal.' The start of Orange County real estate's 2007 has been a major disappointment, at best. Hopes had circled that buyers would shed last year's indifference and get their shopping patterns reinvigorated by the generous selection of homes for sale, a growing flock of somewhat motivated sellers and relatively affordable financing. Instead, buyers are increasingly saying 'No, thank you.'"
Dr. Housing Bubble - "Lifestyles of the Poor and Notorious. 10 Southern California Homes that Prove a Gargantuan Housing Bubble." (5-25-07)
"We have folks making chump change being able to find access to millions of dollars in credit simply because they have a pulse and are able to fog the mirror on their leased Lexus. Even though I’ve featured over 24 homes in Real Homes of Genius, I still get people in the delusional state thinking that there is no housing bubble. 'Dr. Housing Bubble, you cherry pick homes and what does that prove?' they say in a condescending manner. Aside from the fact that the median value of homes is outrageously priced in every county in Southern California (and the median is derived from an aggregate of homes) I’m simply making the story more tangible for the readers who still have doubts."
CNN - "Speed of subprime bust surprises lenders" (5-25-07)
"The subprime mortgage meltdown has been a shock to industry insiders, but now they say it's hitting harder and faster than expected - even to those who predicted the crisis in the first place. That was the message Monday from a panel of leading industry executives on the state of the mortgage lending industry at the Mortgage Bankers Association's National Secondary Market Conference & Expo in New York."
Chicago Tribune - "Trump trumpeting condos for sale" (5-25-07)
"For developer Donald Trump, a press conference may not solve every problem, but it's worth a try. In an effort to turn around a slowdown in sales of units in his luxury tower being built along the Chicago River, Trump on Thursday will meet with reporters to deliver a message: He's got a sale going on. 'We're pricing to sell,' Trump said in an interview Wednesday about his 825-unit Trump International Hotel and Tower now under construction. 'People think we're sold out but we're not.'"
Seeking Alpha - "Subprime Derivatives Say Bernanke Will Be Wrong" (5-25-07)
"U.S. mortgages in foreclosure rose in April 62% from a year ago, according to RealtyTrac Inc. Folks are increasingly losing their homes as we warned last October. Attempting to allay fears, Federal Reserve Chairman Ben Bernanke spoke last Thursday: We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."
Realty Times - "Mortgage Sector Shaking Economic Foundation" (5-25-07)
"More evidence reveals the growing chasm between those who can have home loans and those who can't as lenders tighten standards for subprime loans but not prime. Meanwhile, fallout from the mortgage market and other housing market woes finds experts second guessing initial forecasts that the economy is safe from turmoil in the housing market."
BBC News - "US home sales up as prices slump" (5-25-07)
"The number of new builds sold leapt 16.2%, ahead of forecasts and making an annual rate of 981,000 units. But analysts warned against reading too much into the numbers, noting the heavy incentives homebuilders were offering buyers to shift stock."
Orange County Register - "Grubb merger will give Santa Ana firm more exposure" (5-25-07)
"Merging with Grubb & Ellis Co. will give NNN Realty Advisors' investment deals greater exposure, particularly to a growing number of aging baby boomers, the CEO of the Santa Ana-based investment firm said today during a conference call on the proposed joining of the two companies. NNN Realty, the parent company of Triple Net Properties, offers investment opportunities through apartment and office real estate investment trusts and by pooling investor money in the joint purchase of commercial properties."
Orange County Register - "Mortgage rates spike" (5-25-07)
"Mortgage rates in Orange County spiked this week, at exactly the wrong time for a sluggish housing market. The average rate on a 30-year fixed loan with a one-point fee hit 6.107 percent for the week ended Thursday – its highest level in seven months. Fixed rates peaked at 6.616 percent in July 2006, according to National Financial News Services."
Los Angeles Times - "Stocks fall on housing data" (5-25-07)
"Wall Street slumped Thursday after upbeat economic reports damped hopes that the Federal Reserve might cut interest rates this year. The Dow Jones industrials fell for a fourth day, their longest losing streak since February."
Real Estate Journal - "Mortgage Brokers: Are They Friends or Foes for Borrowers?" (5-25-07)
"The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me? Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients."
"Total existing-home sales including single-family, townhomes, condominiums and co-ops fell 2.6 percent to a seasonally adjusted annual rate1 of 5.99 million units in April from an upwardly revised level of 6.15 million in March, and are 10.7 percent lower than the 6.71 million-unit pace in April 2006. Lawrence Yun, NAR senior economist, isn’t surprised. 'We’ve been anticipating slower home sales because many subprime loan products are no longer available,' he said. 'In addition, increased scrutiny by lenders is stopping risky mortgage origination, which is good for both consumers and the lending community. Fortunately, a wide availability of conventional mortgage products and the 4.5 million jobs created over the past 24 months will help to stabilize the market going forward.'"
Orange County Register - "Cheaper homes seem to sell slower" (5-25-07)
"Housing's no longer 'cooling' or 'in a lull' or 'returning to normal.' The start of Orange County real estate's 2007 has been a major disappointment, at best. Hopes had circled that buyers would shed last year's indifference and get their shopping patterns reinvigorated by the generous selection of homes for sale, a growing flock of somewhat motivated sellers and relatively affordable financing. Instead, buyers are increasingly saying 'No, thank you.'"
Dr. Housing Bubble - "Lifestyles of the Poor and Notorious. 10 Southern California Homes that Prove a Gargantuan Housing Bubble." (5-25-07)
"We have folks making chump change being able to find access to millions of dollars in credit simply because they have a pulse and are able to fog the mirror on their leased Lexus. Even though I’ve featured over 24 homes in Real Homes of Genius, I still get people in the delusional state thinking that there is no housing bubble. 'Dr. Housing Bubble, you cherry pick homes and what does that prove?' they say in a condescending manner. Aside from the fact that the median value of homes is outrageously priced in every county in Southern California (and the median is derived from an aggregate of homes) I’m simply making the story more tangible for the readers who still have doubts."
CNN - "Speed of subprime bust surprises lenders" (5-25-07)
"The subprime mortgage meltdown has been a shock to industry insiders, but now they say it's hitting harder and faster than expected - even to those who predicted the crisis in the first place. That was the message Monday from a panel of leading industry executives on the state of the mortgage lending industry at the Mortgage Bankers Association's National Secondary Market Conference & Expo in New York."
Chicago Tribune - "Trump trumpeting condos for sale" (5-25-07)
"For developer Donald Trump, a press conference may not solve every problem, but it's worth a try. In an effort to turn around a slowdown in sales of units in his luxury tower being built along the Chicago River, Trump on Thursday will meet with reporters to deliver a message: He's got a sale going on. 'We're pricing to sell,' Trump said in an interview Wednesday about his 825-unit Trump International Hotel and Tower now under construction. 'People think we're sold out but we're not.'"
Seeking Alpha - "Subprime Derivatives Say Bernanke Will Be Wrong" (5-25-07)
"U.S. mortgages in foreclosure rose in April 62% from a year ago, according to RealtyTrac Inc. Folks are increasingly losing their homes as we warned last October. Attempting to allay fears, Federal Reserve Chairman Ben Bernanke spoke last Thursday: We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."
Realty Times - "Mortgage Sector Shaking Economic Foundation" (5-25-07)
"More evidence reveals the growing chasm between those who can have home loans and those who can't as lenders tighten standards for subprime loans but not prime. Meanwhile, fallout from the mortgage market and other housing market woes finds experts second guessing initial forecasts that the economy is safe from turmoil in the housing market."
BBC News - "US home sales up as prices slump" (5-25-07)
"The number of new builds sold leapt 16.2%, ahead of forecasts and making an annual rate of 981,000 units. But analysts warned against reading too much into the numbers, noting the heavy incentives homebuilders were offering buyers to shift stock."
Orange County Register - "Grubb merger will give Santa Ana firm more exposure" (5-25-07)
"Merging with Grubb & Ellis Co. will give NNN Realty Advisors' investment deals greater exposure, particularly to a growing number of aging baby boomers, the CEO of the Santa Ana-based investment firm said today during a conference call on the proposed joining of the two companies. NNN Realty, the parent company of Triple Net Properties, offers investment opportunities through apartment and office real estate investment trusts and by pooling investor money in the joint purchase of commercial properties."
Orange County Register - "Mortgage rates spike" (5-25-07)
"Mortgage rates in Orange County spiked this week, at exactly the wrong time for a sluggish housing market. The average rate on a 30-year fixed loan with a one-point fee hit 6.107 percent for the week ended Thursday – its highest level in seven months. Fixed rates peaked at 6.616 percent in July 2006, according to National Financial News Services."
Los Angeles Times - "Stocks fall on housing data" (5-25-07)
"Wall Street slumped Thursday after upbeat economic reports damped hopes that the Federal Reserve might cut interest rates this year. The Dow Jones industrials fell for a fourth day, their longest losing streak since February."
Real Estate Journal - "Mortgage Brokers: Are They Friends or Foes for Borrowers?" (5-25-07)
"The political debate over how to deal with a surge in defaults on home loans is raising a question that consumers ought to consider: Is my mortgage broker really working for me? Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price. But many brokers are making it clear they don't see things that way. They are fighting efforts by federal and state politicians to impose a fiduciary duty on them to put their customers' interests first, as lawyers, real-estate agents and financial planners generally are required to do with their clients."
Thursday, May 24, 2007
NAHB - "Builders Urge Reforms To Spur Rental Housing Opportunities" (5-24-07)
"The National Association of Home Builders (NAHB) today called on Congress to enact several reforms to the Low Income Housing Tax Credit (LIHTC) program to enable more builders to invest in affordable rental housing. Testifying on behalf of NAHB before the House Ways and Means Subcommittee on Select Revenue Measures, Steve Lawson, a home builder from Virginia Beach, Va., said that the LIHTC has facilitated the construction or preservation of nearly 1.4 million homes in the past 20 years, making it the foremost tool for the production and rehabilitation of affordable housing."
Yahoo - "Home Sales Soar by Record Amount" (5-24-07)
"Sales of new homes surged in April by the biggest amount in 14 years, but the median price of a new home dropped by the largest amount on record. The mixed signals left no clear picture of whether the worst of the nation's housing slump is over. The Commerce Department reported that sales of new single-family homes jumped by 16.2 percent in April to a seasonally adjusted annual rate of 981,000 units. That was far better than the tiny 0.2 percent gain that economists had been expecting."
Yahoo - "Toll Brothers Posts Lower 2Q Profit" (5-24-07)
"Luxury homebuilder Toll Brothers Inc. said Thursday its fiscal second-quarter profit fell sharply, as the company took hefty charges to write down property values amid continued weakness in the housing market. For the three months ended April 30, net income dropped to $36.7 million, or 22 cents per share, from $174.9 million, or $1.06 per share, a year ago. The latest quarter includes writedowns of $72.9 million, or 44 cents per share, compared with just $7.3 million, or 4 cents per share in the prior-year period."
Market Watch - "Income checks needed for loans, regulator says" (5-24-07)
"Banks need to know a potential borrower's real -- not stated -- income when a subprime loan is applied for, a top U.S. banking regulator said Wednesday, as problems in the subprime mortgage market persist. 'What we need to make clear,' said Comptroller of the Currency John Dugan, 'is the principle that a lender, in underwriting a mortgage loan, must assess not just a borrower's will to make timely payments on the loan, but also his or her capacity to do so.'"
Reuters - "Ex-subprime loan officers eye booming senior market" (5-24-07)
"Jobless subprime mortgage specialists are looking for employment in the booming market for loans to senior citizens, mortgage market executives said on Tuesday. Between 12,000 to 15,000 displaced mortgage lenders may begin to seek employment in the growing market for reverse mortgages, an increasingly popular home equity loan for homeowners who are 62 years old or older, Goldman, Sachs & Co. (GS.N: Quote, Profile, Research and Wells Fargo Home Mortgage executives said at a mortgage conference."
Yahoo - "American Express to let cardholders charge mortgage payments" (5-24-07)
"You pay hundreds, sometimes thousands, of dollars on your mortgage every month. Just imagine how many rewards points that could earn on your plastic. Now, American Express is aiming to make that a reality for its cardholders. In what is considered to be a first for the credit card and mortgage industries, American Express on Wednesday said it will now allow cardholders with any of its charge or credit cards and a prime loan from American Home Mortgage to charge their mortgage payments and earn reward points for doing so."
American Chronicle - "Economic Tsunami Warning" (5-24-07)
"More than anecdotal evidence now points to an economic tsunami forming from the sub-prime mortgage meltdown “ripples” which began to register on financial seismometers 18 months ago. It's an instructive image, how a seemingly small, inconsequential thing can later, unexpectedly manifest itself in a big, deadly, destructive way."
South Florida Business Journal - "Law firm starts practice to address real estate problems" (5-24-07)
"Shutts & Bowen LLP has launched a complex loan workout practice group to focus on clients who are grappling with the effects of a slowdown in the real estate market. For the new group, the law firm said it will use lawyers from its South Florida, Tampa and Orlando offices who are experienced in the fields of bankruptcy, creditors' rights, real estate, receiverships, taxation and litigation."
NorthJersey.com - "Housing slowdown leads to job cuts" (5-24-07)
"The housing slowdown has led to thousands of job cuts, with more to come, the Mortgage Bankers Association said this week. Construction has been hit hardest, with a loss of 45,000 jobs nationwide during 2006, according to 'Trends in Housing-Related Employment,' the group's report."
Patrick.net - "NetBank Funding Exiting Wholesale Mortgage Business" (5-24-07)
"Suspension of New Registrations and Rate Locks Effective immediately, NetBank will cease accepting registrations and rate locks on new loans and rate locks on existing registered loans that are in a float status. Relocks, changes to existing locks, or extensions will not be granted."
USA Today - "Ex-FBI Director Freeh joins Fannie Mae board" (5-24-07)
"Fannie Mae (FNM), the largest U.S. mortgage finance company, said Wednesday that former FBI Director Louis Freeh will join its board of directors. Freeh will work on the board's compliance and compensation committees. He becomes the eighth new director elected to Fannie's board since 2004. Freeh was director of the Federal Bureau of Investigation from 1993 to 2001."
Bloomberg - "New York Subpoenas First American Appraisal Unit" (5-24-07)
"New York Attorney General Andrew Cuomo issued a subpoena to the real estate appraisal unit of First American Corp. in his investigation of whether mortgage brokers pressured appraisers to inflate property values. First American's eAppraiseIT LLC, which values up to 15,000 homes a year in New York, was asked for information about appraisals performed throughout the state, President Anthony Merlo Jr., said in an interview today."
Orange County Register - "Stock of Grubb & Ellis rises on news of takeover" (5-24-07)
"The stock price for Grubb & Ellis Co. jumped by more than 10 percent today on the news that a Santa Ana-based real estate investment firm will take over the commercial brokerage in a proposed merger set to close next fall. NNN Realty Advisors Inc., owner of the investment firm Triple Net Properties of Santa Ana, will end up owning 59 percent of the newly merged company and will move Grubb’s headquarters from Chicago to Santa Ana. Triple Net’s founder, Tony Thompson, will be the new board chairman of the combined entity."
Real Estate Journal - "Why a Mortgage May Be Your Best (and Worst) Move" (5-24-07)
"If mortgage debt is good debt, why are so many borrowers having such a bad time? Financial experts often tout the virtues of home loans, arguing mortgages are the cheapest money you will ever borrow. Yet many homeowners are ruing the day they took out a big loan, and some are falling behind on their payments and even losing their homes to foreclosure. As these folks have discovered, mortgages are a double-edged sword. The leverage can magnify your gains -- but it can also leave you in a nasty bind."
"The National Association of Home Builders (NAHB) today called on Congress to enact several reforms to the Low Income Housing Tax Credit (LIHTC) program to enable more builders to invest in affordable rental housing. Testifying on behalf of NAHB before the House Ways and Means Subcommittee on Select Revenue Measures, Steve Lawson, a home builder from Virginia Beach, Va., said that the LIHTC has facilitated the construction or preservation of nearly 1.4 million homes in the past 20 years, making it the foremost tool for the production and rehabilitation of affordable housing."
Yahoo - "Home Sales Soar by Record Amount" (5-24-07)
"Sales of new homes surged in April by the biggest amount in 14 years, but the median price of a new home dropped by the largest amount on record. The mixed signals left no clear picture of whether the worst of the nation's housing slump is over. The Commerce Department reported that sales of new single-family homes jumped by 16.2 percent in April to a seasonally adjusted annual rate of 981,000 units. That was far better than the tiny 0.2 percent gain that economists had been expecting."
Yahoo - "Toll Brothers Posts Lower 2Q Profit" (5-24-07)
"Luxury homebuilder Toll Brothers Inc. said Thursday its fiscal second-quarter profit fell sharply, as the company took hefty charges to write down property values amid continued weakness in the housing market. For the three months ended April 30, net income dropped to $36.7 million, or 22 cents per share, from $174.9 million, or $1.06 per share, a year ago. The latest quarter includes writedowns of $72.9 million, or 44 cents per share, compared with just $7.3 million, or 4 cents per share in the prior-year period."
Market Watch - "Income checks needed for loans, regulator says" (5-24-07)
"Banks need to know a potential borrower's real -- not stated -- income when a subprime loan is applied for, a top U.S. banking regulator said Wednesday, as problems in the subprime mortgage market persist. 'What we need to make clear,' said Comptroller of the Currency John Dugan, 'is the principle that a lender, in underwriting a mortgage loan, must assess not just a borrower's will to make timely payments on the loan, but also his or her capacity to do so.'"
Reuters - "Ex-subprime loan officers eye booming senior market" (5-24-07)
"Jobless subprime mortgage specialists are looking for employment in the booming market for loans to senior citizens, mortgage market executives said on Tuesday. Between 12,000 to 15,000 displaced mortgage lenders may begin to seek employment in the growing market for reverse mortgages, an increasingly popular home equity loan for homeowners who are 62 years old or older, Goldman, Sachs & Co. (GS.N: Quote, Profile, Research and Wells Fargo Home Mortgage executives said at a mortgage conference."
Yahoo - "American Express to let cardholders charge mortgage payments" (5-24-07)
"You pay hundreds, sometimes thousands, of dollars on your mortgage every month. Just imagine how many rewards points that could earn on your plastic. Now, American Express is aiming to make that a reality for its cardholders. In what is considered to be a first for the credit card and mortgage industries, American Express on Wednesday said it will now allow cardholders with any of its charge or credit cards and a prime loan from American Home Mortgage to charge their mortgage payments and earn reward points for doing so."
American Chronicle - "Economic Tsunami Warning" (5-24-07)
"More than anecdotal evidence now points to an economic tsunami forming from the sub-prime mortgage meltdown “ripples” which began to register on financial seismometers 18 months ago. It's an instructive image, how a seemingly small, inconsequential thing can later, unexpectedly manifest itself in a big, deadly, destructive way."
South Florida Business Journal - "Law firm starts practice to address real estate problems" (5-24-07)
"Shutts & Bowen LLP has launched a complex loan workout practice group to focus on clients who are grappling with the effects of a slowdown in the real estate market. For the new group, the law firm said it will use lawyers from its South Florida, Tampa and Orlando offices who are experienced in the fields of bankruptcy, creditors' rights, real estate, receiverships, taxation and litigation."
NorthJersey.com - "Housing slowdown leads to job cuts" (5-24-07)
"The housing slowdown has led to thousands of job cuts, with more to come, the Mortgage Bankers Association said this week. Construction has been hit hardest, with a loss of 45,000 jobs nationwide during 2006, according to 'Trends in Housing-Related Employment,' the group's report."
Patrick.net - "NetBank Funding Exiting Wholesale Mortgage Business" (5-24-07)
"Suspension of New Registrations and Rate Locks Effective immediately, NetBank will cease accepting registrations and rate locks on new loans and rate locks on existing registered loans that are in a float status. Relocks, changes to existing locks, or extensions will not be granted."
USA Today - "Ex-FBI Director Freeh joins Fannie Mae board" (5-24-07)
"Fannie Mae (FNM), the largest U.S. mortgage finance company, said Wednesday that former FBI Director Louis Freeh will join its board of directors. Freeh will work on the board's compliance and compensation committees. He becomes the eighth new director elected to Fannie's board since 2004. Freeh was director of the Federal Bureau of Investigation from 1993 to 2001."
Bloomberg - "New York Subpoenas First American Appraisal Unit" (5-24-07)
"New York Attorney General Andrew Cuomo issued a subpoena to the real estate appraisal unit of First American Corp. in his investigation of whether mortgage brokers pressured appraisers to inflate property values. First American's eAppraiseIT LLC, which values up to 15,000 homes a year in New York, was asked for information about appraisals performed throughout the state, President Anthony Merlo Jr., said in an interview today."
Orange County Register - "Stock of Grubb & Ellis rises on news of takeover" (5-24-07)
"The stock price for Grubb & Ellis Co. jumped by more than 10 percent today on the news that a Santa Ana-based real estate investment firm will take over the commercial brokerage in a proposed merger set to close next fall. NNN Realty Advisors Inc., owner of the investment firm Triple Net Properties of Santa Ana, will end up owning 59 percent of the newly merged company and will move Grubb’s headquarters from Chicago to Santa Ana. Triple Net’s founder, Tony Thompson, will be the new board chairman of the combined entity."
Real Estate Journal - "Why a Mortgage May Be Your Best (and Worst) Move" (5-24-07)
"If mortgage debt is good debt, why are so many borrowers having such a bad time? Financial experts often tout the virtues of home loans, arguing mortgages are the cheapest money you will ever borrow. Yet many homeowners are ruing the day they took out a big loan, and some are falling behind on their payments and even losing their homes to foreclosure. As these folks have discovered, mortgages are a double-edged sword. The leverage can magnify your gains -- but it can also leave you in a nasty bind."
Wednesday, May 23, 2007
The Library of Congress - "H.R.1427: Federal Housing Finance Reform Act of 2007"
The Washington Post - "IRS Kicks Homeowners While They Are Down" (5-23-07)
"For homeowners who are seriously delinquent on their mortgages and hoping for relief, the Internal Revenue Service has bad news: If your lender agrees to modify your loan and forgive any of your debt, you could owe federal income tax on the amount forgiven."
NAHB - "Long-Term Viability Of Affordable Housing Threatened" (5-23-07)
"Significantly increasing operating costs are putting in financial jeopardy hundreds of affordable apartment communities across the country that were built using Low Income Housing Tax Credits (LIHTC), according to a new study by the National Association of Home Builders (NAHB). Adding to the threat is a recent change in the data used by the U.S. Department of Housing and Urban Development (HUD) to calculate income limits. This change in data methods has artificially frozen both the maximum income limit requirements of eligible residents and the rents that can be charged in a large number of areas across the county. In these areas, it’s impossible to offset rising costs though increases in rents that would normally occur as the result of ordinary inflation."
CAR - "Court of Appeal rules against attorney David Barry, says claims against C.A.R. were 'fatally defective'" (5-23-07)
"The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today announced that the Court of Appeal, Fourth Appellate District, Division One has again ruled in favor of C.A.R. in its malicious prosecution complaint against attorney David Barry and plaintiff Arleen Freeman."
MBA - "Mortgage Applications Increase in Latest MBA Survey" (5-23-07)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 18, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 686.2, an increase of 1.6 percent on a seasonally adjusted basis from 675.5 one week earlier. On an unadjusted basis, the Index increased 1.4 percent compared with the previous week and was up 23 percent compared with the same week one year earlier."
The Washington Post - "House Tightens Reins on Fannie, Freddie" (5-23-07)
"Legislation to tighten federal oversight of the two biggest buyers of home mortgages, Fannie Mae and Freddie Mac, cleared the House yesterday. However, the bill could lose the support of the Bush administration because of a new provision trimming the authority of federal regulators."
CNN - "Speed of subprime bust surprises lenders" (5-23-07)
"The subprime mortgage meltdown has been a shock to industry insiders, but now they say it's hitting harder and faster than expected - even to those who predicted the crisis in the first place. That was the message Monday from a panel of leading industry executives on the state of the mortgage lending industry at the Mortgage Bankers Association's National Secondary Market Conference & Expo in New York."
MSNBC - "When it comes to houses, more are living large" (5-23-07)
"McMansions are sprouting in the suburbs of Washington and Atlanta, in southern Connecticut and out West in Utah as an appetite for bigger homes just keeps on growing. One in five American houses had at least four bedrooms in 2005. That's up from one in six in 1990, despite shrinking families and increasing costs for construction and energy."
Yahoo - "Shares of Homebuilders Jump After Treasury Secretary Says Housing Slump Mostly Over" (5-23-07)
"Shares of the nation's largest homebuilders rose Tuesday after U.S. Treasury Secretary Henry Paulson said the housing slump is near its end. In an interview on CNBC, U.S. Treasury Secretary Henry Paulson said the housing slowdown is 'largely' over and 'contained,' according to a report from Dow Jones Newswires."
MSNBC - "Brokers, bankers play subprime blame game" (5-23-07)
"The heads of trade groups representing mortgage bankers and brokers traded barbs Tuesday over who's to blame for the housing market's woes. The head of the mortgage banking industry's trade group claimed brokers profited from a home loan boom but didn't do enough to examine whether borrowers could repay."
CNBC - "Hate Writing the Mortgage Check? Charge It!!" (5-23-07)
"I love plastic. I know, I know, the petroleum issues. But today I learned one more reason to love plastic: I can pay for my mortgage with it. Yes, American Express is breaking new ground, allowing its card members to pay their monthly mortgage bills on the card. I know what you're thinking, but hold on... Amex is requiring that these be prime loans only, so you can forget that whole subprime mortgage implosion issue. And of course, they'll be charging you $395 to enroll in the program."
Palm Beach Post - "Toughen rules, say mortgage bankers" (5-23-07)
"The subprime mortgage market was spoiled by bad guys who tried to make a quick buck in an otherwise reputable business, John Robbins, president of the Mortgage Bankers Association, said Tuesday. Robbins made his comments in a speech at the National Press Club, where he called for tougher licensing standards."
floridatoday.com - "Economist says housing problems are not over" (5-23-07)
"Troubles in the housing industry are not over, although things are better in Florida than in many other markets, according to a leading economist with the mortgage agency Freddie Mac. Amy Crews Cutts, deputy chief economist with Freddie Mac, said the big problems in the industry now are the continued large supply of homes on the market and the overuse in the past year of riskier "subprime" mortgages, a good number of which went to homebuyers who shouldn't have received them in the first place."
CNN - "Retirement interrupted" (5-23-07)
"Walking along a pier in Daytona Beach with their youngest grandson on a recent Saturday afternoon, Steve and Carol Daimler stopped to see what fish the locals were catching. The fishermen wowed 10-year-old David with a big flounder they'd just landed and photos of a 500-pound, nine-foot shark they'd once caught. After a day spent playing miniature golf, eating homemade ice cream and splashing around in his grandparents' in-ground pool, David declared, 'This is the best day of my life.'"
sacbee.com - "Housing activists tour homes" (5-23-07)
"On Saturday, a few dozen protesters swept into Sorrento to remind developers about the wants and needs of those who cannot afford their half- million-dollar homes. Lennar Corporation, in partnership with AKT Development Corporation, developed the 1,015-acre Anatolia community. It comprises 14 'villages.' A sales office opened in February 2005. Prices for the village residencies range from $300,000 to $600,000. Most are sold out."
Chicago Business - "USG to cut 10 percent of salaried workforce" (5-23-07)
"Building products maker USG Corp. said Monday it is eliminating 500 jobs, or 10% of its salaried work force worldwide, as demand for its products is reduced by the housing slump. The company's employees were told about the action last week, according to a filing with the Securities and Exchange Commission."
Orange County Register - "Nearly half polled agree with Immel" (5-23-07)
"Orange County real estate broker Phil Immel recently told the Lansner on real Estate blog that 'In my opinion, only one-third of sellers are serious; one-third are testing the market; and one-third are delusional.' Here's what visitors to that blog thought of that comment, in an unscientific online poll:"
The Washington Post - "IRS Kicks Homeowners While They Are Down" (5-23-07)
"For homeowners who are seriously delinquent on their mortgages and hoping for relief, the Internal Revenue Service has bad news: If your lender agrees to modify your loan and forgive any of your debt, you could owe federal income tax on the amount forgiven."
NAHB - "Long-Term Viability Of Affordable Housing Threatened" (5-23-07)
"Significantly increasing operating costs are putting in financial jeopardy hundreds of affordable apartment communities across the country that were built using Low Income Housing Tax Credits (LIHTC), according to a new study by the National Association of Home Builders (NAHB). Adding to the threat is a recent change in the data used by the U.S. Department of Housing and Urban Development (HUD) to calculate income limits. This change in data methods has artificially frozen both the maximum income limit requirements of eligible residents and the rents that can be charged in a large number of areas across the county. In these areas, it’s impossible to offset rising costs though increases in rents that would normally occur as the result of ordinary inflation."
CAR - "Court of Appeal rules against attorney David Barry, says claims against C.A.R. were 'fatally defective'" (5-23-07)
"The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today announced that the Court of Appeal, Fourth Appellate District, Division One has again ruled in favor of C.A.R. in its malicious prosecution complaint against attorney David Barry and plaintiff Arleen Freeman."
MBA - "Mortgage Applications Increase in Latest MBA Survey" (5-23-07)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 18, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 686.2, an increase of 1.6 percent on a seasonally adjusted basis from 675.5 one week earlier. On an unadjusted basis, the Index increased 1.4 percent compared with the previous week and was up 23 percent compared with the same week one year earlier."
The Washington Post - "House Tightens Reins on Fannie, Freddie" (5-23-07)
"Legislation to tighten federal oversight of the two biggest buyers of home mortgages, Fannie Mae and Freddie Mac, cleared the House yesterday. However, the bill could lose the support of the Bush administration because of a new provision trimming the authority of federal regulators."
CNN - "Speed of subprime bust surprises lenders" (5-23-07)
"The subprime mortgage meltdown has been a shock to industry insiders, but now they say it's hitting harder and faster than expected - even to those who predicted the crisis in the first place. That was the message Monday from a panel of leading industry executives on the state of the mortgage lending industry at the Mortgage Bankers Association's National Secondary Market Conference & Expo in New York."
MSNBC - "When it comes to houses, more are living large" (5-23-07)
"McMansions are sprouting in the suburbs of Washington and Atlanta, in southern Connecticut and out West in Utah as an appetite for bigger homes just keeps on growing. One in five American houses had at least four bedrooms in 2005. That's up from one in six in 1990, despite shrinking families and increasing costs for construction and energy."
Yahoo - "Shares of Homebuilders Jump After Treasury Secretary Says Housing Slump Mostly Over" (5-23-07)
"Shares of the nation's largest homebuilders rose Tuesday after U.S. Treasury Secretary Henry Paulson said the housing slump is near its end. In an interview on CNBC, U.S. Treasury Secretary Henry Paulson said the housing slowdown is 'largely' over and 'contained,' according to a report from Dow Jones Newswires."
MSNBC - "Brokers, bankers play subprime blame game" (5-23-07)
"The heads of trade groups representing mortgage bankers and brokers traded barbs Tuesday over who's to blame for the housing market's woes. The head of the mortgage banking industry's trade group claimed brokers profited from a home loan boom but didn't do enough to examine whether borrowers could repay."
CNBC - "Hate Writing the Mortgage Check? Charge It!!" (5-23-07)
"I love plastic. I know, I know, the petroleum issues. But today I learned one more reason to love plastic: I can pay for my mortgage with it. Yes, American Express is breaking new ground, allowing its card members to pay their monthly mortgage bills on the card. I know what you're thinking, but hold on... Amex is requiring that these be prime loans only, so you can forget that whole subprime mortgage implosion issue. And of course, they'll be charging you $395 to enroll in the program."
Palm Beach Post - "Toughen rules, say mortgage bankers" (5-23-07)
"The subprime mortgage market was spoiled by bad guys who tried to make a quick buck in an otherwise reputable business, John Robbins, president of the Mortgage Bankers Association, said Tuesday. Robbins made his comments in a speech at the National Press Club, where he called for tougher licensing standards."
floridatoday.com - "Economist says housing problems are not over" (5-23-07)
"Troubles in the housing industry are not over, although things are better in Florida than in many other markets, according to a leading economist with the mortgage agency Freddie Mac. Amy Crews Cutts, deputy chief economist with Freddie Mac, said the big problems in the industry now are the continued large supply of homes on the market and the overuse in the past year of riskier "subprime" mortgages, a good number of which went to homebuyers who shouldn't have received them in the first place."
CNN - "Retirement interrupted" (5-23-07)
"Walking along a pier in Daytona Beach with their youngest grandson on a recent Saturday afternoon, Steve and Carol Daimler stopped to see what fish the locals were catching. The fishermen wowed 10-year-old David with a big flounder they'd just landed and photos of a 500-pound, nine-foot shark they'd once caught. After a day spent playing miniature golf, eating homemade ice cream and splashing around in his grandparents' in-ground pool, David declared, 'This is the best day of my life.'"
sacbee.com - "Housing activists tour homes" (5-23-07)
"On Saturday, a few dozen protesters swept into Sorrento to remind developers about the wants and needs of those who cannot afford their half- million-dollar homes. Lennar Corporation, in partnership with AKT Development Corporation, developed the 1,015-acre Anatolia community. It comprises 14 'villages.' A sales office opened in February 2005. Prices for the village residencies range from $300,000 to $600,000. Most are sold out."
Chicago Business - "USG to cut 10 percent of salaried workforce" (5-23-07)
"Building products maker USG Corp. said Monday it is eliminating 500 jobs, or 10% of its salaried work force worldwide, as demand for its products is reduced by the housing slump. The company's employees were told about the action last week, according to a filing with the Securities and Exchange Commission."
Orange County Register - "Nearly half polled agree with Immel" (5-23-07)
"Orange County real estate broker Phil Immel recently told the Lansner on real Estate blog that 'In my opinion, only one-third of sellers are serious; one-third are testing the market; and one-third are delusional.' Here's what visitors to that blog thought of that comment, in an unscientific online poll:"
Tuesday, May 22, 2007
Seeking Alpha - "Housing Is Tumbling Even Faster Than Reported" (5-22-07)
"Real Estate Consultant John Burns has looked at the housing data and reached a rather interesting conclusion: 'The housing market has softened much more than is being reported.' Given all the negative news coverage, that's almost hard to believe. But John does a good job dissecting the data, and he is now concerned that both the publicly disseminated New and Existing Home Sales information is misleading. Even worse, he fears, is that policy makers are relying on this bad data to conclude that the housing market correction has not been too severe."
Yahoo - "Robert Shiller: Mr. Worst-case scenario" (5-22-07)
"Robert Shiller is worried about your home's value, and that's not good. A finance and economics professor at Yale, Shiller proved he could see a crash coming with his book "Irrational Exuberance," which forecast the end of the 1990s stock bubble and hit bookstores in March 2000 - almost to the day the Nasdaq started to collapse. Today, Shiller believes homes are roughly as overvalued as stocks were then and, once again, he's worth listening to."
Bloomberg - "Fremont Sells Commercial Lending Unit, Replaces CEO" (5-22-07)
"Fremont General Corp., whose loans to risky borrowers helped trigger the subprime mortgage crisis, agreed to sell its commercial real-estate unit for $1.9 billion and replaced its top three executives. IStar Financial Inc. will buy the commercial lending business, which has about 166 employees, said Daniel Hilley, a spokesman for Santa Monica, California-based Fremont. Shares of the company surged as much as 46 percent, and subprime lenders including NovaStar Financial Inc. also gained."
Yahoo - "Stocks Can't Fall? Check Out REITs' Retreat" (5-22-07)
"Back in early February, the real estate investment trust sector was the cat's meow -- it could do no wrong. Despite my pooh-poohing the sector's seemingly ridiculous popularity (and valuations) on Street Insight and even in a Barron's editorial, the group marched ever higher. Premiums to net asset value were at all-time record highs, dividend yields were at all-time lows (seemingly disconnected from the level of interest rates), multiples to funds from operations hit historically high levels -- and the entire sector was seen as takeover fodder."
Dr. Housing Bubble - "Housing Corruption and Greed: The Broken Windows Theory and Fundamental Attribution Error." (5-22-07)
"Have you ever wondered why many mortgage brokers and real estate agents try to hard sell you on a property or a unique mortgage? Those with dogmatic views usually try to convince themselves as much as they try to convince other people; they have a vested interest in believing that nothing negative can ever happen to real estate. And with this, you create a business culture where anything goes and financial prudence is thrown out the window. And speaking of windows, this brings us to the Broken Window Theory and how it applies to the current housing market."
The News-Press - "Bad loans saddle area banks" (5-22-07)
"Area banks are racking up millions of dollars in bad debt, thanks to the softening real estate market in Southwest Florida. Five Southwest Florida banks had a combined $57.5 million in outstanding construction and land loans that weren't being paid, according to records from the Federal Deposit Insurance Corp. for the first quarter of 2007."
Seeking Alpha - "San Bernardino County Not Recession-Proof: Wishful Thinking Won't Work" (5-22-07)
"I read an article Thursday in which the manager of Tarbell Realtors in Upland, CA was quoted as saying "At this point, at least, San Bernardino County housing is recession-proof." - Bill Velto. This is so wrong, it flies in the face of ALL the housing data. Resale prices have been going down in the County and in Upland for over a year, double digit in some areas. Oversupply conditions exist in most markets with some having over a 3-year supply."
"Real Estate Consultant John Burns has looked at the housing data and reached a rather interesting conclusion: 'The housing market has softened much more than is being reported.' Given all the negative news coverage, that's almost hard to believe. But John does a good job dissecting the data, and he is now concerned that both the publicly disseminated New and Existing Home Sales information is misleading. Even worse, he fears, is that policy makers are relying on this bad data to conclude that the housing market correction has not been too severe."
Yahoo - "Robert Shiller: Mr. Worst-case scenario" (5-22-07)
"Robert Shiller is worried about your home's value, and that's not good. A finance and economics professor at Yale, Shiller proved he could see a crash coming with his book "Irrational Exuberance," which forecast the end of the 1990s stock bubble and hit bookstores in March 2000 - almost to the day the Nasdaq started to collapse. Today, Shiller believes homes are roughly as overvalued as stocks were then and, once again, he's worth listening to."
Bloomberg - "Fremont Sells Commercial Lending Unit, Replaces CEO" (5-22-07)
"Fremont General Corp., whose loans to risky borrowers helped trigger the subprime mortgage crisis, agreed to sell its commercial real-estate unit for $1.9 billion and replaced its top three executives. IStar Financial Inc. will buy the commercial lending business, which has about 166 employees, said Daniel Hilley, a spokesman for Santa Monica, California-based Fremont. Shares of the company surged as much as 46 percent, and subprime lenders including NovaStar Financial Inc. also gained."
Yahoo - "Stocks Can't Fall? Check Out REITs' Retreat" (5-22-07)
"Back in early February, the real estate investment trust sector was the cat's meow -- it could do no wrong. Despite my pooh-poohing the sector's seemingly ridiculous popularity (and valuations) on Street Insight and even in a Barron's editorial, the group marched ever higher. Premiums to net asset value were at all-time record highs, dividend yields were at all-time lows (seemingly disconnected from the level of interest rates), multiples to funds from operations hit historically high levels -- and the entire sector was seen as takeover fodder."
Dr. Housing Bubble - "Housing Corruption and Greed: The Broken Windows Theory and Fundamental Attribution Error." (5-22-07)
"Have you ever wondered why many mortgage brokers and real estate agents try to hard sell you on a property or a unique mortgage? Those with dogmatic views usually try to convince themselves as much as they try to convince other people; they have a vested interest in believing that nothing negative can ever happen to real estate. And with this, you create a business culture where anything goes and financial prudence is thrown out the window. And speaking of windows, this brings us to the Broken Window Theory and how it applies to the current housing market."
The News-Press - "Bad loans saddle area banks" (5-22-07)
"Area banks are racking up millions of dollars in bad debt, thanks to the softening real estate market in Southwest Florida. Five Southwest Florida banks had a combined $57.5 million in outstanding construction and land loans that weren't being paid, according to records from the Federal Deposit Insurance Corp. for the first quarter of 2007."
Seeking Alpha - "San Bernardino County Not Recession-Proof: Wishful Thinking Won't Work" (5-22-07)
"I read an article Thursday in which the manager of Tarbell Realtors in Upland, CA was quoted as saying "At this point, at least, San Bernardino County housing is recession-proof." - Bill Velto. This is so wrong, it flies in the face of ALL the housing data. Resale prices have been going down in the County and in Upland for over a year, double digit in some areas. Oversupply conditions exist in most markets with some having over a 3-year supply."
Monday, May 21, 2007
NAHB - "NAHB Remodelers Offer Tips For Making Your Bathroom Green" (5-21-07)
"Celebrate May is Remodeling Month and green up your bathroom with energy efficient and sustainable products. The National Association of Home Builders (NAHB) Remodelers offers this guide of typical appliances and fixtures -- and their lifespans -- so you can make smart choices for that next bathroom project. 'Homeowners can easily transform their bathrooms with these simple energy and water efficient upgrades,' said NAHB Remodelers Chair Mike Nagel, CGR, CAPS, a remodeler from Chicago. 'Whether it’s simply swapping out a shower head or completely gutting the room, it makes a lot of sense to go green when remodeling a bathroom.'"
NAR - "First Quarter Commercial Real Estate Index Rises Again, But Decelerating" (5-21-07)
"The Commercial Leading Indicator for Brokerage Activity,* a forward-looking index for the commercial real estate market, rose slightly in the first quarter to the highest level on record but the rate of growth has decelerated over the past year, according to the National Association of Realtors. The Commercial Leading Indicator for Brokerage Activity increased 0.2 percent to an index of 120.3 in the first quarter from a reading of 120.1 in the fourth quarter, and is 0.8 percent higher than the first quarter of 2006 when it stood at 119.3. NAR’s track of the index dates back to 1990."
Reuters - "Housing to weigh more than expected on growth" (5-21-07)
"Troubles in the housing market will weigh on economic growth this year even more than earlier estimated, according to a forecast of economists released on Monday. Real gross domestic product, the government's broadest measure of economic output, is expected to advance 2.3 percent in 2007. That is down from an earlier estimate in February for 2.8 percent growth, a survey conducted by the National Association for Business Economics found."
Market Watch - "Gloom settles over housing market" (5-21-07)
"At the beginning of the year, there was hope that housing had turned the corner. But these expectations seem to have faded away. 'We were seeing signs of recovery last year, but a lot of that reflected warmer than usual weather,' Guatieri said. Economists say housing is bumping down near the bottom. 'We think the housing market will remain weak right through this year. It probably won't be until early next year that we see a stabilization and some recovery,' he added."
MSNBC - "Mortgage-firm layoffs spread across industry" (5-21-07)
"Subprime mortgage lending's deep freeze has sent a chill over the rest of the mortgage industry as layoffs spread to those who lend to the more creditworthy. But even as smaller players shed staff, the industry's largest players such as Wells Fargo and Countrywide Financial are stepping up their hiring as they seek to grab marketshare amid the carnage."
Reuters - "Countrywide chief decries subprime regulation" (5-21-07)
"Countrywide Financial Corp. Chief Executive Angelo Mozilo on Monday said regulation in the subprime mortgage industry will help crooks while hurting lenders and the housing market. 'It's better for the crooks,' Mozilo told Reuters before speaking at a Mortgage Bankers Association conference in Manhattan. 'It's only the good people who have to comply. Regulation, in my opinion, has caused part of the problem. When they attacked the pay option and interest- only loans, that really put a dent in a lot of the product, which is perfectly good product.'"
The Motley Fool - "The Worst Investment Ever" (5-21-07)
"My fellow Fool John Rosevear considers a house to be the best investment ever. I disagree. A house is a place to live, not a road to riches. Think about it for a minute. What characteristics do Fools look for in a great investment? Positive cash flow, low expense ratios, low transaction fees, and historically proven returns. Using these criteria, the average house falls well short of the all-time best."
Forbes - "America's most overpriced home markets" (5-21-07)
"No matter the locale, denizens almost always gripe about the stiff cost of living, housing and doing business. But in some places the financial pain is clearly more acute than others."
San Francisco Chronicle - "Crucial real estate decisions await at the end of the line" (5-21-07)
"Like death itself, end-of-life real estate is a universe of transactions that few of us want to contemplate. Since I began writing this column seven years ago, I've heard all kinds of sad stories of bitter feuds and convoluted laws, but the worst ones always involve that moment when the ephemeral nature of real estate becomes painfully clear: No matter how long we have owned our homes, no matter how much we depended on the house as a security against bad times, no matter how lovingly we remodeled that guest bedroom, one day we die and our homes don't go with us. And what's more, there are often a number of interests vying for control of the place called home."
Orange County Register - "How O.C. homes did since 2005" (5-21-07)
"For the first four months of 2007 compared with same period in 2005, sales for all types of Orange County home sales decreased 37.7 percent. The median sales price decreased 10.9 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."
The Union-Tribune - "Cut-rate or cut-throat?" (5-20-07)
"When it came time for José Viesca, 26, to buy a home closer to his commercial loan job in Escondido, he didn't turn to Coldwell Banker, Century 21 or any of the other traditional real estate brokerages. He turned to Redfin, a Seattle-based online brokerage whose sole San Diego agent, Erik van Joosten, works out of his Del Mar home."
Orange County Register - "High roller of home loans" (5-20-07)
"Quick Loan has been accused of predatory lending, deceptive underwriting and fraud in at least eight lawsuits. In addition, Department of Corporations records show 33 complaints against Quick Loan, most alleging unfair business practices. Most of the lawsuits were settled out of court. And state regulators have never disciplined Quick Loan."
Ventura County Star - "Home foreclosure auction draws county bidders" (5-20-07)
"Roxie Bajwa had an exciting Saturday. The Porterville resident made a trip to the Los Angeles Convention Center for an auction of foreclosed homes. She left with a new home in Port Hueneme. 'I'm excited nervous and excited,' she said just after placing the winning bid of $465,000 for the three-bedroom, two-bathroom house."
Orange County Register - "Cheaper homes seem to sell slower" (5-20-07)
"DataQuick stats show 10,661 O.C. homes of all stripes sold in the first four months of this year. That's down 21 percent from 2006 after a 21 percent year-over-year drop in 2005. That puts 2007's buying pace 22 percent behind the 1988-2007 average. This is not some small statistical sliver. We're talking about one third of an entire year here. And this year's sales pace is so sluggish that only two years – 1993 and 1995 – started any slower for homebuying in DataQuick's two decades of O.C. sales history."
Los Angeles Times - "Basking in rustic refinement" (5-20-07)
"A hunting lodge in the middle of Los Angeles seems a fanciful folly today. But in 1929, foxes, cougars and deer roamed freely in the hills of Los Feliz. At the age of 69 and widowed, Leona P. Wood commissioned this half-timbered, Norman-style hunting lodge. It took at least five years to complete."
"When it came time for José Viesca, 26, to buy a home closer to his commercial loan job in Escondido, he didn't turn to Coldwell Banker, Century 21 or any of the other traditional real estate brokerages. He turned to Redfin, a Seattle-based online brokerage whose sole San Diego agent, Erik van Joosten, works out of his Del Mar home."
Orange County Register - "High roller of home loans" (5-20-07)
"Quick Loan has been accused of predatory lending, deceptive underwriting and fraud in at least eight lawsuits. In addition, Department of Corporations records show 33 complaints against Quick Loan, most alleging unfair business practices. Most of the lawsuits were settled out of court. And state regulators have never disciplined Quick Loan."
Ventura County Star - "Home foreclosure auction draws county bidders" (5-20-07)
"Roxie Bajwa had an exciting Saturday. The Porterville resident made a trip to the Los Angeles Convention Center for an auction of foreclosed homes. She left with a new home in Port Hueneme. 'I'm excited nervous and excited,' she said just after placing the winning bid of $465,000 for the three-bedroom, two-bathroom house."
Orange County Register - "Cheaper homes seem to sell slower" (5-20-07)
"DataQuick stats show 10,661 O.C. homes of all stripes sold in the first four months of this year. That's down 21 percent from 2006 after a 21 percent year-over-year drop in 2005. That puts 2007's buying pace 22 percent behind the 1988-2007 average. This is not some small statistical sliver. We're talking about one third of an entire year here. And this year's sales pace is so sluggish that only two years – 1993 and 1995 – started any slower for homebuying in DataQuick's two decades of O.C. sales history."
Los Angeles Times - "Basking in rustic refinement" (5-20-07)
"A hunting lodge in the middle of Los Angeles seems a fanciful folly today. But in 1929, foxes, cougars and deer roamed freely in the hills of Los Feliz. At the age of 69 and widowed, Leona P. Wood commissioned this half-timbered, Norman-style hunting lodge. It took at least five years to complete."
The Arizona Republic - "Economist: Home prices unlikely to rebound soon" (5-19-07)
"Anyone looking for a quick rebound in housing prices probably is in for a disappointment, said an economist speaking in Phoenix this week. 'We think real estate prices will move sideways or slightly lower for several years,' said Thomas Higgins, of Los Angeles investment firm Payden & Rygel."
Orange County Register - "Blog This House? You Better Not If You Are A Realtor" (5-19-07)
"Should Realtors blog about houses? Is blogging the same thing as advertising? A fascinating story evolving in Seattle raises these issues, specifically: Can Realtors publish blogs with comments about houses listed by other Realtors? The answer from the MLS in Seattle appears to be 'No way.'"
dailynews.com - "American nightmare" (5-19-07)
"Now that some of the dire fears about adjustable-rate mortgages and sub- prime loans are proving true, lenders and nonprofit groups are rushing to come up with ways to slow down the defaults and foreclosures. Institutions behind these assistance programs say that a lot of home buyers were duped or deceived into signing bad loans. The main goal, they say, should be to keep people in their homes."
The Press Enterprise - "Investors in foreclosure rally in Temecula" (5-19-07)
"Families stood shoulder to shoulder at a busy Temecula intersection Saturday to warn passersby that they are facing financial ruin because of an ongoing investment mortgage scheme and to call for authorities to shut down and arrest the culprits. 'We want them put out of business,' said Mory Simmons, a 63-year-old insurance agent from San Diego. Simmons, like most of the approximately 40 people at the rally, said they have homes in foreclosure because investment counselors persuaded them to take on far more mortgage debt than they can afford to pay."
"Anyone looking for a quick rebound in housing prices probably is in for a disappointment, said an economist speaking in Phoenix this week. 'We think real estate prices will move sideways or slightly lower for several years,' said Thomas Higgins, of Los Angeles investment firm Payden & Rygel."
Orange County Register - "Blog This House? You Better Not If You Are A Realtor" (5-19-07)
"Should Realtors blog about houses? Is blogging the same thing as advertising? A fascinating story evolving in Seattle raises these issues, specifically: Can Realtors publish blogs with comments about houses listed by other Realtors? The answer from the MLS in Seattle appears to be 'No way.'"
dailynews.com - "American nightmare" (5-19-07)
"Now that some of the dire fears about adjustable-rate mortgages and sub- prime loans are proving true, lenders and nonprofit groups are rushing to come up with ways to slow down the defaults and foreclosures. Institutions behind these assistance programs say that a lot of home buyers were duped or deceived into signing bad loans. The main goal, they say, should be to keep people in their homes."
The Press Enterprise - "Investors in foreclosure rally in Temecula" (5-19-07)
"Families stood shoulder to shoulder at a busy Temecula intersection Saturday to warn passersby that they are facing financial ruin because of an ongoing investment mortgage scheme and to call for authorities to shut down and arrest the culprits. 'We want them put out of business,' said Mory Simmons, a 63-year-old insurance agent from San Diego. Simmons, like most of the approximately 40 people at the rally, said they have homes in foreclosure because investment counselors persuaded them to take on far more mortgage debt than they can afford to pay."
Friday, May 18, 2007
Patrick.net - "San Francisco Chronicle Headline Lies About Housing Prices" (5-18-07)
"The San Francisco Chronicle today reported "Bay Area's housing prices buck national trend", but that is just not true. In fact, it's an outright lie. With a 3% decline in asking prices, Bay Area housing prices fell more than the national decline of about 2% over the last year. That is absolutely not "bucking" the trend downward. It makes you wonder just how much realtor advertising money it took to get the Chronicle to spin the headline that way. I think the Chronicle sold its integrity way too cheaply."
Orange County Register - "OC starter homes a little more affordable" (5-18-07)
"More Orange County residents could afford a starter home here during the first three months of 2007, a time when home prices fell to early 2006 levels while incomes rose slightly, the California Association of Realtors reported today. Statewide, the picture was just the opposite, with slightly fewer California residents able to afford a California starter home than a year earlier."
The Wall Street Journal - "Bernanke Plays Down Threat From Subprime Defaults" (5-18-07)
"Federal Reserve Chairman Ben Bernanke said Thursday that the financial system can withstand the fallout from the subprime-mortgage market "without serious problems." 'We have spent a bit of time evaluating the financial implications of the subprime issues, tried to assess the magnitude of losses, and tried to determine how concentrated they are,' Mr. Bernanke said in response to a question following a speech here. 'There is a sense that, although there is always a possibility for some kind of disruption ..., the financial system will absorb the losses from the subprime mortgage problems without serious problems.'"
"The San Francisco Chronicle today reported "Bay Area's housing prices buck national trend", but that is just not true. In fact, it's an outright lie. With a 3% decline in asking prices, Bay Area housing prices fell more than the national decline of about 2% over the last year. That is absolutely not "bucking" the trend downward. It makes you wonder just how much realtor advertising money it took to get the Chronicle to spin the headline that way. I think the Chronicle sold its integrity way too cheaply."
Orange County Register - "OC starter homes a little more affordable" (5-18-07)
"More Orange County residents could afford a starter home here during the first three months of 2007, a time when home prices fell to early 2006 levels while incomes rose slightly, the California Association of Realtors reported today. Statewide, the picture was just the opposite, with slightly fewer California residents able to afford a California starter home than a year earlier."
The Wall Street Journal - "Bernanke Plays Down Threat From Subprime Defaults" (5-18-07)
"Federal Reserve Chairman Ben Bernanke said Thursday that the financial system can withstand the fallout from the subprime-mortgage market "without serious problems." 'We have spent a bit of time evaluating the financial implications of the subprime issues, tried to assess the magnitude of losses, and tried to determine how concentrated they are,' Mr. Bernanke said in response to a question following a speech here. 'There is a sense that, although there is always a possibility for some kind of disruption ..., the financial system will absorb the losses from the subprime mortgage problems without serious problems.'"
Inman News - "How to Sell Your Home in 5 Days" (5-17-07)
"I had a conversation today that made me rethink how homes get sold in slower markets. We know there are areas where Realtors are scratching their heads, wondering how to get homes sold. And, we know from this week's round of statistics that more sellers are listing their homes, sales are slowing and prices are dropping even more slowly than number of sales is slowing down."
DQNews.com - "Bay Area home sales drop, prices up" (5-17-07)
"Bay Area homes sold at the slowest pace in 12 years last month, the result of a continued buyer-seller standoff as well as very slow sales in some lower-cost neighborhoods in the East Bay. Prices increased for the third month in a row to a new record, a real estate information service reported. A total of 7,447 new and resale houses and condos were sold in the nine-county Bay Area last month. That was down 10.5 percent from 8,317 in March, and down 18.4 percent from 9,129 for April last year, according to DataQuick Information Systems."
The Californian - "Home prices fall locally, nationally" (5-17-07)
"Home prices in Riverside County fell in April for the first time in a decade as buyers continued to gain market power from large numbers of unsold houses, a research firm reported Tuesday. New and existing homes in the county sold for a median $409,000 last month, down 1 percent from April 2006, DataQuick Information Systems reported. Just 2,987 escrows closed, making April's pace barely half that of a year earlier and slower than any month in more than three years, according to DataQuick."
The Washington Post - "The Bad News On Condos" (5-17-07)
"Two years ago, during the giddy real estate frenzy, some investors bought 300-plus garden-style apartment units in Fairfax County to convert to condominiums. Yesterday, a California bank foreclosed on the group's loan and bought the property -- minus about 45 units that had been sold -- for $60 million, outbidding a suitor from suburban Chicago at an auction on the front steps of the Fairfax County Judicial Center. The bank, Fremont Investment and Loan, said it hoped to resell the property."
The News & Advance - "A matter of denial: The housing market" (5-17-07)
"Changes in the mortgage market are starting to affect the Lynchburg real estate market. By the end of March, local real estate agents had placed 991 homes under contract so far this year, about 47 more homes than in 2006, according to the Virginia Association of Realtors."
CNBC - "Subprime Worries Persist Despite Views of Bernanke, Paulson" (5-17-07)
"Testimony by the two top U.S. economic officials on Wednesday raised fresh concerns in financial markets about the deteriorating housing market, despite their view that subprime mortgage problems are 'contained.' The practices of lenders in the $1 trillion subprime sector have drawn scrutiny from regulators and law enforcement officials who believe some borrowers have been fraudulently induced to take on more debt than they can handle."
The Market Oracle - "US Housing Sector is Crashing, False Housing and Jobs statistics to eventually benefit Gold" (5-17-07)
"The newest deceptions are with jobs and housing. Each is much worse than reported. The housing decline might be as much as 15% worse than reported, which leads to much bigger job loss than is reported. Most of the home construction job loss is under the table, to people not on state jobless insurance programs, and to immigrant workers paid in cash. Both fall through the statistical cracks in those home frames and plywood floors underlayments. A quick preface on the two biggest corrupted statistics first, since of paramount importance."
Orange County Register - "No government aid for foreclosures, poll says" (5-17-07)
"There's much talk about various ways the government could get financial help to certain homeowners, primarily lower-income households, who can't meet their mortgage payments. We asked visitors to the Lansner on Real Estate blog if any homeowners facing foreclosure should get government aid. And the results from 870 votes cast online in what's an unscientific sample of public sentiment were stark"
Voice of San Diego - "What Could Save the Housing Market" (5-17-07)
"The speculative housing bubble that launched San Diego home prices so high is now in the process of deflating. Prices have been on the decline for over a year, but they remain well above the levels that would be justified by the economic fundamentals now that the bubble-era forces of rampant buyer optimism and unsustainably lax lending are disappearing before our eyes."
Providence Business News - "Mass. foreclosure auctions quadruple in April" (5-17-07)
"As the housing market in Massachusetts continued to weaken, foreclosure auctions rose 355 percent in April to the highest level in years, according to The Warren Group. The Boston real estate and research firm said 1,172 such auctions were advertised in the Bay State last month, compared with 376 in April 2006."
Ludwig von Mises Institute - "The Dark Side of the Credit Boom" (5-17-07)
"Under today's government-controlled paper-money standards, the world's major economies have embarked upon an unprecedented expansion of credit, starting in the early 1980s.[1] As credit growth has been outstripping economies' rise in output, total debt levels in percent of gross domestic product (GDP) have increased strongly. Take, for instance, the US. Figure 1 (a) depicts total debt and its constituent components in percent of GDP for the period 1960-Q1 to 2006-Q4. Total debt rose from 142% at the beginning of the 1960s to nearly 331% at the end of 2006. Excluding the domestic financial sector — which expanded from 5.6% to 105% — the debt ratio increased from 136% to 226%."
"I had a conversation today that made me rethink how homes get sold in slower markets. We know there are areas where Realtors are scratching their heads, wondering how to get homes sold. And, we know from this week's round of statistics that more sellers are listing their homes, sales are slowing and prices are dropping even more slowly than number of sales is slowing down."
DQNews.com - "Bay Area home sales drop, prices up" (5-17-07)
"Bay Area homes sold at the slowest pace in 12 years last month, the result of a continued buyer-seller standoff as well as very slow sales in some lower-cost neighborhoods in the East Bay. Prices increased for the third month in a row to a new record, a real estate information service reported. A total of 7,447 new and resale houses and condos were sold in the nine-county Bay Area last month. That was down 10.5 percent from 8,317 in March, and down 18.4 percent from 9,129 for April last year, according to DataQuick Information Systems."
The Californian - "Home prices fall locally, nationally" (5-17-07)
"Home prices in Riverside County fell in April for the first time in a decade as buyers continued to gain market power from large numbers of unsold houses, a research firm reported Tuesday. New and existing homes in the county sold for a median $409,000 last month, down 1 percent from April 2006, DataQuick Information Systems reported. Just 2,987 escrows closed, making April's pace barely half that of a year earlier and slower than any month in more than three years, according to DataQuick."
The Washington Post - "The Bad News On Condos" (5-17-07)
"Two years ago, during the giddy real estate frenzy, some investors bought 300-plus garden-style apartment units in Fairfax County to convert to condominiums. Yesterday, a California bank foreclosed on the group's loan and bought the property -- minus about 45 units that had been sold -- for $60 million, outbidding a suitor from suburban Chicago at an auction on the front steps of the Fairfax County Judicial Center. The bank, Fremont Investment and Loan, said it hoped to resell the property."
The News & Advance - "A matter of denial: The housing market" (5-17-07)
"Changes in the mortgage market are starting to affect the Lynchburg real estate market. By the end of March, local real estate agents had placed 991 homes under contract so far this year, about 47 more homes than in 2006, according to the Virginia Association of Realtors."
CNBC - "Subprime Worries Persist Despite Views of Bernanke, Paulson" (5-17-07)
"Testimony by the two top U.S. economic officials on Wednesday raised fresh concerns in financial markets about the deteriorating housing market, despite their view that subprime mortgage problems are 'contained.' The practices of lenders in the $1 trillion subprime sector have drawn scrutiny from regulators and law enforcement officials who believe some borrowers have been fraudulently induced to take on more debt than they can handle."
The Market Oracle - "US Housing Sector is Crashing, False Housing and Jobs statistics to eventually benefit Gold" (5-17-07)
"The newest deceptions are with jobs and housing. Each is much worse than reported. The housing decline might be as much as 15% worse than reported, which leads to much bigger job loss than is reported. Most of the home construction job loss is under the table, to people not on state jobless insurance programs, and to immigrant workers paid in cash. Both fall through the statistical cracks in those home frames and plywood floors underlayments. A quick preface on the two biggest corrupted statistics first, since of paramount importance."
Orange County Register - "No government aid for foreclosures, poll says" (5-17-07)
"There's much talk about various ways the government could get financial help to certain homeowners, primarily lower-income households, who can't meet their mortgage payments. We asked visitors to the Lansner on Real Estate blog if any homeowners facing foreclosure should get government aid. And the results from 870 votes cast online in what's an unscientific sample of public sentiment were stark"
Voice of San Diego - "What Could Save the Housing Market" (5-17-07)
"The speculative housing bubble that launched San Diego home prices so high is now in the process of deflating. Prices have been on the decline for over a year, but they remain well above the levels that would be justified by the economic fundamentals now that the bubble-era forces of rampant buyer optimism and unsustainably lax lending are disappearing before our eyes."
Providence Business News - "Mass. foreclosure auctions quadruple in April" (5-17-07)
"As the housing market in Massachusetts continued to weaken, foreclosure auctions rose 355 percent in April to the highest level in years, according to The Warren Group. The Boston real estate and research firm said 1,172 such auctions were advertised in the Bay State last month, compared with 376 in April 2006."
Ludwig von Mises Institute - "The Dark Side of the Credit Boom" (5-17-07)
"Under today's government-controlled paper-money standards, the world's major economies have embarked upon an unprecedented expansion of credit, starting in the early 1980s.[1] As credit growth has been outstripping economies' rise in output, total debt levels in percent of gross domestic product (GDP) have increased strongly. Take, for instance, the US. Figure 1 (a) depicts total debt and its constituent components in percent of GDP for the period 1960-Q1 to 2006-Q4. Total debt rose from 142% at the beginning of the 1960s to nearly 331% at the end of 2006. Excluding the domestic financial sector — which expanded from 5.6% to 105% — the debt ratio increased from 136% to 226%."
Wednesday, May 16, 2007
MBA - "Mortgage Applications Decrease Slightly in Latest MBA Survey" (5-16-07)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 11, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 675.5, a decrease of 0.8 percent on a seasonally adjusted basis from 680.7 one week earlier. On an unadjusted basis, the Index decreased 0.6 percent compared with the previous week and was up 13.8 percent compared with the same week one year earlier. The Refinance Index increased slightly to 2115.5 from 2115.2 the previous week and the seasonally adjusted Purchase Index decreased 1.4 percent to 432.3 from 438.3 one week earlier. The seasonally adjusted Conventional Index decreased 0.5 percent to 997.6 from 1003.1 the previous week, and the seasonally adjusted Government Index decreased 3.2 percent to 138.6 from 143.2 the previous week."
Dr. Housing Bubble - "Why Did the Housing Phenomenon Spread?" (5-16-07)
"We can learn a lot from the social sciences especially in analyzing the current housing bubble. Many may see very little connection between housing and social science but behavioral economics and marketing have much to do and say regarding our current environment. This is particularly relevant in analyzing the current housing market because we are in a bubble; and by definition something in a bubble does not follow conventional rules. First, we must ask ourselves how can a relatively stable investment such as housing, become the topic de jour in all investing circles for the past 7 years. Next, we need to ask why housing became such an overnight phenomenon and spread like a blistering hot wildfire. Not only did housing spread into every imaginable aspect of the American psyche, it also contributed to 30% of all employment since the start of the millennium."
CVBT - "Central Valley cities lead the nation in foreclosures" (5-16-07)
"The Central Valley city of Stockton has the nation’s highest foreclosure rate -- one foreclosure filing for every 131 households, nearly six times the national average -- according to figures compiled by RealtyTrac Inc., an Irvine-based publisher of a national database of pre-foreclosure, foreclosure, For Sale By Owner, resale and new homes. Other California cities with foreclosure rates in the top 10 include Vallejo-Fairfield at No. 2, Riverside-San Bernardino at No. 4, Modesto at No. 6, Sacramento at No. 7, and Merced at No. 8."
Bloomberg - "Mortgage Defaults Rise 62 Percent" (5-16-07)
"Mortgages in foreclosure rose 62 percent in April and the number of Americans falling behind on home loans will climb this year as home prices fall and lending standards are tightened, RealtyTrac Inc. said. There were 147,708 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio, the Irvine, California-based seller of foreclosure data said today. The median U.S. home price fell 1.8 percent in the fourth quarter, according to a separate report by the National Association of Realtors."
Mish's Global Economic Trend Analysis - "Squeeze on Wage Earners Accelerates" (5-16-07)
"Real average weekly earnings fell by 0.5 percent from March to April after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. A 0.3 percent decline in average weekly hours and a 0.5 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers were partially offset by a 0.2 percent rise in average hourly earnings."
Los Angeles Times - "Home sales hint at longer slump ahead" (5-16-07)
"Southern California home sales plunged to a 12-year low in April, suggesting that the region's real estate slump is far from over. Prices were up overall, rising 6.1% from a year earlier to a median of $505,000, according to data released Tuesday. But that increase was largely driven by an uptick in Los Angeles County, masking declines in Riverside, San Diego and Ventura counties."
Bloomberg - "Most U.S. Stocks Fall on Home Depot Earnings" (5-16-07)
"Most U.S. stocks fell a second day after Home Depot Inc.'s profit dropped more than forecast, housing prices tumbled and foreclosures rose, heightening concern the real-estate slump may worsen. Home Depot, the world's biggest home-improvement retailer, and Apple Inc., the maker of the iPod music player, led the Standard & Poor's 500 Index to its third decline in four days. Shares of Amgen Inc., the world's biggest biotechnology company, dragged the Nasdaq Composite Index to a two-week low, while the Dow Jones Industrial Index climbed to its 22nd record this year, buoyed by General Motors Corp."
The Wall Street Journal - "Lenders Get Tougher" (5-16-07)
"As the number of delinquent mortgages climbs, lenders have tightened their standards for issuing loans, including such well-publicized moves as raising minimum credit scores and cutting back on 100% financing and low-documentation loans. Now, some lenders are probing more intently would-be borrowers' finances. They are taking a tougher look at how much the property a borrower wants to buy is worth. They are peering further into clients' pasts for credit problems and requiring more in-depth reviews of borrowers who say they are self-employed. Some lenders are taking a harder stance when it comes to whose credit score a couple can use when applying for a mortgage, rather than simply allowing them to use the higher of the two scores."
eFinanceDirectory.com - "60 Percent of Liar Loan Applicants Exaggerate Income" (5-16-07)
"The use of stated income loans, or liar loans as they are known throughout the industry, has increased exponentially over the last few years. Analysts at Credit Suisse Group say that liar loans account for 46 percent of the subprime mortgage loans being granted to borrowers. Liar loans do not require borrowers to prove their income to qualify for a mortgage loan; borrowers merely state what they do and how much they earn doing it on the application."
Reuters - "Mortgage brokers cashed in on U.S. housing bounty" (5-16-07)
"Money may not grow on trees but for a while it seemed to grow on houses, and Colleen Moorhead knew exactly where to turn when she needed to harvest some cash. With a few phone calls, broker Joyce DeAngelo could put Moorhead and her husband into a new mortgage and cut them a check. They used more than $100,000 in cash they netted from the refinancing for living expenses and renovations."
Orange County Register - "No government aid for foreclosures, poll says" (5-16-07)
"There's much talk about various ways the government could get financial help to certain homeowners, primarily lower-income households, who can't meet their mortgage payments. We asked visitors to the Lansner on Real Estate blog if any homeowners facing foreclosure should get government aid. And the results from 870 votes cast online in what's an unscientific sample of public sentiment were stark"
Los Angeles Times - "Panel urges rent control expansion" (5-16-07)
"In an action intended to close a loophole and protect middle-income tenants, a Los Angeles City Council committee moved Tuesday to expand rent control to apartments that are built to replace torn-down units. If approved by the full council and the mayor, the measure would add another aspect to the city's rent control law, which now applies only to buildings constructed prior to 1979."
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 11, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 675.5, a decrease of 0.8 percent on a seasonally adjusted basis from 680.7 one week earlier. On an unadjusted basis, the Index decreased 0.6 percent compared with the previous week and was up 13.8 percent compared with the same week one year earlier. The Refinance Index increased slightly to 2115.5 from 2115.2 the previous week and the seasonally adjusted Purchase Index decreased 1.4 percent to 432.3 from 438.3 one week earlier. The seasonally adjusted Conventional Index decreased 0.5 percent to 997.6 from 1003.1 the previous week, and the seasonally adjusted Government Index decreased 3.2 percent to 138.6 from 143.2 the previous week."
Dr. Housing Bubble - "Why Did the Housing Phenomenon Spread?" (5-16-07)
"We can learn a lot from the social sciences especially in analyzing the current housing bubble. Many may see very little connection between housing and social science but behavioral economics and marketing have much to do and say regarding our current environment. This is particularly relevant in analyzing the current housing market because we are in a bubble; and by definition something in a bubble does not follow conventional rules. First, we must ask ourselves how can a relatively stable investment such as housing, become the topic de jour in all investing circles for the past 7 years. Next, we need to ask why housing became such an overnight phenomenon and spread like a blistering hot wildfire. Not only did housing spread into every imaginable aspect of the American psyche, it also contributed to 30% of all employment since the start of the millennium."
CVBT - "Central Valley cities lead the nation in foreclosures" (5-16-07)
"The Central Valley city of Stockton has the nation’s highest foreclosure rate -- one foreclosure filing for every 131 households, nearly six times the national average -- according to figures compiled by RealtyTrac Inc., an Irvine-based publisher of a national database of pre-foreclosure, foreclosure, For Sale By Owner, resale and new homes. Other California cities with foreclosure rates in the top 10 include Vallejo-Fairfield at No. 2, Riverside-San Bernardino at No. 4, Modesto at No. 6, Sacramento at No. 7, and Merced at No. 8."
Bloomberg - "Mortgage Defaults Rise 62 Percent" (5-16-07)
"Mortgages in foreclosure rose 62 percent in April and the number of Americans falling behind on home loans will climb this year as home prices fall and lending standards are tightened, RealtyTrac Inc. said. There were 147,708 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio, the Irvine, California-based seller of foreclosure data said today. The median U.S. home price fell 1.8 percent in the fourth quarter, according to a separate report by the National Association of Realtors."
Mish's Global Economic Trend Analysis - "Squeeze on Wage Earners Accelerates" (5-16-07)
"Real average weekly earnings fell by 0.5 percent from March to April after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. A 0.3 percent decline in average weekly hours and a 0.5 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers were partially offset by a 0.2 percent rise in average hourly earnings."
Los Angeles Times - "Home sales hint at longer slump ahead" (5-16-07)
"Southern California home sales plunged to a 12-year low in April, suggesting that the region's real estate slump is far from over. Prices were up overall, rising 6.1% from a year earlier to a median of $505,000, according to data released Tuesday. But that increase was largely driven by an uptick in Los Angeles County, masking declines in Riverside, San Diego and Ventura counties."
Bloomberg - "Most U.S. Stocks Fall on Home Depot Earnings" (5-16-07)
"Most U.S. stocks fell a second day after Home Depot Inc.'s profit dropped more than forecast, housing prices tumbled and foreclosures rose, heightening concern the real-estate slump may worsen. Home Depot, the world's biggest home-improvement retailer, and Apple Inc., the maker of the iPod music player, led the Standard & Poor's 500 Index to its third decline in four days. Shares of Amgen Inc., the world's biggest biotechnology company, dragged the Nasdaq Composite Index to a two-week low, while the Dow Jones Industrial Index climbed to its 22nd record this year, buoyed by General Motors Corp."
The Wall Street Journal - "Lenders Get Tougher" (5-16-07)
"As the number of delinquent mortgages climbs, lenders have tightened their standards for issuing loans, including such well-publicized moves as raising minimum credit scores and cutting back on 100% financing and low-documentation loans. Now, some lenders are probing more intently would-be borrowers' finances. They are taking a tougher look at how much the property a borrower wants to buy is worth. They are peering further into clients' pasts for credit problems and requiring more in-depth reviews of borrowers who say they are self-employed. Some lenders are taking a harder stance when it comes to whose credit score a couple can use when applying for a mortgage, rather than simply allowing them to use the higher of the two scores."
eFinanceDirectory.com - "60 Percent of Liar Loan Applicants Exaggerate Income" (5-16-07)
"The use of stated income loans, or liar loans as they are known throughout the industry, has increased exponentially over the last few years. Analysts at Credit Suisse Group say that liar loans account for 46 percent of the subprime mortgage loans being granted to borrowers. Liar loans do not require borrowers to prove their income to qualify for a mortgage loan; borrowers merely state what they do and how much they earn doing it on the application."
Reuters - "Mortgage brokers cashed in on U.S. housing bounty" (5-16-07)
"Money may not grow on trees but for a while it seemed to grow on houses, and Colleen Moorhead knew exactly where to turn when she needed to harvest some cash. With a few phone calls, broker Joyce DeAngelo could put Moorhead and her husband into a new mortgage and cut them a check. They used more than $100,000 in cash they netted from the refinancing for living expenses and renovations."
Orange County Register - "No government aid for foreclosures, poll says" (5-16-07)
"There's much talk about various ways the government could get financial help to certain homeowners, primarily lower-income households, who can't meet their mortgage payments. We asked visitors to the Lansner on Real Estate blog if any homeowners facing foreclosure should get government aid. And the results from 870 votes cast online in what's an unscientific sample of public sentiment were stark"
Los Angeles Times - "Panel urges rent control expansion" (5-16-07)
"In an action intended to close a loophole and protect middle-income tenants, a Los Angeles City Council committee moved Tuesday to expand rent control to apartments that are built to replace torn-down units. If approved by the full council and the mayor, the measure would add another aspect to the city's rent control law, which now applies only to buildings constructed prior to 1979."
NAHB - "Builders Leading The Way In Green Building" (5-15-07)
"The National Association of Home Builders (NAHB) today told Congress how its members are bringing green building to the mainstream by developing affordable, energy-efficient and environmentally friendly construction techniques. Testifying before the Senate Environment and Public Works Committee, NAHB Green Building Subcommittee Chair Ray Tonjes, a custom builder from Austin, Texas, noted that the recent strength and growth of green building is due in large part to its voluntary nature, which provides builders and developers the flexibility that is essential for incorporating the principles of sustainable design."
NAHB - "Builder Confidence Slips Again In May" (5-15-07)
"Ongoing concerns about subprime-related problems in the mortgage market caused builder confidence about the state of housing demand to decline three more points in May, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. With a current reading of 30, the HMI has now returned to the lowest level in its current cycle, which was previously hit in September of 2006. 'Builders are feeling the impacts of tighter lending standards on current home sales as well as cancellations, and they are bracing for continued challenges ahead,' said NAHB President Brian Catalde, a home builder from El Segundo, Calif."
NAR - "Seven Out of 10 Voters Believe America is Not Prepared for a Natural Disaster" (5-15-07)
"America is not prepared for a catastrophic natural disaster, and Congress must take action now. That was the message delivered during the Insurance Availability in Disaster-Prone Areas session at the National Association of Realtors® Midyear Legislative Meetings & Trade Expo today."
NAR - "NAR Says Eliminating "Phantom Tax" on Foreclosures is Good for Consumers" (5-15-07)
"The National Association of Realtors® commended Senators Debbie Stabenow (D-Mich.) and George Voinovich (R-Ohio) for introducing a bill today that would repeal a law that forces individuals to pay income tax when a portion of their mortgage loan is forgiven after a short sale or as part of a foreclosure. Since the mid-90s, NAR has actively engaged in efforts to change this law and is encouraged by the actions taken today by the Senate in S.1394, the Mortgage Cancellation Tax Relief Act."
NAR - "NAR Subprime Lending Policy Advocates Responsible Lending Practices" (5-15-07)
"The National Association of Realtors® released its Enhanced Subprime Lending Policy, including Responsible Lending Principles, to hundreds of Realtors® today at the Regulatory Issues Forum, part of NAR’s Midyear Legislative Meetings & Trade Expo here. The policy addresses top national concerns, such as the collapse of the subprime mortgage market, the rising rate of foreclosures, and predatory lending."
NAR - "Realtors® Play "Hardball" in Washington" (5-15-07)
"Just as voters' voices will be heard next November, more than 7,500 Realtors® from across the country are in Washington, D.C., this week to voice their support for practical solutions to issues facing the real estate industry. As part of the Midyear agenda, Realtors® will meet with their elected officials to discuss small business health plans, protect consumers from banks in real estate, ensure a federal natural disaster policy, and advocate for subprime mortgage lending reforms and FHA modernization."
NAR - "First-Quarter Metro Home Prices & State Sales Show Broad Stabilization" (5-15-07)
"State existing-home sales in the first quarter generally are below a year ago but more states are improving than reported in the fourth quarter of 2006, and home prices in most areas show that conditions are favoring buyers, according to the latest quarterly survey by the National Association of Realtors®."
MSN - "Mortgage brokers cashed in on U.S. housing bounty" (5-15-07)
"Money may not grow on trees but for a while it seemed to grow on houses, and Colleen Moorhead knew exactly where to turn when she needed to harvest some cash. With a few phone calls, broker Joyce DeAngelo could put Moorhead and her husband into a new mortgage and cut them a check. They used more than $100,000 in cash they netted from the refinancing for living expenses and renovations."
C Net - "Casey Serin: The world's most hated blogger?" (5-15-07)
"With scant income, assets, or business savvy, the would-be real-estate mogul managed to purchase eight homes in hopes of reselling them at a profit. Along the way, he's lost all of them, run up some $170,000 in credit card and credit line debt, and launched iamfacingforeclosure.com to share his woes with the world. (Editor's note: Serin's site was intermittently reachable Monday.) Financial exhibitionism, coupled with a lack of penitence for stiffing his creditors, has transformed the 24-year-old resident of this sleepy Sacramento suburb into a celebrity among fellow bloggers. But unlike other online celebrities, Serin's stardom comes from a unique source: "haters" who patronize his blog solely to learn what financial missteps he's made today."
Yahoo - "Home Depot 1Q Profit Drops 29.5 Percent" (5-15-07)
"The Home Depot Inc., the world's largest home improvement store chain, cited erratic weather and continued weakness in the housing market as it reported Tuesday a 29.5 percent drop in first-quarter profit on a slight increase in sales. The results fell short of Wall Street expectations, and Home Depot's shares slipped 26 cents to $39.27 in morning trading after tumbling 2.6 percent earlier in the session."
Bloomberg - "Mortgage Defaults Rise 62 Percent, RealtyTrac Reports" (5-15-07)
"Mortgages in foreclosure rose 62 percent in April and the number of Americans falling behind on home loans will climb this year as home prices fall and lending standards are tightened, RealtyTrac Inc. said. There were 147,708 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio, the Irvine, California-based seller of foreclosure data said today. The median U.S. home price fell 1.8 percent in the fourth quarter, according to a separate report by the National Association of Realtors."
NPR - "Former Ameriquest Workers Tell of Deception" (5-15-07)
"Some former employees of the nation's leading subprime lender say the company encouraged them to conceal rate terms and make fake fixed-loan documents that pushed customers into loans they couldn't afford."
Palm Beach Post - "Tug of War: Owners don't budge as houses sit unsold" (5-15-07)
"The region's once-sizzling housing market - which for nearly five years lured investors with double-digit gains, easy credit and 40-year-low interest rates - has simmered to a showdown. Indeed, some market watchers believe home prices are the object of a high-stakes tug of war between home buyers in Palm Beach County and the Treasure Coast armed with low interest rates, and home sellers who refuse to budge from boom-time home prices despite rising inventory, surging foreclosures and tightened credit standards."
The Herald Tribune - "'60 Minutes' puts Realtors on defensive" (5-15-07)
"Using an Internet-based business to slash real estate commissions gets the CBS "60 Minutes" treatment on Sunday, prompting the Sarasota Association of Realtors and its national counterpart to do some advance coaching of their agents."
Best Syndication - "No Closing Cost Mortgage Advertising Is A Lie!" (5-15-07)
"No Closing Cost and Flat Fee mortgage advertising in a word is a rip-off. So much so that California regulators outlawed the use of the phase in all mortgage advertising in their state. All state mortgage regulators should immediately adopted the same restriction if they truely want to protect mortgage consumers. Until then, the rest of the country is fair game. That means you! Read this carefully and learning to protect yourself. Not do so can cost you $20,000, $50,000 or even $100,000 over your mortgage paying lifetime."
Seeking Alpha - "Banks Face Growing Pressure on Home Prices" (5-15-07)
"One of the themes I've developed over the years was that of the Slow-Motion-Slow-Down: As rates ticked higher, home sales would slow, refis and MEW would decrease, inventory would build, and prices would come down."
eFinanceDirectory.com - "Update on the Subprime Bailout" (5-15-07)
"Billions of dollars have already been earmarked for people who got into trouble with subprime loans. The plans are risky, because administrators will be hard pressed to bail out the unfortunate borrowers who signed their lives away without rewarding the lenders who made the bad loans."
The Wall Street Journal - "Mortgage Woes Push Banks to Big Discounts" (5-15-07)
"A surge of foreclosures over the past year or so has left lenders struggling to sell a growing backlog of homes. Rather than relying on real-estate agents, the usual practice, some are turning to large-scale auctions to speed up the sale process."
Market Watch - "Banks tightening mortgage-lending standards: Fed" (5-15-07)
"U.S. banks dramatically tightened their standards for approving residential mortgages in the first quarter, the Federal Reserve said Monday. In particular, banks made it harder to get subprime residential mortgage loans and nontraditional loans such as interest-only loans, the Fed reported. All told, at least 23 of the 53 domestic banks surveyed, or 43%, tightened their mortgage lending standards, up from 16% in the fourth quarter. The latest data are not strictly comparable to previous numbers, because the Fed has changed the wording of its questionnaire."
Orange County Register - "46% say latest median price is "totally off" (5-15-07)
"Recent mid-month home-price reports from DataQuick shows the median resale price at what would be a new record high for a full month. The current record, $705,000, was set in April 2006. We asked visitors to the Lansner on Real Estate blog if this was a solid statistic, or just a statistical quirk? The 844 votes cast online, in what's an unscientific sample of public sentiment, said the recent median is ..."
"The National Association of Home Builders (NAHB) today told Congress how its members are bringing green building to the mainstream by developing affordable, energy-efficient and environmentally friendly construction techniques. Testifying before the Senate Environment and Public Works Committee, NAHB Green Building Subcommittee Chair Ray Tonjes, a custom builder from Austin, Texas, noted that the recent strength and growth of green building is due in large part to its voluntary nature, which provides builders and developers the flexibility that is essential for incorporating the principles of sustainable design."
NAHB - "Builder Confidence Slips Again In May" (5-15-07)
"Ongoing concerns about subprime-related problems in the mortgage market caused builder confidence about the state of housing demand to decline three more points in May, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. With a current reading of 30, the HMI has now returned to the lowest level in its current cycle, which was previously hit in September of 2006. 'Builders are feeling the impacts of tighter lending standards on current home sales as well as cancellations, and they are bracing for continued challenges ahead,' said NAHB President Brian Catalde, a home builder from El Segundo, Calif."
NAR - "Seven Out of 10 Voters Believe America is Not Prepared for a Natural Disaster" (5-15-07)
"America is not prepared for a catastrophic natural disaster, and Congress must take action now. That was the message delivered during the Insurance Availability in Disaster-Prone Areas session at the National Association of Realtors® Midyear Legislative Meetings & Trade Expo today."
NAR - "NAR Says Eliminating "Phantom Tax" on Foreclosures is Good for Consumers" (5-15-07)
"The National Association of Realtors® commended Senators Debbie Stabenow (D-Mich.) and George Voinovich (R-Ohio) for introducing a bill today that would repeal a law that forces individuals to pay income tax when a portion of their mortgage loan is forgiven after a short sale or as part of a foreclosure. Since the mid-90s, NAR has actively engaged in efforts to change this law and is encouraged by the actions taken today by the Senate in S.1394, the Mortgage Cancellation Tax Relief Act."
NAR - "NAR Subprime Lending Policy Advocates Responsible Lending Practices" (5-15-07)
"The National Association of Realtors® released its Enhanced Subprime Lending Policy, including Responsible Lending Principles, to hundreds of Realtors® today at the Regulatory Issues Forum, part of NAR’s Midyear Legislative Meetings & Trade Expo here. The policy addresses top national concerns, such as the collapse of the subprime mortgage market, the rising rate of foreclosures, and predatory lending."
NAR - "Realtors® Play "Hardball" in Washington" (5-15-07)
"Just as voters' voices will be heard next November, more than 7,500 Realtors® from across the country are in Washington, D.C., this week to voice their support for practical solutions to issues facing the real estate industry. As part of the Midyear agenda, Realtors® will meet with their elected officials to discuss small business health plans, protect consumers from banks in real estate, ensure a federal natural disaster policy, and advocate for subprime mortgage lending reforms and FHA modernization."
NAR - "First-Quarter Metro Home Prices & State Sales Show Broad Stabilization" (5-15-07)
"State existing-home sales in the first quarter generally are below a year ago but more states are improving than reported in the fourth quarter of 2006, and home prices in most areas show that conditions are favoring buyers, according to the latest quarterly survey by the National Association of Realtors®."
MSN - "Mortgage brokers cashed in on U.S. housing bounty" (5-15-07)
"Money may not grow on trees but for a while it seemed to grow on houses, and Colleen Moorhead knew exactly where to turn when she needed to harvest some cash. With a few phone calls, broker Joyce DeAngelo could put Moorhead and her husband into a new mortgage and cut them a check. They used more than $100,000 in cash they netted from the refinancing for living expenses and renovations."
C Net - "Casey Serin: The world's most hated blogger?" (5-15-07)
"With scant income, assets, or business savvy, the would-be real-estate mogul managed to purchase eight homes in hopes of reselling them at a profit. Along the way, he's lost all of them, run up some $170,000 in credit card and credit line debt, and launched iamfacingforeclosure.com to share his woes with the world. (Editor's note: Serin's site was intermittently reachable Monday.) Financial exhibitionism, coupled with a lack of penitence for stiffing his creditors, has transformed the 24-year-old resident of this sleepy Sacramento suburb into a celebrity among fellow bloggers. But unlike other online celebrities, Serin's stardom comes from a unique source: "haters" who patronize his blog solely to learn what financial missteps he's made today."
Yahoo - "Home Depot 1Q Profit Drops 29.5 Percent" (5-15-07)
"The Home Depot Inc., the world's largest home improvement store chain, cited erratic weather and continued weakness in the housing market as it reported Tuesday a 29.5 percent drop in first-quarter profit on a slight increase in sales. The results fell short of Wall Street expectations, and Home Depot's shares slipped 26 cents to $39.27 in morning trading after tumbling 2.6 percent earlier in the session."
Bloomberg - "Mortgage Defaults Rise 62 Percent, RealtyTrac Reports" (5-15-07)
"Mortgages in foreclosure rose 62 percent in April and the number of Americans falling behind on home loans will climb this year as home prices fall and lending standards are tightened, RealtyTrac Inc. said. There were 147,708 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio, the Irvine, California-based seller of foreclosure data said today. The median U.S. home price fell 1.8 percent in the fourth quarter, according to a separate report by the National Association of Realtors."
NPR - "Former Ameriquest Workers Tell of Deception" (5-15-07)
"Some former employees of the nation's leading subprime lender say the company encouraged them to conceal rate terms and make fake fixed-loan documents that pushed customers into loans they couldn't afford."
Palm Beach Post - "Tug of War: Owners don't budge as houses sit unsold" (5-15-07)
"The region's once-sizzling housing market - which for nearly five years lured investors with double-digit gains, easy credit and 40-year-low interest rates - has simmered to a showdown. Indeed, some market watchers believe home prices are the object of a high-stakes tug of war between home buyers in Palm Beach County and the Treasure Coast armed with low interest rates, and home sellers who refuse to budge from boom-time home prices despite rising inventory, surging foreclosures and tightened credit standards."
The Herald Tribune - "'60 Minutes' puts Realtors on defensive" (5-15-07)
"Using an Internet-based business to slash real estate commissions gets the CBS "60 Minutes" treatment on Sunday, prompting the Sarasota Association of Realtors and its national counterpart to do some advance coaching of their agents."
Best Syndication - "No Closing Cost Mortgage Advertising Is A Lie!" (5-15-07)
"No Closing Cost and Flat Fee mortgage advertising in a word is a rip-off. So much so that California regulators outlawed the use of the phase in all mortgage advertising in their state. All state mortgage regulators should immediately adopted the same restriction if they truely want to protect mortgage consumers. Until then, the rest of the country is fair game. That means you! Read this carefully and learning to protect yourself. Not do so can cost you $20,000, $50,000 or even $100,000 over your mortgage paying lifetime."
Seeking Alpha - "Banks Face Growing Pressure on Home Prices" (5-15-07)
"One of the themes I've developed over the years was that of the Slow-Motion-Slow-Down: As rates ticked higher, home sales would slow, refis and MEW would decrease, inventory would build, and prices would come down."
eFinanceDirectory.com - "Update on the Subprime Bailout" (5-15-07)
"Billions of dollars have already been earmarked for people who got into trouble with subprime loans. The plans are risky, because administrators will be hard pressed to bail out the unfortunate borrowers who signed their lives away without rewarding the lenders who made the bad loans."
The Wall Street Journal - "Mortgage Woes Push Banks to Big Discounts" (5-15-07)
"A surge of foreclosures over the past year or so has left lenders struggling to sell a growing backlog of homes. Rather than relying on real-estate agents, the usual practice, some are turning to large-scale auctions to speed up the sale process."
Market Watch - "Banks tightening mortgage-lending standards: Fed" (5-15-07)
"U.S. banks dramatically tightened their standards for approving residential mortgages in the first quarter, the Federal Reserve said Monday. In particular, banks made it harder to get subprime residential mortgage loans and nontraditional loans such as interest-only loans, the Fed reported. All told, at least 23 of the 53 domestic banks surveyed, or 43%, tightened their mortgage lending standards, up from 16% in the fourth quarter. The latest data are not strictly comparable to previous numbers, because the Fed has changed the wording of its questionnaire."
Orange County Register - "46% say latest median price is "totally off" (5-15-07)
"Recent mid-month home-price reports from DataQuick shows the median resale price at what would be a new record high for a full month. The current record, $705,000, was set in April 2006. We asked visitors to the Lansner on Real Estate blog if this was a solid statistic, or just a statistical quirk? The 844 votes cast online, in what's an unscientific sample of public sentiment, said the recent median is ..."
Monday, May 14, 2007
NAHB - "NAHB Remodelers Offer Green Kitchen Guide" (5-14-07)
"No matter what color you plan to paint your kitchen, you can 'green it up' with energy efficient and sustainable products. To celebrate May is Remodeling Month, the National Association of Home Builders (NAHB) Remodelers offers this guide of products and appliances and their lifespans so you can make smart choices for that next kitchen project. 'With a few simple steps, homeowners can turn a kitchen renovation into a green renovation,' said NAHB Remodelers Chair Mike Nagel, CGR, CAPS, a remodeler from Chicago. 'These upgrades can significantly reduce utility bills while looking great for years to come.'"
NAR - "Who are Office Tenants of the Future? NAR Report Highlights Hot Sectors" (5-14-07)
"A new study by the National Association of Realtors® predicts employment related to office-based occupations will rise by 6.5 percent nationally through 2009 and grow nearly the same amount from 2010-2014. The study, 'Who are Your Future Tenants? Office Employment in the United States: 2004-2014,' demonstrates why the shift to the service sector in the U.S. economy has made the need for office space an important economic indicator."
NAR - "NAR Partners With the Center for Responsible Lending and Neighborworks America to Keep Families in Their Homes" (5-14-07)
"The National Association of Realtors®, in partnership with the Center for Responsible Lending and NeighborWorks America, introduced a new brochure today at NAR’s 2007 Midyear Legislative Meetings & Trade Expo. 'Learn How to Avoid Foreclosure and Keep Your Home' is the fifth mortgage-related brochure in NAR’s consumer education series."
Real Estate Journal - "At Hip Condos, Animal House Meets the Empty Nest" (5-14-07)
"Mr. Schaefer's Bristol Development Group is pitching the project, Velocity, to twenty- and thirtysomething professionals willing to trade space (as little as 535 square feet) for affordability (as low as $165,000) and a chance to live in a hot urban neighborhood. Developers across the country are appealing to young buyers -- many of them single, almost all without children -- with buildings that promise not just an affordable first home but also a great social life. The amenities tell the story: videogame lounges and outdoor fire pits, rooftop soaking tubs, on-site bars and poolside drinks. But it's not so easy to control demographics in the open market. Some of the buildings are drawing unexpected buyers: people old enough to be the parents of the kids down the hall. And that's leading to territorial conflicts, social snubs -- even planned boardroom coups."
Orlando Sentinel - "Real estate pros say publicity can shape market's psychology" (5-14-07)
"Fact or fiction: The media decide whether you buy or sell a home. Sounds ridiculous, even insulting. But many real estate professionals insist there is a psychological component to buying a house -- and that a lot of negative publicity about the housing market can have an effect on whether consumers will buy, sell or sit."
Reuters - "Accredited Home dips as "significant" loss seen" (5-14-07)
"Accredited Home Lenders Holding Co. (LEND.O: Quote, Profile , Research) shares dipped on Monday after the struggling subprime mortgage lender projected a "significant" first-quarter loss and cut 1,300 jobs, but said it ended March with more than $350 million of available cash. In a filing late Friday with the U.S. Securities and Exchange Commission, San Diego-based Accredited Home said it cut its work force to 2,900 as of March 31 from 4,200 at year end, to slash costs amid a 'turbulent mortgage industry.'"
Market Watch - "Weak spring may drive home prices lower" (5-14-07)
"A spring home-selling season that's looking like a bust and pressure from growing inventories of houses in the resale market should intensify home-price declines in the second half of 2007, Wall Street analysts say."
Advertising Age - "The Housing Market's Great! (Or So Say Ads From Realtors)" (5-14-07)
"'It's a great time to buy or sell a home,' declared a print ad that ran in dozens of major national newspapers late last year from the National Association of Realtors. Six months later, though, that rosy, upbeat message contrasts starkly with the facts: 2006 was the worst real-estate market in five years. Sales dropped 8.4%, and home prices rose a meager 1.1%, according to data from the association's own research arm."
MSN - "Middle class living on the edge?" (5-14-07)
"The middle class today is less prepared for an economic emergency, such as losing a job or visiting an emergency room, than at any time since the late 1970s, concludes a new study from a political think tank in Washington, D.C., that's funded by Democrats."
Yahoo - "Homebuilders in a Hole" (5-14-07)
"When Kara Homes began building Horizons at Birch Hill, a community for active seniors, the plans were ambitious: 228 spacious residences that weren't typical cookie-cutter McMansions. But four years later, the project in Old Bridge, N.J., has been abandoned by Kara, which is now in Chapter 11. A dozen or so homes stand unfinished, the front doors swinging in the wind, and the half-built clubhouse bears a large 'Unsafe for Human Occupancy' sign."
Washington Post - "Edwards Says He Didn't Know About Subprime Push" (5-14-07)
"The hedge fund that employed John Edwards markedly expanded its subprime lending business while he worked there, becoming a major player in the high-risk mortgage sector Edwards has pilloried in his presidential campaign. Edwards said yesterday that he was unaware of the push by the firm, Fortress Investment Group, into subprime lending and that he wishes he had asked more questions before taking the job. The former senator from North Carolina said he had asked Fortress officials whether it was involved in predatory lending practices before taking the job in 2005 and was assured it was not."
Market Watch - "CPI, housing weakness seen weighing on stocks" (5-14-07)
"U.S. stocks will lose ground next week, pressured by a series of economic reports and corporate financial results that are expected to show the impact of a rise in consumer inflation and further weakening in the housing sector, market strategists said. The reports, including the consumer price index, housing starts and building permits are expected to add to recent economic data showing higher prices and slowing economic growth."
freeERISA.com - "Bottom-up Insights from the Bubble Bloggers" (5-14-07)
"For the 'dismal science' of economic forecasting, April 24 was one of the most dismal days in memory. Before that day, the consensus forecast among 60 leading economists for March existing homes sales was 6.45 million (seasonally adjusted annual rate), with none of them predicting a rate below 6.2 million. On that day, the National Association of Realtors (NAR) released data reporting sales of 6.12 million, for a 13% year-over-year (YOY) decline."
"No matter what color you plan to paint your kitchen, you can 'green it up' with energy efficient and sustainable products. To celebrate May is Remodeling Month, the National Association of Home Builders (NAHB) Remodelers offers this guide of products and appliances and their lifespans so you can make smart choices for that next kitchen project. 'With a few simple steps, homeowners can turn a kitchen renovation into a green renovation,' said NAHB Remodelers Chair Mike Nagel, CGR, CAPS, a remodeler from Chicago. 'These upgrades can significantly reduce utility bills while looking great for years to come.'"
NAR - "Who are Office Tenants of the Future? NAR Report Highlights Hot Sectors" (5-14-07)
"A new study by the National Association of Realtors® predicts employment related to office-based occupations will rise by 6.5 percent nationally through 2009 and grow nearly the same amount from 2010-2014. The study, 'Who are Your Future Tenants? Office Employment in the United States: 2004-2014,' demonstrates why the shift to the service sector in the U.S. economy has made the need for office space an important economic indicator."
NAR - "NAR Partners With the Center for Responsible Lending and Neighborworks America to Keep Families in Their Homes" (5-14-07)
"The National Association of Realtors®, in partnership with the Center for Responsible Lending and NeighborWorks America, introduced a new brochure today at NAR’s 2007 Midyear Legislative Meetings & Trade Expo. 'Learn How to Avoid Foreclosure and Keep Your Home' is the fifth mortgage-related brochure in NAR’s consumer education series."
Real Estate Journal - "At Hip Condos, Animal House Meets the Empty Nest" (5-14-07)
"Mr. Schaefer's Bristol Development Group is pitching the project, Velocity, to twenty- and thirtysomething professionals willing to trade space (as little as 535 square feet) for affordability (as low as $165,000) and a chance to live in a hot urban neighborhood. Developers across the country are appealing to young buyers -- many of them single, almost all without children -- with buildings that promise not just an affordable first home but also a great social life. The amenities tell the story: videogame lounges and outdoor fire pits, rooftop soaking tubs, on-site bars and poolside drinks. But it's not so easy to control demographics in the open market. Some of the buildings are drawing unexpected buyers: people old enough to be the parents of the kids down the hall. And that's leading to territorial conflicts, social snubs -- even planned boardroom coups."
Orlando Sentinel - "Real estate pros say publicity can shape market's psychology" (5-14-07)
"Fact or fiction: The media decide whether you buy or sell a home. Sounds ridiculous, even insulting. But many real estate professionals insist there is a psychological component to buying a house -- and that a lot of negative publicity about the housing market can have an effect on whether consumers will buy, sell or sit."
Reuters - "Accredited Home dips as "significant" loss seen" (5-14-07)
"Accredited Home Lenders Holding Co. (LEND.O: Quote, Profile , Research) shares dipped on Monday after the struggling subprime mortgage lender projected a "significant" first-quarter loss and cut 1,300 jobs, but said it ended March with more than $350 million of available cash. In a filing late Friday with the U.S. Securities and Exchange Commission, San Diego-based Accredited Home said it cut its work force to 2,900 as of March 31 from 4,200 at year end, to slash costs amid a 'turbulent mortgage industry.'"
Market Watch - "Weak spring may drive home prices lower" (5-14-07)
"A spring home-selling season that's looking like a bust and pressure from growing inventories of houses in the resale market should intensify home-price declines in the second half of 2007, Wall Street analysts say."
Advertising Age - "The Housing Market's Great! (Or So Say Ads From Realtors)" (5-14-07)
"'It's a great time to buy or sell a home,' declared a print ad that ran in dozens of major national newspapers late last year from the National Association of Realtors. Six months later, though, that rosy, upbeat message contrasts starkly with the facts: 2006 was the worst real-estate market in five years. Sales dropped 8.4%, and home prices rose a meager 1.1%, according to data from the association's own research arm."
MSN - "Middle class living on the edge?" (5-14-07)
"The middle class today is less prepared for an economic emergency, such as losing a job or visiting an emergency room, than at any time since the late 1970s, concludes a new study from a political think tank in Washington, D.C., that's funded by Democrats."
Yahoo - "Homebuilders in a Hole" (5-14-07)
"When Kara Homes began building Horizons at Birch Hill, a community for active seniors, the plans were ambitious: 228 spacious residences that weren't typical cookie-cutter McMansions. But four years later, the project in Old Bridge, N.J., has been abandoned by Kara, which is now in Chapter 11. A dozen or so homes stand unfinished, the front doors swinging in the wind, and the half-built clubhouse bears a large 'Unsafe for Human Occupancy' sign."
Washington Post - "Edwards Says He Didn't Know About Subprime Push" (5-14-07)
"The hedge fund that employed John Edwards markedly expanded its subprime lending business while he worked there, becoming a major player in the high-risk mortgage sector Edwards has pilloried in his presidential campaign. Edwards said yesterday that he was unaware of the push by the firm, Fortress Investment Group, into subprime lending and that he wishes he had asked more questions before taking the job. The former senator from North Carolina said he had asked Fortress officials whether it was involved in predatory lending practices before taking the job in 2005 and was assured it was not."
Market Watch - "CPI, housing weakness seen weighing on stocks" (5-14-07)
"U.S. stocks will lose ground next week, pressured by a series of economic reports and corporate financial results that are expected to show the impact of a rise in consumer inflation and further weakening in the housing sector, market strategists said. The reports, including the consumer price index, housing starts and building permits are expected to add to recent economic data showing higher prices and slowing economic growth."
freeERISA.com - "Bottom-up Insights from the Bubble Bloggers" (5-14-07)
"For the 'dismal science' of economic forecasting, April 24 was one of the most dismal days in memory. Before that day, the consensus forecast among 60 leading economists for March existing homes sales was 6.45 million (seasonally adjusted annual rate), with none of them predicting a rate below 6.2 million. On that day, the National Association of Realtors (NAR) released data reporting sales of 6.12 million, for a 13% year-over-year (YOY) decline."
Orange County Register - "Lending's next tsunami?" (5-13-07)
"Michael Perry, chief executive of IndyMac Bancorp, is stubborn when it comes to delinquent loans. He refuses to ditch them, even as they expand rapidly on the books of Pasadena-based IndyMac, which has two units based in Irvine and is the largest U.S. lender in a credit category dubbed "Alt-A," which is one level above the risky subprime niche. It turned in a company record of $90 billion in loans last year."
The Union Tribune - "No surprising development" (5-13-07)
"Near the peak of San Diego's housing boom, home builder D.R. Horton purchased a steep, nine-acre hillside along Friars Road across from Fashion Valley mall for $22 million. The land was earmarked for Fashion Walk, a trendy, 161-unit condo project. D.R. Horton spent $1.5 million on a 46-foot-high retaining wall to hold back the slope. The company graded a flat shelf for the condos, hauling away tons of dirt. It poured concrete foundations for elevator shafts."
The Union Tribune - "Foreclosure frenzy" (5-13-07)
"The bidding on foreclosed homes was so fast and furious that Candace and Curtis Friedman were still feeling an adrenaline rush as they were escorted out of the auction to sign a purchase agreement. 'You don't have a lot of time to think,' said Curtis, a stay-at-home dad from El Cajon. 'It's the fastest $200,000 we ever spent. It's over before you know what happened.'"
Orange County Register - "O.C. mortgage layoffs begin to add up" (5-13-07)
"The turmoil in the mortgage industry is beginning to take its toll on local jobs. It's hard to get a handle on the actual number because the companies are notoriously tight-lipped about job cuts. Many don't report layoffs, even though state law requires employers with more than 75 workers to notify the Employment Development Department if they lay off more than 50 people in a 30-day period (that's the so-called WARN notice)."
Orange County Register - "46% say latest median price is 'totally off'" (5-13-07)
"Recent mid-month home-price reports from DataQuick shows the median resale price at what would be a new record high for a full month. The current record, $705,000, was set in April 2006. We asked visitors to the Lansner on Real Estate blog if this was a solid statistic, or just a statistical quirk? The 844 votes cast online, in what's an unscientific sample of public sentiment, said the recent median is ..."
LA Times - "Midcentury style, but wired for today" (5-13-07)
"Selected as Metropolitan Home magazine's design house of 2007 and Westweek's featured house this year, this home is reminiscent of Midcentury Modern models. The Hollywood Hills house has white terrazzo floors, 12-foot-high Douglas fir ceilings, a free-flowing floor plan and exterior walls of glass."
LA Times - "Call for simplifying rules over home loans still goes unheeded" (5-13-07)
"For decades, both government and industry have been calling for updated and simplified rules governing the home-loan process. But they have been unable to agree on anything that would modernize two key consumer-protection laws. Those would be the Real Estate Settlement Procedures Act and the Truth in Lending Act. RESPA is designed to help consumers be better shoppers in the home-buying process; TILA requires clear disclosure of key lending terms and all costs."
LA Times - "Holding mortgage is risky for seller" (5-13-07)
"Most sellers who take back second mortgages for buyers view them as investments that can yield an attractive rate of return. However, I don't view them as very good investments unless a seller can obtain a higher price on the sale. Although the promised rate may be high, second mortgages are riskier than first mortgages, and few sellers are qualified to assess the risk. Borrowers who get into payment trouble sometimes stop paying on the second while continuing to pay on the first mortgage, gambling that the second mortgage lender won't do anything about it. Forcing a borrower into foreclosure is costly, and because the second mortgage lender gets paid only after the first mortgage lender has been paid in full, there may be nothing left."
"Michael Perry, chief executive of IndyMac Bancorp, is stubborn when it comes to delinquent loans. He refuses to ditch them, even as they expand rapidly on the books of Pasadena-based IndyMac, which has two units based in Irvine and is the largest U.S. lender in a credit category dubbed "Alt-A," which is one level above the risky subprime niche. It turned in a company record of $90 billion in loans last year."
The Union Tribune - "No surprising development" (5-13-07)
"Near the peak of San Diego's housing boom, home builder D.R. Horton purchased a steep, nine-acre hillside along Friars Road across from Fashion Valley mall for $22 million. The land was earmarked for Fashion Walk, a trendy, 161-unit condo project. D.R. Horton spent $1.5 million on a 46-foot-high retaining wall to hold back the slope. The company graded a flat shelf for the condos, hauling away tons of dirt. It poured concrete foundations for elevator shafts."
The Union Tribune - "Foreclosure frenzy" (5-13-07)
"The bidding on foreclosed homes was so fast and furious that Candace and Curtis Friedman were still feeling an adrenaline rush as they were escorted out of the auction to sign a purchase agreement. 'You don't have a lot of time to think,' said Curtis, a stay-at-home dad from El Cajon. 'It's the fastest $200,000 we ever spent. It's over before you know what happened.'"
Orange County Register - "O.C. mortgage layoffs begin to add up" (5-13-07)
"The turmoil in the mortgage industry is beginning to take its toll on local jobs. It's hard to get a handle on the actual number because the companies are notoriously tight-lipped about job cuts. Many don't report layoffs, even though state law requires employers with more than 75 workers to notify the Employment Development Department if they lay off more than 50 people in a 30-day period (that's the so-called WARN notice)."
Orange County Register - "46% say latest median price is 'totally off'" (5-13-07)
"Recent mid-month home-price reports from DataQuick shows the median resale price at what would be a new record high for a full month. The current record, $705,000, was set in April 2006. We asked visitors to the Lansner on Real Estate blog if this was a solid statistic, or just a statistical quirk? The 844 votes cast online, in what's an unscientific sample of public sentiment, said the recent median is ..."
LA Times - "Midcentury style, but wired for today" (5-13-07)
"Selected as Metropolitan Home magazine's design house of 2007 and Westweek's featured house this year, this home is reminiscent of Midcentury Modern models. The Hollywood Hills house has white terrazzo floors, 12-foot-high Douglas fir ceilings, a free-flowing floor plan and exterior walls of glass."
LA Times - "Call for simplifying rules over home loans still goes unheeded" (5-13-07)
"For decades, both government and industry have been calling for updated and simplified rules governing the home-loan process. But they have been unable to agree on anything that would modernize two key consumer-protection laws. Those would be the Real Estate Settlement Procedures Act and the Truth in Lending Act. RESPA is designed to help consumers be better shoppers in the home-buying process; TILA requires clear disclosure of key lending terms and all costs."
LA Times - "Holding mortgage is risky for seller" (5-13-07)
"Most sellers who take back second mortgages for buyers view them as investments that can yield an attractive rate of return. However, I don't view them as very good investments unless a seller can obtain a higher price on the sale. Although the promised rate may be high, second mortgages are riskier than first mortgages, and few sellers are qualified to assess the risk. Borrowers who get into payment trouble sometimes stop paying on the second while continuing to pay on the first mortgage, gambling that the second mortgage lender won't do anything about it. Forcing a borrower into foreclosure is costly, and because the second mortgage lender gets paid only after the first mortgage lender has been paid in full, there may be nothing left."
Tracy Press - "That sinking feeling" (5-12-07)
"The number of houses on the market in Tracy and Mountain House is still climbing, while prices either remain flat or have dropped since the beginning of the year. The latest numbers from the Central Valley Association of Realtors show 930 houses for sale in Tracy, Banta and Mountain House as of the end of April, though only 249 houses actually sold during the first four months of 2007."
The Union Tribune - "Subprime lender in S.D. sees big losses" (5-12-07)
"Troubled subprime mort-gage originator Accredited Home Lenders said yesterday that it expects 'significant losses' during its first quarter and that it has slashed 1,300 jobs nationwide so far this year. The San Diego company, which specializes in loans to borrowers with poor credit, revealed the cutbacks and other information in a filing late yesterday with federal securities regulators."
Ventura County Star - "Auction process lures homeowner hopefuls to bid" (5-12-07)
"The lure of finding a great deal draws people to home foreclosure auctions, but there is no guarantee. Still, plenty of house-hunters turned out last weekend to tour area homes that will be sold to the highest bidders on May 19 at the Los Angeles Convention Center. Some dream the event will present a chance for them to own a home in Ventura County, where the median price for new and existing homes and condominiums was $566,750 in March. Others are looking for investment properties at a steal."
WCAX - "Vermont Housing Market in Deep Freeze?" (5-12-07)
"The downturn in the housing market in Vermont has not been as dramatic as other parts of the country. Experts say it's not a seller's market anymore, but it's not buyer's market either. 'It's what I call a stable market. So, you're not seeing anything appreciating, but we're not seeing the big dips -- we're not seeing people having to drop 25,000, 50,000,' said Geri Reilly, a realtor from the Burlington area."
The Union Tribune - "S.D. homes most overpriced" (5-12-07)
"San Diego County's high housing prices are no surprise to residents, but now Forbes.com has named the region as the nation's most overpriced real estate market in a ranking of the country's 40 largest metro areas. 'Had the weather been included as a statistical measurement, there's no doubt that San Diego would have avoided our list of the top 10 most overpriced cities – but we didn't factor in sunshine,' report author Matt Woolsey said."
ABC7 - "Hands Off: Allstate Bails On Golden State" (5-12-07)
"Allstate, California's third-largest home insurer, is backing away from writing homeowners policies. Allstate claims the combination of high housing costs and all-too-frequent natural disasters is just too much for it to handle anymore. The very big insurance company is telling state homeowners to go pound sand and some believe it's all part of a very calculated bluff."
Orange County Register - "California new home sales down 37 percent in March" (5-12-07)
"Pending sales of new homes in California fell by 3.7 percent from February to March, and were down 37 percent on an annual basis, a new report from Hanley Wood Market Intelligence of Costa Mesa shows. Statewide, buyers agreed to purchase 5,775 new houses, condos, townhomes and 'plexes,' such as duplexes or triplexes, the real estate research firm reported. That compares to just fewer than 6,000 new home contracts signed this February and 9,160 in March 2006, Hanley Wood said."
"The number of houses on the market in Tracy and Mountain House is still climbing, while prices either remain flat or have dropped since the beginning of the year. The latest numbers from the Central Valley Association of Realtors show 930 houses for sale in Tracy, Banta and Mountain House as of the end of April, though only 249 houses actually sold during the first four months of 2007."
The Union Tribune - "Subprime lender in S.D. sees big losses" (5-12-07)
"Troubled subprime mort-gage originator Accredited Home Lenders said yesterday that it expects 'significant losses' during its first quarter and that it has slashed 1,300 jobs nationwide so far this year. The San Diego company, which specializes in loans to borrowers with poor credit, revealed the cutbacks and other information in a filing late yesterday with federal securities regulators."
Ventura County Star - "Auction process lures homeowner hopefuls to bid" (5-12-07)
"The lure of finding a great deal draws people to home foreclosure auctions, but there is no guarantee. Still, plenty of house-hunters turned out last weekend to tour area homes that will be sold to the highest bidders on May 19 at the Los Angeles Convention Center. Some dream the event will present a chance for them to own a home in Ventura County, where the median price for new and existing homes and condominiums was $566,750 in March. Others are looking for investment properties at a steal."
WCAX - "Vermont Housing Market in Deep Freeze?" (5-12-07)
"The downturn in the housing market in Vermont has not been as dramatic as other parts of the country. Experts say it's not a seller's market anymore, but it's not buyer's market either. 'It's what I call a stable market. So, you're not seeing anything appreciating, but we're not seeing the big dips -- we're not seeing people having to drop 25,000, 50,000,' said Geri Reilly, a realtor from the Burlington area."
The Union Tribune - "S.D. homes most overpriced" (5-12-07)
"San Diego County's high housing prices are no surprise to residents, but now Forbes.com has named the region as the nation's most overpriced real estate market in a ranking of the country's 40 largest metro areas. 'Had the weather been included as a statistical measurement, there's no doubt that San Diego would have avoided our list of the top 10 most overpriced cities – but we didn't factor in sunshine,' report author Matt Woolsey said."
ABC7 - "Hands Off: Allstate Bails On Golden State" (5-12-07)
"Allstate, California's third-largest home insurer, is backing away from writing homeowners policies. Allstate claims the combination of high housing costs and all-too-frequent natural disasters is just too much for it to handle anymore. The very big insurance company is telling state homeowners to go pound sand and some believe it's all part of a very calculated bluff."
Orange County Register - "California new home sales down 37 percent in March" (5-12-07)
"Pending sales of new homes in California fell by 3.7 percent from February to March, and were down 37 percent on an annual basis, a new report from Hanley Wood Market Intelligence of Costa Mesa shows. Statewide, buyers agreed to purchase 5,775 new houses, condos, townhomes and 'plexes,' such as duplexes or triplexes, the real estate research firm reported. That compares to just fewer than 6,000 new home contracts signed this February and 9,160 in March 2006, Hanley Wood said."
Orange County Register - "LendingTree lays off 20% of 2,200 workers" (5-11-07)
"LendingTree of Charlotte, N.C., which has a major presence in Orange County, laid off 20 percent of its 2,200 workers nationwide today, the company said. Rebecca Anderson, a spokeswoman for the company, said that although a majority of the workers are in Irvine, the layoffs are evenly distributed across Irvine, Charlotte and Jacksonville, Fla. That would equate to 440 layoffs, including 147 or so in Irvine."
Orange County Register - "New Century: We may never file profit reports" (5-11-07)
"Wow, my blog is on fire, I guess with people curious about LendingTree. But I feel obligated to update everyone about New Century Financial of Irvine, the once mighty subprime lender in bankruptcy court. The true story may never be told about its accounting mistakes since the company now says it may never file another report. Here's what AP has:"
Orange County Register - "Orange County home prices and sales" (5-11-07)
"For the 22 business days ending April 25, sales for all types of Orange County home sales decreased 26.5 percent. The median sales price decreased .6 percent. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change."
NAR - "New Realtor.com Feature Streamlines Online Real Estate Services" (5-11-07)
"At the click of a mouse, consumers visiting Realtor.com, the official Web site of the National Association of Realtors®, can now more easily find Realtors® offering online transaction management services, bringing transparency and enhanced communications throughout each stage of increasingly complex real estate transactions. Consumers can identify these Realtors® by looking for the RELAY™ icon."
NAR - "NAR Survey Shows Realtors® Investing in and Demanding More Technology" (5-11-07)
"Realtors® invest heavily in technology with more than half of brokers, sales agents, associate brokers and managers saying they spent more than $1,000 last year, according to a new survey by the National Association of Realtors®. The 2007 Realtor® Technology Survey, conducted by NAR’s Center for REALTOR® Technology, also found that 25 percent of respondents spent more than $2,000 on technology in 2006. In addition, approximately two-thirds of those surveyed have a real estate business Web site, and a quarter spends more than $1,000 annually to maintain their site. Nearly all of these sites – 93 percent – provide listing search capabilities. Other than their own Web site, the most popular sites for Realtors® to display their listings include the local MLS, their broker’s Web site and REALTOR.com."
USA Today - "Hot property on cable" (5-11-07)
"Even as home sales and prices rapidly cool, shows that focus on selling homes — particularly for home "flippers" — remain a hot and growing commodity. Cable channels including HGTV, TLC, Bravo, A&E and DIY are ratcheting up home-dealing programming with new shows featuring developers, investors and do-it-yourselfers."
SFGate.com - "Fractional Fairy tale: The dream of owning a vacation home can come true via tenancy-in-common" (5-11-07)
"In the last 10 years, buying a second home has become the epitome of the American dream. Homeownership may have marked entry into the promised land, but it was the vacation property that fueled the most ecstatic visions: wineries, beach houses, pieds-à-terre and mountain cabins. These were not places where people lived, worked and paid bills, but where life unfolded according to the seasons, with the ebb and flow of recreation, family reunions and private retreats."
San Francisco Chronicle - "Ignoring equity line could hurt" (5-11-07)
"Daniel Y. of San Francisco has a question that's on the mind of many homeowners these days. Daniel wants to sell his condo and move into a bigger one in a nicer neighborhood. He figures the price he could get would pay off his first mortgage, but not a $50,000 home equity line of credit he took out last year to repay credit card debt. Daniel says the shortfall could be $10,000 to $30,000 and wants to know what would happen if he didn't pay it."
The Boston Globe - "Subprime woes hit buyers" (5-11-07)
"The meltdown in the subprime mortgage sector is making it harder for first-time and other home buyers with little down payment money to get even conventional loans, adding more troubles to a slumping real estate market. Due to a rash of defaults by subprime borrowers, mortgage companies have tightened lending to clients with good credit as well. These are typically buyers who once easily got 90 to 100 percent financing for a home, but now either have trouble getting loans or are paying more for them."
Blown Mortgage - "New Century's unbelievable yield spread premium offer" (5-11-07)
"Let me first start off by saying that this offer was presented to myself and my business partner as owners of our company from our representative at New Century. I have no idea whether this was common practice at New Century, but I believe from talking with our rep that it was. I never received anything in writing to confirm the offer, nor did we ever move forward with it to see if it actually would happen."
California Housing Forecast - "The Data Lies" (5-11-07)
"Almost every statistic reported about the housing market is misleading in some way. While the housing market is getting worse by the day, you wouldn't know it from information reported by the government, Wall Street, banks, realtors, media, and industry associations. Worse, none of them have tried to educate the public about the problems with their data. Here you will find the most complete description of what is wrong with the housing market data. Most of it is my own work. Some is copied from other sources as noted."
eFinanceDirectory.com - "Future of the Southern California Housing Market: Interview With Rich Toscano" (5-11-07)
"Rich Toscano is a financial advisor with Pacific Capital Associates in San Diego. He frequently writes about the housing market for voiceofsandiego.org, and for his own website, Professor Piggington's Econo-Almanac for the Landed Poor. Rich recently took time to share his views with us on the Southern California Housing Bubble."
San Francisco Chronicle - "5 arrested in alleged Alameda County real estate fraud" (5-11-07)
"The husband-and-wife owners of a Vallejo mortgage company and three other people were arrested today for their roles in an alleged $3.5 million real-estate fraud in Alameda County, authorities said. Amy Schloemann, 30, and her husband, Karim Akil, 40, also known as Scott Kinney, were named in a 73-count complaint filed in Alameda County Superior Court accusing them of defrauding two mortgage companies, Union Bank of California, local real-estate brokers and citizens from April 2005 to August 2006."
NPR - "Stocks' Gains May Be Linked to Housing Losses" (5-11-07)
"Though it fell nearly 150 points Thursday, the Dow Jones Industrial Average has been setting record highs in recent weeks, while home sales are at their lowest level in nearly four years. Some experts say real estate's swoon is freeing up money to bolster stocks. That could explain why one of the strongest stock market rallies on record has come at a time when gasoline prices are soaring, the overall economy is slowing and home sales are down."
Guardian Unlimited - "Wal-Mart posts worst sales ever as US retail figures slump" (5-11-07)
"The company said same store sales fell 3.5% in April on the same month a year ago. Same store sales measure the performance of stores that have been open for at least 12 months. But Wal-Mart was not the only US retailer turning in a poor performance in April, triggering fears that the US housing slump might be spilling over into consumer spending and that the economy might be taking a turn for the worse."
Mortgage Bankers Association - "HUD Solicits Comments on Revising Standards for Mortgagor's Investment in Mortgaged Property" (5-11-07)
"Through this proposed rule, HUD submits, for public comment, specific standards governing a mortgagor's investment in property for which the mortgage is insured by the Federal Housing Administration (FHA). Specifically, this proposed rule would codify HUD's longstanding practice, authorized by statute, of allowing a mortgagor's investment to be derived from gifts by family members and certain organizations. The standards would address a situation in which the mortgagor's investment is derived from a gift, loan, or other payment that is provided by any donor, including an individual or an organization, and would also specify prohibited sources for a mortgagor's investment."
"LendingTree of Charlotte, N.C., which has a major presence in Orange County, laid off 20 percent of its 2,200 workers nationwide today, the company said. Rebecca Anderson, a spokeswoman for the company, said that although a majority of the workers are in Irvine, the layoffs are evenly distributed across Irvine, Charlotte and Jacksonville, Fla. That would equate to 440 layoffs, including 147 or so in Irvine."
Orange County Register - "New Century: We may never file profit reports" (5-11-07)
"Wow, my blog is on fire, I guess with people curious about LendingTree. But I feel obligated to update everyone about New Century Financial of Irvine, the once mighty subprime lender in bankruptcy court. The true story may never be told about its accounting mistakes since the company now says it may never file another report. Here's what AP has:"
Orange County Register - "Orange County home prices and sales" (5-11-07)
"For the 22 business days ending April 25, sales for all types of Orange County home sales decreased 26.5 percent. The median sales price decreased .6 percent. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change."
NAR - "New Realtor.com Feature Streamlines Online Real Estate Services" (5-11-07)
"At the click of a mouse, consumers visiting Realtor.com, the official Web site of the National Association of Realtors®, can now more easily find Realtors® offering online transaction management services, bringing transparency and enhanced communications throughout each stage of increasingly complex real estate transactions. Consumers can identify these Realtors® by looking for the RELAY™ icon."
NAR - "NAR Survey Shows Realtors® Investing in and Demanding More Technology" (5-11-07)
"Realtors® invest heavily in technology with more than half of brokers, sales agents, associate brokers and managers saying they spent more than $1,000 last year, according to a new survey by the National Association of Realtors®. The 2007 Realtor® Technology Survey, conducted by NAR’s Center for REALTOR® Technology, also found that 25 percent of respondents spent more than $2,000 on technology in 2006. In addition, approximately two-thirds of those surveyed have a real estate business Web site, and a quarter spends more than $1,000 annually to maintain their site. Nearly all of these sites – 93 percent – provide listing search capabilities. Other than their own Web site, the most popular sites for Realtors® to display their listings include the local MLS, their broker’s Web site and REALTOR.com."
USA Today - "Hot property on cable" (5-11-07)
"Even as home sales and prices rapidly cool, shows that focus on selling homes — particularly for home "flippers" — remain a hot and growing commodity. Cable channels including HGTV, TLC, Bravo, A&E and DIY are ratcheting up home-dealing programming with new shows featuring developers, investors and do-it-yourselfers."
SFGate.com - "Fractional Fairy tale: The dream of owning a vacation home can come true via tenancy-in-common" (5-11-07)
"In the last 10 years, buying a second home has become the epitome of the American dream. Homeownership may have marked entry into the promised land, but it was the vacation property that fueled the most ecstatic visions: wineries, beach houses, pieds-à-terre and mountain cabins. These were not places where people lived, worked and paid bills, but where life unfolded according to the seasons, with the ebb and flow of recreation, family reunions and private retreats."
San Francisco Chronicle - "Ignoring equity line could hurt" (5-11-07)
"Daniel Y. of San Francisco has a question that's on the mind of many homeowners these days. Daniel wants to sell his condo and move into a bigger one in a nicer neighborhood. He figures the price he could get would pay off his first mortgage, but not a $50,000 home equity line of credit he took out last year to repay credit card debt. Daniel says the shortfall could be $10,000 to $30,000 and wants to know what would happen if he didn't pay it."
The Boston Globe - "Subprime woes hit buyers" (5-11-07)
"The meltdown in the subprime mortgage sector is making it harder for first-time and other home buyers with little down payment money to get even conventional loans, adding more troubles to a slumping real estate market. Due to a rash of defaults by subprime borrowers, mortgage companies have tightened lending to clients with good credit as well. These are typically buyers who once easily got 90 to 100 percent financing for a home, but now either have trouble getting loans or are paying more for them."
Blown Mortgage - "New Century's unbelievable yield spread premium offer" (5-11-07)
"Let me first start off by saying that this offer was presented to myself and my business partner as owners of our company from our representative at New Century. I have no idea whether this was common practice at New Century, but I believe from talking with our rep that it was. I never received anything in writing to confirm the offer, nor did we ever move forward with it to see if it actually would happen."
California Housing Forecast - "The Data Lies" (5-11-07)
"Almost every statistic reported about the housing market is misleading in some way. While the housing market is getting worse by the day, you wouldn't know it from information reported by the government, Wall Street, banks, realtors, media, and industry associations. Worse, none of them have tried to educate the public about the problems with their data. Here you will find the most complete description of what is wrong with the housing market data. Most of it is my own work. Some is copied from other sources as noted."
eFinanceDirectory.com - "Future of the Southern California Housing Market: Interview With Rich Toscano" (5-11-07)
"Rich Toscano is a financial advisor with Pacific Capital Associates in San Diego. He frequently writes about the housing market for voiceofsandiego.org, and for his own website, Professor Piggington's Econo-Almanac for the Landed Poor. Rich recently took time to share his views with us on the Southern California Housing Bubble."
San Francisco Chronicle - "5 arrested in alleged Alameda County real estate fraud" (5-11-07)
"The husband-and-wife owners of a Vallejo mortgage company and three other people were arrested today for their roles in an alleged $3.5 million real-estate fraud in Alameda County, authorities said. Amy Schloemann, 30, and her husband, Karim Akil, 40, also known as Scott Kinney, were named in a 73-count complaint filed in Alameda County Superior Court accusing them of defrauding two mortgage companies, Union Bank of California, local real-estate brokers and citizens from April 2005 to August 2006."
NPR - "Stocks' Gains May Be Linked to Housing Losses" (5-11-07)
"Though it fell nearly 150 points Thursday, the Dow Jones Industrial Average has been setting record highs in recent weeks, while home sales are at their lowest level in nearly four years. Some experts say real estate's swoon is freeing up money to bolster stocks. That could explain why one of the strongest stock market rallies on record has come at a time when gasoline prices are soaring, the overall economy is slowing and home sales are down."
Guardian Unlimited - "Wal-Mart posts worst sales ever as US retail figures slump" (5-11-07)
"The company said same store sales fell 3.5% in April on the same month a year ago. Same store sales measure the performance of stores that have been open for at least 12 months. But Wal-Mart was not the only US retailer turning in a poor performance in April, triggering fears that the US housing slump might be spilling over into consumer spending and that the economy might be taking a turn for the worse."
Mortgage Bankers Association - "HUD Solicits Comments on Revising Standards for Mortgagor's Investment in Mortgaged Property" (5-11-07)
"Through this proposed rule, HUD submits, for public comment, specific standards governing a mortgagor's investment in property for which the mortgage is insured by the Federal Housing Administration (FHA). Specifically, this proposed rule would codify HUD's longstanding practice, authorized by statute, of allowing a mortgagor's investment to be derived from gifts by family members and certain organizations. The standards would address a situation in which the mortgagor's investment is derived from a gift, loan, or other payment that is provided by any donor, including an individual or an organization, and would also specify prohibited sources for a mortgagor's investment."
NAR - "NAR Member Survey Shows Patience and Professionalism Pay Over Time" (5-10-07)
"Realtors® come from varied backgrounds, work mostly on commission and become successful over a period of time, according to a new member survey by the National Association of Realtors®. The typical member is 51 years old, works 40 hours per week and has been in the business for seven years. More than 1.3 million Realtors® – about half of all real estate licensees – are characterized in the highly detailed 2007 National Association of Realtors® Member Profile."
Bloomberg - "April Foreclosure Filings More Than Double Over 2006" (5-10-07)
"U.S. homeowners entered the foreclosure process in April at more than double the rate of a year ago as tightening credit made it more difficult to refinance and a swelling supply of unsold homes made it tough to sell. The number of homeowners in all three phases of foreclosure rose last month over the same period a year ago, according to Sacramento-based Foreclosures.com, which gathers data from county courthouses nationwide. Those receiving their first notice of foreclosure from a bank climbed 127 percent, those with homes going up for sale by auction jumped 164 percent and those whose homes were repossessed by banks went up 40 percent."
RealtyTrac - "MORE THAN 430,000 FORECLOSURE FILINGS REPORTED IN Q1" (5-10-07)
"(http://www.realtytrac.com/gateway_co.asp?accnt=137300), the leading online marketplace for foreclosure properties, today released first-quarter data from its 2007 U.S. Foreclosure Market Report, showing more than 430,000 foreclosure filings — default notices, auction sale notices and bank repossessions — reported nationwide during the first three months of the year, up 27 percent from the previous quarter and up 35 percent from the first quarter of 2006. The nation’s quarterly foreclosure rate of one foreclosure filing for every 264 households was the highest quarterly foreclosure rate since RealtyTrac began issuing its report 27 months ago."
Market Watch - "House of denial" (5-10-07)
"Since the market bubble burst in early 2000, everyone has credited housing with not only minimizing the negative impact of the losses, but subsequently generating a tremendous recovery in both equity prices and individual wealth -- and rightly so. Yet now, when all signs point to a rapid end to the glory days of real estate, we appear dead set on believing that the housing sector alone is not powerful enough to throw a wrench into the economic machine. Again, that's a rather unbalanced view.
The idea that a widespread downturn in home prices will not have a major impact on the economy is simply a pipedream. Despite this, true believers in the housing market still abound. Why? Here are a few reasons offered by the acolytes in support of the idea that housing weakness won't lead to large-scale suffering:"
Bloomberg - "Fed Keeps Rate at 5.25%; Says Inflation is `Predominant' Risk" (5-10-07)
"The Federal Reserve kept the benchmark U.S. interest rate at 5.25 percent and said inflation remains the 'predominant' risk for the economy. 'The committee's predominant policy concern remains the risk that inflation will fail to moderate as expected,' the Federal Open Market Committee said in a statement today after meeting in Washington. 'Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth.'"
Charles Hugh Smith - "Interest Rate See-Saw" (5-10-07)
"It's a given that rising supply (inventory) and slackening demand (fewer buyers) lead to price declines in any market--for instance, housing. Since interest rates fell for an entire generation (22 years) from their peak in 1981, the relationship between housing prices and interest rates has been largely forgotten or at least neglected. As interest rates rise, the "see-saw" of higher rates and dropping house values will place pricing pressure on even the most desirable housing."
Yahoo - "Congress debates mortgage reforms" (5-10-07)
"Congress is looking at potential reforms to risky home lending practices, although a House subcommittee hearing on Tuesday suggests lawmakers are still sorting out the complex workings of the mortgage market and wondering whether reforms will be necessary or helpful. With the number of foreclosures nationally jumping 47 percent in March from a year ago, lawmakers are weighing whether new lending rules are needed or whether the market is already in the process of self-correcting. The task of crafting reforms is made more complicated by the long list of players involved in mortgage transactions."
Market Watch - "Toll cites trickle-up effect of subprime" (5-10-07)
"Toll Brothers Inc. said Wednesday that it doesn't expect to meet its full-year profit outlook and that more stringent lending standards as a result of problems in subprime mortgages are reverberating in its own luxury-home market. The Horsham, Pa.-based company reported preliminary results ahead of its full financial results for the second quarter, scheduled for release on May 24. For the quarter ended April 30, Toll said home-building revenue fell 19% from a year earlier, while net signed contracts dropped 25%."
Blown Mortgage - "Schahrzad Berkland Podcast Interview Series" (5-10-07)
"In this edition of the Blown Mortgage audio podcast series we shake it up a bit and take time to talk with a housing analyst with an interview with Schahrzad Berkland of CaliforniaHousingForecast.com. Schahrzad has a keen eye on the housing market in Southern California and uses statistical analysis to make predictions of where she thinks the market is headed. Her views are not for the weak of heart. She anticipates and easy drop of 30-40% of home prices, and further in some areas. While I don't necessarily agree with the level of severity she predicts, she does make a compelling case using interesting and statistic-based arguments regarding the current housing market and the problems with it. This is a great interview and I recommend that even if you don't believe there is a big problem in housing that you listen to what Schahrzad has to say and learn from her insight."
Orange County Register - "Impac reports $121.7 million first-quarter loss" (5-10-07)
"Losses are mounting at Impac Mortgage Holdings of Irvine as it struggles with delinquent loans and a loss of appetite among investors for loans in the credit category above subprime. The real estate investment trust reported late Thursday a first-quarter loss of $121.7 million, compared to a profit of $85.6 million a year ago. In the fourth quarter, Impac reported a loss of $59.5 million."
"Realtors® come from varied backgrounds, work mostly on commission and become successful over a period of time, according to a new member survey by the National Association of Realtors®. The typical member is 51 years old, works 40 hours per week and has been in the business for seven years. More than 1.3 million Realtors® – about half of all real estate licensees – are characterized in the highly detailed 2007 National Association of Realtors® Member Profile."
Bloomberg - "April Foreclosure Filings More Than Double Over 2006" (5-10-07)
"U.S. homeowners entered the foreclosure process in April at more than double the rate of a year ago as tightening credit made it more difficult to refinance and a swelling supply of unsold homes made it tough to sell. The number of homeowners in all three phases of foreclosure rose last month over the same period a year ago, according to Sacramento-based Foreclosures.com, which gathers data from county courthouses nationwide. Those receiving their first notice of foreclosure from a bank climbed 127 percent, those with homes going up for sale by auction jumped 164 percent and those whose homes were repossessed by banks went up 40 percent."
RealtyTrac - "MORE THAN 430,000 FORECLOSURE FILINGS REPORTED IN Q1" (5-10-07)
"(http://www.realtytrac.com/gateway_co.asp?accnt=137300), the leading online marketplace for foreclosure properties, today released first-quarter data from its 2007 U.S. Foreclosure Market Report, showing more than 430,000 foreclosure filings — default notices, auction sale notices and bank repossessions — reported nationwide during the first three months of the year, up 27 percent from the previous quarter and up 35 percent from the first quarter of 2006. The nation’s quarterly foreclosure rate of one foreclosure filing for every 264 households was the highest quarterly foreclosure rate since RealtyTrac began issuing its report 27 months ago."
Market Watch - "House of denial" (5-10-07)
"Since the market bubble burst in early 2000, everyone has credited housing with not only minimizing the negative impact of the losses, but subsequently generating a tremendous recovery in both equity prices and individual wealth -- and rightly so. Yet now, when all signs point to a rapid end to the glory days of real estate, we appear dead set on believing that the housing sector alone is not powerful enough to throw a wrench into the economic machine. Again, that's a rather unbalanced view.
The idea that a widespread downturn in home prices will not have a major impact on the economy is simply a pipedream. Despite this, true believers in the housing market still abound. Why? Here are a few reasons offered by the acolytes in support of the idea that housing weakness won't lead to large-scale suffering:"
Bloomberg - "Fed Keeps Rate at 5.25%; Says Inflation is `Predominant' Risk" (5-10-07)
"The Federal Reserve kept the benchmark U.S. interest rate at 5.25 percent and said inflation remains the 'predominant' risk for the economy. 'The committee's predominant policy concern remains the risk that inflation will fail to moderate as expected,' the Federal Open Market Committee said in a statement today after meeting in Washington. 'Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth.'"
Charles Hugh Smith - "Interest Rate See-Saw" (5-10-07)
"It's a given that rising supply (inventory) and slackening demand (fewer buyers) lead to price declines in any market--for instance, housing. Since interest rates fell for an entire generation (22 years) from their peak in 1981, the relationship between housing prices and interest rates has been largely forgotten or at least neglected. As interest rates rise, the "see-saw" of higher rates and dropping house values will place pricing pressure on even the most desirable housing."
Yahoo - "Congress debates mortgage reforms" (5-10-07)
"Congress is looking at potential reforms to risky home lending practices, although a House subcommittee hearing on Tuesday suggests lawmakers are still sorting out the complex workings of the mortgage market and wondering whether reforms will be necessary or helpful. With the number of foreclosures nationally jumping 47 percent in March from a year ago, lawmakers are weighing whether new lending rules are needed or whether the market is already in the process of self-correcting. The task of crafting reforms is made more complicated by the long list of players involved in mortgage transactions."
Market Watch - "Toll cites trickle-up effect of subprime" (5-10-07)
"Toll Brothers Inc. said Wednesday that it doesn't expect to meet its full-year profit outlook and that more stringent lending standards as a result of problems in subprime mortgages are reverberating in its own luxury-home market. The Horsham, Pa.-based company reported preliminary results ahead of its full financial results for the second quarter, scheduled for release on May 24. For the quarter ended April 30, Toll said home-building revenue fell 19% from a year earlier, while net signed contracts dropped 25%."
Blown Mortgage - "Schahrzad Berkland Podcast Interview Series" (5-10-07)
"In this edition of the Blown Mortgage audio podcast series we shake it up a bit and take time to talk with a housing analyst with an interview with Schahrzad Berkland of CaliforniaHousingForecast.com. Schahrzad has a keen eye on the housing market in Southern California and uses statistical analysis to make predictions of where she thinks the market is headed. Her views are not for the weak of heart. She anticipates and easy drop of 30-40% of home prices, and further in some areas. While I don't necessarily agree with the level of severity she predicts, she does make a compelling case using interesting and statistic-based arguments regarding the current housing market and the problems with it. This is a great interview and I recommend that even if you don't believe there is a big problem in housing that you listen to what Schahrzad has to say and learn from her insight."
Orange County Register - "Impac reports $121.7 million first-quarter loss" (5-10-07)
"Losses are mounting at Impac Mortgage Holdings of Irvine as it struggles with delinquent loans and a loss of appetite among investors for loans in the credit category above subprime. The real estate investment trust reported late Thursday a first-quarter loss of $121.7 million, compared to a profit of $85.6 million a year ago. In the fourth quarter, Impac reported a loss of $59.5 million."
Wednesday, May 09, 2007
The Wall Street Journal - "As Market Cools, Home Buyers Seek a Way Out" (5-9-07)
"In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot -- and now want to get out of them. Even as many of the new buildings are completed, buyers are filing lawsuits claiming they were duped into purchases they couldn't afford, or victimized through fraudulent investment schemes. Some are scrutinizing their contracts looking for loopholes, or searching out tiny flaws in finished homes that might allow them to back out without losing their deposits."
Reuters - "US mortgage applications rise in 3rd straight week" (5-9-07)
"U.S. mortgage applications increased for a third straight week, driven to a two-month high by demand for both purchases and refinancings, an industry trade group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted applications index rose 3.6 percent in the week to May 4 to 680.7, its highest since 690.5 in the week ended March 9."
Yahoo - "Congress Debates Mortgage Reforms" (5-9-07)
"Congress is looking at potential reforms to risky home lending practices, although a House subcommittee hearing on Tuesday suggests lawmakers are still sorting out the complex workings of the mortgage market and wondering whether reforms will be necessary or helpful. With the number of foreclosures nationally jumping 47 percent in March from a year ago, lawmakers are weighing whether new lending rules are needed or whether the market is already in the process of self-correcting. The task of crafting reforms is made more complicated by the long list of players involved in mortgage transactions."
The San Diego Union-Tribune - "Troubled mortgage borrowers find help" (5-9-07)
"Ernestine Witherspoon managed to hang onto her house in Washington even after she lost her job and fell far behind on her mortgage payments. Her lender, Countrywide Home Loans, was weeks away from seizing the house when Witherspoon called, explained her situation and worked out a plan to repay the $9,800 she owed. She scraped together $3,600 – only because she landed a new job – and Countrywide then tacked $25 onto her monthly payments for the life of the loan to make up the difference."
CNN - "Toll Brothers' home sales slide" (5-9-07)
"Luxury home builder Toll Brothers said on Wednesday it would post lower quarterly home building sales and warned it no longer expects to achieve its most recent quarterly and annual forecasts. 'Twenty months into this housing downturn, we continue to face difficult conditions in most of our markets,' Chief Executive Robert Toll said in a statement releasing the company's preliminary second-quarter results."
NAHB - "Americans To Spend More Than $232 Billion On Home Remodeling In 2007" (5-9-07)
"Americans will spend nearly $233 billion on home remodeling this year, according to the National Association of Home Builders’ (NAHB) 2007 industry forecast. That represents a 1.9 percent increase from the record $228 billion spent in 2006, according to estimates from the U.S. Census Bureau. NAHB announced this forecast today at a teleconference celebrating National Home Remodeling Month."
NAHB - "Remodeling Market Erodes Slightly During Housing Downswing" (5-9-07)
"Remodeling activity eroded slightly in the first quarter of 2007, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI). The current market conditions index slipped from 48.2 to 46.1 on a seasonally adjusted basis while future expectations edged up to 46.5 from 46.0. The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects, and 50 is normally the dividing line between a growing and contracting market."
Mortgage Bankers Association - "Mortgage Applications Increase in Latest MBA Survey" (5-9-07)
"The Mortgage Bankers Association (MBA) today released its weekly Mortgage Applications Survey for the week ending May 4, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 680.7, an increase of 3.6 percent on a seasonally adjusted basis from 657.2 one week earlier. On an unadjusted basis, the Index increased 4 percent compared with the previous week and was up 19.9 percent compared with the same week one year earlier. The Refinance Index increased 4.9 percent to 2115.2 from 2015.8 the previous week and the seasonally adjusted Purchase Index increased 2.6 percent to 438.3 from 427.3 one week earlier. The seasonally adjusted Conventional Index increased 3.2 percent to 1003.1 from 972.3 the previous week, and the seasonally adjusted Government Index increased 8.6 percent to 143.2 from 131.8 the previous week."
Financial Sense University - "SUBPRIME AMERICA INFECTS ASIA AND EUROPE" (5-9-07)
"As the US real estate market collapses, questions about subprime mortgages and those unable to pay are in the news. These are not inconsequential questions. Over $1.5 trillion of subprime—don’t ask, don’t tell—mortgages were issued and are now beginning to default. As the defaults mount, the consequences will spread to countries and institutions far beyond the shores of the US and the desks of the originating lenders—for the majority of America’s subprime loans are owned by investors, banks, insurance companies, and pension funds in Europe and in Asia."
The Ticker - "WSJ's Tim Annett talks housing, subprimes" (5-9-07)
"In the last five years, consumer spending fueled by home equity cash outs has exceeded their earnings. But greater leverage exposes them to risk if the value of all real estate falls. Banks, meanwhile, increased their mortgage holdings causing the boom that most Americans enjoyed. This, however, made them susceptible to mortgage defaults which were in fact inevitable. Shouldn't subprime defaults have occurred earlier when the real estate bubble burst?"
The Examiner - "Regulators crack down on escrow officers in mortgage fraud" (5-9-07)
"Arizona regulators are cracking down on escrow officers for skimming hundreds of thousands of dollars off home sales as part of a wave of mortgage fraud that has hit the state. Regulators are concerned that more escrow officers are stealing from their employers and homeowners and that others may be tied to mortgage fraud, a category of white-collar crime that has exploded across the country."
CNN - "Confessions of a time-share salesperson" (5-9-07)
"The slick, fast-talking time-share salesman still exists. He may no longer wear a lime-green leisure suit, but he's solely focused on the sale -- and he's largely the reason the industry has a less-than-stellar reputation. Some salespeople talk, talk and talk, and never listen to the client. There's no shortage of unseemly tactics, with questions like "Don't you think your children deserve better?" I've seen a salesperson give a tour of one time-share and then at the last minute try to sell a property in another part of the country. To avoid falling for a trick, pay close attention and never let a salesperson tell you what you want."
Real Estate Journal - "Why Househunting Can Spark That Age-Old Battle of the Sexes" (5-9-07)
"When hunting for a house, what do women want? What do men? Surprisingly, there's very little formal research on this issue, and much of it is on singles rather than couples. For instance, the National Association of Realtors' 2006 survey of consumers found that unmarried women looked for places near friends and family when home shopping, while single men wanted places that were near work or school. But the trade association doesn't break down responses of married couples by gender. When singles become couples, whose wish list wins?"
The Denver Post - "Rental housing glut seen" (5-9-07)
"The glut of U.S. properties for sale is about to hit the rental market. A record number of homeowners who can't sell condominiums and houses are competing for tenants with the country's biggest apartment owners led by Chicago-based Equity Residential, said Jack McCabe, the founder of Deerfield Beach, Fla.-based McCabe Research & Consulting LLC. Metropolitan New York, where demand for housing exceeds supply, may be the only place where rents increase, albeit at a slower pace, he said."
Real Estate Journal - "Safeguarding Your Home's Value As Foreclosures Flood the Market" (5-9-07)
"Gary Kent has more foreclosed properties to sell than ever before during his 23 years in the real estate business. The San Diego-based realty agent currently represents about 100 homes for sale, 85 of which are foreclosures. A year ago, Kent represented about 20 homes for sale with only a couple of foreclosures among them."
Orange County Register - "Effort to limit private fees on home sales killed" (5-9-07)
"State Sen. Lou Correa's bill to ban fees that are charged each time a home is sold died in committee today, even though he offered amendments to allow the fees under limited circumstances. Working with the California Association of Realtors, the Santa Ana Democrat originally sought to ban private transfer fees, a relatively new mechanism used by developers to raise revenue for charities or development costs long after their homes had sold."
Orange County Register - "Private mortgage insurance regains popularity" (5-9-07)
"Private mortgage insurance is making a comeback. Until six or eight months ago, private mortgage insurance was out of favor as people eager to get into the roaring housing market took adjustable-rate mortgages or "piggyback" loans or some other exotic form of financing. But as the market has cooled and lenders have tightened their standards, many people who want homes – especially first-time home buyers and those with little money for down payments – are choosing traditional fixed-rate mortgages backed by private mortgage insurance, or PMI."
"In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot -- and now want to get out of them. Even as many of the new buildings are completed, buyers are filing lawsuits claiming they were duped into purchases they couldn't afford, or victimized through fraudulent investment schemes. Some are scrutinizing their contracts looking for loopholes, or searching out tiny flaws in finished homes that might allow them to back out without losing their deposits."
Reuters - "US mortgage applications rise in 3rd straight week" (5-9-07)
"U.S. mortgage applications increased for a third straight week, driven to a two-month high by demand for both purchases and refinancings, an industry trade group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted applications index rose 3.6 percent in the week to May 4 to 680.7, its highest since 690.5 in the week ended March 9."
Yahoo - "Congress Debates Mortgage Reforms" (5-9-07)
"Congress is looking at potential reforms to risky home lending practices, although a House subcommittee hearing on Tuesday suggests lawmakers are still sorting out the complex workings of the mortgage market and wondering whether reforms will be necessary or helpful. With the number of foreclosures nationally jumping 47 percent in March from a year ago, lawmakers are weighing whether new lending rules are needed or whether the market is already in the process of self-correcting. The task of crafting reforms is made more complicated by the long list of players involved in mortgage transactions."
The San Diego Union-Tribune - "Troubled mortgage borrowers find help" (5-9-07)
"Ernestine Witherspoon managed to hang onto her house in Washington even after she lost her job and fell far behind on her mortgage payments. Her lender, Countrywide Home Loans, was weeks away from seizing the house when Witherspoon called, explained her situation and worked out a plan to repay the $9,800 she owed. She scraped together $3,600 – only because she landed a new job – and Countrywide then tacked $25 onto her monthly payments for the life of the loan to make up the difference."
CNN - "Toll Brothers' home sales slide" (5-9-07)
"Luxury home builder Toll Brothers said on Wednesday it would post lower quarterly home building sales and warned it no longer expects to achieve its most recent quarterly and annual forecasts. 'Twenty months into this housing downturn, we continue to face difficult conditions in most of our markets,' Chief Executive Robert Toll said in a statement releasing the company's preliminary second-quarter results."
NAHB - "Americans To Spend More Than $232 Billion On Home Remodeling In 2007" (5-9-07)
"Americans will spend nearly $233 billion on home remodeling this year, according to the National Association of Home Builders’ (NAHB) 2007 industry forecast. That represents a 1.9 percent increase from the record $228 billion spent in 2006, according to estimates from the U.S. Census Bureau. NAHB announced this forecast today at a teleconference celebrating National Home Remodeling Month."
NAHB - "Remodeling Market Erodes Slightly During Housing Downswing" (5-9-07)
"Remodeling activity eroded slightly in the first quarter of 2007, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI). The current market conditions index slipped from 48.2 to 46.1 on a seasonally adjusted basis while future expectations edged up to 46.5 from 46.0. The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects, and 50 is normally the dividing line between a growing and contracting market."
Mortgage Bankers Association - "Mortgage Applications Increase in Latest MBA Survey" (5-9-07)
"The Mortgage Bankers Association (MBA) today released its weekly Mortgage Applications Survey for the week ending May 4, 2007. The Market Composite Index, a measure of mortgage loan application volume, was 680.7, an increase of 3.6 percent on a seasonally adjusted basis from 657.2 one week earlier. On an unadjusted basis, the Index increased 4 percent compared with the previous week and was up 19.9 percent compared with the same week one year earlier. The Refinance Index increased 4.9 percent to 2115.2 from 2015.8 the previous week and the seasonally adjusted Purchase Index increased 2.6 percent to 438.3 from 427.3 one week earlier. The seasonally adjusted Conventional Index increased 3.2 percent to 1003.1 from 972.3 the previous week, and the seasonally adjusted Government Index increased 8.6 percent to 143.2 from 131.8 the previous week."
Financial Sense University - "SUBPRIME AMERICA INFECTS ASIA AND EUROPE" (5-9-07)
"As the US real estate market collapses, questions about subprime mortgages and those unable to pay are in the news. These are not inconsequential questions. Over $1.5 trillion of subprime—don’t ask, don’t tell—mortgages were issued and are now beginning to default. As the defaults mount, the consequences will spread to countries and institutions far beyond the shores of the US and the desks of the originating lenders—for the majority of America’s subprime loans are owned by investors, banks, insurance companies, and pension funds in Europe and in Asia."
The Ticker - "WSJ's Tim Annett talks housing, subprimes" (5-9-07)
"In the last five years, consumer spending fueled by home equity cash outs has exceeded their earnings. But greater leverage exposes them to risk if the value of all real estate falls. Banks, meanwhile, increased their mortgage holdings causing the boom that most Americans enjoyed. This, however, made them susceptible to mortgage defaults which were in fact inevitable. Shouldn't subprime defaults have occurred earlier when the real estate bubble burst?"
The Examiner - "Regulators crack down on escrow officers in mortgage fraud" (5-9-07)
"Arizona regulators are cracking down on escrow officers for skimming hundreds of thousands of dollars off home sales as part of a wave of mortgage fraud that has hit the state. Regulators are concerned that more escrow officers are stealing from their employers and homeowners and that others may be tied to mortgage fraud, a category of white-collar crime that has exploded across the country."
CNN - "Confessions of a time-share salesperson" (5-9-07)
"The slick, fast-talking time-share salesman still exists. He may no longer wear a lime-green leisure suit, but he's solely focused on the sale -- and he's largely the reason the industry has a less-than-stellar reputation. Some salespeople talk, talk and talk, and never listen to the client. There's no shortage of unseemly tactics, with questions like "Don't you think your children deserve better?" I've seen a salesperson give a tour of one time-share and then at the last minute try to sell a property in another part of the country. To avoid falling for a trick, pay close attention and never let a salesperson tell you what you want."
Real Estate Journal - "Why Househunting Can Spark That Age-Old Battle of the Sexes" (5-9-07)
"When hunting for a house, what do women want? What do men? Surprisingly, there's very little formal research on this issue, and much of it is on singles rather than couples. For instance, the National Association of Realtors' 2006 survey of consumers found that unmarried women looked for places near friends and family when home shopping, while single men wanted places that were near work or school. But the trade association doesn't break down responses of married couples by gender. When singles become couples, whose wish list wins?"
The Denver Post - "Rental housing glut seen" (5-9-07)
"The glut of U.S. properties for sale is about to hit the rental market. A record number of homeowners who can't sell condominiums and houses are competing for tenants with the country's biggest apartment owners led by Chicago-based Equity Residential, said Jack McCabe, the founder of Deerfield Beach, Fla.-based McCabe Research & Consulting LLC. Metropolitan New York, where demand for housing exceeds supply, may be the only place where rents increase, albeit at a slower pace, he said."
Real Estate Journal - "Safeguarding Your Home's Value As Foreclosures Flood the Market" (5-9-07)
"Gary Kent has more foreclosed properties to sell than ever before during his 23 years in the real estate business. The San Diego-based realty agent currently represents about 100 homes for sale, 85 of which are foreclosures. A year ago, Kent represented about 20 homes for sale with only a couple of foreclosures among them."
Orange County Register - "Effort to limit private fees on home sales killed" (5-9-07)
"State Sen. Lou Correa's bill to ban fees that are charged each time a home is sold died in committee today, even though he offered amendments to allow the fees under limited circumstances. Working with the California Association of Realtors, the Santa Ana Democrat originally sought to ban private transfer fees, a relatively new mechanism used by developers to raise revenue for charities or development costs long after their homes had sold."
Orange County Register - "Private mortgage insurance regains popularity" (5-9-07)
"Private mortgage insurance is making a comeback. Until six or eight months ago, private mortgage insurance was out of favor as people eager to get into the roaring housing market took adjustable-rate mortgages or "piggyback" loans or some other exotic form of financing. But as the market has cooled and lenders have tightened their standards, many people who want homes – especially first-time home buyers and those with little money for down payments – are choosing traditional fixed-rate mortgages backed by private mortgage insurance, or PMI."
Tuesday, May 08, 2007
Sign On San Diego - "As mortgage lending tightens, house hunters with weak credit get shut out" (5-8-07)
"With a second child on the way, Chris Shields and his wife, Michelle, wanted to move from their two-bedroom apartment in Southern California to a house with more space. But because their timing coincided with a shakeout in the mortgage market earlier this year, their credit now isn't good enough to get a loan to purchase the house they wanted with no money down."
CNN - "Home-price forecast: First ever decline" (5-8-07)
"Home prices are expected to finish down for the year, the National Association of Realtors (NAR) said Tuesday, which would mark the first drop since the group started tracking values in 1968. NAR projects a 1 percent decline in the median price of an existing single-family home, to $219,800. The group, in a forecast made a month ago, had previously been expecting a 0.7 percent decline. Prior to that, it had expected a gain of 1.2 percent."
Yahoo - "Frenzy of risky mortgages leaves path of destruction" (5-8-07)
"On September 15, 2004, the clock was ticking on Lelon DeWitt's life and his subprime loan. When the transmission repairman underwent open-heart surgery, he told his mortgage broker he didn't want a housing loan that was in the works."
NAHB - "NAHB Headquarters Garners Third Energy Star" (5-8-07)
"The National Association of Home Builders has earned its third ENERGY STAR designation for the National Housing Center, the downtown Washington, D.C. office building that serves as the association’s headquarters. The designation recognizes buildings that conserve natural resources while providing a comfortable and healthy environment for employees and visitors."
Bloomberg - "April Foreclosure Filings More Than Double Over 2006" (5-8-07)
"U.S. homeowners entered the foreclosure process in April at more than double the rate of a year ago as tightening credit made it more difficult to refinance and a swelling supply of unsold homes made it tough to sell. The number of homeowners in all three phases of foreclosure rose last month over the same period a year ago, according to Sacramento-based Foreclosures.com, which gathers data from county courthouses nationwide. Those receiving their first notice of foreclosure from a bank climbed 127 percent, those with homes going up for sale by auction jumped 164 percent and those whose homes were repossessed by banks went up 40 percent."
Reuters - "Home market took a costly subprime advance" (5-8-07)
"The subprime mortgage industry rushed so many buyers into the housing market that it opened an ownership gap, pulling in people who likely would have bought a home only years later, and that gap will stall a recovery in the sector. The relaxed standards of subprime loans coaxed many borrowers with damaged credit to hurry a purchase during a five-year run-up in home values. Many buyers in that stretch were also relative youngsters who would have otherwise delayed buying a home."
The Enquirer - "House hunters with weak credit get shut out" (5-8-07)
"With a second child on the way, Chris Shields and his wife, Michelle, wanted to move from their two-bedroom apartment in Southern California to a house with more space. But because their timing coincided with a shakeout in the mortgage market earlier this year, their credit now isn't good enough to get a loan to purchase the house they wanted with no money down."
Inside Bay Area - "Broker backs subprime, mortgage oversight" (5-8-07)
"It's no surprise that consumer groups are blaming themortgage industry for a spike in foreclosures made to high-risk borrowers. And while the industry is defending itself against claims that the high-risk subprime loans were irresponsibly made to borrowers who shouldn't have gotten them, a Burlingame-based mortgage broker is siding with the critics. And if that weren't enough, Steven Krystofiak is also raising alarms about mortgage fraud, which he claims happens a lot in California."
Chicago Tribune - "Housing cheers turn gloomy" (5-8-07)
"On his way out the door, the housing industry's self-described 'cheerleader' is making one last economic forecast -- a sober one at that. 'We're in a real estate recession,' said David Lereah, chief economist for the National Association of Realtors, who surprised many this week when he announced he would leave the Chicago-based trade group on May 19."
MSN - "Why rent? To get richer" (5-8-07)
"I have something un-American to confess: I rent an apartment despite having enough money to buy a house. I plan to keep renting for as long as I can. I'm not just holding out for better prices. Renting will make me richer. I normally write about stocks for SmartMoney.com, but the boss asked me to explain to readers my reason for renting. Here goes: Businesses are great investments while houses are poor ones, so I'd rather rent the latter and own the former."
NAHB - "FHA Single-Family Reform Headed for House Floor" (5-8-07)
"By a strong bipartisan margin of 45 to 19, the House Financial Services Committee on May 3 approved legislation that would reform and revitalize the Federal Housing Administration’s single-family mortgage insurance programs. H.R. 1852, the Expanding American Homeownership Act of 2007, would give the FHA greater flexibility to respond to the needs of borrowers, enable more working families to become home owners and provide a viable alternative to the volatile subprime market."
Bloomberg - "Rents Peak in Housing Glut; New York Escapes Decline" (5-8-07)
"The glut of U.S. properties for sale is about to hit the rental market. A record number of homeowners who can't sell condominiums and houses are competing for tenants with the country's biggest apartment owners led by Chicago-based Equity Residential, said Jack McCabe, the founder of Deerfield Beach, Florida-based McCabe Research & Consulting LLC. Metropolitan New York, where demand for housing exceeds supply, may be the only place where rents increase, albeit at a slower pace, he said."
The Seattle Times - "Borrower, beware: Debt disaster looms as rates rise on easy-money mortgages" (5-8-07)
"It was a sweet little house, with affordable day care nearby for their 6-year-old son. Patrick Fultz and Laurel Swartz were hooked. But when the couple — with no savings and about $20,000 in credit-card debt — shopped for a mortgage to buy their 1,200-square-foot house in Tukwila last year, they heard the same thing from lenders and in a home-buying class they attended: Forget it."
"With a second child on the way, Chris Shields and his wife, Michelle, wanted to move from their two-bedroom apartment in Southern California to a house with more space. But because their timing coincided with a shakeout in the mortgage market earlier this year, their credit now isn't good enough to get a loan to purchase the house they wanted with no money down."
CNN - "Home-price forecast: First ever decline" (5-8-07)
"Home prices are expected to finish down for the year, the National Association of Realtors (NAR) said Tuesday, which would mark the first drop since the group started tracking values in 1968. NAR projects a 1 percent decline in the median price of an existing single-family home, to $219,800. The group, in a forecast made a month ago, had previously been expecting a 0.7 percent decline. Prior to that, it had expected a gain of 1.2 percent."
Yahoo - "Frenzy of risky mortgages leaves path of destruction" (5-8-07)
"On September 15, 2004, the clock was ticking on Lelon DeWitt's life and his subprime loan. When the transmission repairman underwent open-heart surgery, he told his mortgage broker he didn't want a housing loan that was in the works."
NAHB - "NAHB Headquarters Garners Third Energy Star" (5-8-07)
"The National Association of Home Builders has earned its third ENERGY STAR designation for the National Housing Center, the downtown Washington, D.C. office building that serves as the association’s headquarters. The designation recognizes buildings that conserve natural resources while providing a comfortable and healthy environment for employees and visitors."
Bloomberg - "April Foreclosure Filings More Than Double Over 2006" (5-8-07)
"U.S. homeowners entered the foreclosure process in April at more than double the rate of a year ago as tightening credit made it more difficult to refinance and a swelling supply of unsold homes made it tough to sell. The number of homeowners in all three phases of foreclosure rose last month over the same period a year ago, according to Sacramento-based Foreclosures.com, which gathers data from county courthouses nationwide. Those receiving their first notice of foreclosure from a bank climbed 127 percent, those with homes going up for sale by auction jumped 164 percent and those whose homes were repossessed by banks went up 40 percent."
Reuters - "Home market took a costly subprime advance" (5-8-07)
"The subprime mortgage industry rushed so many buyers into the housing market that it opened an ownership gap, pulling in people who likely would have bought a home only years later, and that gap will stall a recovery in the sector. The relaxed standards of subprime loans coaxed many borrowers with damaged credit to hurry a purchase during a five-year run-up in home values. Many buyers in that stretch were also relative youngsters who would have otherwise delayed buying a home."
The Enquirer - "House hunters with weak credit get shut out" (5-8-07)
"With a second child on the way, Chris Shields and his wife, Michelle, wanted to move from their two-bedroom apartment in Southern California to a house with more space. But because their timing coincided with a shakeout in the mortgage market earlier this year, their credit now isn't good enough to get a loan to purchase the house they wanted with no money down."
Inside Bay Area - "Broker backs subprime, mortgage oversight" (5-8-07)
"It's no surprise that consumer groups are blaming themortgage industry for a spike in foreclosures made to high-risk borrowers. And while the industry is defending itself against claims that the high-risk subprime loans were irresponsibly made to borrowers who shouldn't have gotten them, a Burlingame-based mortgage broker is siding with the critics. And if that weren't enough, Steven Krystofiak is also raising alarms about mortgage fraud, which he claims happens a lot in California."
Chicago Tribune - "Housing cheers turn gloomy" (5-8-07)
"On his way out the door, the housing industry's self-described 'cheerleader' is making one last economic forecast -- a sober one at that. 'We're in a real estate recession,' said David Lereah, chief economist for the National Association of Realtors, who surprised many this week when he announced he would leave the Chicago-based trade group on May 19."
MSN - "Why rent? To get richer" (5-8-07)
"I have something un-American to confess: I rent an apartment despite having enough money to buy a house. I plan to keep renting for as long as I can. I'm not just holding out for better prices. Renting will make me richer. I normally write about stocks for SmartMoney.com, but the boss asked me to explain to readers my reason for renting. Here goes: Businesses are great investments while houses are poor ones, so I'd rather rent the latter and own the former."
NAHB - "FHA Single-Family Reform Headed for House Floor" (5-8-07)
"By a strong bipartisan margin of 45 to 19, the House Financial Services Committee on May 3 approved legislation that would reform and revitalize the Federal Housing Administration’s single-family mortgage insurance programs. H.R. 1852, the Expanding American Homeownership Act of 2007, would give the FHA greater flexibility to respond to the needs of borrowers, enable more working families to become home owners and provide a viable alternative to the volatile subprime market."
Bloomberg - "Rents Peak in Housing Glut; New York Escapes Decline" (5-8-07)
"The glut of U.S. properties for sale is about to hit the rental market. A record number of homeowners who can't sell condominiums and houses are competing for tenants with the country's biggest apartment owners led by Chicago-based Equity Residential, said Jack McCabe, the founder of Deerfield Beach, Florida-based McCabe Research & Consulting LLC. Metropolitan New York, where demand for housing exceeds supply, may be the only place where rents increase, albeit at a slower pace, he said."
The Seattle Times - "Borrower, beware: Debt disaster looms as rates rise on easy-money mortgages" (5-8-07)
"It was a sweet little house, with affordable day care nearby for their 6-year-old son. Patrick Fultz and Laurel Swartz were hooked. But when the couple — with no savings and about $20,000 in credit-card debt — shopped for a mortgage to buy their 1,200-square-foot house in Tukwila last year, they heard the same thing from lenders and in a home-buying class they attended: Forget it."
Orange County Register - "Who's at risk from subprime implosion?" (5-6-07)
"They're often described as tickets to homeownership for people with damaged credit. But subprime mortgages also are reshaping entire neighborhoods. In subdivisions from Rialto to Sacramento, half or more of all home-purchase mortgages in 2005 were subprime."
North County Times - "Mortgage brokers get fatter payoff for selling riskier loans" (5-6-07)
"When mortgage brokers sign up borrowers, they have a big financial incentive to promote risky loans, according to a variety of industry experts. Over the last three years, risky loans have fueled the rise in mortgage defaults, foreclosures and bank auctions of distressed properties throughout the state, a loan industry watchdog said last week."
Yahoo - "Investors Await Fed's Decision on Rates" (5-6-07)
"After another record-setting week on Wall Street, investors are wondering whether stocks are due for a fall or are headed even higher. This week's words from the Federal Reserve and retail sales could provide some clues. Recently, it has seemed as if nothing can derail the stock market's climb. Economic reports last week were mixed, but institutional investors remained enthusiastic thanks to soaring takeover activity. News Corp.'s bid for Dow Jones & Co. reinvigorated the stock market Tuesday after a morning of mixed economic news, and on Friday, reports that Microsoft Corp. might be mulling a buy of Yahoo Inc. nudged stocks higher despite lackluster jobs data."
Orange County Register - "O.C. home to biggest subprime lenders" (5-6-07)
"Five of the 10 largest subprime home lenders in America in 2005 were based in Orange County. The top 10 lenders made nearly half of all subprime home purchase loans that year. Here are the top 10 lenders, the amount loaned in billions of dollars and their share of the subprime market."
Los Angeles Times - "Better-heeled failing home economics too" (5-6-07)
"Sheriff's Deputy Mike Strickland is a postman of bad news, delivering eviction notices in the western stretch of San Bernardino County. He is armed with a Glock .45, which he seldom draws, and Scotch tape, which he goes through in prodigious amounts while posting court orders on doors and windows."
Los Angeles Times - "Delinquent borrowers may get a tax surprise along with forgiven debt" (5-6-07)
"For homeowners seriously delinquent on their mortgages and hoping for some relief, the IRS has bad news: If your lender agrees to modify your loan and forgive any part of your debt, you could owe federal income taxes on the amount forgiven. When personal debts are canceled by a creditor, the amount forgiven is treated as ordinary income under the Internal Revenue Code unless the taxpayer is insolvent or bankrupt. And the lender is required by law to report the amount canceled to the IRS."
Los Angeles Times - "Quick action can head off a foreclosure nightmare" (5-6-07)
"Tina and Richard Buchbinder know how it feels to lose a home to foreclosure. More than 11 years after walking away from their two-bedroom home, Richard, 43, a manager for a truck repair shop, and Tina, 37, a telephone answering service operator, recall the feelings of shame and loss. 'It was hard,' Richard said. 'I felt an obligation. I made a promise to pay that house note. It was emotional too. We had two kids in that house. But when we stopped and looked at what would be the right thing for our family, letting the bank foreclose on our home was the best option for us at the time.'"
"They're often described as tickets to homeownership for people with damaged credit. But subprime mortgages also are reshaping entire neighborhoods. In subdivisions from Rialto to Sacramento, half or more of all home-purchase mortgages in 2005 were subprime."
North County Times - "Mortgage brokers get fatter payoff for selling riskier loans" (5-6-07)
"When mortgage brokers sign up borrowers, they have a big financial incentive to promote risky loans, according to a variety of industry experts. Over the last three years, risky loans have fueled the rise in mortgage defaults, foreclosures and bank auctions of distressed properties throughout the state, a loan industry watchdog said last week."
Yahoo - "Investors Await Fed's Decision on Rates" (5-6-07)
"After another record-setting week on Wall Street, investors are wondering whether stocks are due for a fall or are headed even higher. This week's words from the Federal Reserve and retail sales could provide some clues. Recently, it has seemed as if nothing can derail the stock market's climb. Economic reports last week were mixed, but institutional investors remained enthusiastic thanks to soaring takeover activity. News Corp.'s bid for Dow Jones & Co. reinvigorated the stock market Tuesday after a morning of mixed economic news, and on Friday, reports that Microsoft Corp. might be mulling a buy of Yahoo Inc. nudged stocks higher despite lackluster jobs data."
Orange County Register - "O.C. home to biggest subprime lenders" (5-6-07)
"Five of the 10 largest subprime home lenders in America in 2005 were based in Orange County. The top 10 lenders made nearly half of all subprime home purchase loans that year. Here are the top 10 lenders, the amount loaned in billions of dollars and their share of the subprime market."
Los Angeles Times - "Better-heeled failing home economics too" (5-6-07)
"Sheriff's Deputy Mike Strickland is a postman of bad news, delivering eviction notices in the western stretch of San Bernardino County. He is armed with a Glock .45, which he seldom draws, and Scotch tape, which he goes through in prodigious amounts while posting court orders on doors and windows."
Los Angeles Times - "Delinquent borrowers may get a tax surprise along with forgiven debt" (5-6-07)
"For homeowners seriously delinquent on their mortgages and hoping for some relief, the IRS has bad news: If your lender agrees to modify your loan and forgive any part of your debt, you could owe federal income taxes on the amount forgiven. When personal debts are canceled by a creditor, the amount forgiven is treated as ordinary income under the Internal Revenue Code unless the taxpayer is insolvent or bankrupt. And the lender is required by law to report the amount canceled to the IRS."
Los Angeles Times - "Quick action can head off a foreclosure nightmare" (5-6-07)
"Tina and Richard Buchbinder know how it feels to lose a home to foreclosure. More than 11 years after walking away from their two-bedroom home, Richard, 43, a manager for a truck repair shop, and Tina, 37, a telephone answering service operator, recall the feelings of shame and loss. 'It was hard,' Richard said. 'I felt an obligation. I made a promise to pay that house note. It was emotional too. We had two kids in that house. But when we stopped and looked at what would be the right thing for our family, letting the bank foreclose on our home was the best option for us at the time.'"
Monday, May 07, 2007
Washington Post - "Pressure at Mortgage Firm Led To Mass Approval of Bad Loans" (5-7-07)
"New Century has become the premier example of a group of companies that grew rapidly during the housing boom, selling working-class Americans with questionable credit huge numbers of 'subprime' loans with 'teaser' rates that typically rose after the first two years. This business transformed the once-tiny New Century into a lending powerhouse that was held up as a of the mortgage industry's success."
Orange County Register - "State of Subprime" (5-7-07)
"Subprime loans helped consumers with blemished credit buy homes. But their homes are threatened by the collapse of the subprime industry. The damage is likely to hit some California counties and neighborhoods far more than others."
NAR - "Higher Lending Standards Can Help Curb Abusive Practices, NAR Tells Banking Regulators" (5-7-07)
"The National Association of Realtors® is calling on bank regulators to adopt higher lending standards while giving lenders more flexibility in determining whether homebuyers can afford to meet their loan obligations."
CAR - "Amendments to SB 670 legislation will place responsible limits on private transfer taxes" (5-7-07)
"Senate Bill 670 (Correa), “Private Transfer Tax Prohibition” has been amended to place responsible restrictions on private transfer taxes levied by developers and limit the proceeds to environmental and affordable housing efforts related to the new development on which the private transfer taxes are imposed. The original legislation, sponsored by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), brought needed attention to a number of significant problems related to the imposition of private transfer taxes and proposed an outright prohibition on private transfer taxes."
Yahoo - "Investors Await Fed's Decision on Rates" (5-7-07)
"After another record-setting week on Wall Street, investors are wondering whether stocks are due for a fall or are headed even higher. This week's words from the Federal Reserve and retail sales could provide some clues. Recently, it has seemed as if nothing can derail the stock market's climb. Economic reports last week were mixed, but institutional investors remained enthusiastic thanks to soaring takeover activity. News Corp.'s bid for Dow Jones & Co. reinvigorated the stock market Tuesday after a morning of mixed economic news, and on Friday, reports that Microsoft Corp. might be mulling a buy of Yahoo Inc. nudged stocks higher despite lackluster jobs data."
Bloomberg - "Moody's, S&P Understate Subprime Risk, Study Says" (5-7-07)
"Moody's Investors Service, Standard & Poor's and Fitch Ratings understate the risks of subprime mortgage bonds, putting funding for the U.S. housing industry at risk, according to a study to be released today. The ratings companies can't evaluate the probability of losses because home loans that back the debt have constantly changing underwriting standards, according to the study by Joshua Rosner, a managing director of investment research firm Graham Fisher & Co. in New York, and Joseph R. Mason, an associate finance professor at Drexel University in Philadelphia."
Asia Times - "Investing in a fool's paradise" (5-7-07)
"The rapid slowing of America's economy has been shrugged off by stock markets worldwide, which continue to vault higher on the increasingly misplaced notion that corporate profits will grow perpetually. In sharp contrast, currency markets have grasped the idea that the US economy is falling into recession, punishing the dollar. As economic weakness intensifies in the months ahead, expect dollar depreciation to accelerate. The dollar is likely to drop by at least 15% against most currencies by the end of 2007."
Bradenton Herald - "New Century to lay off 2,000" (5-7-07)
"Financially strapped subprime mortgage lender New Century Financial Corp. failed to receive any bids for its mortgage loan origination business, forcing it to shut down the unit and lay off about 2,000 employees, the company told employees Thursday. The Irvine-based company, which has been preparing to sell off its assets under Chapter 11 bankruptcy protection since last month, notified employees during a conference call that they would be laid off effective Friday."
USA Today - "Parents selling homes when kids go to college" (5-7-07)
"In towns such as this, where highly rated public schools are supported by even higher property taxes, many parents faced with college bills are selling the empty nest while it's still warm. By moving only as far as the next town, they can cut their local taxes in half. As a result, Graduation Day and Moving Day are getting closer and closer. In the weeks before high school ends, "you'll see the for-sale signs going up," says Ros Schulman, whose son is college-bound."
SFGate.com - "Real estate short sales: "win-win" or reward for failure to live within one's means?" (5-7-07)
"Usually, when something sounds too good to be true -- it is. But as more people are facing the possibility of foreclosure -- losing both their house and their credit in a process fraught with humiliation -- a little-known transaction known as a 'short sale' may seem like a dream come true. Short sales occur when a lender allows a homeowner in default to sell a house for less than the total value of the loan. In most cases, the lender then forgives the remaining portion of the debt."
The Market Oracle - "Real Estate Crash a Post Mortem for the Stock Market" (5-7-07)
"The real estate market is crashing faster than anyone had anticipated. Housing prices have fallen in 17 of 20 of the nation's largest cities and the trend lines indicate that the worst is yet to come. March sales of new homes plummeted by a record 23.5% (year over year) removing all hope for a quick rebound. Problems in the subprime and Alt-A loans are ing in previously “hot markets” resulting in an unprecedented number of foreclosures. The defaults have slowed demand for new homes and increased the glut of houses already on the market. This is putting additional downward pressure on prices and profits. More and more builders are struggling just to keep their heads above water. This isn't your typical 1980s-type “correction”; it's a full-blown real estate cyclone smashing everything in its path."
Detroit Free Press - "Buying under the radar" (5-7-07)
"As the housing market has tightened across the country in recent months, home auctions have become more popular as a way to sell a house when facing a line. Now, regional homebuilders are getting into the act through a unique program called Sale by Sealed Bid."
Real Estate Journal - "As Market Cools, Builders Face Lawsuits and a Rash of Complaints" (5-7-07)
"In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot -- and now want to get out of them. Even as many of the new buildings are completed, buyers are filing lawsuits claiming they were duped into purchases they couldn't afford, or victimized through fraudulent investment schemes. Some are scrutinizing their contracts looking for loopholes, or searching out tiny flaws in finished homes that might allow them to back out without losing their deposits."
"New Century has become the premier example of a group of companies that grew rapidly during the housing boom, selling working-class Americans with questionable credit huge numbers of 'subprime' loans with 'teaser' rates that typically rose after the first two years. This business transformed the once-tiny New Century into a lending powerhouse that was held up as a of the mortgage industry's success."
Orange County Register - "State of Subprime" (5-7-07)
"Subprime loans helped consumers with blemished credit buy homes. But their homes are threatened by the collapse of the subprime industry. The damage is likely to hit some California counties and neighborhoods far more than others."
NAR - "Higher Lending Standards Can Help Curb Abusive Practices, NAR Tells Banking Regulators" (5-7-07)
"The National Association of Realtors® is calling on bank regulators to adopt higher lending standards while giving lenders more flexibility in determining whether homebuyers can afford to meet their loan obligations."
CAR - "Amendments to SB 670 legislation will place responsible limits on private transfer taxes" (5-7-07)
"Senate Bill 670 (Correa), “Private Transfer Tax Prohibition” has been amended to place responsible restrictions on private transfer taxes levied by developers and limit the proceeds to environmental and affordable housing efforts related to the new development on which the private transfer taxes are imposed. The original legislation, sponsored by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), brought needed attention to a number of significant problems related to the imposition of private transfer taxes and proposed an outright prohibition on private transfer taxes."
Yahoo - "Investors Await Fed's Decision on Rates" (5-7-07)
"After another record-setting week on Wall Street, investors are wondering whether stocks are due for a fall or are headed even higher. This week's words from the Federal Reserve and retail sales could provide some clues. Recently, it has seemed as if nothing can derail the stock market's climb. Economic reports last week were mixed, but institutional investors remained enthusiastic thanks to soaring takeover activity. News Corp.'s bid for Dow Jones & Co. reinvigorated the stock market Tuesday after a morning of mixed economic news, and on Friday, reports that Microsoft Corp. might be mulling a buy of Yahoo Inc. nudged stocks higher despite lackluster jobs data."
Bloomberg - "Moody's, S&P Understate Subprime Risk, Study Says" (5-7-07)
"Moody's Investors Service, Standard & Poor's and Fitch Ratings understate the risks of subprime mortgage bonds, putting funding for the U.S. housing industry at risk, according to a study to be released today. The ratings companies can't evaluate the probability of losses because home loans that back the debt have constantly changing underwriting standards, according to the study by Joshua Rosner, a managing director of investment research firm Graham Fisher & Co. in New York, and Joseph R. Mason, an associate finance professor at Drexel University in Philadelphia."
Asia Times - "Investing in a fool's paradise" (5-7-07)
"The rapid slowing of America's economy has been shrugged off by stock markets worldwide, which continue to vault higher on the increasingly misplaced notion that corporate profits will grow perpetually. In sharp contrast, currency markets have grasped the idea that the US economy is falling into recession, punishing the dollar. As economic weakness intensifies in the months ahead, expect dollar depreciation to accelerate. The dollar is likely to drop by at least 15% against most currencies by the end of 2007."
Bradenton Herald - "New Century to lay off 2,000" (5-7-07)
"Financially strapped subprime mortgage lender New Century Financial Corp. failed to receive any bids for its mortgage loan origination business, forcing it to shut down the unit and lay off about 2,000 employees, the company told employees Thursday. The Irvine-based company, which has been preparing to sell off its assets under Chapter 11 bankruptcy protection since last month, notified employees during a conference call that they would be laid off effective Friday."
USA Today - "Parents selling homes when kids go to college" (5-7-07)
"In towns such as this, where highly rated public schools are supported by even higher property taxes, many parents faced with college bills are selling the empty nest while it's still warm. By moving only as far as the next town, they can cut their local taxes in half. As a result, Graduation Day and Moving Day are getting closer and closer. In the weeks before high school ends, "you'll see the for-sale signs going up," says Ros Schulman, whose son is college-bound."
SFGate.com - "Real estate short sales: "win-win" or reward for failure to live within one's means?" (5-7-07)
"Usually, when something sounds too good to be true -- it is. But as more people are facing the possibility of foreclosure -- losing both their house and their credit in a process fraught with humiliation -- a little-known transaction known as a 'short sale' may seem like a dream come true. Short sales occur when a lender allows a homeowner in default to sell a house for less than the total value of the loan. In most cases, the lender then forgives the remaining portion of the debt."
The Market Oracle - "Real Estate Crash a Post Mortem for the Stock Market" (5-7-07)
"The real estate market is crashing faster than anyone had anticipated. Housing prices have fallen in 17 of 20 of the nation's largest cities and the trend lines indicate that the worst is yet to come. March sales of new homes plummeted by a record 23.5% (year over year) removing all hope for a quick rebound. Problems in the subprime and Alt-A loans are ing in previously “hot markets” resulting in an unprecedented number of foreclosures. The defaults have slowed demand for new homes and increased the glut of houses already on the market. This is putting additional downward pressure on prices and profits. More and more builders are struggling just to keep their heads above water. This isn't your typical 1980s-type “correction”; it's a full-blown real estate cyclone smashing everything in its path."
Detroit Free Press - "Buying under the radar" (5-7-07)
"As the housing market has tightened across the country in recent months, home auctions have become more popular as a way to sell a house when facing a line. Now, regional homebuilders are getting into the act through a unique program called Sale by Sealed Bid."
Real Estate Journal - "As Market Cools, Builders Face Lawsuits and a Rash of Complaints" (5-7-07)
"In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot -- and now want to get out of them. Even as many of the new buildings are completed, buyers are filing lawsuits claiming they were duped into purchases they couldn't afford, or victimized through fraudulent investment schemes. Some are scrutinizing their contracts looking for loopholes, or searching out tiny flaws in finished homes that might allow them to back out without losing their deposits."
Orange County Register - "Who's at risk from subprime implosion?" (5-5-07)
"They're often described as tickets to homeownership for people with damaged credit. But subprime mortgages also are reshaping entire neighborhoods. In subdivisions from Rialto to Sacramento, half or more of all home-purchase mortgages in 2005 were subprime."
North County Times - "Mortgage brokers get fatter payoff for selling riskier loans" (5-5-07)
"When mortgage brokers sign up borrowers, they have a big financial incentive to promote risky loans, according to a variety of industry experts. Over the last three years, risky loans have fueled the rise in mortgage defaults, foreclosures and bank auctions of distressed properties throughout the state, a loan industry watchdog said last week."
"They're often described as tickets to homeownership for people with damaged credit. But subprime mortgages also are reshaping entire neighborhoods. In subdivisions from Rialto to Sacramento, half or more of all home-purchase mortgages in 2005 were subprime."
North County Times - "Mortgage brokers get fatter payoff for selling riskier loans" (5-5-07)
"When mortgage brokers sign up borrowers, they have a big financial incentive to promote risky loans, according to a variety of industry experts. Over the last three years, risky loans have fueled the rise in mortgage defaults, foreclosures and bank auctions of distressed properties throughout the state, a loan industry watchdog said last week."
CNN - "Schumer wants aid for subprime borrowers" (5-5-07)
"Community groups that help subprime borrowers try to save their homes from foreclosure would receive $300 million in aid under legislation introduced by Democratic Senator Charles Schumer Thursday. The infusion of federal money would help consumer groups reach out to troubled borrowers and, in some cases, provide new financing directly."
Bloomberg - "Subprime Won't Be `Anchor' to Economy, Buffett Says" (5-5-07)
"The subprime mortgage crisis won't be 'any huge anchor' to the economy, though lenders and borrowers will have 'plenty of misery,' Berkshire Hathaway Inc. Chairman Warren Buffett said today. 'It will be a very big problem for those involved, but I think it is unlikely that factor alone triggers anything in the larger economy,' Buffett, 76, said at the company's annual shareholder meeting in Omaha, Nebraska. The prediction assumes unemployment doesn't increase 'significantly' and interest rates don't go up 'dramatically,' he said."
The Market Oracle - "Dump REITs - An early heads up on another Important US real estate trend!" (5-5-07)
"Mike Larson writes: You want to know how to make big money in the markets? Be early. By picking up on a trend in its infancy, you're able to position your portfolio for the day when that trend explodes onto the front pages of the nation's business sections. Then, when mainstream investors pile in, you'll be there to sell to them."
AOL Money & Finance - "As market cools, home buyers seek a way out by suing builders" (5-5-07)
"In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot - and now want to get out of them. Even as many of the new buildings are completed, buyers are filing lawsuits claiming they were duped into purchases they couldn't afford, or victimized through fraudulent investment schemes. Some are scrutinizing their contracts looking for loopholes, or searching out tiny flaws in finished homes that might allow them to back out without losing their deposits."
Yahoo - "GM profit plunges after housing finance loss" (5-5-07)
"General Motors Corp. (NYSE:GM - news) on Thursday reported a 90 percent drop in first-quarter earnings, missing Wall Street estimates by a wide margin, as mortgage-related losses at its GMAC affiliate swamped gains in its main business. GM Chief Financial Officer Fritz Henderson said weaker GMAC results were the major reason earnings missed even the lowest of Wall Street expectations."
Orange County Register - "Private mortgage insurance regains popularity" (5-5-07)
"Private mortgage insurance is making a comeback. Until six or eight months ago, private mortgage insurance was out of favor as people eager to get into the roaring housing market took adjustable-rate mortgages or "piggyback" loans or some other exotic form of financing."
"Community groups that help subprime borrowers try to save their homes from foreclosure would receive $300 million in aid under legislation introduced by Democratic Senator Charles Schumer Thursday. The infusion of federal money would help consumer groups reach out to troubled borrowers and, in some cases, provide new financing directly."
Bloomberg - "Subprime Won't Be `Anchor' to Economy, Buffett Says" (5-5-07)
"The subprime mortgage crisis won't be 'any huge anchor' to the economy, though lenders and borrowers will have 'plenty of misery,' Berkshire Hathaway Inc. Chairman Warren Buffett said today. 'It will be a very big problem for those involved, but I think it is unlikely that factor alone triggers anything in the larger economy,' Buffett, 76, said at the company's annual shareholder meeting in Omaha, Nebraska. The prediction assumes unemployment doesn't increase 'significantly' and interest rates don't go up 'dramatically,' he said."
The Market Oracle - "Dump REITs - An early heads up on another Important US real estate trend!" (5-5-07)
"Mike Larson writes: You want to know how to make big money in the markets? Be early. By picking up on a trend in its infancy, you're able to position your portfolio for the day when that trend explodes onto the front pages of the nation's business sections. Then, when mainstream investors pile in, you'll be there to sell to them."
AOL Money & Finance - "As market cools, home buyers seek a way out by suing builders" (5-5-07)
"In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot - and now want to get out of them. Even as many of the new buildings are completed, buyers are filing lawsuits claiming they were duped into purchases they couldn't afford, or victimized through fraudulent investment schemes. Some are scrutinizing their contracts looking for loopholes, or searching out tiny flaws in finished homes that might allow them to back out without losing their deposits."
Yahoo - "GM profit plunges after housing finance loss" (5-5-07)
"General Motors Corp. (NYSE:GM - news) on Thursday reported a 90 percent drop in first-quarter earnings, missing Wall Street estimates by a wide margin, as mortgage-related losses at its GMAC affiliate swamped gains in its main business. GM Chief Financial Officer Fritz Henderson said weaker GMAC results were the major reason earnings missed even the lowest of Wall Street expectations."
Orange County Register - "Private mortgage insurance regains popularity" (5-5-07)
"Private mortgage insurance is making a comeback. Until six or eight months ago, private mortgage insurance was out of favor as people eager to get into the roaring housing market took adjustable-rate mortgages or "piggyback" loans or some other exotic form of financing."
Friday, May 04, 2007
Orange County Register - "FBI probes claims of real estate fraud involving dead couple" (5-4-07)
"FBI officials said Thursday that they are investigating claims that a Mission Viejo couple killed in a confrontation with police were involved in real estate fraud. 'We're assisting Laguna Beach Police Department on information that the Parks were involved in real estate fraud,' said Laura Eimiller, a bureau spokeswoman. 'We're reviewing documents in our possession to see if they were committing fraud.'"
CNN - "April job growth: Slowest since '04" (5-4-07)
"Employers added fewer jobs in April than at anytime in more than two years, as the government's closely watched reading on the nation's labor market came short of Wall Street expectations. The report shows a net gain of 88,000 jobs in April, down from the revised gain of 177,000 in the March report. Economists surveyed by Briefing.com had forecast a gain of 100,000 in the most recent report."
Yahoo - "States Rush to Act on Mortgage Reform" (5-4-07)
"As state lawmakers rush to reform lending practices that have contributed to a recent surge of mortgage defaults and foreclosures, consumer advocates say these efforts fall short of what is truly needed: a federal law protecting home buyers. The number of foreclosures nationally jumped 47 percent in March from a year ago, according to RealtyTrac Inc., a problem concentrated among borrowers with shaky credit who took out higher-priced loans."
Mercury News - "New Century to lay off 2,000 workers as unit goes unsold" (5-4-07)
"Financially strapped subprime mortgage lender New Century Financial Corp., failed to receive any bids for its mortgage loan origination business, forcing it to shut down the unit and lay off around 2,000 employees, the company told employees Thursday. The Irvine-based company, which has been preparing to sell off its assets under Chapter 11 bankruptcy protection since last month, notified employees during a conference call that they would be laid off effective Friday."
Forbes - "GM's Well-Timed Exit" (5-4-07)
"General Motors’ decision last year to unload a 51% stake in GMAC, its financing arm, appears to be exceedingly well-timed. Not long ago, GMAC was the only thing propping up GM earnings. The company barely made money on its auto operations, but was raking in dough -- $2.2 billion in 2006 – from GMAC’s car loans and home mortgages."
Hartford Courant - "Looking Out For Borrowers" (5-4-07)
"Lenders, consumer groups and other players in the subprime mortgage market reached agreement Wednesday with Senate Banking Committee Chairman Christopher J. Dodd on ways to avoid an epidemic of foreclosures, including a greater effort to move beleaguered borrowers into mortgages they can afford. The two-page 'statement of principles" included a pledge that, where possible, "refinancing to prime loans should be made in as streamlined and low-cost fashion as possible.'"
CNBC - "Tip of the Iceberg" (5-4-07)
"As lawmakers on Capitol Hill stand in front of brightly colored placards, touting their 'Save the Subprimer' proposals (witness Sen. Charles Schumer today), and banks get together with community groups in aggressive campaigns to seek out those in danger of default and save them from ultimate foreclosure (witness EMC's "Mortgage Mod Squad"), I fear something is getting lost. We're not in the thick of the crisis; we're right at the start. Three hundred billion dollars worth of adjustable rate mortgages are set to re-set in the next two fiscal quarters. We've already seen what happened in the first quarter of this year. Foreclosures spiked, lenders balked and the spring housing market shut its shutters. Every industry association, from the Home Builders to the Realtors, revised their forecasts, pushing any thoughts of a recovery back from 2007 far into 2008."
Business Journal - "Home values drop 7.4 percent" (5-4-07)
"Median home values in the Sacramento area dropped 7.4 percent in the first quarter from a year ago, the latest evidence the housing market slowdown continues in the region. Yolo County endured the region's largest decline in value, at 13.2 percent to $394,990, according to Zillow.com, an online real estate tracking company in Seattle."
The New York Times - "A Warning on Risk in Commercial Mortgages" (5-4-07)
"Spurred by the collapse of the subprime mortgage market, the leading bond rating agencies are beginning to crack down on what they see as risky lending practices in commercial real estate. Low interest rates and an abundance of investment capital have led to heady times for buyers and sellers of office buildings, hotels and other income-producing property. Buildings have traded at record prices and loan terms have become increasingly generous, with many buyers putting little or no equity into the deals."
Bloomberg - "Fed, Criticized by Congress, Plans Mortgage Hearing" (5-4-07)
"The Federal Reserve Board, under fire from Congress for lax enforcement during the biggest mortgage boom in American history, will hold a public hearing on how it might use its authority to prevent abuses in the mortgage market. 'The goal is to provide sustainable homeownership through responsible lending,' Fed Governor Randall Kroszner, the central bank's chief liaison with the banking industry, said in a press release."
Los Angeles Times - "N.Y. senator aims to help homeowners" (5-4-07)
"In a bid to stop a wave of foreclosures, Sen. Charles E. Schumer (D-N.Y.) on Thursday urged Congress to approve $300 million for counseling and outreach efforts to help beleaguered borrowers hold onto their homes through refinancing deals and other financial strategies that would require cooperation from private lenders. Schumer also proposed legislation to hold mortgage brokers and independent, non-bank lenders such as Ameriquest Mortgage Co. legally responsible for making loans that borrowers can understand and can afford."
"FBI officials said Thursday that they are investigating claims that a Mission Viejo couple killed in a confrontation with police were involved in real estate fraud. 'We're assisting Laguna Beach Police Department on information that the Parks were involved in real estate fraud,' said Laura Eimiller, a bureau spokeswoman. 'We're reviewing documents in our possession to see if they were committing fraud.'"
CNN - "April job growth: Slowest since '04" (5-4-07)
"Employers added fewer jobs in April than at anytime in more than two years, as the government's closely watched reading on the nation's labor market came short of Wall Street expectations. The report shows a net gain of 88,000 jobs in April, down from the revised gain of 177,000 in the March report. Economists surveyed by Briefing.com had forecast a gain of 100,000 in the most recent report."
Yahoo - "States Rush to Act on Mortgage Reform" (5-4-07)
"As state lawmakers rush to reform lending practices that have contributed to a recent surge of mortgage defaults and foreclosures, consumer advocates say these efforts fall short of what is truly needed: a federal law protecting home buyers. The number of foreclosures nationally jumped 47 percent in March from a year ago, according to RealtyTrac Inc., a problem concentrated among borrowers with shaky credit who took out higher-priced loans."
Mercury News - "New Century to lay off 2,000 workers as unit goes unsold" (5-4-07)
"Financially strapped subprime mortgage lender New Century Financial Corp., failed to receive any bids for its mortgage loan origination business, forcing it to shut down the unit and lay off around 2,000 employees, the company told employees Thursday. The Irvine-based company, which has been preparing to sell off its assets under Chapter 11 bankruptcy protection since last month, notified employees during a conference call that they would be laid off effective Friday."
Forbes - "GM's Well-Timed Exit" (5-4-07)
"General Motors’ decision last year to unload a 51% stake in GMAC, its financing arm, appears to be exceedingly well-timed. Not long ago, GMAC was the only thing propping up GM earnings. The company barely made money on its auto operations, but was raking in dough -- $2.2 billion in 2006 – from GMAC’s car loans and home mortgages."
Hartford Courant - "Looking Out For Borrowers" (5-4-07)
"Lenders, consumer groups and other players in the subprime mortgage market reached agreement Wednesday with Senate Banking Committee Chairman Christopher J. Dodd on ways to avoid an epidemic of foreclosures, including a greater effort to move beleaguered borrowers into mortgages they can afford. The two-page 'statement of principles" included a pledge that, where possible, "refinancing to prime loans should be made in as streamlined and low-cost fashion as possible.'"
CNBC - "Tip of the Iceberg" (5-4-07)
"As lawmakers on Capitol Hill stand in front of brightly colored placards, touting their 'Save the Subprimer' proposals (witness Sen. Charles Schumer today), and banks get together with community groups in aggressive campaigns to seek out those in danger of default and save them from ultimate foreclosure (witness EMC's "Mortgage Mod Squad"), I fear something is getting lost. We're not in the thick of the crisis; we're right at the start. Three hundred billion dollars worth of adjustable rate mortgages are set to re-set in the next two fiscal quarters. We've already seen what happened in the first quarter of this year. Foreclosures spiked, lenders balked and the spring housing market shut its shutters. Every industry association, from the Home Builders to the Realtors, revised their forecasts, pushing any thoughts of a recovery back from 2007 far into 2008."
Business Journal - "Home values drop 7.4 percent" (5-4-07)
"Median home values in the Sacramento area dropped 7.4 percent in the first quarter from a year ago, the latest evidence the housing market slowdown continues in the region. Yolo County endured the region's largest decline in value, at 13.2 percent to $394,990, according to Zillow.com, an online real estate tracking company in Seattle."
The New York Times - "A Warning on Risk in Commercial Mortgages" (5-4-07)
"Spurred by the collapse of the subprime mortgage market, the leading bond rating agencies are beginning to crack down on what they see as risky lending practices in commercial real estate. Low interest rates and an abundance of investment capital have led to heady times for buyers and sellers of office buildings, hotels and other income-producing property. Buildings have traded at record prices and loan terms have become increasingly generous, with many buyers putting little or no equity into the deals."
Bloomberg - "Fed, Criticized by Congress, Plans Mortgage Hearing" (5-4-07)
"The Federal Reserve Board, under fire from Congress for lax enforcement during the biggest mortgage boom in American history, will hold a public hearing on how it might use its authority to prevent abuses in the mortgage market. 'The goal is to provide sustainable homeownership through responsible lending,' Fed Governor Randall Kroszner, the central bank's chief liaison with the banking industry, said in a press release."
Los Angeles Times - "N.Y. senator aims to help homeowners" (5-4-07)
"In a bid to stop a wave of foreclosures, Sen. Charles E. Schumer (D-N.Y.) on Thursday urged Congress to approve $300 million for counseling and outreach efforts to help beleaguered borrowers hold onto their homes through refinancing deals and other financial strategies that would require cooperation from private lenders. Schumer also proposed legislation to hold mortgage brokers and independent, non-bank lenders such as Ameriquest Mortgage Co. legally responsible for making loans that borrowers can understand and can afford."
Thursday, May 03, 2007
Bloomberg - "GMAC Has $305 Million 1st-Quarter Loss on Home Loans" (5-3-07)
"GMAC LLC, the finance company partly owned by General Motors Corp., said it had a $305 million first- quarter loss and injected $1 billion into its home-lending unit amid a ``sharp downturn'' in the U.S. mortgage market. The results compared with year-earlier net income of $495 million, Detroit-based GMAC said today. GMAC's Residential Capital LLC lost $905 million compared with year-earlier earnings of $201 million."
Yahoo - "Six Ways to Avoid a Mortgage Mess" (5-3-07)
"With foreclosures on the rise, lenders have been blamed for aggressively qualifying consumers for mortgages they couldn't afford. While there's no doubt that lenders are partly responsible for the mess, there's plenty of blame to go around, and borrowers need only look in the mirror to find where to start."
CoStar Group - "Debt Volume Fuels Bubble Fears" (5-3-07)
"As has been true for most real estate booms, the widespread availability of debt financing under the most generous of terms has fueled this remarkable period in the U.S. commercial real estate market. Buildings continue to be traded at record prices and loan terms have become increasingly generous, with many buyers putting little or no equity into deals."
Press Release Newswire - "Real Estate Bubble Burst Favors Flexible Agents" (5-3-07)
"Now that the housing market has clearly shifted in the buyer's favor, home sellers are doing everything possible to squeeze every last nickel out of the sale of their home. In the past, this meant selling their home themselves, thereby avoiding the 6% commission that most real estate agents charge. However, putting a home on the market without an agent's guidance has left many sellers frustrated and without offers. Today, savvy home sellers are finding a new way to avoid high commissions while continuing to benefit from an agent's services. A new website, http://agentBOOST.com, allows home buyers and sellers to upload details about the property they wish to buy or sell and contact agents in their area who are interested in working with them for less than the standard commission."
Bethy's Ramblings - "Renting vs. Buying" (5-3-07)
"I have something un-American to confess: I rent an apartment despite having enough money to buy a house. I plan to keep renting for as long as I can. I'm not just holding out for better prices. Renting will make me richer. I normally write about stocks for SmartMoney.com, but the boss asked me to explain to readers my reason for renting. Here goes: Businesses are great investments while houses are poor ones, so I'd rather rent the latter and own the former. "
CNN - "The buyers: The Quams and the too-good-to-be-true mortgage" (5-3-07)
"Newlyweds Erik and Brandi Quam can't really afford their home. The monthly carrying costs on their two-bedroom condo in Arlington, Va. run about $2,500 a month, and they fear the bill could go higher still as their adjustable mortgage resets to higher interest rates. It's already a tight squeeze: They've taken in a roommate to help pay the bills. Unfortunately, they can't afford to sell either. Thanks to a falling housing market and a prepayment penalty of about $11,500, they'd owe the bank more than their place is worth. "It makes me want to cry every month," says Brandi, 26. The irony is that the Quams should be able to afford their place: It cost just $219,000 when a still-single Brandi, fresh out of the Air Force, bought it."
CNN - "The investors: How to get rich trading "idiot" loans" (5-3-07)
"The housing boom was good to John Devaney. Really good. He owns a Rolls-Royce, a Gulfstream Jet, a 12,000-square-foot mansion in Key Biscayne and a 143-foot yacht, as well as a few Renoirs and a valuable 1823 reproduction of the Declaration of Independence. Devaney's not a developer, and he's certainly not a flipper. The 36-year-old CEO of United Capital Markets is a bond trader. And one of his specialties is buying and selling bonds that are backed by the mortgage payments of ordinary homeowners."
Yahoo - "How the Subprime Mess Affects Your Portfolio" (5-3-07)
"So far this year, one of the big financial stories has been the meltdown of the subprime-mortgage market. Subprime mortgages--those made to borrowers with relatively weak credit--have become increasingly prevalent in recent years, helped by low interest rates and a buoyant housing market. But, starting in late 2006 and accelerating in the early months of this year, the number of subprime mortgages in default has spiked, as borrowers without much financial breathing room found themselves unable to make payments. This, in turn, has caused financial pain for a lot of companies involved in the subprime market and the housing market in general, from mortgage lenders to banks to homebuilders, with the potential for more problems down the road."
Mortgage Bankers Association - "HGTV Home Buying Host & Author Suzanne Whang To Promote National Homeownership Month And Home Loan Learning Center Website for MBA" (5-3-07)
"The Mortgage Bankers Association (MBA) announced today that Suzanne Whang, HGTV television host and home-buying author, has agreed to promote MBA’s Home Loan Learning Center (www.homeloanlearningcenter.com) this June during National Homeownership Month. Ms. Whang will provide consumers with important tips and information about the home-buying process and will guide them through the tools and other critical information on homeloanlearningcenter.com, MBA’s unbiased consumer education website which arms consumers with the information they need to become informed home buyers."
Mortgage Bankers Association - "Press Release - Originations" (5-3-07)
"The commercial/multifamily originations market grew 10 percent in 2006, with mortgage bankers closing $406.1 billion in commercial/multifamily loans according the Mortgage Bankers Association 2006 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation. Increases were seen across every property type and most investor groups, and were led by increases in loans for office buildings and loans intended for commercial bank and savings institution portfolios."
"GMAC LLC, the finance company partly owned by General Motors Corp., said it had a $305 million first- quarter loss and injected $1 billion into its home-lending unit amid a ``sharp downturn'' in the U.S. mortgage market. The results compared with year-earlier net income of $495 million, Detroit-based GMAC said today. GMAC's Residential Capital LLC lost $905 million compared with year-earlier earnings of $201 million."
Yahoo - "Six Ways to Avoid a Mortgage Mess" (5-3-07)
"With foreclosures on the rise, lenders have been blamed for aggressively qualifying consumers for mortgages they couldn't afford. While there's no doubt that lenders are partly responsible for the mess, there's plenty of blame to go around, and borrowers need only look in the mirror to find where to start."
CoStar Group - "Debt Volume Fuels Bubble Fears" (5-3-07)
"As has been true for most real estate booms, the widespread availability of debt financing under the most generous of terms has fueled this remarkable period in the U.S. commercial real estate market. Buildings continue to be traded at record prices and loan terms have become increasingly generous, with many buyers putting little or no equity into deals."
Press Release Newswire - "Real Estate Bubble Burst Favors Flexible Agents" (5-3-07)
"Now that the housing market has clearly shifted in the buyer's favor, home sellers are doing everything possible to squeeze every last nickel out of the sale of their home. In the past, this meant selling their home themselves, thereby avoiding the 6% commission that most real estate agents charge. However, putting a home on the market without an agent's guidance has left many sellers frustrated and without offers. Today, savvy home sellers are finding a new way to avoid high commissions while continuing to benefit from an agent's services. A new website, http://agentBOOST.com, allows home buyers and sellers to upload details about the property they wish to buy or sell and contact agents in their area who are interested in working with them for less than the standard commission."
Bethy's Ramblings - "Renting vs. Buying" (5-3-07)
"I have something un-American to confess: I rent an apartment despite having enough money to buy a house. I plan to keep renting for as long as I can. I'm not just holding out for better prices. Renting will make me richer. I normally write about stocks for SmartMoney.com, but the boss asked me to explain to readers my reason for renting. Here goes: Businesses are great investments while houses are poor ones, so I'd rather rent the latter and own the former. "
CNN - "The buyers: The Quams and the too-good-to-be-true mortgage" (5-3-07)
"Newlyweds Erik and Brandi Quam can't really afford their home. The monthly carrying costs on their two-bedroom condo in Arlington, Va. run about $2,500 a month, and they fear the bill could go higher still as their adjustable mortgage resets to higher interest rates. It's already a tight squeeze: They've taken in a roommate to help pay the bills. Unfortunately, they can't afford to sell either. Thanks to a falling housing market and a prepayment penalty of about $11,500, they'd owe the bank more than their place is worth. "It makes me want to cry every month," says Brandi, 26. The irony is that the Quams should be able to afford their place: It cost just $219,000 when a still-single Brandi, fresh out of the Air Force, bought it."
CNN - "The investors: How to get rich trading "idiot" loans" (5-3-07)
"The housing boom was good to John Devaney. Really good. He owns a Rolls-Royce, a Gulfstream Jet, a 12,000-square-foot mansion in Key Biscayne and a 143-foot yacht, as well as a few Renoirs and a valuable 1823 reproduction of the Declaration of Independence. Devaney's not a developer, and he's certainly not a flipper. The 36-year-old CEO of United Capital Markets is a bond trader. And one of his specialties is buying and selling bonds that are backed by the mortgage payments of ordinary homeowners."
Yahoo - "How the Subprime Mess Affects Your Portfolio" (5-3-07)
"So far this year, one of the big financial stories has been the meltdown of the subprime-mortgage market. Subprime mortgages--those made to borrowers with relatively weak credit--have become increasingly prevalent in recent years, helped by low interest rates and a buoyant housing market. But, starting in late 2006 and accelerating in the early months of this year, the number of subprime mortgages in default has spiked, as borrowers without much financial breathing room found themselves unable to make payments. This, in turn, has caused financial pain for a lot of companies involved in the subprime market and the housing market in general, from mortgage lenders to banks to homebuilders, with the potential for more problems down the road."
Mortgage Bankers Association - "HGTV Home Buying Host & Author Suzanne Whang To Promote National Homeownership Month And Home Loan Learning Center Website for MBA" (5-3-07)
"The Mortgage Bankers Association (MBA) announced today that Suzanne Whang, HGTV television host and home-buying author, has agreed to promote MBA’s Home Loan Learning Center (www.homeloanlearningcenter.com) this June during National Homeownership Month. Ms. Whang will provide consumers with important tips and information about the home-buying process and will guide them through the tools and other critical information on homeloanlearningcenter.com, MBA’s unbiased consumer education website which arms consumers with the information they need to become informed home buyers."
Mortgage Bankers Association - "Press Release - Originations" (5-3-07)
"The commercial/multifamily originations market grew 10 percent in 2006, with mortgage bankers closing $406.1 billion in commercial/multifamily loans according the Mortgage Bankers Association 2006 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation. Increases were seen across every property type and most investor groups, and were led by increases in loans for office buildings and loans intended for commercial bank and savings institution portfolios."
Wednesday, May 02, 2007
Sign On San Diego - "Index finds economy in county ailing" (5-2-07)
"A think tank founded by health care entrepreneur and former mayoral candidate Steven Francis launched a new barometer yesterday for measuring the county's economic health. And the economy isn't looking too swift, according to Francis' San Diego Institute for Policy Research, which opened in January."
The Press Enterprise - "Home-buying season has weak start" (5-2-07)
"The home-buying season got off to such a weak start in Inland Southern California this year that homes are still being built faster than they are sold, according to a report released Monday. Metrostudy, a real-estate information firm based in Riverside, reported 5,414 new home sales in Riverside and San Bernardino Counties in the first quarter of this year, a 50 percent decline from the same period a year ago."
Voice of San Diego - "Report: Recession Unlikely But More Pain in Housing" (5-2-07)
"Despite "storm clouds" of near-record foreclosure and default rates, weakness in the real estate market won't be enough to trigger a recession locally, at the state level or nationwide, a team of California economists say. Real estate encompasses a vast majority of the economic concerns for San Diego County identified in a new report from the University of California, Los Angeles Anderson Forecast, a widely respected panel of thinkers on state and national economics. The report is to be released to paying subscribers of the Anderson Forecast on Tuesday, and discussed in a breakfast seminar at downtown's Manchester Hyatt hotel."
Sign On San Diego - "Index finds economy in county ailing" (5-2-07)
"A think tank founded by health care entrepreneur and former mayoral candidate Steven Francis launched a new barometer yesterday for measuring the county's economic health. Advertisement and the economy isn't looking too swift, according to Francis' San Diego Institute for Policy Research, which opened in January."
CNN - "The buyers: The Quams and the too-good-to-be-true mortgage" (5-2-07)
"Newlyweds Erik and Brandi Quam can't really afford their home. The monthly carrying costs on their two-bedroom condo in Arlington, Va. run about $2,500 a month, and they fear the bill could go higher still as their adjustable mortgage resets to higher interest rates. It's already a tight squeeze: They've taken in a roommate to help pay the bills. Unfortunately, they can't afford to sell either. Thanks to a falling housing market and a prepayment penalty of about $11,500, they'd owe the bank more than their place is worth. "It makes me want to cry every month," says Brandi, 26. The irony is that the Quams should be able to afford their place: It cost just $219,000 when a still-single Brandi, fresh out of the Air Force, bought it."
CNN - "The brokers: Would you get your mortgage from this man?" (5-2-07)
"Morning commuters in Boston, Chicago and Phoenix are slapped awake by the voice of a pugnacious Texan shouting out of the radio. "When your mortgage payment goes up 400 bucks a month, you can dislocate your jaw and swallow it like a snake eatin' an egg," the voice says. "Or spend another seven grand and have some predator redo your mortgage. Unacceptable." The voice belongs to Jon Shibley, 39, the president of Lenox Financial Mortgage. Over 13 years he's built his business from a one-man shop in Atlanta into a 200-employee company that arranges mortgages and refinancings in 24 states."
CNN - "The appraisers: Price estimates made to order" (5-2-07)
"Last summer Daniel Kim was feeling pinched. So when Kim, now 27, of San Leandro, Calif. got a call from a mortgage company, he was intrigued. The loan officer, Mia Yi of ALG Capital, sold Kim on refinancing, putting him an additional $81,000 in debt on his house. Kim says he was surprised he could borrow more. He had bought the two-bedroom the previous year for $560,000 with no money down, and everything he had read said the market in his area was cooling. But after Yi produced an appraisal in November that said his house was worth $642,000, Kim signed. I was excited,' he says, 'that my house had appreciated that much.'"
CNN - "The investors: How to get rich trading "idiot" loans" (5-2-07)
"The housing boom was good to John Devaney. Really good. He owns a Rolls-Royce, a Gulfstream Jet, a 12,000-square-foot mansion in Key Biscayne and a 143-foot yacht, as well as a few Renoirs and a valuable 1823 reproduction of the Declaration of Independence. Devaney's not a developer, and he's certainly not a flipper. The 36-year-old CEO of United Capital Markets is a bond trader. And one of his specialties is buying and selling bonds that are backed by the mortgage payments of ordinary homeowners."
The Daily Reckoning - "Collapse of U.S. Housing Bubble Will Balance Income & Consumption" (5-2-07)
"Richard Suttmeier on Real Money hit the nail on the head when he said yesterday that the real estate explosion is about to implode. Like him, I believe that the subprime collapse is not just a speed bump in the 'New Economy.' Instead, it is a sign of wider problems in mortgage lending that threaten the viability of the New Economy itself. That’s because the collapse of the housing bubble means that a major 'band-aid' has been ripped off of America’s Achilles heel, the cash-strapped, savings short American consumer, exposing the scab underneath."
Herald Tribune - "Appraisers felt pressure during boom" (5-2-07)
"Real estate appraisers were under tremendous pressure during the boom to provide appraisals that would allow bankers to make mortgage loans. Now that the boom is over, appraisers find themselves being blamed for loans that went bad."
eFinanceDirectory.com - "The Second Great Depression: Interview With Author Warren Brussee" (5-2-07)
"Starting in 2001, in response to the stock market's sudden drop and to make sure the US did not go into a deep recession, the Fed lowered its federal funds rate from 5.5% all the way down to 1%. This enabled lower mortgage rates. At the same time, lending institutions started using creative mortgage loans, including negative amortization, interest only, low initial teaser rates, zero down, and adjustable rate mortgages. This dramatically increased the potential number of home buyers and the ability of buyers to buy more expensive homes. This increased demand caused bidding for available homes and drove up prices: the old demand versus supply thing! As prices rose, people began to look at homes as investments, bringing even more people into the market. Between 2000 and 2005, the median price of homes went up 49% over the historical expected price rise."
Bloomberg - "Bond Demand Put Risky Subprime Borrowers Into Homes" (5-2-07)
"Demand for bonds, and investors' complacency toward risk, can be blamed for the record early delinquencies and defaults on subprime home loans, speakers at an industry conference in Miami said. The poor performance of subprime home loans made last year stems from an average drop of at least 0.50 percentage point in the yield premiums for credit risk on all types of fixed-income assets since 2000, Mortgage Bankers Association Chief Economist Doug Duncan said, citing research by other economists."
The Motley Fool - "Lipstick on the Housing Pig" (5-2-07)
"Consider it an unsightly, smeared, parting smooch from housing's biggest , the National Association of Realtors' ex-economist, David Lereah. The NAR's newest pending sales report is an absolute hog. March pending sales were down a whopping 10.5% from 2006, and they even managed to score a sequential drop of 4.9%, something that should not happen as we head into the spring buying season. But the NAR is ever willing to put lipstick on the pig."
Mortgage Bankers Association - "Robbins Announces MBA's Support for Senate Banking Committee's Principles for Mortgage Servicers" (5-2-07)
"John M. Robbins, CMB, Chairman of the Mortgage Bankers Association, today stated MBA's support for principles for mortgage servicers identified during the recent Homeownership Preservation Summit hosted by Senate Banking Committee Chairman Christopher Dodd. 'The Mortgage Bankers Association endorses the homeownership preservation principles developed under Chairman Dodd's leadership,' said Mr. Robbins. 'We appreciate the Chairman's efforts in bringing together important elements of the mortgage finance industry to ensure that all that can be done on behalf of borrowers facing foreclosure is being done.'"
Orange County Register - "Readers rank O.C. communities" (5-2-07)
"Builder consultants Real Estate Economics of Irvine recently ranked 12 clusters of O.C. communities by their housing market's potential based on several economic factors. Below, is Real Estate Economics' five most promising, in order from the top. We asked visitors to the Lansner on Real Estate how they saw this list, and three-quarters of them agreed with these consultants. Though, their order of the top five was a different."
Real Estate Journal - "Vacation-Home Sales Hit Record; Investment Purchases Fall" (5-2-07)
"A sharp drop in investment-home sales offset a record number of vacation-home purchases to bring down the overall number of second-home purchases in 2006, the National Association of Realtors reported. Vacation-home sales rose 4.7% to a record 1.07 million homes in 2006 from 1.02 million in 2005. Investment-home sales fell 28.9% to 1.65 million homes in 2006 from 2.32 million in 2005, according to the group's annual survey of investment- and vacation-home buyers."
Real Estate Journal - "Real-Estate Professionals Say IRS Snares Them by Mistake" (5-2-07)
"Some real-estate professionals say they are being mistaken for sometime investors by the Internal Revenue Service, and that could prohibit them from taking advantage of certain tax and economic benefits. Consider the case of David Friedman, a real-estate broker and property owner in Los Angeles. Like many professionals in the business, he not only sells homes to consumers, he also buys and sells undeveloped land and owns single-family homes that he rents out. He says he works every day and has amassed holdings in Southern California and Oklahoma that are valued at $20 million."
"A think tank founded by health care entrepreneur and former mayoral candidate Steven Francis launched a new barometer yesterday for measuring the county's economic health. And the economy isn't looking too swift, according to Francis' San Diego Institute for Policy Research, which opened in January."
The Press Enterprise - "Home-buying season has weak start" (5-2-07)
"The home-buying season got off to such a weak start in Inland Southern California this year that homes are still being built faster than they are sold, according to a report released Monday. Metrostudy, a real-estate information firm based in Riverside, reported 5,414 new home sales in Riverside and San Bernardino Counties in the first quarter of this year, a 50 percent decline from the same period a year ago."
Voice of San Diego - "Report: Recession Unlikely But More Pain in Housing" (5-2-07)
"Despite "storm clouds" of near-record foreclosure and default rates, weakness in the real estate market won't be enough to trigger a recession locally, at the state level or nationwide, a team of California economists say. Real estate encompasses a vast majority of the economic concerns for San Diego County identified in a new report from the University of California, Los Angeles Anderson Forecast, a widely respected panel of thinkers on state and national economics. The report is to be released to paying subscribers of the Anderson Forecast on Tuesday, and discussed in a breakfast seminar at downtown's Manchester Hyatt hotel."
Sign On San Diego - "Index finds economy in county ailing" (5-2-07)
"A think tank founded by health care entrepreneur and former mayoral candidate Steven Francis launched a new barometer yesterday for measuring the county's economic health. Advertisement and the economy isn't looking too swift, according to Francis' San Diego Institute for Policy Research, which opened in January."
CNN - "The buyers: The Quams and the too-good-to-be-true mortgage" (5-2-07)
"Newlyweds Erik and Brandi Quam can't really afford their home. The monthly carrying costs on their two-bedroom condo in Arlington, Va. run about $2,500 a month, and they fear the bill could go higher still as their adjustable mortgage resets to higher interest rates. It's already a tight squeeze: They've taken in a roommate to help pay the bills. Unfortunately, they can't afford to sell either. Thanks to a falling housing market and a prepayment penalty of about $11,500, they'd owe the bank more than their place is worth. "It makes me want to cry every month," says Brandi, 26. The irony is that the Quams should be able to afford their place: It cost just $219,000 when a still-single Brandi, fresh out of the Air Force, bought it."
CNN - "The brokers: Would you get your mortgage from this man?" (5-2-07)
"Morning commuters in Boston, Chicago and Phoenix are slapped awake by the voice of a pugnacious Texan shouting out of the radio. "When your mortgage payment goes up 400 bucks a month, you can dislocate your jaw and swallow it like a snake eatin' an egg," the voice says. "Or spend another seven grand and have some predator redo your mortgage. Unacceptable." The voice belongs to Jon Shibley, 39, the president of Lenox Financial Mortgage. Over 13 years he's built his business from a one-man shop in Atlanta into a 200-employee company that arranges mortgages and refinancings in 24 states."
CNN - "The appraisers: Price estimates made to order" (5-2-07)
"Last summer Daniel Kim was feeling pinched. So when Kim, now 27, of San Leandro, Calif. got a call from a mortgage company, he was intrigued. The loan officer, Mia Yi of ALG Capital, sold Kim on refinancing, putting him an additional $81,000 in debt on his house. Kim says he was surprised he could borrow more. He had bought the two-bedroom the previous year for $560,000 with no money down, and everything he had read said the market in his area was cooling. But after Yi produced an appraisal in November that said his house was worth $642,000, Kim signed. I was excited,' he says, 'that my house had appreciated that much.'"
CNN - "The investors: How to get rich trading "idiot" loans" (5-2-07)
"The housing boom was good to John Devaney. Really good. He owns a Rolls-Royce, a Gulfstream Jet, a 12,000-square-foot mansion in Key Biscayne and a 143-foot yacht, as well as a few Renoirs and a valuable 1823 reproduction of the Declaration of Independence. Devaney's not a developer, and he's certainly not a flipper. The 36-year-old CEO of United Capital Markets is a bond trader. And one of his specialties is buying and selling bonds that are backed by the mortgage payments of ordinary homeowners."
The Daily Reckoning - "Collapse of U.S. Housing Bubble Will Balance Income & Consumption" (5-2-07)
"Richard Suttmeier on Real Money hit the nail on the head when he said yesterday that the real estate explosion is about to implode. Like him, I believe that the subprime collapse is not just a speed bump in the 'New Economy.' Instead, it is a sign of wider problems in mortgage lending that threaten the viability of the New Economy itself. That’s because the collapse of the housing bubble means that a major 'band-aid' has been ripped off of America’s Achilles heel, the cash-strapped, savings short American consumer, exposing the scab underneath."
Herald Tribune - "Appraisers felt pressure during boom" (5-2-07)
"Real estate appraisers were under tremendous pressure during the boom to provide appraisals that would allow bankers to make mortgage loans. Now that the boom is over, appraisers find themselves being blamed for loans that went bad."
eFinanceDirectory.com - "The Second Great Depression: Interview With Author Warren Brussee" (5-2-07)
"Starting in 2001, in response to the stock market's sudden drop and to make sure the US did not go into a deep recession, the Fed lowered its federal funds rate from 5.5% all the way down to 1%. This enabled lower mortgage rates. At the same time, lending institutions started using creative mortgage loans, including negative amortization, interest only, low initial teaser rates, zero down, and adjustable rate mortgages. This dramatically increased the potential number of home buyers and the ability of buyers to buy more expensive homes. This increased demand caused bidding for available homes and drove up prices: the old demand versus supply thing! As prices rose, people began to look at homes as investments, bringing even more people into the market. Between 2000 and 2005, the median price of homes went up 49% over the historical expected price rise."
Bloomberg - "Bond Demand Put Risky Subprime Borrowers Into Homes" (5-2-07)
"Demand for bonds, and investors' complacency toward risk, can be blamed for the record early delinquencies and defaults on subprime home loans, speakers at an industry conference in Miami said. The poor performance of subprime home loans made last year stems from an average drop of at least 0.50 percentage point in the yield premiums for credit risk on all types of fixed-income assets since 2000, Mortgage Bankers Association Chief Economist Doug Duncan said, citing research by other economists."
The Motley Fool - "Lipstick on the Housing Pig" (5-2-07)
"Consider it an unsightly, smeared, parting smooch from housing's biggest , the National Association of Realtors' ex-economist, David Lereah. The NAR's newest pending sales report is an absolute hog. March pending sales were down a whopping 10.5% from 2006, and they even managed to score a sequential drop of 4.9%, something that should not happen as we head into the spring buying season. But the NAR is ever willing to put lipstick on the pig."
Mortgage Bankers Association - "Robbins Announces MBA's Support for Senate Banking Committee's Principles for Mortgage Servicers" (5-2-07)
"John M. Robbins, CMB, Chairman of the Mortgage Bankers Association, today stated MBA's support for principles for mortgage servicers identified during the recent Homeownership Preservation Summit hosted by Senate Banking Committee Chairman Christopher Dodd. 'The Mortgage Bankers Association endorses the homeownership preservation principles developed under Chairman Dodd's leadership,' said Mr. Robbins. 'We appreciate the Chairman's efforts in bringing together important elements of the mortgage finance industry to ensure that all that can be done on behalf of borrowers facing foreclosure is being done.'"
Orange County Register - "Readers rank O.C. communities" (5-2-07)
"Builder consultants Real Estate Economics of Irvine recently ranked 12 clusters of O.C. communities by their housing market's potential based on several economic factors. Below, is Real Estate Economics' five most promising, in order from the top. We asked visitors to the Lansner on Real Estate how they saw this list, and three-quarters of them agreed with these consultants. Though, their order of the top five was a different."
Real Estate Journal - "Vacation-Home Sales Hit Record; Investment Purchases Fall" (5-2-07)
"A sharp drop in investment-home sales offset a record number of vacation-home purchases to bring down the overall number of second-home purchases in 2006, the National Association of Realtors reported. Vacation-home sales rose 4.7% to a record 1.07 million homes in 2006 from 1.02 million in 2005. Investment-home sales fell 28.9% to 1.65 million homes in 2006 from 2.32 million in 2005, according to the group's annual survey of investment- and vacation-home buyers."
Real Estate Journal - "Real-Estate Professionals Say IRS Snares Them by Mistake" (5-2-07)
"Some real-estate professionals say they are being mistaken for sometime investors by the Internal Revenue Service, and that could prohibit them from taking advantage of certain tax and economic benefits. Consider the case of David Friedman, a real-estate broker and property owner in Los Angeles. Like many professionals in the business, he not only sells homes to consumers, he also buys and sells undeveloped land and owns single-family homes that he rents out. He says he works every day and has amassed holdings in Southern California and Oklahoma that are valued at $20 million."
Orange County Register - "Tell me 'Am I talking to the right people?'" (5-1-07)
"Why does the O.C. chapter of the Building Industry Association no longer love me? I’m not sure. But parsing their public statement about my work last week. I’m guessing one beef ("Lansner regularly quotes sources with views far removed from other prominent housing market researchers") comes from an interview I did for my blog and The Register with investment adviser Peter Schiff. He boldly suggested O.C. home prices will fall 50 percent in this cycle."
Sign On San Diego - "California population nears 38 million, L.A. tops 4 million" (5-1-07)
"California's population is closing in on 38 million and its biggest city now has more than 4 million people, but the state's growth rate has slowed since the start of the decade, state officials said Tuesday. The Department of Finance's demographics unit said California had nearly 37.7 million residents as of on Jan. 1, up by about 470,000 since the start of 2006. One of every eight Americans now lives in the state."
Reuters - "Realtors' upbeat economist, Lereah, steps down" (5-1-07)
"The economist who prodded investors into the U.S. housing boom and has been skewered by bloggers during the bust is leaving a top real estate trade association, the group said Monday. David Lereah, the author of 'Are You Missing the Real Estate Boom?', will leave the the National Association of Realtors' by the middle of next month after serving as the head economist for seven years, a spokesman said."
Sign On San Diego - "Prices to start rebound next fall, forecast says" (5-1-07)
"Despite a surge in home foreclosures, the worst may be over for San Diego County's beleaguered housing market, according to a study to be released today by UCLA's Anderson Forecast, one of the state's leading economic think tanks. But that's not to say that home prices are going to immediately start going back up."
KCRA - "Investors Say They Were Duped In Real Estate Scam" (5-1-07)
"A three-month-long KCRA 3 investigation has uncovered millions of dollars of fraud in the local real estate market. Seven individuals, including Romano, have filed lawsuits alleging fraud, conspiracy and blatant misrepresentations by their loan officer, mortgage broker and real estate agent."
Yahoo - "Moral hazard is part of mortgage mess" (5-1-07)
"Today's subprime meltdown, and tomorrow's bigger Alt-A debacle, will bring out a lot of politicians who will demand that something be done to protect consumers from bad loans. But it's going to be hard to protect consumers without bailing out the lenders and investors who were behind those bad loan decisions. That's where moral hazard comes in."
CNN - "Homebuilder Centex posts loss" (5-1-07)
"Centex Corp., the fourth-largest U.S. home builder, reported a wider-than-expected fourth-quarter loss Monday as it responded to the U.S. real-estate slowdown by writing off and revaluing land and by exiting the sub-prime lending and commercial contracting businesses. For the fiscal fourth quarter ended March 31, Centex posted a loss from continuing operations of $22.3 million, or 18 cents a share, compared with its earlier forecast of break-even."
Herald Tribune - "'Soggy' economy renews fears about a recession" (5-1-07)
"Was former Federal Reserve Chairman Alan Greenspan right when he put the chance of a recession this year at one in three? A report released Friday showed the country logged its worst economic growth in four years in the opening quarter of 2007. That raised fresh questions about whether troubles in the U.S. housing market will spread and throw the economy into a tailspin before the year is out."
Palm Beach Post - "This Eden is garden of trouble for condos" (5-1-07)
"During the recent condo-conversion craze, the Eden was among the first projects to promise buyers a hip lifestyle in a downtown setting. But four years after sales first started, the project remains a hulking eyesore, partly gutted and nowhere near done. Work on the conversion has started, stopped, started and now stopped again. Now comes word that two of the complex's four buildings won't be finished anytime soon. Two sources say those buildings are undergoing a redesign that will push the Eden's completion date even further into the future. Meanwhile, residents who have moved into the first building won't be enjoying their clubhouse in coming days. Work on the 8,000-square-foot facility has ceased, and several subcontractors have filed liens in Palm Beach County over unpaid bills. Among them: the clubhouse's general contractor, InCom Restorations. The Jacksonville-based company filed a lien for $251,305 in March but was paid on that lien this month - only to file another lien for $171,565 on April 16, county records show."
North County Times - "Renters market: Competition, 'doubling up' cited as reasons for shift locally" (5-1--7)
"In San Diego County, vacancy rates among large rental complexes jumped from 1.84 percent to 4.54 percent during the six-month period from October through March 31, the highest six-month rate since 1995, according to a MarketPointe Realty Advisors' Rental Trends survey, which supplies information to rental property owners."
Seeking Alpha - "Home Equity Debt: The Long Slow Squeeze Continues" (5-1-07)
"One of the many ing after effects of the Greenspan term at the Fed is that huge amount of home equity that has been extracted but not yet paid back by homeowners with no intention of selling their home. If your mortgage is more than a few years old, it no longer makes sense to refinance the extracted equity back into a new first mortgage for three reasons. First, you'd have to start back at month one on the loan amortization schedule; second, you probably won't get a lower interest rate; and third, you'll have more loan fees to pay."
Dr. Housing Bubble - "Mission Accomplished: 3 Housing Issues: Multiple Bottoms, Declining Dollar, and More Sub-prime and Alt-A Defaults." (5-1-07)
"It is said that the definition of insanity is doing the same thing over and over and expecting a different result. If we adhere to this definition, housing pundits must be clinically insane because since the middle of 2006 we’ve been hearing rhetoric of “yes, today we’ve reached bottom.” Amazing how these folks live on one way streets. During the past seven years, each new record high was welcomed and when asked if this was a peak most would respond that the sky was the limit. No end in their immediate future. If up to them, housing would appreciate 20% each year until the end of time. Yet now that we’ve experienced only two moderately challenging quarters the housing complex is ready to throw in the towel and issue a Siren call that this is the absolute bottom, mission accomplished. They would like us to believe their rhetoric as gospel and ignore every fundamental economic indicator pointing to the contrary."
eFinanceDirectory.com - "NAR Changes Forecast for Housing Again" (5-1-07)
"The National Association of Realtors (NAR) is notorious for making optimistic predictions in regards to housing. After stating repeatedly that there was no such thing as a housing bubble in 2005, the NAR changed their stance in 2006, admitting that a price correction may be afoot. The association then called the bottom of the correction in August of 2006, September of 2006, and December of 2006. Now it seems they have changed their tune once again."
Mortgage Bankers Association - "Freddie Mac Enhances Loan Propector for Processing FHA Loans" (5-1-07)
"Freddie Mac has enhanced the credit funtionality of Loan Prospector, making it easier for lenders to assess Federal Housing Authority (FHA) mortgages.The change reduces the number of times lenders have to reorder merged credit for a FHA loan for a single borrower. With these changes, the lender will only have to reorder merged credit for a borrower when any of the following changes are made during the loan process: There is a change tosingle borrower’s critical borrower data. The credit data has expired past the 120 days of credit freshness for the merged credit report for a single borrower. The lender selects to order a joint merged credit report rather than a single merged credit report and vice versa."
Orange County Register - "Merrill Lynch scraps Option One's $1.5 billion credit line" (5-1-07)
"Let's see, it has been two weeks since H&R Block announced the planned sale of its subprime unit Option One Mortgage Corp. in Irvine to Cerberus Capital Management L.P. Well, the tax preparer from Kansas City, Missiouri already has hit a little snag, though nothing that will derail the deal at this point. The company said in a filing today that its mortgage unit lost a $1.5 billion credit line from Merrill Lynch & Co. Other investment banks reduced or rearranged their financial backing. For example, UBS cut its credit line from 1.5 billion to $750 million."
Real Estate Journal - "Homeowners Wage a Rebellion As Property-Tax Assessments Rise" (5-1-07)
"Falling home prices and rising property-tax assessments are fueling a grass-roots tax rebellion. From coastal Florida to the shores of Hawaii, homeowners are lodging record numbers of appeals, fighting against rising assessments that are, in many cases, pushing up annual tax payments significantly."
"Why does the O.C. chapter of the Building Industry Association no longer love me? I’m not sure. But parsing their public statement about my work last week. I’m guessing one beef ("Lansner regularly quotes sources with views far removed from other prominent housing market researchers") comes from an interview I did for my blog and The Register with investment adviser Peter Schiff. He boldly suggested O.C. home prices will fall 50 percent in this cycle."
Sign On San Diego - "California population nears 38 million, L.A. tops 4 million" (5-1-07)
"California's population is closing in on 38 million and its biggest city now has more than 4 million people, but the state's growth rate has slowed since the start of the decade, state officials said Tuesday. The Department of Finance's demographics unit said California had nearly 37.7 million residents as of on Jan. 1, up by about 470,000 since the start of 2006. One of every eight Americans now lives in the state."
Reuters - "Realtors' upbeat economist, Lereah, steps down" (5-1-07)
"The economist who prodded investors into the U.S. housing boom and has been skewered by bloggers during the bust is leaving a top real estate trade association, the group said Monday. David Lereah, the author of 'Are You Missing the Real Estate Boom?', will leave the the National Association of Realtors' by the middle of next month after serving as the head economist for seven years, a spokesman said."
Sign On San Diego - "Prices to start rebound next fall, forecast says" (5-1-07)
"Despite a surge in home foreclosures, the worst may be over for San Diego County's beleaguered housing market, according to a study to be released today by UCLA's Anderson Forecast, one of the state's leading economic think tanks. But that's not to say that home prices are going to immediately start going back up."
KCRA - "Investors Say They Were Duped In Real Estate Scam" (5-1-07)
"A three-month-long KCRA 3 investigation has uncovered millions of dollars of fraud in the local real estate market. Seven individuals, including Romano, have filed lawsuits alleging fraud, conspiracy and blatant misrepresentations by their loan officer, mortgage broker and real estate agent."
Yahoo - "Moral hazard is part of mortgage mess" (5-1-07)
"Today's subprime meltdown, and tomorrow's bigger Alt-A debacle, will bring out a lot of politicians who will demand that something be done to protect consumers from bad loans. But it's going to be hard to protect consumers without bailing out the lenders and investors who were behind those bad loan decisions. That's where moral hazard comes in."
CNN - "Homebuilder Centex posts loss" (5-1-07)
"Centex Corp., the fourth-largest U.S. home builder, reported a wider-than-expected fourth-quarter loss Monday as it responded to the U.S. real-estate slowdown by writing off and revaluing land and by exiting the sub-prime lending and commercial contracting businesses. For the fiscal fourth quarter ended March 31, Centex posted a loss from continuing operations of $22.3 million, or 18 cents a share, compared with its earlier forecast of break-even."
Herald Tribune - "'Soggy' economy renews fears about a recession" (5-1-07)
"Was former Federal Reserve Chairman Alan Greenspan right when he put the chance of a recession this year at one in three? A report released Friday showed the country logged its worst economic growth in four years in the opening quarter of 2007. That raised fresh questions about whether troubles in the U.S. housing market will spread and throw the economy into a tailspin before the year is out."
Palm Beach Post - "This Eden is garden of trouble for condos" (5-1-07)
"During the recent condo-conversion craze, the Eden was among the first projects to promise buyers a hip lifestyle in a downtown setting. But four years after sales first started, the project remains a hulking eyesore, partly gutted and nowhere near done. Work on the conversion has started, stopped, started and now stopped again. Now comes word that two of the complex's four buildings won't be finished anytime soon. Two sources say those buildings are undergoing a redesign that will push the Eden's completion date even further into the future. Meanwhile, residents who have moved into the first building won't be enjoying their clubhouse in coming days. Work on the 8,000-square-foot facility has ceased, and several subcontractors have filed liens in Palm Beach County over unpaid bills. Among them: the clubhouse's general contractor, InCom Restorations. The Jacksonville-based company filed a lien for $251,305 in March but was paid on that lien this month - only to file another lien for $171,565 on April 16, county records show."
North County Times - "Renters market: Competition, 'doubling up' cited as reasons for shift locally" (5-1--7)
"In San Diego County, vacancy rates among large rental complexes jumped from 1.84 percent to 4.54 percent during the six-month period from October through March 31, the highest six-month rate since 1995, according to a MarketPointe Realty Advisors' Rental Trends survey, which supplies information to rental property owners."
Seeking Alpha - "Home Equity Debt: The Long Slow Squeeze Continues" (5-1-07)
"One of the many ing after effects of the Greenspan term at the Fed is that huge amount of home equity that has been extracted but not yet paid back by homeowners with no intention of selling their home. If your mortgage is more than a few years old, it no longer makes sense to refinance the extracted equity back into a new first mortgage for three reasons. First, you'd have to start back at month one on the loan amortization schedule; second, you probably won't get a lower interest rate; and third, you'll have more loan fees to pay."
Dr. Housing Bubble - "Mission Accomplished: 3 Housing Issues: Multiple Bottoms, Declining Dollar, and More Sub-prime and Alt-A Defaults." (5-1-07)
"It is said that the definition of insanity is doing the same thing over and over and expecting a different result. If we adhere to this definition, housing pundits must be clinically insane because since the middle of 2006 we’ve been hearing rhetoric of “yes, today we’ve reached bottom.” Amazing how these folks live on one way streets. During the past seven years, each new record high was welcomed and when asked if this was a peak most would respond that the sky was the limit. No end in their immediate future. If up to them, housing would appreciate 20% each year until the end of time. Yet now that we’ve experienced only two moderately challenging quarters the housing complex is ready to throw in the towel and issue a Siren call that this is the absolute bottom, mission accomplished. They would like us to believe their rhetoric as gospel and ignore every fundamental economic indicator pointing to the contrary."
eFinanceDirectory.com - "NAR Changes Forecast for Housing Again" (5-1-07)
"The National Association of Realtors (NAR) is notorious for making optimistic predictions in regards to housing. After stating repeatedly that there was no such thing as a housing bubble in 2005, the NAR changed their stance in 2006, admitting that a price correction may be afoot. The association then called the bottom of the correction in August of 2006, September of 2006, and December of 2006. Now it seems they have changed their tune once again."
Mortgage Bankers Association - "Freddie Mac Enhances Loan Propector for Processing FHA Loans" (5-1-07)
"Freddie Mac has enhanced the credit funtionality of Loan Prospector, making it easier for lenders to assess Federal Housing Authority (FHA) mortgages.The change reduces the number of times lenders have to reorder merged credit for a FHA loan for a single borrower. With these changes, the lender will only have to reorder merged credit for a borrower when any of the following changes are made during the loan process: There is a change tosingle borrower’s critical borrower data. The credit data has expired past the 120 days of credit freshness for the merged credit report for a single borrower. The lender selects to order a joint merged credit report rather than a single merged credit report and vice versa."
Orange County Register - "Merrill Lynch scraps Option One's $1.5 billion credit line" (5-1-07)
"Let's see, it has been two weeks since H&R Block announced the planned sale of its subprime unit Option One Mortgage Corp. in Irvine to Cerberus Capital Management L.P. Well, the tax preparer from Kansas City, Missiouri already has hit a little snag, though nothing that will derail the deal at this point. The company said in a filing today that its mortgage unit lost a $1.5 billion credit line from Merrill Lynch & Co. Other investment banks reduced or rearranged their financial backing. For example, UBS cut its credit line from 1.5 billion to $750 million."
Real Estate Journal - "Homeowners Wage a Rebellion As Property-Tax Assessments Rise" (5-1-07)
"Falling home prices and rising property-tax assessments are fueling a grass-roots tax rebellion. From coastal Florida to the shores of Hawaii, homeowners are lodging record numbers of appeals, fighting against rising assessments that are, in many cases, pushing up annual tax payments significantly."
CNN - "WaMu clamps down on subprime lending" (4-30-07)
"Washington Mutual Inc. said it is making fewer subprime mortgages and emphasizing higher-quality loans to boost earnings and cut risk after its home loans unit lost $113 million from January to March. The largest U.S. savings and loan said Friday it is also significantly reducing loans that require little documentation of borrowers' income or assets and second mortgages that let borrowers buy homes with little or no money down."
CNN - "Homes: Big drop in speculation" (4-30-07)
"After years of big increases in the buying of real estate for investing, speculators fled many housing markets last year. Second-home sales dropped from 40 percent of all home sales to just 36 percent, according to a report released Monday by the National Association of Realtors (NAR)."
Bloomberg - "Treasuries Rise Most in Two Months Amid Stability in Inflation" (4-30-07)
"U.S. Treasury 10-year notes rose the most in more than two months as the measure of inflation favored by Federal Reserve policy makers showed consumer prices excluding food and energy were stable in March. The larger-than-forecast decline in inflation, as measured by the core personal consumption expenditures price index, bolstered the view that the Fed may cut interest rates this year after raising them 17 times between 2004 and 2006. Treasuries extended their gains after an industry report showed business activity slowed more than forecast this month."
Bloomberg "Housing? What Housing? I Don't See Any Housing" (4-30-07)
"Excluding housing, the U.S. economy is doing just fine. That's the latest rationalization of a select group of operators who think that the Bush administration's 4.6 percentage point cut in the top marginal tax rate and 5-point reduction in the top capital gains rate can protect the economy from any and all ills."
Houston Chronicle - "AHM 1Q Profit Shrinks 44 Percent" (4-30-07)
"American Home Mortgage Investment Corp. said Monday first-quarter profit shrank 44 percent because of mounting payment defaults and sagging home prices. The mortgage lender said net income fell to $30.7 million, or 54 cents per share, from $54.5 million, or $1.02 per share, in the first quarter of 2006."
Herald Tribune - "Moody's downgrades risky mortgage debt" (4-30-07)
"Moody's Investors Service, citing more subprime mortgage loan losses than forecast, has downgraded the ratings on 27 different pools of securities created over the past two years by Lehman Brothers Holdings. Bonds created through Lehman's Structured Asset Investment Loan Trust from 2005 and 2006 were cut because of "higher-than-anticipated rates of delinquency," Moody's said Friday."
Voices of San Diego - "In Acqua Vista, Some Owners Under Water" (4-30-07)
"New downtown condos were gold in 2004. Real estate countywide had exploded, giving decades-long homeowners some equity -- and a dangling carrot -- to invest in another property. Buyers rushed to deposit thousands of dollars to secure their spot and, in turn, their visions of a comfortable life, or perhaps retirement. But now, 14 of the building's 383 units are in foreclosure, according to RealtyTrac. Thirty-eight units are on the market, some listed at a loss. A few brightly colored "for sale by owner" and "for lease" signs stand out against the neutral beige and peach building. Some analysts and Realtors familiar with the project say its appeal is dimmed by its apartment-like qualities, such as white refrigerators instead of stainless steel and a flooring option called "marnoleum" instead of tile in many units floors eight and below."
Yahoo - "Jeremy Grantham: All the World's a Bubble" (4-30-07)
"How high will the Dow go? 15,000? 20,000? How about 36,000? While euphoria sweeps stock markets here and worldwide, there are at least a few voices of dissent. One, unsurprisingly, is legendary value investor Jeremy Grantham -- the man Dick Cheney, plus a lot of other rich people, trusts with his money. Grantham, chairman of Boston firm Grantham Mayo Van Otterloo, has been a voice of caution for years. But he has upped his concerns in his latest letter to shareholders. Grantham says we are now seeing the first worldwide bubble in history covering all asset classes."
The Market Oracle - "More Bad News on the US Housing Market" (4-30-07)
"First, total sales fell a sharp 8.4% to a seasonally-adjusted annual pace of 6.12 million. That was the single-biggest monthly decline in 18 years, and it left sales at their lowest level since June 2003. Second, prices fell again. While the year-over-year decline was just 0.3%, it was the eighth such drop in a row … the longest losing streak on record. Third, supply remains a major problem. The total number of homes for sale was just shy of 3.75 million units — 17% higher than a year ago."
Business Week - "Why This Slump Is Different" (4-30-07)
"As the housing downturn grinds on, that has become the mantra for everyone from homeowners and lenders to agents and investors. There have been previous busts, but this one is markedly different. Never before have home prices fallen so broadly: Median national home prices slipped 0.3% in March from a year earlier, and the National Association of Realtors predicts a fall of 0.7% for 2007, which would mark the first annual drop since the Great Depression era. And foreclosure filings are increasingly common, jumping 42% in 2006 to 1.2 million, calculates RealtyTrac. There's little relief in sight; in the first quarter, 2 million homeowners were at least 30 days late on their payments, an increase of 26% from last year, according to Moody's Economy.com Inc."
Realtor.org - "Vacation-Home Sales Rise to Record, Investment Sales Plummet in 2006" (4-30-07)
"Second-home sales were mixed in 2006, with the combined total of vacation- and investment-home sales accounting for 36 percent of all existing and new residential transactions – down from 40 percent of sales in 2005, according to the National Association of Realtors®. NAR’s annual Investment and Vacation Home Buyers Survey shows vacation-home sales rose 4.7 percent to a record 1.07 million in 2006 from 1.02 million in 2005, while investment-home sales fell sharply, down 28.9 percent to 1.65 million in 2006 from a record 2.32 million in 2005. By contrast, primary residence sales fell 4.1 percent to 4.82 million in 2006 from 5.02 million in 2005."
Real Estate Journal - "Taking Home Photos That Will Draw Buyers" (4-30-07)
"Selling a home used to be all about "curb appeal," or the first impression a property conveys to potential buyers as they pull up in front. A house that looks unattractive from the street won't sell, the mantra goes. These days, a property's "pix appeal," or attractiveness in photos posted in online listings, is equally as important. Eighty percent of home buyers used the Internet last year to search for a home, and nearly 25% reported that they first found the property they purchased on the Internet, according to a National Association of Realtors survey."
"Washington Mutual Inc. said it is making fewer subprime mortgages and emphasizing higher-quality loans to boost earnings and cut risk after its home loans unit lost $113 million from January to March. The largest U.S. savings and loan said Friday it is also significantly reducing loans that require little documentation of borrowers' income or assets and second mortgages that let borrowers buy homes with little or no money down."
CNN - "Homes: Big drop in speculation" (4-30-07)
"After years of big increases in the buying of real estate for investing, speculators fled many housing markets last year. Second-home sales dropped from 40 percent of all home sales to just 36 percent, according to a report released Monday by the National Association of Realtors (NAR)."
Bloomberg - "Treasuries Rise Most in Two Months Amid Stability in Inflation" (4-30-07)
"U.S. Treasury 10-year notes rose the most in more than two months as the measure of inflation favored by Federal Reserve policy makers showed consumer prices excluding food and energy were stable in March. The larger-than-forecast decline in inflation, as measured by the core personal consumption expenditures price index, bolstered the view that the Fed may cut interest rates this year after raising them 17 times between 2004 and 2006. Treasuries extended their gains after an industry report showed business activity slowed more than forecast this month."
Bloomberg "Housing? What Housing? I Don't See Any Housing" (4-30-07)
"Excluding housing, the U.S. economy is doing just fine. That's the latest rationalization of a select group of operators who think that the Bush administration's 4.6 percentage point cut in the top marginal tax rate and 5-point reduction in the top capital gains rate can protect the economy from any and all ills."
Houston Chronicle - "AHM 1Q Profit Shrinks 44 Percent" (4-30-07)
"American Home Mortgage Investment Corp. said Monday first-quarter profit shrank 44 percent because of mounting payment defaults and sagging home prices. The mortgage lender said net income fell to $30.7 million, or 54 cents per share, from $54.5 million, or $1.02 per share, in the first quarter of 2006."
Herald Tribune - "Moody's downgrades risky mortgage debt" (4-30-07)
"Moody's Investors Service, citing more subprime mortgage loan losses than forecast, has downgraded the ratings on 27 different pools of securities created over the past two years by Lehman Brothers Holdings. Bonds created through Lehman's Structured Asset Investment Loan Trust from 2005 and 2006 were cut because of "higher-than-anticipated rates of delinquency," Moody's said Friday."
Voices of San Diego - "In Acqua Vista, Some Owners Under Water" (4-30-07)
"New downtown condos were gold in 2004. Real estate countywide had exploded, giving decades-long homeowners some equity -- and a dangling carrot -- to invest in another property. Buyers rushed to deposit thousands of dollars to secure their spot and, in turn, their visions of a comfortable life, or perhaps retirement. But now, 14 of the building's 383 units are in foreclosure, according to RealtyTrac. Thirty-eight units are on the market, some listed at a loss. A few brightly colored "for sale by owner" and "for lease" signs stand out against the neutral beige and peach building. Some analysts and Realtors familiar with the project say its appeal is dimmed by its apartment-like qualities, such as white refrigerators instead of stainless steel and a flooring option called "marnoleum" instead of tile in many units floors eight and below."
Yahoo - "Jeremy Grantham: All the World's a Bubble" (4-30-07)
"How high will the Dow go? 15,000? 20,000? How about 36,000? While euphoria sweeps stock markets here and worldwide, there are at least a few voices of dissent. One, unsurprisingly, is legendary value investor Jeremy Grantham -- the man Dick Cheney, plus a lot of other rich people, trusts with his money. Grantham, chairman of Boston firm Grantham Mayo Van Otterloo, has been a voice of caution for years. But he has upped his concerns in his latest letter to shareholders. Grantham says we are now seeing the first worldwide bubble in history covering all asset classes."
The Market Oracle - "More Bad News on the US Housing Market" (4-30-07)
"First, total sales fell a sharp 8.4% to a seasonally-adjusted annual pace of 6.12 million. That was the single-biggest monthly decline in 18 years, and it left sales at their lowest level since June 2003. Second, prices fell again. While the year-over-year decline was just 0.3%, it was the eighth such drop in a row … the longest losing streak on record. Third, supply remains a major problem. The total number of homes for sale was just shy of 3.75 million units — 17% higher than a year ago."
Business Week - "Why This Slump Is Different" (4-30-07)
"As the housing downturn grinds on, that has become the mantra for everyone from homeowners and lenders to agents and investors. There have been previous busts, but this one is markedly different. Never before have home prices fallen so broadly: Median national home prices slipped 0.3% in March from a year earlier, and the National Association of Realtors predicts a fall of 0.7% for 2007, which would mark the first annual drop since the Great Depression era. And foreclosure filings are increasingly common, jumping 42% in 2006 to 1.2 million, calculates RealtyTrac. There's little relief in sight; in the first quarter, 2 million homeowners were at least 30 days late on their payments, an increase of 26% from last year, according to Moody's Economy.com Inc."
Realtor.org - "Vacation-Home Sales Rise to Record, Investment Sales Plummet in 2006" (4-30-07)
"Second-home sales were mixed in 2006, with the combined total of vacation- and investment-home sales accounting for 36 percent of all existing and new residential transactions – down from 40 percent of sales in 2005, according to the National Association of Realtors®. NAR’s annual Investment and Vacation Home Buyers Survey shows vacation-home sales rose 4.7 percent to a record 1.07 million in 2006 from 1.02 million in 2005, while investment-home sales fell sharply, down 28.9 percent to 1.65 million in 2006 from a record 2.32 million in 2005. By contrast, primary residence sales fell 4.1 percent to 4.82 million in 2006 from 5.02 million in 2005."
Real Estate Journal - "Taking Home Photos That Will Draw Buyers" (4-30-07)
"Selling a home used to be all about "curb appeal," or the first impression a property conveys to potential buyers as they pull up in front. A house that looks unattractive from the street won't sell, the mantra goes. These days, a property's "pix appeal," or attractiveness in photos posted in online listings, is equally as important. Eighty percent of home buyers used the Internet last year to search for a home, and nearly 25% reported that they first found the property they purchased on the Internet, according to a National Association of Realtors survey."
Orange County Register - "Inland Empire feels housing market's pain" (4-29-07)
"Prices for the area as a whole have yet to drop. But Inland Empire prices last month were virtually unchanged from a year ago. Annual percentage gains in price fell from 22 percent in San Bernardino County a year ago to 1 percent last month. In Riverside County, appreciation fell from 10 percent to 0.6 percent."
Times Herald-Record - "Subprime has further to fall" (4-29-07)
"The sharp decline of the subprime housing market offering high-cost mortgages hasn't yet hit bottom, the head of home mortgage buyer Freddie Mac said Friday. The number of home buyers starting such loans peaked last year, and interest rates for those buyers are due to rise in the next few years, which could cause foreclosures to spike further, Richard F. Syron said in an interview with The Associated Press."
CNN - "Wells Fargo to settle subprime lawsuit" (4-29-07)
"Wells Fargo & Co., the fifth-largest U.S. bank, has agreed to pay up to $6.8 million to settle a class-action lawsuit accusing it of improper nonprime mortgage lending practices in California. In a joint statement Thursday, the San Francisco-based bank and lawyers for the plaintiffs said Wells Fargo Financial Inc. will earmark $2.4 million to provide relief to class members who are more than 60 days late on loan payments."
"Prices for the area as a whole have yet to drop. But Inland Empire prices last month were virtually unchanged from a year ago. Annual percentage gains in price fell from 22 percent in San Bernardino County a year ago to 1 percent last month. In Riverside County, appreciation fell from 10 percent to 0.6 percent."
Times Herald-Record - "Subprime has further to fall" (4-29-07)
"The sharp decline of the subprime housing market offering high-cost mortgages hasn't yet hit bottom, the head of home mortgage buyer Freddie Mac said Friday. The number of home buyers starting such loans peaked last year, and interest rates for those buyers are due to rise in the next few years, which could cause foreclosures to spike further, Richard F. Syron said in an interview with The Associated Press."
CNN - "Wells Fargo to settle subprime lawsuit" (4-29-07)
"Wells Fargo & Co., the fifth-largest U.S. bank, has agreed to pay up to $6.8 million to settle a class-action lawsuit accusing it of improper nonprime mortgage lending practices in California. In a joint statement Thursday, the San Francisco-based bank and lawyers for the plaintiffs said Wells Fargo Financial Inc. will earmark $2.4 million to provide relief to class members who are more than 60 days late on loan payments."
Orange County Register - "Slow housing market predicted through 2008" (4-28-07)
"Expect the housing slump to continue at least through 2008, building industry officials said Friday at an annual conference hosted by the Orange County chapter of the Building Industry Association. Speakers focused on how the housing market has changed in the past year, citing declining sales, a drop in construction and a halt to land acquisitions."
Bloomberg - "Spending May Take a Hit as U.S. Home Prices Decline" (4-28-07)
"With home prices in danger of falling this year for the first time in at least four decades, Americans are turning wary about borrowing against their houses to pay for vacations, education or remodeling projects. In a reversal of the 'wealth effect,' people who once viewed soaring home values as a rationalization for higher spending appear to be pulling back."
Orange County Register - "Insider Q&A gets Cal State Fullerton's housing outlook" (4-28-07)
"Mira: As expected, housing downturn has continued in earnest during the current year and the data both at the national and local level confirm this outlook.
Nationally: (1) existing home sales declined 8.5 percent during 2006, compared to the previous year; (2) housing starts declined 12 percent (on an annualized basis) during 2006 and were down 38 percent (on a year-over-year basis) for the month of January; and (3) the median house price has declined from its prior peaks."
"Expect the housing slump to continue at least through 2008, building industry officials said Friday at an annual conference hosted by the Orange County chapter of the Building Industry Association. Speakers focused on how the housing market has changed in the past year, citing declining sales, a drop in construction and a halt to land acquisitions."
Bloomberg - "Spending May Take a Hit as U.S. Home Prices Decline" (4-28-07)
"With home prices in danger of falling this year for the first time in at least four decades, Americans are turning wary about borrowing against their houses to pay for vacations, education or remodeling projects. In a reversal of the 'wealth effect,' people who once viewed soaring home values as a rationalization for higher spending appear to be pulling back."
Orange County Register - "Insider Q&A gets Cal State Fullerton's housing outlook" (4-28-07)
"Mira: As expected, housing downturn has continued in earnest during the current year and the data both at the national and local level confirm this outlook.
Nationally: (1) existing home sales declined 8.5 percent during 2006, compared to the previous year; (2) housing starts declined 12 percent (on an annualized basis) during 2006 and were down 38 percent (on a year-over-year basis) for the month of January; and (3) the median house price has declined from its prior peaks."
MSNBC - "Baby boomers going bankrupt at faster rate" (4-27-07)
"Americans over the age of 55 are filing for bankruptcy at a faster rate than the general population as growing mortgage debt and higher health care costs make them more vulnerable, a new study shows. The trend of rising bankruptcies among older Americans is likely to continue for the foreseeable future, according to the study’s authors, John Golmant and Tom Ulrich, researchers at the Administrative Office of the U.S. Courts."
Bloomberg - "U.S. Economy: Growth Slows to Least in Four Years" (4-27-07)
"The U.S. economy grew last quarter at the slowest pace in four years because of the housing slump and a bigger trade deficit, leaving consumer spending to keep the expansion alive. The 1.3 percent annual growth rate was less than forecast and followed a 2.5 percent fourth-quarter pace, the Commerce Department reported today in Washington. A measure of inflation watched by the Federal Reserve rose at a faster pace."
CNN - "Mortgages that put you in charge" (4-27-07)
"Usually, when borrowers want to restructure their mortgages - go from a fixed-rate to a variable rate, for example - they have to refinance, an onerous, expensive process. There are new closing cost, legal fees and title search and insurance fees that could add thousands of dollars to the mortgage principals. But the new product from Washington Mutual (Charts, Fortune 500) (WaMu), called Mortgage Plus, gives customers the ability to switch the type of loan they have without going through a refinance."
CNN - "Housing vacancies hit record high" (4-27-07)
"In the latest sign of weakness in the housing market, there are now a record number of homes sitting vacant and for sale in the United States, and the percentage of Americans owning a home has slipped slightly. A Census Bureau reported Friday that there are were a record 2.18 million homes for sale in the first quarter, which were not occupied, up 4 percent from the record levels seen in the fourth quarter, and up 38 percent from year earlier levels."
"AVMs, or automated valuation models, are good enough to give lenders a 30,000-ft. view of local housing values, especially when they are lending only 75% or so what they house is really worth. But they just won't do on a house-by-house basis when lenders are putting up 95% or more of the home's value. Whether or not you are seeking a home-equity loan or a primary mortgage, if your lender is relying on an AVM, ask to have your place valued by a human being who actually looks at your specific house, compares it to others in the neighborhood, checks out the community and does all the things an appraiser is supposed to do. In most cases, lenders will bow to your wishes, especially if you are willing to write the check to cover the several hundred dollars a full appraisal will cost."
MSN - "Rising foreclosures have widespread fallout" (4-27-07)
"The number of foreclosure filings -- from default notices to repossessions -- continued to surge in March, increasing 47% from the same period a year earlier and 7% from February. The 149,150 filings represent a foreclosure rate of one in every 775 households, according to Irvine, Calif.-based RealtyTrac. The March increase in foreclosures bucks the historical trend, lenders say. Typically, foreclosure activity declines in March, as more homeowners use tax refunds to bail themselves out of mortgage shortfalls caused by job loss, health problems or divorce."
World Net Daily - "U.S. economy poised for nose dive" (4-27-07)
"As the dollar sinks to near-record lows against the euro and the British pound, the stock market has returned to record highs, but investors are being advised to anticipate a worldwide downturn and the U.S. economy may have already entered a recession."
Bloomberg - "Homebuilders May Break Loan Covenants, Moody's Says" (4-27-07)
"U.S. homebuilders are in jeopardy of violating their lending agreements in coming months because of a drop in sales, according to Moody's Investors Service. More than half, or 11, of the 21 builders that Moody's rates failed to generate more cash than they spent in 2006, analyst Joseph Snider in New York said in a report today. Homebuilders often have to promise banks that they will have twice as much operating revenue as interest expenses over a given time or the bank can demand immediate repayment of a loan, Snider said."
Sun-Sentinel - "BankAtlantic's 1Q profits drop amid rise in troubled real estate loans" (4-27-07)
"BankAtlantic Bancorp. first-quarter profits dropped as the bank reported a sharp rise in troubled real estate loans. The bank said earnings fell to 9 cents a share or $5.7 million compared to 10 cents a share or $6.5 million in the three months ended in March. The company recorded a loss from continuing operations of $2.2 million compared to income from continuing operations of $8 million for the first quarter of 2006."
People's Daily Online - "California becomes U.S. largest state in foreclosure fillings" (4-27-07)
"California became the biggest state in the United States in terms of foreclosure fillings, taking up about 18 percent of the national total, according to figures released on Wednesday. The state reported 80,595 first-quarter foreclosure filings, numerically more than any other state, said RealtyTrac which provided the figures."
Seeking Alpha - "Selling Your Credit Score" (4-27-07)
"When your credit scores don't qualify you for the home mortgage you want, where do you turn? That's an especially timely question now, as banks and mortgage companies tighten underwriting standards for applicants with less than perfect credit. But federal and state authorities fear that some borrowers are turning to a fast-growing business on the Internet: companies that claim to boost credit scores by transplanting the credit DNA of people with excellent payment histories into the credit files of people with subpar histories -- ostensibly without breaking any law."
Mortgage Bankers Association - "Ginnie Mae Allows Zero Day Delay Fixed Rate Securities" (4-27-07)
"Ginnie Mae announeces that effective for transactions with a closing date of May 30, 2007, and thereafter, Ginnie Mae will permit Fixed Rate bonds to be structured as Zero Day Delay classes for REMIC transactions. Currently, Ginnie Mae permits only Floating Rate and Inverse Floating Rate bonds to be structured as Zero Day Delay classes for REMIC transactions. This enhancement will improve the marketability of Ginnie Mae Multiclass securities and increase the investor base for these securities."
Orange County Register - "Wells Fargo settles suit over subprime practices" (4-27-07)
"The company said it pledges to continue for three years certain improvements it had already put into practice and to enact a default relief program for qualifying class members. The relief program earmarks $2.4 million to provide relief to qualifying class members whose loans have become more than 60 days delinquent, and up to $4.4 million for cash payments to class members who submit claims. Class members are certain California customers who entered into real-estate-secured loans with Wells Fargo Financial between Dec. 18, 1999, and Nov. 20, 2005. The Association of Community Organizations for Reform Now, a party to the suit, had alleged that the company failed to adequately disclose points and prepayment penalties and inaccurately reported the loan balances of some California customers to credit reporting agencies."
LA Times - "Earnings fall at 2 mortgage firms but loan standards rise" (4-27-07)
"Profit fell 37% at Countrywide, the nation's No. 1 mortgage lender, mainly because of problems with sub-prime loans to customers with shaky credit, heavy debt loads or other financial risks. Earnings dropped 34% at IndyMac, a Countrywide spinoff that specializes in borrowers a notch above sub-prime who can't get the cheapest prime loans. But both companies have tightened their lending standards amid rising delinquencies. Countrywide's earnings report, in particular, provided details about how the riskiest sorts of sub-prime loans have become all but extinct."
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