Wednesday, April 30, 2008

Mortgage Bankers Association - "Mortgage Applications Decrease In Latest MBA Weekly Survey" (4-30-08)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 25, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 567.0, a decrease of 11.1 percent on a seasonally adjusted basis from 637.6 one week earlier. On an unadjusted basis, the Index decreased 10.2 percent compared with the previous week and was down 14.2 percent compared with the same week one year earlier."

Bloomberg - "Citigroup Increases Stock Offering to $4.5 Billion" (4-30-08)

"Citigroup Inc., under pressure to bolster capital depleted by mounting losses, sold $4.5 billion of stock, 50 percent more than it planned. Citigroup fell as much as 4 percent in New York trading after the biggest U.S. bank said in a statement that it priced 178.1 million shares at $25.27 each, a discount to yesterday's closing price of $26.32. The sale represents about 3 percent of the bank's shares outstanding as of March 31."

The San Diego Union Tribune - "Housing prices off 19.2% in S.D. area" (4-30-08)

"The Standard & Poor's/Case-Shiller home-price index for February, which was released yesterday, showed San Diego County prices down 19.2 percent from February 2007. San Diego, which ranked fifth out of 20 markets surveyed, trailed Las Vegas, which was down 22.8 percent; Miami, down 21.7 percent; Phoenix, down 20.8 percent; and Los Angeles, down 19.4 percent over the same period."

CNBC - "FDIC Finalizing Direct Home Loan Plans: WSJ" (4-30-08)

"Federal Deposit Insurance Corp Chairman Sheila Bair is finalizing a legislative proposal that will let the Treasury Department issue direct loans for nearly 1 million homeowners, in a move to prop up the housing market, the Wall Street Journal said on Wednesday. The plan, which needs Congress approval, would permit new government loans so borrowers can repay up to 20 percent of the principal they owe on their mortgage, the report said, citing confidential draft of the proposal."

Bloomberg - "Jones Lang Declines After Earnings Miss Analysts' Estimates" (4-30-08)

"Jones Lang LaSalle Inc., the second-largest commercial property broker, fell as much as 10 percent in New York trading after earnings missed analysts' estimates. First-quarter net income declined to $2.8 million, or 9 cents a share, the Chicago-based company said yesterday in a statement after the regular trading. Analysts on average projected net income of 69 cents a share."

Orange County Register - "Building slump zaps drywall prices 36%" (4-30-08)

"Sheetrock-brand wallboard maker USG says its average North America selling price for its signature product was $104.41 per thousand square feet in the first quarter, down 36% from $164.12 in the year ago period."

Orange County Register - "O.C. mortgage debt slipped in 2007" (4-30-08)

"TransUnion, one of the big three credit-reporting agencies, said the average mortgage debt in Orange County dropped at the end of 2007 for the first time in two years. The average consumer mortgage debt of $410,093 in the fourth quarter of 2007 was down 3.4 percent from the prior quarter, the first time it dropped quarter-to-quarter since the end of 2005 (back then it was a meager 0.5 percent dip.)"

Orange County Register - "Industrial property still hot in O.C." (4-30-08)

"Grubb & Ellis says the place to be in O.C. real estate during the first quarter was in warehouses and other industrial space. Industrial vacancies here remained tight at 4.3% during the first quarter, just slightly above the 4% in the fourth quarter of 2007. That compares to the office market, which saw the vacancy rate jump to 14.9%."

Wall Street Journal - "Room to Rise? In Hotels, Operators Have an Edge Over Owners" (4-30-08)

"For investors trying to determine which hotel companies are best positioned to ride out a downturn, economic and construction data don't tell the whole story. The industry has evolved over the past decade into two groups. One is composed of companies that manage and operate hotels, such as InterContinental Hotels Group PLC, Starwood Hotels & Resorts Worldwide Inc., and Wyndham Hotels & Resorts LLC, a unit of Wyndham Worldwide Corp. The other group is composed of real-estate investment trusts that build, buy and own hotel properties; most REITs aren't household names."

Wall Street Journal - "Wells Fargo Is Sanctioned For Role in Mortgage Woes" (4-30-08)

"a federal bankruptcy judge has penalized a trustee, San Francisco-based Wells Fargo & Co., imposing a $250,000 sanction against it. The judge last week said Wells Fargo failed to monitor a mortgage-servicing company that the court found took improper actions in a consumer-bankruptcy case and made misrepresentations to the court."

Tuesday, April 29, 2008

Yahoo - "Home prices sink at record clip; foreclosures keep mounting" (4-29-08)

In a bad omen for sellers and lenders this spring home selling season, the erosion of house values is accelerating and foreclosure filings are doubling, new data showed Tuesday. A closely watched index of home prices in 20 cities fell almost 13 percent in February from a year earlier, a record for the seven-year-old S&P's/Case-Shiller Home Price index. The report follows news that foreclosure filings between January and March also hit a new high, and comes a day after the government said the number of vacant homes on the market also hit a record."

Bloomberg - "Bonds, Stocks Show Bernanke Fixing Financial System" (4-29-08)

"Federal Reserve Chairman Ben S. Bernanke is persuading investors that the financial markets are working again. The Standard & Poor's 500 Index gained 7.88 percent since the central bank backed the purchase of Bear Stearns Cos. on March 16. Companies sold $45.3 billion of debt last week, the most ever. High-yield bonds are poised for their best month in five years and mortgage securities are outperforming Treasuries for the first time in 2008."

Bloomberg - "More Subprime, Alt-A Mortgages May Head `Underwater'" (4-29-08)

About half of recent subprime and Alt-A borrowers may soon owe more on their mortgages than their houses are worth or hold minimal equity, putting $800 billion of debt at greater risk of default, according to Barclays Capital. Subprime loans from 2006 and 2007 that exceed the value of the homes jumped 5 percentage points to 19.8 percent in the fourth quarter, and may reach 26 percent by midyear if prices drop at the same pace, Barclays analysts wrote in a report yesterday. Alt-A loans, a grade better than subprime, would grow to 23 percent from 16.3 percent."

Forbes - "Worst Cities For Homeowner Debt" (4-29-08)

This article contains a chart listing information like the median home price and the total mortgages of each city

The San Diego Union Tribune - "State budget '$20 billion out of whack'" (4-29-08)

"Gov. Arnold Schwarzenegger said yesterday that the state budget is “$20 billion out of whack,” a startling figure that doubles some previous estimates. A shortfall of that size in a projected general fund of $101 billion would create more pressure for deep cuts and tax increases to balance a budget for the fiscal year that begins July 1."

Market Watch - "
Countrywide posts $893 million first-quarter loss" (4-29-08)

"Troubled mortgage lender Countrywide Financial Corp. continued to hemorrhage money in a toughening housing climate, reporting Tuesday that it lost $893 million in the first quarter compared to a profit of $434 million during the same period last year."

Yahoo - "Homes facing foreclosure more than doubled in 1Q from 2007" (4-29-08)

The number of U.S. homes heading toward foreclosure more than doubled in the first quarter from a year earlier, as weakening property values and tighter lending left many homeowners powerless to prevent homes from being auctioned to the highest bidder, a research firm said Monday."

Realty Times - "Real Estate Marketing Strategies - Getting Your Clients to Buy Now!" (4-29-08)

"Have you been feeling frustrated at clients who don't seem to be able to make a decision? At the beginning they seem interested in buying, either they've contacted you or you contacted them. Then as they see some homes may begin listening to the news about today's marketplace, they start to get cold feet."

Realty Times - "Mortgage Fraud Now An Organized Crime Staple" (4-29-08)

"Fraud associated with home loans first cashed in on the greed that came with the previously booming housing market, when some buyers would do anything to own a home. The cons used falsified applications, inflated appraisals and other techniques to get home loans approved on the home buying end."

Realty Times - "
Condo Trends: The Good, The Bad, The Ugly of Condo Fees" (4-29-08)

"The problem with condo fees, is that the monthly expense is rolled into your debt-to-income-ratio by mortgage lenders and can affect your buying power. For instance, if you have a condo fee of $300 per month, your purchasing power could drop by $50,000 if you were buying a home with a 6 percent mortgage on a 30-year note."

Orange County Register - "Closing HELOCs could bite banks, report says" (4-29-08)

"KBW said there’s an additional $1.2 trillion in outstanding debt on credit lines and home-equity loans. To put the numbers in perspective, the total of $2.2 trillion (used and unused HELOCs and home-equity loans) equates to 20 percent of outstanding first-mortgage debt and roughly 85 percent of outstanding non-mortgage consumer debt ($2.5 trillion), the report found."

Monday, April 28, 2008

Bloomberg - "Dollar Slide Drives Budget as Japan Shuns Treasuries" (4-28-08)

The Japanese, who own $586.6 billion, or 12 percent of U.S. government debt, had their worst quarter in Treasuries this decade, losing 7 percent in the first three months of the year as the dollar fell to the lowest since 1995 versus the yen, Merrill Lynch & Co. indexes show. Dai-ichi Mutual Life Insurance Co., Meiji Yasuda Life Insurance Co. and Sumitomo Life Insurance Co., three of the nation's four-biggest insurers, would rather accept the world's lowest bond yields in Japan than buy U.S. debt."

Yahoo - "Vacant homes set new record high in first quarter" (4-28-08)

The percentage of vacant homes for sale in the U.S. set a new record high in the first quarter of this year, the government said Monday. The Census Bureau report shows that 2.9 percent of U.S. homes -- excluding rental properties -- were vacant and up for sale, compared with 2.8 percent in the fourth quarter of 2007. It was the highest quarterly number in records going back to 1956."

Bloomberg - "KB Home's Broad Says Home Prices May Drop Another 20%" (4-28-08)

Eli Broad, a philanthropist and co- founder of KB Home, the fifth-largest U.S. homebuilder by revenue, said he expects home prices to drop another 20 percent."

Bloomberg - "Maguire Chairman Proposes to Purchase 75% of Company" (4-28-08)

Maguire offered $21 per share, or 23 percent more than the closing price of $17.07 on April 25, for 75 percent of the company. He is proposing the company sell most of its assets outside Orange County and pay investors a special dividend funded by the proceeds, Maguire Properties said in a statement today. Maguire fell 45 cents, or 2.6 percent, to $16.62 at 4:01 p.m. in New York Stock Exchange composite trading."

Bloomberg - "Zell Says Macklowe Will Get $6 Billion for New York Buildings" (4-28-08)

Harry Macklowe should raise about $6 billion from the sale of seven New York office towers that he bought for $7 billion from Blackstone Group LP last year, according to Sam Zell, the real estate investor who sold the properties to Blackstone."

Realty Times - "Washington Report: Fannie and Freddie Under Fire From Groups" (4-28-08)

"Private mortgage insurers -- who work hand in hand with Fannie and Freddie by writing coverage on loans with downpayments less than 20 percent -- are enforcing even more extensive and restrictive lists of declining markets. Some industry estimates put the total number of Zip codes affected across the country at between 8,000 and 12,000."
Ventura County Star - "Home quality dropping with prices" (4-26-08)

"Stoked by a rash of short sales and other distressed transactions, inventory of homes on the market has swelled as demand has sagged. Quality also has become an issue as strapped homeowners seemed to have lost that 'pride of ownership.'Properties foreclosed on within the past year accounted for 35.2 percent of the existing homes sold in Ventura County during March, according to DataQuick Information Systems."

The San Diego Union Tribune - "Resales of homes a house divided" (4-27-08)

San Diego County's unprecedented housing downturn has created a sharp split in the resale market, with foreclosed properties selling at steep discounts while other homes take a much smaller hit. Although values are down in all categories, the variance between the resale prices of foreclosed and regular properties is dramatic."

Orange County Register - "
O.C. building slump hits non-home projects, too" (4-27-08)

"Construction Industry Research Board, Burbank-based group tracking building permits statewide, says planned construction in Orange County of commercial, industrial and other non-residential projects in O.C. fell to the lowest level in six years.That’s one reason why the estimated value of all building permits combined (see chart above) was $663 million for January through March this year, or a little more than half the value of permits issued during the first three months of 2007. Last year’s value was the high for the decade, with permits valued at nearly $1.3 billion in the first quarter."

The San Diego Union Tribune - "'Declining market' tag may threaten recovery" (4-27-08)

Could widespread designations of entire ZIP codes, metropolitan areas – even entire states – as 'declining markets' hinder a real estate recovery and hurt minority groups and moderate-income buyers disproportionately? Growing ranks of critics say the answer is yes. Since late 2007, most lenders, insurers and mortgage investment firms have compiled lists of local markets that they consider to be posing higher risks because housing values are dropping. Within those areas, borrowers are charged higher rates, loan fees and down payments – costs that can rise significantly when applicants have credit scores below designated minimum levels."

Friday, April 25, 2008

CBIA - "New-Home Production Down Again in March, CBIA Announces" (4-25-08)

"According to housing permit data supplied by the Construction Industry Research Board, total housing starts in California, as measured by building permits issued, dropped 65 percent in March when compared to the same month a year ago to 4,713 units. Production of single-family homes fell 63 percent while construction of multifamily units decreased 68 percent when compared to March of 2007."

CAR - "C.A.R. reports sales decreased 24.5 percent, median home price fell 29 percent in March" (4-25-08)

Home sales decreased 24.5 percent in March in California compared with the same period a year ago, while the median price of an existing home fell 29 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today."

Bloomberg - "
Homeowners Convert to Costlier Fixed-Rate Loans Amid ARM Fears" (4-25-08)

Mortgage refinancing in the U.S. is increasing as record numbers of homeowners dump their adjustable-rate mortgages for the security of a fixed loan. The amount of refinanced home loans will reach $321 billion by the end of June, the most in a year, according to estimates from Washington-based Fannie Mae, the largest buyer of mortgages. Nine out of 10 of those borrowers will choose a fixed rate, Fannie Mae said."

Yahoo - "Many states appear to be in recession as deficits grow" (4-25-08)

The finances of many states have deteriorated so badly that they appear to be in a recession, regardless of whether that's true for the nation as a whole, a survey of all 50 state fiscal directors concludes."

Bloomberg - "Loan Derivatives Index Soars as Banks Find Takers for LBO Debt" (4-25-08)

A gauge of investor confidence in the U.S. leveraged-loan market is headed for its biggest monthly increase since being created last year as banks find ways to sell loans they have been stuck with the past 10 months."

Bloomberg - "Steel Says Premature to Call U.S. Credit Crisis Over" (4-25-08)

Treasury Undersecretary Robert Steel said it's premature to say that financial market turmoil stemming from tightening credit conditions is near an end."

Orange County Register - "O.C. builder defaults on $235 million debt" (4-25-08)

"An Irvine developer defaulted on a $235 million loan borrowed against Bakersfield’s planned McAllister Ranch golf course community, chalking up what’s probably Kern’s largest soured debt so far in the current market downturn. A default notice recorded Tuesday in Kern County shows SunCal Cos., the company behind the 6,000-home project, owes late payments totaling more than $4 million to lender Lehman Commercial Paper Inc., a New Jersey-based financial company."

Orange County Register - "Subprime fraud rampant at end of housing boom" (4-25-08)

"The State Foreclosure Prevention Working Group came to this conclusion after noticing a 'worsening trend' of subprime loans going into delinquency prior to an increase in monthly payments due to the end of a low introductory teaser rate. For example, in the group’s first report based on data from Oct. 2007 it found the percentage of loans facing reset in Q3 2009 that are currently delinquent was 21.4%. That figure increased to 28.5%, based on more recent data from January 2008."

Realty Times - "Inflation Jitters Push Mortgage Rates Up This Week" (4-25-08)

"Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.03 percent with an average 0.3 point for the week ending April 24, 2008, up from last week when it averaged 5.88 percent. Last year at this time, the 30-year FRM averaged 6.16 percent."

The Wall Street Journal - "Rising Property Taxes Fill Gaps, Pinch Homeowners" (4-25-08)

"Faced with revenue shortfalls, local governments across the U.S. are raising property-tax rates, angering homeowners already hit by the housing slump and economic slowdown. Spring Valley, N.Y., approved a 9.7% increase in the property-tax rate to balance its budget. A number of fast-growing suburbs around Washington, D.C., have raised rates, while Memphis Mayor Willie Herenton has proposed a 17% increase in the property-tax rate to close a budget gap."

Thursday, April 24, 2008

NAHB - "Builders Lead The Way In Energy Efficient Housing, Congress Told" (4-24-08)

"Calling green building 'the next evolution in residential construction,' the National Association of Home Builders (NAHB) told Congress today that the best way to help small home builders promote residential energy efficiency and sustainability technology in home construction is by extending tax incentives for new energy-efficient homes."

Market Watch - "New-home sales sink 8.5% to 17-year low" (4-24-08)

"The decline in new-home sales to a seasonally adjusted annual rate of 526,000 was much weaker than the 577,000 pace expected by economists surveyed by MarketWatch. New-home sales are down 36.6% compared with a year ago and are down 62% from the peak in July 2005. February's sales pace was revised lower to 575,000 from 590,000"

CNN - "Homebuilders: No recovery until 2009" (4-24-08)

"The damaged housing and home construction markets will continue to take a beating at least through the end of the year, according to economists who spoke Thursday at a forecast conference sponsored by the National Association of Home Builders. The economists said the deterioration of the housing market helped the U.S. economy slip into a recession that will continue through June. They said high oil prices will continue to hamper consumer spending, and the ongoing credit crisis will make home financing difficult, stalling a housing recovery until at least 2009."

CNN - "Rates on 30-year mortgages top 6%" (4-24-08)

"Rates on 30-year mortgages topped 6% for the first time in six weeks as financial markets grew more worried about rising inflation pressures. Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.03% this week after three straight weeks at 5.88%. Rates on 30-year mortgages were last above 6% the week of March 16 when they averaged 6.13%."

Realty Times - "Real Estate Outlook: Index Says Positive Growth Underway" (4-24-08)

"You might not hear much about them on TV or in the papers, but there are some economic signs popping up right now that are -- at the VERY least -- encouraging for housing and real estate."

Realty Times - "Regional Report: West" (4-24-08)

"'s list of the 25 worst housing markets in 2008 is dominated by California, who has 8 cities in the list. Of the remaining 17 cities, 4 are from other western states like Arizona and Oregon. Our agents in some western cities don't necessarily echo these dire reports about the overall market."

Realty Times - "Tax Rebate Uses For Sellers" (4-24-08)

"Starting in May, the U.S. Treasury Department will begin sending rebates to taxpayers, who had $3,000 of income, filed a 2007 tax return and have a valid Social Security number. Eligible taxpayers will receive up to $600 ($1,200 for married couples). Parents will receive an additional $300 for each eligible child younger than 17."

Realty Times - "Is the Single Member LLC a New IRS Target?" (4-24-08)

"A little known Court Case has just sent ripples through the business community. If you, or someone you know, has one of the 1.2 million Limited Liability Companies in the US today, you'll want to read this alert."

Wednesday, April 23, 2008

Mortgage Bankers Application - "Mortgage Applications Decrease In Latest MBA Weekly Survey" (4-23-08)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 18, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 637.6, a decrease of 14.2 percent on a seasonally adjusted basis from 743.4 one week earlier. On an unadjusted basis, the Index decreased 13.4 percent compared with the previous week and was down 3.2 percent compared with the same week one year earlier."

USA Today - "Renters can't escape housing foreclosure crisis" (4-23-08)

"The most brutal real estate slump in decades is reverberating through the rental market. Renters in properties that are being foreclosed on are being evicted. Homeowners forced into foreclosure are becoming tenants again and driving up rents. And renters not yet ready to buy a home — shut out by stricter lending rules or hoping to buy after prices fall still further — are creating a dynamic shift: Even as real estate is sputtering, the rental market is surging."

Bloomberg - "Ambac Posts Loss on CDO Writedown, New Business Drop" (4-23-08)

"Ambac Financial Group Inc., the bond insurer that lost 93 percent of its stock market value in the past year, posted a wider loss than analysts estimated after $3.1 billion in charges for subprime-mortgage securities. The world's second-largest bond insurer tumbled 43 percent in New York Stock Exchange trading after reporting a first- quarter net loss of $1.66 billion, or $11.69 a share. The company also revised claims estimates higher by $2 billion and said it may be in violation of at least one loan covenant."

Bloomberg - "Credit Suisse May Post Quarterly Loss on SF5 Billion Writedown" (4-23-08)

"The world's biggest banks and securities firms have reported credit losses and writedowns of $290 billion since the start of 2007 following the collapse of the U.S. subprime mortgage market."

The Washington - "Lenders Swamped by Delinquent Mortgages" (4-23-08)

"Seven out of 10 troubled mortgage borrowers remain without a plan to work out their loans despite increased industry efforts to help them, according to a new report from a coalition of state attorneys general and banking regulators. The group collected data from 13 of the largest subprime lenders from October through January and found that the lenders are overwhelmed by their workloads and unable to keep pace with the number of borrowers who are falling behind on payments."

The Washington Post - "Effort to Rein In Fannie, Freddie Gains Steam" (4-23-08)

"Treasury Department officials have stepped up efforts to strengthen the regulation of Fannie Mae and Freddie Mac, the two largest buyers of home mortgages, pressing key senators to break a legislative stalemate that has lasted for years. The recent turmoil in credit markets has refocused attention on Fannie Mae and Freddie Mac, which play a vital role in supporting the U.S. mortgage market. About 80 percent of all home loans are now bought by these two federally chartered companies, according to Freddie Mac."

Bloomberg - "Morgan Stanley Raises $2.5 Billion for Real Estate" (4-23-08)

"Morgan Stanley, seeking profits amid the decline in real estate values, raised an additional $2.5 billion for a global property fund that will invest part of its assets in U.S. mortgage debt. About half of the new money in the Special Situations Fund III will be spent in the U.S., Spain and the U.K., as well as other developed markets in Europe and Asia, said John Carrafiell, joint global head of real estate investing for Morgan Stanley. The rest will be invested in emerging markets."

Bloomberg - "Kimball Hill, U.S. Homebuilder, Files for Bankruptcy" (4-23-08)

"Kimball Hill Inc., a closely held homebuilder active in five U.S. states and 29 affiliates, filed for Chapter 11 bankruptcy protection as demand for new homes tumbles. The Rolling Meadows, Illinois-based company listed assets of $795.5 million and debt of $631.9 million as of Dec. 31 in documents filed today in U.S. Bankruptcy Court in Chicago. Kimball Hill sells houses in California, Illinois, Florida, Texas and Las Vegas."

Bloomberg - "Pulte Loss Widens to $696.1 Million in Housing Slump" (4-23-08)

"Pulte Homes Inc., the fourth-largest U.S. homebuilder, reported a $696.1 million first-quarter net loss, about three times wider than analysts expected, as stricter mortgage-lending standards cut demand. The net loss swelled to $2.75 a share, from $85.7 million, or 34 cents, a year earlier, the Bloomfield Hills, Michigan-based company said today in a statement. Pulte's sixth consecutive quarterly loss included $663.6 million of expenses to write down the value of land. Revenue declined 23 percent to $1.45 billion."

Bloomberg - "GE Real Estate Buys EU1.27 Billion of Property Loans" (4-23-08)

"General Electric Co. bought 1.27 billion euros ($2.03 billion) worth of commercial-property loans in Europe, the U.S. firm's second acquisition of such loans in five months. The 39 loans were bought from closely held Capmark Financial Group Inc. at a discount, Michael Rowan, GE's head of real estate in the U.K., said in an interview today. Most of the loans are backed by properties in Germany, according to Rowan, who declined to disclose the purchase price."

Bloomberg - "U.S. Architects' Services Index Falls to Record as Demand Slows" (4-23-08)

"Slowing demand for U.S. architectural services last month drove down a billings index to a record, as developers cut back plans for commercial construction this year, the American Institute of Architects said. The Architecture Billings Index dropped to 39.7 last month from 41.8 in February, the Washington-based institute said today in a statement. The score was the lowest since the survey's inception in November 1995. Any score below 50 indicates a decrease in billings from the previous month."

Tuesday, April 22, 2008

NAR - "Existing-Home Sales Slip in March" (4-22-08)

"Existing-home sales – including single-family, townhomes, condominiums and co-ops – were down 2.0 percent to a seasonally adjusted annual rate (1) of 4.93 million units in March from a level of 5.03 million in February, and remain 19.3 percent below the 6.11 million-unit pace in March 2007. A rise in condo sales in March was offset by a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South."

DQNews - "Another Jump in California Foreclosure Activity" (4-22-08)

"The number of California homes going into foreclosure jumped last quarter to its highest level in more than 15 years, as the market continued to works its way through declining home values and a pool of at-risk mortgages that were originated in 2005 and 2006, a real estate information service reported. Lending institutions sent homeowners 113,676 default notices during the January-to-March period. That was up by 39.4 percent from 81,550 the previous quarter, and up 143.1 percent from 46,760 for first-quarter 2007, according to DataQuick Information Systems."

The San Diego Union Tribune - "Banks report more disheartening results" (4-22-08)

"Nine months after the crisis in the American mortgage market began to tear through the financial world, the cost to banks, in terms of their own sinking investments, is approaching $300 billion. To shore up their weakened finances, one bank after another is racing to raise capital – a total of $160 billion so far. The pain is far from over. Even the most optimistic forecasters say banks will suffer billions of dollars in additional write-downs on mortgage investments and other debt in the months ahead. The final figure for the banks' write-downs could eventually exceed $750 billion – twice some early estimates – if the economy sinks into a prolonged recession, some analysts say."

Bloomberg - "Bobbleheads Get Cynical in Lawsuits Over Muni Swaps" (4-22-08)

"Several state and local bond issuers are suing their dealers and underwriters in class-action lawsuits piggybacking on the Securities and Exchange Commission's investigation into bid- rigging in the municipal market. The lawsuits, which began sprouting in March and now number at least four, don't say anything new. They resemble the various news stories that have appeared on the subject in recent years, almost all of which were based upon Internal Revenue Service letters to issuers. These were usually revealed only as part of 'material-event notices' that issuers have to send out if the IRS comes calling."

CNN - "Many problems with mortgage bailouts" (4-22-08)

"Congress appears eager to help more than a million homeowners facing foreclosure, but a proposal aimed at fixing the battered housing market could instead end up as the latest blow to a recovery. An ambitious plan proposed by Rep. Barney Frank and Sen. Chris Dodd calls for up to $300 billion in loan guarantees from the Federal Housing Administration to refinance loans that homeowners can't afford as long as the original lender reduces the principal on the loan to 85% of the home's current market value."

Orange County Register - "Downey’s problematic assets increase by $521 million in Q1" (4-22-08)

"Downey Financial continues to see loans go sour even as it refinances some folks out of loans that allow them to defer interest and principal payments to the future. Its total nonperforming assets rose by $521 million in the first quarter to $1.562 billion and represented 11.9% of total assets, vs. 0.9% a year ago."

Orange County Register - "Calif. home prices down 22.48%, nation’s worst" (4-22-08)

"First American LoanPerformance says California home prices were falling at a 22.48% annual pace in late March, again, worst in the nation. Next in this dubious line was Florida (-17.41%), then Nevada (-16.67%), Arizona (-16.32%), and Ohio (-10.78%.) California has been at the bottom of this national ranking since May."

Monday, April 21, 2008

Bloomberg - "Citigroup Plans to Sell $6 Billion of Hybrid Bonds" (4-21-08)

Citigroup Inc., after posting almost $16 billion in writedowns, is bolstering capital by selling $6 billion of preferred shares in its biggest public debt offering. The perpetual hybrid bonds may pay 8.4 percent for 10 years, according to a person who declined to be named because terms aren't set."

Bloomberg - "National City May Get $7 Billion to Replenish Capital" (4-21-08)

National City Corp., Ohio's biggest bank and subprime lender, may get $6 billion to $7 billion from a group led by Corsair Capital LLC to bolster its balance sheet, said a person with knowledge of the situation. The investors will pay $5 a share, said the person, who didn't want to be identified before a possible announcement later today. National City slid 8.4 percent to $7.65 in premarket trading today at 8:35 a.m. in New York."

Bloomberg - "Bank of America Net Income Falls 77% on Writedowns" (4-21-08)

Bank of America Corp., the second- largest U.S. bank, said profit dropped for a third straight quarter as the company set aside $6.01 billion for bad loans. First-quarter net income declined 77 percent to $1.21 billion from $5.26 billion a year earlier, the Charlotte, North Carolina-based bank said today in a statement. The results fell short of analysts' estimates and sent the bank's stock down 2.5 percent in New York trading."

MSN - "Average Joe still can't afford a home" (4-21-08)

"Comparing housing costs in 210 metropolitan areas with the wages earned by workers in 60 occupations, the study found that homeownership is often unaffordable for workers in each of the five-fastest growing occupations -- registered nurses, retail salespeople, customer-service representatives, food-preparation workers and office clerks. Registered nurses, who typically have high salaries, were unable to purchase a median-priced home in 108 of the markets."

The Washington Post - "Housing Sense in Congress?" (4-21-08)

"Presidential candidates insist that Washington needs fixing, and we in the commentariat love to expose hypocrisy, pork-barreling and gridlock. So it feels awkward to admit the truth about the subprime meltdown. First Congress produced a timely and well-crafted stimulus. Now it is working on proposals to help homeowners, and with one ugly exception, the recommendations are sound."

CNN - "The trillion-dollar mortgage time bomb" (4-21-08)

"Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac. Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money."

CNN - "When a HELOC freezes over" (4-21-08)

"As of September, delinquencies on HELOCs were up 47% year over year, according to; the numbers are expected to be worse in 2008. In response, Countrywide has already suspended an estimated 122,000 lines, many in high-foreclosure-rate states, and USAA has frozen or reduced some 15,000 accounts.Bank of America, Chase and Citibank, among others, are following suit."

CNN - "Waiting for a subprime perp walk" (4-21-08)

"Admit it. you want to see some justice handed out on Wall Street. Thanks to the Great Mortgage Panic of 2008, your home value is tumbling, credit is harder to get and the job market may turn a lot tougher. And let's not even talk about your 401(k) balance. It's natural to be angry when forces beyond your control mess with your life. So we're looking for villains. Some people - especially Wall Street people - blame feckless, house-hungry borrowers. Then there were regulators who didn't bother to regulate. But the heart of the matter is that Wall Street went nuts. Again."

Orange County Register - "Downey reports $248 million loss, says reduced pay-option loans" (4-21-08)

"Downey Financial in Newport Beach reported Monday a first-quarter loss of $248 million, vs. a profit of $43 million a year ago. It’s suspending its dividend to shore up capital amid soft housing and credit markets."

Orange County Register - "Realtors volunteer as foreclosure counselors" (4-21-08)

"The Orange County Association of Realtors donated $20,000 to support foreclosure counseling by the Fair Housing Council of Orange County, the council announced last week. In addition, more than 50 real estate agents have been trained as volunteers to support the foreclosure counseling process and about 100 volunteers more are expected to be trained, said Connie Der Torossian, the council’s vice president of marketing and outreach."
Los Angeles Times - "How troubled borrowers can try for a mortgage write-down" (4-20-08)

"For you to get the same deal -- to get your lender to write down the value of the loan by 20% to 25% -- the lender must be shown that taking such a cut is the only logical choice. You want to show that if you fail, the loan's owner will be getting back a house that is worth less than it has invested in it."

Los Angeles Times - "The muted market" (4-20-08)

"Twenty-three families checked out the bedrooms (small), dining room (large) and kitchen (upgraded) during the four-hour open house on a recent cool, cloudy Sunday. Three expressed interest in buying the three-bedroom 'character home,' as Coldwell Banker agent Denise Barnes described the 1,364-square-foot 1922 California bungalow, reduced to $605,000 from $645,000. But most said they were waiting for prices to drop further."
The San Diego Union Tribune - "Silver lining in the midst of more bad housing news" (4-19-08)

Buried beneath all the sour news of rising foreclosures and declining prices last week was a bit of good news for the San Diego County housing market: Prices have finally fallen low enough to achieve some semblance of affordability for potential home buyers. With the median price down to $385,000 – roughly the same as in summer 2003 – much of the frothiness of the Great San Diego Housing Bubble has melted away."

Option ARMageddon - "
Bring back the Gold Standard?" (4-19-08)

"It's time to confront currency disorder. Our goal should be to put forward a new proposal for international monetary relations on the scale of the 1944 Bretton Woods agreement, invoking the same sentiments that inspired architects John Maynard Keynes and Harry Dexter White to provide a foundation of hope for a world all too prone to violence. A global system based on a universally-accepted monetary asset -- the U.S. has the world's highest level of official gold reserves, followed by Germany and France -- would not only counter Russia's offensive. It would convert a national security threat into a golden opportunity."

Friday, April 18, 2008

Money News - "Hussman: Mortgage Crisis Just Beginning" (4-18-08)

"The subprime mortgage crisis is far from over and may still only be in its early stages, says money fund guru John Hussman, who manages the $3.18 billion Hussman Strategic Growth Fund. Hussman reckons the U.S. economy is just starting the game of mortgage defaults and has many more innings to go. He points to the number of adjustable mortgages yet to reset to higher rates — so high that many more foreclosures are inevitable."

Times Online - "Morgan Stanley predicts one in ten homeowners ‘facing negative equity’" (4-18-08)

"House prices will fall by 15 per cent in the next two years, pushing one in ten homeowners into negative equity, a leading investment bank has forecast. Morgan Stanley predicts that 1.2 million people will be in negative equity, owing more money on their mortgage than their home is worth — levels not seen since the early 1990s."

Yahoo - "Is It Time to Buy Real Estate?" (4-18-08)

"Representatives of the NAR say that this makes it the best buyer's market in a long time. Prices are down, interest rates are near a 45-year low and the supply of houses is high."

CNN - "Momentum builds for foreclosure relief" (4-18-08)

"Congress isn't done debating how best to stem the foreclosure crisis, but one near-certainty has emerged: Lawmakers will pull together a housing bill that expands Washington's role in helping troubled borrowers. Key legislators, Bush administration officials, banking regulators and the presidential candidates have lined up behind the idea of letting the Federal Housing Administration back new loans for homeowners at risk of foreclosure."

Bloomberg - "Citigroup Reports Loss on Writedowns, Credit Costs" (4-18-08)

Citigroup, the biggest U.S. bank by assets, reported almost $16 billion of trading writedowns and increased bad loan reserves as customers fell behind on home, car and credit-card payments. The New York-based company's net loss of $1.02 a share compared with an estimate of $1.66 by Merrill Lynch & Co.'s Guy Moszkowski, Institutional Investor's top-rated brokerage analyst, who had predicted an $18 billion writedown."

Bloomberg - "Two-Year Treasury Notes Post Biggest Weekly Decline Since 2001" (4-18-08)

U.S. two-year Treasury notes posted their biggest weekly decline since 2001 as better-than-forecast revenue from Citigroup Inc. spurred gains in stocks and decreased demand for government debt."

Bloomberg - "Auction-Bond Probes Widen as Cuomo Subpoenas 18 Firms" (4-18-08)

Regulators are widening their probes into the collapse of the auction-rate securities market as states from New York to Washington scrutinize how Wall Street peddled the bonds to investors and issuers. New York Attorney General Andrew Cuomo subpoenaed 18 banks and securities firms including UBS AG and Merrill Lynch & Co. in an investigation that could lead to criminal charges, a person familiar with the probe said yesterday. Officials from nine other states formed a task force to determine whether brokers misrepresented the debt as an alternative to money-market investments when they sold it to individuals."

Bloomberg - "Bush Names SBA Head Preston as Housing Secretary" (4-18-08)

President George W. Bush today named Steven C. Preston secretary of U.S. Housing and Urban Development, replacing Alphonso Jackson, who resigned amid a federal criminal probe into contracts awarded by the agency. Preston, head of the Small Business Administration, would be the nation's 14th HUD secretary. Jackson announced his resignation March 31 amid calls by lawmakers for him to step down. His last day on the job was today."

Bloomberg - "Former Fannie Mae Executives to Pay $31.4 Million" (4-18-08)

Former Fannie Mae Chief Executive Officer Franklin Raines and two deputies agreed to a $31.4 million settlement with the government over allegations they inflated earnings at the largest U.S. mortgage-finance company. Raines is paying $24.7 million, including a $2 million penalty and the forfeiture of stock options, the Office of Federal Housing Enterprise Oversight said in a statement today. Former Chief Financial Officer Timothy Howard will surrender $6.4 million, and Leanne Spencer, who was the Washington-based company's controller, was fined $275,000."

Orange County Register - "
Foreclosure rate in central O.C. 10 times that of coast" (4-18-08)

"DataQuick’s math shows that in the first quarter ‘08 in Orange County there were more than 10 foreclosures per 1,000 houses and condos in a couple of ZIP codes in Santa Ana, while some areas along the coast had less than 1 foreclosure per 1,000. I have a story and big map running in Sunday’s newspaper, but wanted to give you a preview of the map. Dark green is less than 1 per 1,000 and dark red is 6 per 1,000 and higher."

Orange County Register - "K. Hovnanian closing Irvine office" (4-18-08)

"New Jersey-based builder K. Hovnanian Homes has filed a report with the state indicating that it plans to close its Southern California Coastal Region office in Irvine, consolidating its Orange County operations with the Southern California Inland Region in Ontario. As many as 60 positions are being eliminated in the two offices as well as in K. Hovnanian’s field offices from San Diego to the lower central valley, said Nicholas Pappas, the Coastal Region president in Irvine. About 30 of the employees based in Irvine will be jobless when the office closes by May 23, about a dozen of them because they are unwilling to commute to the Ontario office."

Thursday, April 17, 2008

DQNews - "Bay Area home sales remain at two-decade low" (4-17-08)

"A total of 4,898 new and resale houses and condos sold in the nine- county Bay Area in March. That was up 22.8 percent from 3,989 in February, and down 41.1 percent from 8,317 for March 2007, DataQuick Information Systems reported."

The Californian - "HOUSING: Bargain-hunters swarm market" (4-17-08)

"Escrows closed on 522 homes in March, the largest number since August 2006, according to monthly totals from the region's most widely used real estate listing service. The number rose by double digits from year-ago levels in January, and again in February and in March."

Bloomberg - "Merrill Posts Loss on Mortgage Writedowns, Cuts Jobs" (4-17-08)

"Merrill Lynch & Co. posted its third straight quarterly loss and said it will cut about 3,000 more jobs after the credit-market seizure forced the investment bank to write down about $6.5 billion of debt. The smaller-than-estimated charge helped push Merrill shares up as much as 4.7 percent. Analysts including Roger Freeman of Lehman Brothers Holdings Inc. had predicted markdowns of as much as $8 billion. The first-quarter net loss of $1.96 billion, or $2.19 a share, compared with earnings of $2.16 billion, or $2.26, a year earlier, Merrill said."

Bloomberg - "CIT Group Posts Loss on Bad Loans, Cuts Dividend" (4-17-08)

"CIT Group Inc., the commercial lender trying to escape a cash squeeze, cut its dividend and said the firm was unprofitable for a fourth straight quarter after failing to staunch losses on home and student loans. The lender rose 6.1 percent in New York trading after CIT said it found buyers for more than $5 billion of assets and has money to meet obligations into 2009. The first quarter's $249.7 million loss before preferred dividends, or $1.35 a share, compares with a profit of $208.1 million, or $1.01 a share, in the same period a year earlier, according to a statement."

Bloomberg - "Roski Plans $800 Million NFL Stadium in Los Angeles" (4-17-08)

"Developer Edward P. Roski Jr. announced plans to build a new $800 million stadium in Los Angeles to lure a National Football League team to the city. The arena would be constructed on an almost 600-acre site in the City of Industry and include 75,000 seats and 175 suites, Roski said today in a statement. He said he wants to purchase a team or become a minority owner in one, and won't build until a franchise agrees to move to Los Angeles."

Bloomberg - "FBI's Mueller Says Subprime Fraud Probe May Lead to Hedge Funds" (4-17-08)

"FBI Director Robert Mueller said the agency's investigations into the subprime loan meltdown may uncover financial crimes committed by hedge funds and private equity firms. Federal Bureau of Investigation agents have opened 19 criminal probes of companies in connection with the lending crisis, focusing on accounting fraud, insider trading and allegations of deceptive sales practices. Mueller, speaking today to an American Bar Association group in Washington, said he expects more to come as housing prices continue to fall. "

Reuters - "Banks' caution an economic threat: Kohn" (4-17-08)

"U.S. growth has stumbled after the collapse of the subprime mortgage market made financial firms seek refuge from spiraling losses, triggering global financial turmoil prompting the Fed to slash interest rates by 3 percentage points since September."

Orange County Register - "O.C. apartment vacancies hit near 13-year high" (4-17-08)

"Real Facts reports that vacancies in O.C.’s biggest apartment complexes jumped to 6.6% in the first quarter, a level that renters have not seen since 1995’s third quarter as new units hit the market amid a slowing economy."

Orange County Register - "Home-sales tsunami reaches O.C. beach towns" (4-17-08)

"Analysis of DataQuick’s March homebuying report shows the county’s beach-close communities are no longer immune from the current housing slump. DataQuick identified 295 homes selling in beach cities’ ZIP codes last month, a 46% drop from a year ago. In these 17 ZIPs, last month’s median price change was off 11.9% vs. a year ago."

The Wall Street Journal - "Why Lenders Are Leery Of Short Sales" (4-17-08)

"As more people fall behind on their mortgages, lenders have been slow to take advantage of a longstanding alternative to foreclosure -- a so-called short sale. At first glance, a short sale might seem like a win-win for everyone involved. In such an arrangement, the borrower sells the home for less than the amount owed, with the lender forgiving the difference. The sale releases borrowers from their obligations. For mortgage holders, it can be less costly than foreclosing -- and could provide protection against future price drops. For buyers, it can be a chance to buy a home at an attractive price."

The Wall Street Journal - "Freddie Mac to Unveil Lenders' Pact" (4-17-08)

"Freddie Mac is expected to announce Thursday an agreement with three major mortgage lenders aimed at making more funds available for large home loans. The agreement is with Wells Fargo & Co., J.P. Morgan Chase & Co. and Citigroup Inc., Freddie officials said."

Wednesday, April 16, 2008

NAHB - "Housing Starts Fall Further In March" (4-16-08)

"Builders continued to reduce the pace of new-home construction in March amidst ongoing erosion in the overall economy and credit markets, according to the latest figures released today by the U.S. Commerce Department. Total housing starts fell nearly 12 percent to a seasonally adjusted annual rate of 947,000 units for the month, while single-family starts fell 5.7 percent to a rate of 680,000 units."

NAHB - "Builders Report Credit Squeeze On Loans To Build Homes" (4-16-08)

"Presently, funding for viable residential development and construction projects has been severely limited or blocked entirely at federally insured depository institutions, which are the sole source of housing production credit for the small businesses that comprise most of the home building industry, Mitchell told lawmakers."

Mortgage Bankers Association - "REFIs, FHA Lead Increase In Latest MBA Weekly Survey" (4-16-08)

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 11, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 743.4, an increase of 2.5 percent on a seasonally adjusted basis from 725.6 one week earlier. On an unadjusted basis, the Index increased 2.7 percent compared with the previous week and was up 16.4 percent compared with the same week one year earlier."

CNBC - "
Most Americans Say Now Is Good Time to Buy a House" (4-16-08)

"A majority of Americans think now is a good time to buy a home, although few believe the U.S. economy can escape a recession, according to a Reuters/Zogby poll released Wednesday. The survey of 1,049 likely voters found that 53.8 percent thought this was a good buying opportunity as home prices have fallen sharply in many parts of the country. Some 41.6 percent said it was not a good time to buy, and the rest were unsure."

Orange County Register - "OC/LA rent hikes lowest in 8 years" (4-16-08)

"Rents for a primary residence in the LA-OC-Riverside area increased at a 4.4% annual rate in March, a major slide from the 6.9% clocked in March of last year. It was the lowest year-over-year increase since November of 2000, when rents rose at a 4.3% annual pace. March was the third consecutive month annual rent increases declined. The annual rate was 5.9% in January and 5.3% in February."

The Wall Street Journal - "Sunny Side of the Street" (4-16-08)

"Is now a good time to buy real estate? The size of your paycheck likely will play a big part in how you answer that question. While many average Americans are skittish about the housing market, some of the country's richest citizens see the current conditions as perfect for buying, according to the Annual Survey of Affluence and Wealth in America, released on Tuesday by the American Express Publishing Corp. and Harrison Group, a market research and consulting firm."

Bloomberg - "JPMorgan's Dimon Says Real Estate Is `Getting Worse'" (4-16-08)

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he expects U.S. home prices to drop as much as 9 percent this year as even borrowers with the best credit have difficulty keeping up their mortgage payments."
NAHB - "Builder Confidence Remains Unchanged In April" (4-15-08)

"Builder confidence in the market for new single-family homes remained unchanged for a third consecutive month in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI held at 20, up marginally from the record low of 18 set in December of 2007 (the series began in January of 1985)."

NAHB - "Nation Now In Mild Recession, Says NAHB Chief Economist" (4-15-08)

"The deepening slump in the nation’s housing markets has seriously eroded consumer sentiment and pushed the economy into a mild recession, according to the chief economist for the National Association of Home Builders (NAHB)."

DQNews - "Southland home sales log tepid gain; record price drop" (4-15-08)

"A total of 12,808 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in March. That was up 18.8 percent from 10,777 the previous month but down 41.4 percent from 21,856 in March 2007, according to DataQuick Information Systems."

CBIA - "California New Home Market Stays Cold in February, CBIA Announces" (4-15-08)

"The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that new home sales in February were 57 percent below February 2007. While a significant decline, the drop is a small improvement from the year-over-year decline of over 62% in January. During February, 3,191 homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 7,458 in February 2007. Sales of single family homes dropped by 52 percent, while sales of townhomes and 'plexes' – duplexes, triplexes, etc. – were down 48 percent and sales of condominiums were down 79 percent."

Bloomberg - "Swaps Tied to Losses Became `Frankenstein's Monster'" (4-15-08)

The credit-default swap market has become a lesson in being careful what you wish for now that Wall Street has taken $245 billion of losses partly tied to such exotica. Rather than dispersing risk and lowering borrowing costs as former Federal Reserve Chairman Alan Greenspan predicted, the contracts have exacerbated the debt crisis. What was intended as a way for lenders to protect against defaults spawned a market covering $45 trillion of bonds and loans where no one knows how much is traded and speculators who bet on deteriorating credit quality end up forcing that reality."

Monday, April 14, 2008

Bloomberg - "Wachovia Posts Loss, Plans $7 Billion Capital Raising" (4-14-08)

"Wachovia Corp., the fourth-largest U.S. bank, sold $7 billion of stock and cut the dividend after bad home loans in California triggered an unexpected first-quarter loss. The $393 million loss compared with profit of $2.3 billion a year earlier, Wachovia said in a statement today. Wachovia fell the most intraday since the 1987 crash in New York trading after the bank disclosed plans to sell shares at 14 percent less than last week's closing price and cut 500 investment banking jobs, mostly in New York and Charlotte. The stock ended the day down 8.1 percent."

Bloomberg - "Nothing Special With Treasuries as Fed Has Mortgages" (4-14-08)

"The dollar isn't the only casualty of the Federal Reserve's rescue of seized-up credit markets. Bond traders are finding there is nothing special about Treasuries anymore, now that the Fed accepts substitutes for government securities as collateral -- having concluded it wasn't enough to reduce the benchmark interest rate for overnight bank loans six times since September."

Times Online - "US Federal Reserve says that credit crisis is not over yet" (4-14-08)

"The credit crisis engulfing the banking system on both sides of the Atlantic has further to run, said the vice-chairman of the US Federal Reserve. As the US Treasury Secretary and central bankers gave warning that proposed financial reforms would not prevent a repeat of the biggest shock to the world economy since the Great Depression, Donald Kohn, of the Fed, said of the present trouble: 'It is not over yet.'"

CNN - "Majority not buying homes, poll shows" (4-14-08)

"A growing majority say they won't buy a home anytime soon, the latest sign of increasing pessimism about the nation's housing crisis, a poll showed Monday. In a vivid sketch of how the sputtering real estate market is causing distress throughout the country, the Associated Press-AOL Money & Finance poll found that more than a quarter of homeowners worry their home will lose value over the next two years."

Bloomberg - "Bernanke, Greenspan Agree Cash Arms Firms for Slump" (4-14-08)

"The U.S. economy has what Alan Greenspan calls one 'major advantage' as it falls into a recession: Businesses are in far better financial shape than they were entering the past two contractions. Corporations outside of financial services -- from Cisco Systems Inc. to Coca-Cola Co. -- have collectively socked away more than half a trillion dollars in cash. They have also reduced short-term debt and cut inventories to near record-low levels in relation to sales, leaving them better prepared than in the past to weather a contraction."

Bloomberg - "Auction Rate Collapse Brings Bondholders 12% After-Tax Return" (4-14-08)

"The collapse of the $330 billion auction-rate debt market, a disaster for issuers and stranded bondholders, has made it possible for investors to earn 10 percent or more on top-rated securities. Puerto Rico's tax-free AAA 2024 general obligation bonds are paying 12 percent, equivalent to an 18.5 percent yield on taxable issues. That compares with rates of 4.3 percent for 10-year U.S. Treasuries and 10.5 percent for corporate high- yield, high-risk debt, according to indexes compiled by Merrill Lynch & Co."

Bloomberg - "CEO Pay Helped Fuel Subprime Crisis, AFL-CIO Says" (4-14-08)

"Pay plans for chief executive officers helped create the subprime-mortgage crisis by encouraging companies to take on too much risk for short-term gains, the AFL-CIO said in an analysis."

Orange County Register - "Economic slowdown hits O.C. office marketEconomic slowdown hits O.C. office market" (4-14-08)

"Voit Commercial Brokerage says economic uncertainty hit the O.C. office market in the first quarter, with vacancies rising into double-digit territory while lease rates and construction declined."

Orange County Register - "O.C. 3rd in U.S. for least affordable rents" (4-14-08)

"The National Low Income Housing Coalition ranks Orange County as the third most expensive metropolitan area in the U.S. in terms of wages needed to afford the fair market rent. The coalition’s Out of Reach 2007-2008 report estimates that 58% of tenants here can’t afford rents based on their income."

Los Angeles Times - "Listing prices down $130K from peak" (4-14-08)

"Median listing prices in Greater Los Angeles fell another $5,000 in the past week, and have now declined $130,000 from their bubble peak, according to Housing Tracker's analysis of MLS listings."

Friday, April 11, 2008

Voice of San Diego - "Jury Says Realtor Not to Blame for Purchase Price" (4-11-08)

"What are the responsibilities of a real estate agent? The real estate camp was concerned that if the plaintiffs won Thursday, it would catalyze and focus a growing urge around the country to find someone to blame -- and to hold financially responsible -- when houses aren't worth as much as their buyers once paid. Those who sided with the Ummels worried their case would be chalked up to rich people problems, a matter of a measly $150,000 in the scope of a million-dollar tract home near a golf course in North County."

Bloomberg - "Subprime Forces More Insurer CEO Pay Cuts Than Storms" (4-11-08)

Subprime mortgages have proved to be a bigger catastrophe for captains of the insurance industry than any natural disaster. American International Group Inc. cut the 2007 cash bonus for Chief Executive Officer Martin Sullivan by 42 percent as the world's largest insurer reported its biggest quarterly loss in 89 years. Ambac Financial Group Inc. denied Robert Genader any bonus, slashed his cash compensation by 71 percent and then replaced him in January. The reduction was the most of any insurer in the Standard & Poor's 500 Insurance Index."

New York Post - "ECONOMIC HYSTERIA" (4-11-08)

"MEDIA hysteria over the mortgage crisis is almost certainly misleading countless people about prospects for the real economy. The US economy is likely in recession. Yet even that conclusion may be premature - it rests on a short sample of slim evidence. Industrial production has fallen for only one month. First-time claims for unemployment insurance touched recession levels for just one week."

Bloomberg - "WaMu Estimates Cut by Goldman, Short Sale Recommended" (4-11-08)

Washington Mutual Inc.'s 2008 loss will be wider than first estimated, according to Goldman Sachs Group Inc., which recommended selling the shares short. Goldman analysts including James Fotheringham increased their estimate for Seattle-based Washington Mutual's full-year loss to $3.30 a share from $1 after the company's 'highly dilutive' share sale, the securities firm said today in a note to investors. Goldman helped arrange the $7 billion transaction earlier this week at 33 percent below the market price."

Yahoo - "G7 finance chiefs look for ways past credit crisis" (4-11-08)

Finance chiefs from rich nations gathered on Friday to agree on the best course to navigate beyond a credit crisis that threatens to trigger a global recession. With fresh signs of economic distress in the United States, where consumer confidence hit its lowest level since 1982, Group of Seven leaders acknowledged that global growth prospects had dimmed."

Bloomberg - "Lehman CFO Says Market Recovery May Take Until 2009" (4-11-08)

The global credit market crisis worsened last month and recovery for the securities industry may take until next year, Lehman Brothers Holdings Inc. Chief Financial Officer Erin Callan said."

Bloomberg - "Wachovia Tightens Standards for Home Loans Nationally" (4-11-08)

Wachovia Corp., the fourth-largest U.S. bank, will require minimum credit scores for mortgage borrowers and will reduce loan-to-value ratios because of the weak U.S. housing market."

Bloomberg - "Subprime Forces More Insurer CEO Pay Cuts Than Storms" (4-11-08)

Subprime mortgages have proved to be a bigger catastrophe for captains of the insurance industry than any natural disaster. American International Group Inc. cut the 2007 cash bonus for Chief Executive Officer Martin Sullivan by 42 percent as the world's largest insurer reported its biggest quarterly loss in 89 years. Ambac Financial Group Inc. denied Robert Genader any bonus, slashed his cash compensation by 71 percent and then replaced him in January. The reduction was the most of any insurer in the Standard & Poor's 500 Insurance Index."

Orange County Register - "Late-March home sales up in just 5 O.C. ZIPs" (4-11-08)

"DataQuick’s latest look at O.C.housing purchases shows that just 5 of 83 local ZIP codes enjoyed year-to-year sales growth in the 22 business days ended March 26. (The lucky five? Irvine 92618, Anaheim 92805, Orange 92865, Santa Ana 92703 — yes, Santa Ana, and Dana Point 92624.) Overall, sales were down 41%."