Monday, June 30, 2008

Charles Hugh Smith - "Let the Banks Go Under, Sell 10 Million Houses for $1 Each" (6-30-08)

"Today's target: the notion that the collapse of the insolvent U.S. banking system would be so terrible. Really? Terrible for who? Certainly not the nation at large. In fact the dissolution of the insolvent parts of the U.S. banking sector--yes, the investment banks, the money-center banks, the regional banks, and the savings and loans--would actually be an enormously positive development for the nation and indeed the world."

Yahoo - "The Next Victim of the Real Estate Crisis" (6-30-08)

"States are facing flat or even declining revenues even as costs for salaries, fuel, and construction increase. And revenues will only plunge further as the housing slump and credit crunch begin to reflect more in lower property assessments and sales and income taxes. With fewer homes being sold, homeowners are spending less on new furniture, carpets, bathroom and kitchen fixtures, and other household costs. Americans struggling just to make mortgage payments and fill fuel tanks have less to spend on discretionary purchases. Income tax is down as a result of job losses and shrinking profits for corporations, including those in the construction business."

Bloomberg - "Homeowners Fall Further Behind on Mortgage Payments" (6-30-08)

"In the worst housing slump since the Great Depression, 67,967 homeowners with mortgage insurance fell at least 60 days behind on their loans, compared with 40,687 who got back on track, the Mortgage Insurance Companies of America reported today. Borrowers who take on debt of more than 80 percent of a home's value are often required to buy coverage that pays lenders if they default."

Bloomberg - "Treasury Bear Market to Worsen Under Bernanke's Fed" (6-30-08)

"The biggest bear market in Treasuries since 2004 may get worse. Unlike four years ago, when Federal Reserve Chairman Alan Greenspan embarked on 17 consecutive interest-rate increases to contain the threat of rising consumer prices, his successor Ben S. Bernanke is giving investors few assurances that the scourge of inflation will abate anytime soon."

Bloomberg - "California Under Schwarzenegger Underperforms Davis" (6-30-08)

"As the most populous U.S. state, with a gross domestic product that's No. 8 in the world, California is so strapped for cash that it must consider a short-term, $10 billion loan to cover its bills. The widening deficit means the financing may be about 0.85 percentage point more expensive than five years ago, when Davis lost his job over a budget gap twice as large as the $17 billion deficit the state now faces. That's an added $8.5 million on every $1 billion borrowed."

Orange County Register - "Demand for O.C. homes takes first ‘08 dip" (6-30-08)

"Market watcher Steve Thomas at Re/Max Real Estate Services‘ latest report raises a question about the durability of the spring’s buying spurt. Thomas says that shoppers’ demand for O.C. housing, measured by the MLS tally of homes placed in pending escrows in the prior month, fell last week for the first time in 2008."

Orange County Register - "Distressed homes now 40% of O.C. supply" (6-30-08)

"Home market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo reports that the number of O.C. distressed properties (homes listed by agents as foreclosures or short sales) was 5,946 last week, up 48 vs. two weeks earlier or a 0.8% gain. Two weeks ago, distressed homes for sale fell by 7, the first drop of 2008."

Orange County Register - "Commercial construction down 34% in 2008" (6-30-08)

"The Construction Industry Research Board reports that plans for new office, industrial and retail space are down by two-thirds or more so far this year, accounting for the bulk of the declines in non-residential building permit values this year so far. verall, non-residential construction is off 34% in the first five months of the year vs. the same January-May period in 2007, the research board reported."

Bloomberg - "KB Home's Broad Says Investors `Better Off in Cash'" (6-30-08)

"Eli Broad, the philanthropist and founder of KB Home, said the growing number of vacant U.S. homes, mortgage-related losses at banks and declining consumer confidence have convinced him investors are 'letter off in cash' right now."

Bloomberg - "Genworth Mortgage Unit's Rating Reduced by Moody's" (6-30-08)

"Genworth Financial Inc., the insurer spun off by General Electric Co., had the financial strength rating of its mortgage insurance unit cut by Moody's Investors Service. 'The downgrade reflects historically high mortgage defaults and uncertainty about ultimate losses,' Moody's said today in a statement about the Richmond, Virginia-based insurer. The subsidiary was cut to Aa3 from Aa2, the rating company said"

Bloomberg - "Insurers' Catastrophe Claims Rise at Fastest Pace Since 1994" (6-30-08)

"U.S. property and casualty insurers have been hit with $8.9 billion in catastrophe claims so far this year for the highest first-half total since 1994, amid a surge in tornado-related damage, Insurance Services Office Inc. said."
Telegraph.Co.Uk - "Barclays warns of a financial storm as Federal Reserve's credibility crumbles" (6-28-08)

"Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall 'below zero'."

The Market Oracle - "US House Prices Forecast 2008-2010" (6-29-08)

"US House prices continued to plunge for April 08 data, reaching an extreme low reading of down 16.3% on a year earlier as measured by the S&P/ Case-Shiller Composite-10 and down more than 19% from the mid 2006 peak. The rate of decline is the worst since the Great Depression and signals further distress in the real estate linked credit markets and therefore a continuing drag on the US economy in the face of the continuing deleveraging of the mortgage backed derivatives markets. "

The New York Times - "As Housing Bill Evolves, Crisis Grows Deeper" (6-29-08)

"More than three million borrowers are in distress, and analysts are forecasting a couple of million more will fall behind on their payments in the coming year as home prices fall further and the economy weakens."

Orange County Register - "Gov. Arnold says Calif. will ‘grow out’ of housing ills by ‘09" (6-29-08)

"GOV. SCHWARZENEGGER: Well, no, I think that, you know, there were big mistakes made by borrowers and there were big mistakes made by lenders. And I think that everyone was on such a roll and the real estate market always, every year, went up and up and up, and so people started speculating. And, of course, what happened was the housing market was like the dot-com bubble, it was a housing bubble, and it finally — the whole thing collapsed. And now we have to just wait until we grow our way out of this situation. And I think that by next year we will grow out of it."

Friday, June 27, 2008

Yahoo - "BofA to cut 7,500 jobs after Countrywide deal" (6-27-08)

"Bank of America said Thursday it will cut about 7,500 jobs after it closes its acquisition of mortgage lender Countrywide Financial Corp. The job cuts amount to about 12.5 percent of the combined companies' mortgage, home equity and insurance businesses, after the purchase is completed next week."

Bloomberg - "KB Home Reports Loss as Slump Hurts U.S. House Sales" (6-27-08)

"KB Home, the Los Angeles-based homebuilder founded by Eli Broad, reported its fifth straight quarterly loss as rising mortgage rates and falling prices reduced demand for homes. The fiscal second-quarter net loss was $255.9 million, or $3.30 a share, more than three times the average estimate of $1 per share in a Bloomberg survey. KB Home's shares dropped as much as 7.5 percent in New York. Revenue dropped 55 percent to $639.1 million, the company said today in a statement."

Bloomberg - "Homes Less Affordable as Prices Fall, Rates Rise, Zillow Says" (6-27-08)

"Rising mortgage rates are driving up the cost of buying a house even as prices fall, making property more expensive across the U.S., according to a new study by, an online provider of home valuations. Monthly payments on 30-year fixed mortgages are 6 percent to 10 percent higher in 41 of the top U.S. housing markets than they were two months ago. First-quarter prices have declined from a year earlier in 88 percent of those areas, Zillow said."

Bloomberg - "Values of Higher-Priced Homes May Drop Faster, JPMorgan Says" (6-27-08)

"The U.S. home-price declines most associated with lower-priced properties may accelerate among more expensive houses, according to analysts at JPMorgan Chase & Co. The increasing odds that the U.S. will enter a recession and a wave of payment spikes on option adjustable-rate mortgages make the larger percentage drops more likely, New York-based mortgage- bond analysts at JPMorgan wrote in a report today."

Bloomberg - "Fed Reviews Bank Investment Rules to Channel Capital to Lenders" (6-27-08)

"Federal Reserve officials are reviewing regulations that limit investment firms' stakes in banks, aiming to channel more capital into the U.S. banking system. Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson have urged lenders to raise capital to compensate for almost $400 billion in writedowns and credit losses from the collapse of the subprime-mortgage market. Concern about rising loan losses has sent the Standard & Poor's 500 Banks Index into a 21 percent dive this month, putting it on course for its worst monthly return in almost a decade."

Bloomberg - "AIG to Absorb $5 Billion Loss on Securities Lending" (6-27-08)

"American International Group Inc. plans to absorb losses for a dozen insurance units after their securities-lending accounts suffered $13 billion of writedowns tied to the subprime-mortgage collapse during the past year. Moody's Investors Service and A.M. Best Co. both cited the writedowns in May when they downgraded New York-based AIG's credit ratings. State regulators in Texas said they didn't know AIG was investing cash collateral from the securities-lending business in subprime-linked assets and were concerned the insurance units hadn't put aside enough capital to cover potential losses."

Realty Times - "Investor Report: Anti-Flipping Rules" (6-27-08)

"Here's some really good news for anyone involved in acquiring, rehabilitating and reselling foreclosed houses: The Federal Housing Administration is temporarily waiving its 'anti-flipping' rules and will now insure mortgages on properties that have been owned by the current seller for less than 90 days."

Realty Times - "Realty Viewpoint: New Home Sales Will Reverse Without Stimulus" (6-27-08)

"New home sales fell another 2.5 percent in May to a seasonally adjusted rate of 512,000 units. At this rate, about one million new homes will be sold by the end of the year. That's about half what both the National Association of Home Builders and the Joint Center for Housing Studies at Harvard says sustainable new home sales should be."

Thursday, June 26, 2008

Loan Safe Solutions - "New York Tackles Reckless Subprime Lending…Will California Be Next?" (6-26-08)

"New York is the latest to pass a tough law with stronger protections to put an end to many of the abuses that led to today’s foreclosure crisis. This action came on the heels of new laws in Connecticut and Maryland, and Michigan is actively considering a robust bill, too. Approximately a dozen states, including Ohio, Minnesota, and North Carolina last year, have taken the lead in passing common-sense protections consumers should have had all along."

NAR - "May Existing-Home Sales Show Modest Gain" (6-26-08)

"Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 2.0 percent to a seasonally adjusted annual rate 1 of 4.99 million units in May from a level of 4.89 million in April, but are 15.9 percent below the 5.93 million-unit pace in May 2007."

Bloomberg - "Lennar Reports Loss, Says Home Market Not at Bottom" (6-26-08)

"Lennar Corp., the second-largest U.S. homebuilder, reported its fifth straight quarterly loss and said the housing market has yet to see the worst of the slump. The shares fell 8.4 percent after Miami-based Lennar reported a fiscal second-quarter net loss of $121 million, or 76 cents a share. Analysts projected a loss of 68 cents. Revenue fell 61 percent to $1.1 billion."

Bloomberg - "SEC Inquiries Stemming From Subprime Crisis Surge" (6-26-08)

"The U.S. Securities and Exchange Commission's docket of probes stemming from the subprime- mortgage crisis has grown at least 40 percent since January amid mounting investor losses and the collapse of Bear Stearns Cos., a person familiar with the agency's caseload said."

Bloomberg - "Commercial-Mortgage Bond Sales May Reach 12-Year Low" (6-26-08)

"Commercial-mortgage backed securities offerings dropped to $12.2 billion in the first half of the year, from about $137 billion in the same period of 2007, according to JPMorgan Chase & Co. Analysts at the firm, Moody's Investors Service and Royal Bank of Scotland Group Plc cut their forecasts. JPMorgan predicts sales will fall to $20 billion this year from the record $237 billion in 2007 and the lowest since 1996."

Bloomberg - "Subprime-Mortgage Defaults Rise Less Than Some Forecasts in May" (6-26-08)

"Subprime-mortgage defaults last month rose less than some forecasts as some categories of delinquency rates improved, according to data on the debt underlying the benchmark Markit ABX derivatives indexes."

Bloomberg - "Genworth Financial Is `Comfortable' With 2008 Earnings Forecast" (6-26-08)

"The Richmond-Virginia-based company, whose shares have fallen 46 percent in the past year, forecasts a 2008 operating profit range of $2.25 to $2.65 a share. Fraizer last week reorganized management so that its U.S. mortgage-insurance unit reports to him directly, and announced the chief investment officer was leaving the company. The three insurers in the Standard & Poor's 500 Index that declined more than Genworth in the past year all replaced their CEOs."

Realty Times - "Assessing Your Readiness to Invest in Foreclosures" (6-26-08)

"Not everyone is cut out to invest in foreclosures. Some people would rather watch TV, invest in stocks and bonds, spend time with family members, or hang out with their friends. Others have a low risk tolerance and can't convince themselves to borrow money."

Orange County Register - "REITs? Forget it." (6-26-08)

"Who came up with the bright idea of creating a company that buys a bunch of home loans and then pays out nearly all the income it gets to shareholders? What if the loans go bad? What if interest rates rise? Paying at least 90 percent of earnings as dividends, a requirement of any real estate investment trust, means there’s little money left over for a rainy day."

Orange County Register - "Aliso Viejo is top city for property tax cuts" (6-26-08)

"Orange County Tax Assessor’s Office says Aliso Viejo leads Orange County cities in the percentage of its homes that had their property tax assessments reduced for the coming fiscal year"

Wednesday, June 25, 2008

NAHB - "New-Home Sales Decline In May" (6-25-08)

"In the latest evidence of severe and ongoing weakness in the nation’s housing market, the Commerce Department reported today that sales of newly built, single-family homes fell 2.5 percent in May to a seasonally adjusted annual rate of 512,000 units, largely offsetting a gain they recorded in the previous month."

NAR - "NAR Grants Help Increase Local Housing Opportunities" (6-25-08)

"The National Association of Realtors® has awarded $39,500 to 13 local and state Realtor® associations through the Housing Opportunity Fund grants program. The grants help support the housing opportunity efforts of local and state Realtor® associations. 'Realtors® build communities and care about the lack of housing opportunities available to low- and moderate-income families,' said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. 'These grants help support NAR’s mission of advocating solutions to today’s critical housing needs and help position Realtors® as leaders in their communities by increasing access to affordable housing and homeownership.'"

Wall Street Journal - "Consumer Confidence Plummets" (6-25-08)

"American consumers, battered by falling home prices and soaring gasoline prices, are at their gloomiest in decades, raising fears they might cut back on spending later this year and tip the economy into a recession. Consumer confidence plunged in June to its lowest level since 1992, and home-price declines accelerated in April, according to data released Tuesday. The renewed signs of economic weakness underscored why Federal Reserve policy makers, who wrap up a two-day meeting Wednesday, are likely to hold the target for their benchmark interest rate steady at 2%."

Mortgage Bankers Association - "Mortgage Applications Decreased In Latest MBA Weekly Survey" (6-25-08)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending June 20, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 461.3, a decrease of 9.3 percent on a seasonally adjusted basis from 508.4 one week earlier. On an unadjusted basis, the Index decreased 9.3 percent compared with the previous week and was down 25.3 percent compared with the same week one year earlier."

CBIA - "CBIA Sharply Reduces 2008 Housing Forecast" (6-25-08)

"California homebuilders are expected to begin construction on just 72,000 homes, condominiums and apartments this year, significantly lower than earlier forecasts. If that level is correct it will be the lowest production in the Golden State since at least the early 1950s, according to the annual midyear housing forecast released today by the California Building Industry Association."

Market Watch - "Four years of gains in home prices wiped out" (6-25-08)

"Home prices across 20 major U.S. cities have dropped a record 15.3% in the past year and are now back to where they were in the summer of 2004, according to the Case-Shiller home price index released Tuesday by Standard & Poor's."

Yahoo - "Fed leaves rates unchanged, ending 9-months of rate cuts" (6-25-08)

"The Federal Reserve left its key short-term interest rate unchanged Wednesday at 2%, marking the first time in the nine months that it did not cut rates. The central bank also raised alarms about inflation. But experts said it is still unclear what the Fed will do with interest rates at its next meeting Aug. 5 and for the remainder of the year."

Bloomberg - "Analysts Backtrack on Banking Stocks After Saying Worst Is Over" (6-25-08)

"The mortgage-market rout that began last year and led to almost $400 billion in bank writedowns and credit losses has lasted longer and cut deeper than bearish analysts predicted. Citigroup Inc., the biggest U.S. bank by assets, and UBS AG, Switzerland's largest lender, have lost $43 billion and $38 billion, respectively."

Market Watch - "Housing crash hits baby boomers" (6-25-08)

"The collapse of the housing bubble will likely have drastic implications on the wealth and retirement of certain baby boomers, according to a report Tuesday by the Center for Economic and Policy Research."

CNN - "On the path to a housing rebound" (6-25-08)

"The news that housing starts have fallen to their lowest level in 17 years sounds like one more reason to be depressed about the shrinking value of your home. In fact, it's an almost certain sign that the path to a housing recovery is finally in sight. If prices are going to stabilize, let alone rebound, the United States needs to produce far more first-time home buyers than new houses. That's the only way to tame the glut of 'For Sale' signs dotting front yards from the Inland Empire of California to the Gold Coast of Florida."

Bloomberg - "Countrywide Sued by California, Illinois, Over Mortgage Loans" (6-25-08)

"Countrywide Financial Corp., the mortgage lender that lost $2.5 billion amid rising defaults and foreclosures, was sued by California and Illinois for allegedly luring borrowers into risky loans they couldn't afford. Countrywide and Chief Executive Officer Angelo Mozilo were named in the suits, filed today, claiming the lender's tactics led thousands of borrowers to lose their homes when they couldn't make their payments. Countrywide used deceptive practices, including low 'teaser' rates, to entice borrowers into adjustable-rate loans without adequately informing them that the payments would balloon in later months, according to the suits."

CAR - "C.A.R. reports sales increased 18.1 percent; median home price fell 35.3 percent in May" (6-25-08)

"The median price of an existing, single-family detached home in California during May 2008 was $384,840, a 35.3 percent decrease from the revised $594,530 median for May 2007, C.A.R. reported. The May 2008 median price fell 4.7 percent compared with April’s $403,870 median price."

Tuesday, June 24, 2008

Bloomberg - "S&P/Case-Shiller Home Prices Fell 15.3% in April" (6-24-08)

"Home prices in 20 U.S. metropolitan areas fell in April by the most on record, signaling the housing recession is far from over, a private survey showed today. The S&P/Case-Shiller home-price index dropped 15.3 percent from a year earlier, less than forecast, after a 14.3 percent decline in March. The group began keeping year-over-year records in 2001. A separate report showed consumer confidence slumped this month to the lowest level in 16 years."

Bloomberg - "U.S. Homebuilders Rise on Positive Analyst Rating" (6-24-08)

"Centex Corp. and KB Home led an index of U.S. homebuilders to its biggest gain in three weeks after a Credit Suisse analyst started coverage of the builders with an ``overweight'' rating on the industry. A Standard & Poor's measure of home construction companies gained 3.7 percent, the most since June 3, after the positive recommendation in a report dated yesterday by Daniel Oppenheim of Credit Suisse."

Bloomberg - "U.S. Attorney Charges Follieri, Sued by Burkle, With Wire Fraud" (6-24-08)

"Follieri's company, Follieri Group LLC, was sued in April by Ron Burkle's Los Angeles-based Yucaipa Cos., which claimed he used part of a $55.6 million investment in a joint venture with the Yucaipa Corporate Initiatives Fund I to finance a lifestyle that included private jets, a penthouse and trips to Europe with actress Anne Hathaway, his girlfriend at the time."

Bloomberg - "U.S. Housing May Reach `Inflection' in 2009, Credit Suisse Says" (6-24-08)

"The U.S. housing market may reach an 'inflection point' next year as the number of existing homes for sale peaks and new-home construction stalls."

Bloomberg - "Fannie, Freddie Fail to Relieve Jumbo Loan Pressure" (6-24-08)

"Three months after Fannie Mae and Freddie Mac won the freedom to step up home-loan purchases, the government-chartered mortgage-finance companies are doing what critics in the Federal Reserve and Congress had predicted. Instead of using powers granted by Congress to buy jumbo loans for the first time, Freddie Mac and Fannie Mae are purchasing their own mortgage-backed securities, helping reduce losses, company filings show. The large loans, above $417,000, made up almost a third of the U.S. market last year, according to the Mortgage Bankers Association."

Bloomberg - "Bernanke Plays `Dangerous Game' Weighing Talk, Action" (6-24-08)

"Federal Reserve Chairman Ben S. Bernanke, by voicing concern about inflation and the slumping dollar, has fanned investor expectations for an interest-rate increase as soon as August. He may regret it. Raising rates may exacerbate the economic slowdown and roil banks whose losses sent their stocks down the most in a decade this month. Forgoing a rate boost next quarter risks damaging the Fed's credibility and deepening its divisions. Already this year, three officials have dissented on rate decisions."

Reuters - "WaMu may face $30 bln credit losses through 2011: Lehman" (6-24-08)

"Washington Mutual Inc may set aside as much as $30 billion for credit losses through 2011, according to Lehman Brothers Inc analyst Bruce Harting, who increased his forecast for losses this year at the largest U.S. savings and loan. Harting also wrote that the Seattle-based thrift may need to widen its loss forecast of $12 billion to $19 billion tied to single-family residential home loans for the next three to four years."

Wall Street Journal - "U.S.-Backed Mortgage Program Fuels Risks" (6-24-08)

"Mortgages that allow consumers to put little if any money down when buying a home have largely disappeared as a financing option available from private lenders. But they are still available -- and growing more popular -- through a government-backed program. That's raising concerns among critics who blame no-money-down mortgages for many of today's housing market woes. And while federal housing officials are moving to end the practice, for now home builders are promoting the programs to move unsold inventory."

Realty Times - "Market Conditions" (6-24-08)

"The Joint Center for Housing Studies has reported that America's rental market may see some significant changes as the mortgage crisis continues. Foreclosure rates have jumped from less than 200,000 a decade ago -- to a rate in the millions. While slower economic conditions are creating financial hard times for many individuals, much of the blame points to subprime loans, which skewed the line of affordability and reason for buyers in the past few years."

Realty Times - "Climate Change, Home Location Intertwined" (6-24-08)

"When it comes to where you choose to live, be very careful what you wish for. That river-side bargain, bay view dream home or desert adobe could, along with you, become a victim of climate change."

Daily News - "State's real estate bust is still playing out" (6-24-08)

"California's real estate market is a three-act play. Sort of a greed tragedy full of surprises. That's how the UCLA Anderson Forecast sees things. Part of its second-quarter assessment included a section titled 'The Three Phases of the California Real Estate Bust.' Of course, hindsight is a pretty good rear-view mirror. Act 1 was great, for the most part. Act 2 was horrible and Act 3 is still playing itself out."

Monday, June 23, 2008

NAHB - "Builders Call On Congress To Pass Housing Stimulus Bill" (6-23-08)

"The National Association of Home Builders (NAHB) has initiated an all-out effort to get Congress to pass badly needed stimulus legislation that will help stabilize the economy and housing market and assist millions of current and potential home owners. A central component of this legislation is a temporary home buyer tax credit to stimulate home purchases by qualified first-time buyers."

CNN - "Over the horizon, a housing recovery" (6-23-08)

"A new study from the Joint Center for Housing Studies of Harvard University, 'The State of the Nation's Housing 2008,' finds the country poised to see an increase in housing demand over the next decade."

CBIA - "New Residential Construction Still Slow in May, CBIA Announces" (6-23-08)

"According to housing permit data supplied by the Construction Industry Research Board, total housing starts in California, as measured by building permits issued, fell 37 percent in May when compared to the same month a year ago to 7,035 units, the highest monthly total of the year thus far. Single-family home production dropped 52 percent while construction of multifamily units dipped 5 percent when compared to May of 2007."

Realty Times - "Market Conditions" (6-23-08)

"The U.S. Commerce Department reported last week that new home starts were down 3.3 percent in May -- the lowest in 17 years."

Realty Times - "Wild, Wild West: California 'Bringing Bargain-Hunting Buyers Back'" (6-23-08)

"slow sales and rising inventories made home prices more affordable. More bargain-hunters have been attracted to the market, according to Ryan Ratcliff, an Anderson Forecast economist. In April, the median price for single-family homes crashed 32 percent year-over-year, pushing the median price down $200,000, according to California Association of Realtors."

Inman News - "Real estate coach breaks into card games" (6-23-08)

"The market hit its peak in 2005. Historically, real estate cycles tend to be approximately 10 years. If this market follows the patterns from the past, we should see a flattening over the next 12 to 24 months and then a return to price appreciation. The huge number of Gen Ys and foreign investors will drive the next major wave of home purchases."

Inman News - "Market scarred by inflation, capital exhaustion" (6-23-08)

"Mortgage rates have improved, down to 6.5 percent, as credit-market psychology has entered a substantial reversal. In the mass psychosis of late May, the financial markets suddenly decided that the economy had passed bottom; the banking system was recovering; inflation had become the dominant risk; the Fed would therefore begin an extended rate-raising campaign; and it was a good idea to dump every IOU within reach. That hallucination is now responding to medication."

Orange County Register - "O.C. real estate job slump hits 18 months" (6-23-08)

"Employment Development Dept. stats, analyzed by your blogger, show that Orange County real estate and finance jobs in May were 17,800 (-7%) below a year ago, the 18th consecutive month of year-over-year job losses in these property-related niches. All told, jobs in these industries are down 10.5% from the September ‘06 peak."
Ventura Couny Star - "Foreclosures considered for shelters" (6-21-08)

"Nearly 40 financial, government, nonprofit and religious officials met earlier this week in Ventura to explore the idea of developing housing such as emergency shelters, transitional programs and long-term leases for families. Officials said such a program could not only get the homeless off the streets, but also stabilize real estate prices by lowering the number of unsold houses."

CNN - "States take a whack at foreclosures" (6-21-08)

"While Congress has talked for a year about a federal response to the foreclosure crisis, attorneys general have been busy helping troubled homeowners at the state level. AGs are filing lawsuits, lobbying legislatures for tougher mortgage lender laws, and partnering with mortgage servicers and community development groups to help rescue homeowners from foreclosures. Their efforts have paid off. While the Mortgage Bankers Association says a million homes were in foreclosure in the first three months of 2008, one community advocate says that number would have been larger if the AGs weren't involved."

North County Times - "HOUSING: High-end neighborhoods also suffering" (6-21-08)

"From the start of a housing recession that has sent average real estate prices in North County plummeting, some housing analysts said expensive neighborhoods would persevere, dodging steep declines. That's no longer true. Several homes in one of North County's ritzier regions, the San Diego neighborhoods of Rancho Penasquitos and Rancho Bernardo, have tumbled 30 percent in value."

CNN - "Why Bush, Congress may make housing deal" (6-21-08)

"Bush has threatened a veto. But lawmakers in both parties say the housing legislation is a political imperative, and negotiators see the makings of a summertime bargain. For one, the measure contains elements that Bush long has demanded. They include modernizing the Depression-era Federal Housing Administration and creating a new regulator for the government-sponsored mortgage companies Fannie Mae and Freddie Mac."

The San Diego Union Tribune - "Mortgage rates on rise, as are fears for housing" (6-22-08)

"As if the local housing market weren't bad enough, there's another storm cloud on the horizon: rising mortgage rates. The interest rates for 30-year, fixed-rate mortgages averaged more than 6.4 percent last week, rising from 6.3 percent the previous week and an average of 5.8 percent during the first quarter."

Orange County Register - "O.C. builders drop house prices, raise condos" (6-22-08)

"Costa Mesa-based Hanley Wood Market Intelligence reports that the median contract price O.C. builders got for a newly built house fell 8.5% in April to $988,500, vs. $1.08 million in April 2007. The number of contracts also tumbled, declining 35.5% from April 2007 to 89. But builders’ condo prices were up vs. April of last year, rising 3.2% to $453,000, Hanley Wood reported in a recent release from the California Building Industry Association."

Orange County Register - "Subprime and punishment" (6-22-08)

"On Thursday, former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin were indicted for securities fraud and conspiracy — and Cioffi for insider trading too. Their indictment is the first subprime-related charge by federal investigators since the mortgage meltdown began more than a year ago."

Fresno Bee - "Mortgage crisis: Other shoe is poised to drop" (6-22-08)

"An adjustable-rate mortgage bubble is coming to the central San Joaquin Valley's housing market, and the tens of thousands of homeowners who hold those mortgages should prepare for the rate increases to come. That's the word from mortgage counselors worried that the easy lending practices of the housing boom years are about to lead to a lot of pain for borrowers."

Friday, June 20, 2008

Mercury News - "Mortgage rates hit nine-month high" (6-20-08)

"Interest rates for 30-year, fixed-rate mortgages are expected to reach a nine-month high of 6.42 percent today, according to mortgage financing company Freddie Mac."

Bloomberg - "Freddie, Fannie to Post More Losses, Lehman Says" (6-20-08)

"Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance companies, may post further losses in the second quarter as the housing market deteriorates, Lehman Brothers Holdings Inc. said. Lehman changed its forecasts for operating losses for Fannie Mae to $1.20 a share from 68 cents, and lowered its projected loss for Freddie Mac to 55 cents a share from 40 cents, according to report today."

Bloomberg - "Bear Stearns Fund Prosecutors Reveal `Lot of Evidence' of Fraud" (6-20-08)

"Ralph Cioffi, 52, and Matthew Tannin, 46, were charged yesterday with falsely saying the funds were thriving while knowing investments in subprime mortgages could cause their collapse. U.S. prosecutors claimed the men lied about liquidity, redemption requests, and their own investments before the funds shut down last June, costing investors $1 billion."

Inman News - "Tap into Gen X, Gen Y goldmine" (6-20-08)

"If you're not marketing your listings using video, you're missing a huge opportunity to differentiate yourself from the competition, provide a higher level of service to your clients, and reach the hot new Gen X and Gen Y markets. Perhaps the most challenging question is where to begin and how much to spend. Not only are some of the names confusing, so is selecting the one that will work best with your business. The price points range from very little to very expensive, depending upon the level of quality you want."

Realty Times - "Market Conditions" (6-20-08)

"Following a marked drop in oil prices yesterday (it dropped $5 a barrel), stocks surged. In currency trading, the dollar rose versus the euro and the yen. Gas prices dropped on a national average as well. No one wants to jump the gun on spreading the good news, but could this healthy market day be a sign of happier market times to come?"

Realty Times - "Active Vs. Passive Marketing: Changing Real Estate Markets. Strategies to Succeed" (6-20-08)

"Discounts, rebates, do-it-yourself realty companies catering to For Sale By Owners / FSBOS ... are the buzz word! Since real estate right now is having a moment of reckoning in many markets, perspective is needed to take it all in so we can develope survival strategies. Some agents that believe menu pricing and low fees will make them survivors. It doesn't. The markets have changed. Agents that believe otherwise still believe they are in a market that existed a few years ago, and are about to meet the same fate as the dinosaurs! They've failed to learn the most important thing about real estate. Discounting will not pay the bills!"

Realty Times - "Investor Report: Multiple-use 'Flex' Space Properties" (6-20-08)

"Some of the most attractive real estate returns in the coming decade, according to Cannon, will go to investors -- individuals, partnerships, joint venture groups -- who can identify and acquire urban-core land or buildings that are currently underperforming, but that have multiple, adaptive-use potentials going forward."

Orange County Register - "FBI says SoCal has most mortgage fraud reports" (6-20-08)

"We’re looking at all types of fraud: Corporate, criminal enterprises, individuals. The essence of the crime is people aren’t stating the correct facts — to those buying homes, providing mortgages or investing. Fraud runs the gamut from the largest to the smallest. We believe 80 percent of fraud is for profit. And about 20 percent of the fraud is for housing — solely by the borrower using fraudulent documents. The for-profit fraud could be industry insiders who skim equity, inflate the value of property or make fraudulent loans."

Orange County Register - "Foreclosure auction firms accused of 'bait and switch'" (6-20-08)

"At an auction in Pomona in March, Juan and Laura Torres made the highest bid — $146,000 — for a Corona property, according to the suit. Ms. Torres believed she had opened escrow on the property after signing paperwork at the auction and agreed to pay a 5 percent 'buyers premium,' bringing the total price to $153,300. However, 30 days later, she was told that 'she would not be able to purchase the property unless she came up with $50,000 more money,' the suit says."

Orange County Register - "SoCal home woes could mean 50% price drop" (6-20-08)

"Economist Chris Thornberg said Southern California home prices likely will continue falling until mid-to-late 2009. When the dust settles, he added, homes here could end up being worth half as much as they were at the peak of the housing boom."

Thursday, June 19, 2008

CBIA - "California New-Home Market Still Searching for Bottom, CBIA Announces" (6-19-08)

"The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that new-home sales in April were 44 percent below April 2007. While a significant decline, the drop is an improvement from the year-over-year decline of nearly 49 percent in March."

Bloomberg - "Wealthy Investors Shift Funds From Global Banks to Reduce Risks" (6-19-08)

"Trust companies like Wilmington are benefiting from record subprime-infected losses at companies led by Zurich-based UBS AG, the world's biggest money manager for the rich. UBS clients probably withdrew a net $39 billion during the past three months after the company reported more than $38 billion of writedowns and credit-market losses in the past year, London-based analysts at JPMorgan Chase & Co. estimate."

Bloomberg - "U.S. Charges 400 in National Mortgage Fraud Crackdown" (6-19-08)

"Federal prosecutors have charged more than 400 people across the U.S. in a crackdown against mortgage fraud, as the government stepped up efforts to address the subprime loan crisis."

Bloomberg - "Ex-Bear Stearns Fund Managers Indicted for Fraud" (6-19-08)

"two men were charged with misleading investors about the health of two Bear Stearns hedge funds whose implosion ignited the subprime mortgage crisis. Cioffi was also charged with insider trading in the indictment, which cites a series of e-mails between the two men. They both face as much as 20 years in prison if convicted of conspiracy, and Cioffi faces an additional 20-year term if found guilty of insider trading. The U.S. government has been investigating possible fraud by banks and mortgage firms whose investments in subprime loans and securities plunged in value, causing losses that now total $396.6 billion. Cioffi and Tannin were also sued today by the Securities and Exchange Commission."

Bloomberg - "Thornburg Says Survival in Doubt; Delays Tender Offer" (6-19-08)

"Thornburg won't complete a planned tender offer this month and wants to extend the deadline to the end of September, the Santa Fe, New Mexico-based company said in a regulatory filing yesterday. To complete the rescue, Thornburg needs to buy back 90 percent of its preferred shares for about $5 each, a fifth of what investors paid for them. The lender specialized in mortgages of more than $417,000, which typically were used to buy expensive homes. Falling home sales left the company near bankruptcy, before it announced in March the plan to raise $1.35 billion. That plan hinges on a successful tender offer for the preferred shares."

Bloomberg - "Global REIT Shares are Set to Recover, LaSalle Investment Says" (6-19-08)

"Returns on global REITs fell 19 percent last year as borrowing costs rose worldwide due to the faltering U.S. economic outlook following the collapse of the subprime-mortgage market, according to LaSalle Investment. The average earnings of the trusts meanwhile climbed 11 percent, Canter said."

Bloomberg - "U.S. Senate Considers Foreclosure Bill; Bush May Veto" (6-19-08)

"The U.S. Senate today debated legislation that might help prevent home foreclosures, as the Bush administration said the effort to stem losses in the housing market probably will be vetoed. The measure includes a temporary program to offer government insurance to struggling homeowners, a new regulator for mortgage buyers Fannie Mae and Freddie Mac and funding for counseling to help homeowners avoid foreclosure."

Bloomberg - "Triad Plunges as Freddie Mac Rejects Mortgage Insurer" (6-19-08)

"Triad Guaranty Inc. plunged 40 percent and became the first mortgage insurer to stop selling policies after Freddie Mac disqualified the company as a guarantor of new home loans. The worst housing slump since the Great Depression led to record losses at mortgage insurers, which reimburse lenders when homeowners default. Winston-Salem, North Carolina-based Triad, which traded above $60 a share in 2005 as the housing market boomed, lost money in the last three quarters and fell 83 cents to $1.22 at 4 p.m. in Nasdaq Stock Market trading."

Orange County Register - "Calif. homebuying at 13-year low" (6-19-08)

"A total of 33,024 new and resale houses and condos were sold statewide last month. That was up 6.0 percent from 31,150 in April and down 10.7 percent from 36,975 for May last year. Last month’s total made for the slowest May since 1995 when 32,223 homes sold. Of the homes sold in May, 38.3 percent were foreclosure resales, up from a revised 37.6 percent in April and 5.4 percent in May a year ago."

Orange County Register - "Brooks to clients who lost money, I can’t pay" (6-19-08)

"The Financial Industry Regulatory Authority awarded $532,300 this week to a client of Brookstreet Securities Corp., the Irvine investment firm that collapsed last year when it lost millions by investing in collateralized mortgage obligations."

Orange County Register - "Gas prices helping O.C. landlords" (6-19-08)

"Vacancy rates rose to almost 14% this year, up from 8.5% at the start of 2007, caused by overbuilding and by the shuttering of several O.C.-based subprime lenders. Sherlock forecast it will be between 17% and 18% by the end of 2008. This year’s forecast calls for O.C. to lose 15,000 office jobs, he said, and in 2009, office jobs will rise 10,000 — not enough to spur a dramatic increase in demand for office space."

Wednesday, June 18, 2008

NAR - "Commercial Real Estate Easing in Economic Slowdown" (6-18-08)

"Commercial real estate vacancies are trending up modestly, while investment has dropped sharply in the wake of the credit crunch, according to preliminary information for the latest COMMERCIAL REAL ESTATE OUTLOOK* of the National Association of Realtors®."

DQNews - "California May 2008 Home Sales" (6-18-08)

"A total of 33,024 new and resale houses and condos were sold statewide last month. That was up 6.0 percent from 31,150 in April and down 10.7 percent from 36,975 for May last year. Last month's total made for the slowest May since 1995 when 32,223 homes sold."

Mortgage Bankers Association - "Mortgage Applications Decrease In Latest MBA Weekly Survey" (6-18-08)

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending June 13, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 508.4, a decrease of 8.7 percent on a seasonally adjusted basis from 557.1 one week earlier. On an unadjusted basis, the Index decreased 9.6 percent compared with the previous week and was down 21.3 percent compared with the same week one year earlier."

Bloomberg - "Paulson & Co. Says Writedowns May Reach $1.3 Trillion" (6-18-08)

"John Paulson, founder of the hedge fund company Paulson & Co., said global writedowns and losses from the credit crisis may reach $1.3 trillion, exceeding the International Monetary Fund's $945 billion estimate."

Bloomberg - "Fed's Bear Stearns Books Look Prime for Cooking" (6-18-08)

"The Federal Reserve is just days away from completing the financing for its bailout of Bear Stearns Cos., after which the central bank will have another big decision to make: how to account for it."

Bloomberg - "California Home Market Shows First Signs of Recovery" (6-18-08)

"The California housing market may be showing the first signs of a recovery after three years of declining sales and two years of rising foreclosures, the UCLA Anderson Forecast said today. While home prices in the most populous U.S. state are still weak, the number of houses and condominiums changing hands in some parts of California is rising, according to the Anderson Forecast at the University of California, Los Angeles, which released its 127-page forecast for both the state and the U.S. today."

Bloomberg - "Wachovia Moves to Assure Borrowers Understand Loans" (6-18-08)

"Wachovia Corp., which ousted its top executive after estimating it may lose more than $4.5 billion on adjustable-rate home loans, will start calling would-be borrowers to explain the risks of such mortgages. Wachovia is contacting people who apply through independent mortgage brokers to ensure 'the customer understands the key features of the Pick-A-Payment loan product,' according to a June 11 memo from Tim Wilson, head of loan origination at the Charlotte, North Carolina-based company. The loans let borrowers defer part of their monthly bills."

Bloomberg - "Subprime Losses Top $396 Billion on Brokers' Writedowns" (6-18-08)

"The following table shows the $396 billion in asset writedowns and credit losses at more than 100 of the world's biggest banks and securities firms as well as the $302 billion capital raised in response. All the charges stem from the collapse of the U.S. subprime-mortgage market and reflect credit losses or writedowns of mortgage assets that aren't subprime, as well as charges taken on leveraged-loan commitments. Capital raised includes common stock, preferred shares, subordinated debt and hybrid securities which count as Tier 1 or Tier 2 capital, depending on local regulations and the amount of each that's already on the bank's books."

Realty Times - "Is Inflation Back?" (6-18-08)

"If inflation is really the core problem we face it will show up in the form of higher interest levels and steeper foreclosure rates by late Spring and early Summer next year. Payment re-sets from toxic loans will surely be a major cause of foreclosures, but the simple mechanism of higher rates will impact the majority of ARM borrowers, not just those troubled by 'nontraditional' loans. Suddenly now-comfy and secure ARM borrowers will understand what the 'marketplace risk' of adjustable rates really means."

Realty Times - "Realty Viewpoint: Why We Need New Home Production To Fall" (6-18-08)

"Since 2006, there are more single heads of households than marrieds. More singles and non-traditional families are buying homes than ever, yet we keep churning out McMansions, tiny condos and overpriced townhomes. Square footage has doubled since 1950, despite households getting smaller by one whole human being. Does every child really need his or her own bathroom? Aren't there some life lessons to be learned from sharing? The result is that we have over record-high 11-month inventories of homes for sale, and growing. Rampant fear is keeping buyers on the sidelines -- if the suburbs aren't working, what's next?"

Realty Times - "How Top Producers Do Short Sales" (6-18-08)

"Short sales are the most expensive aspect of any real estate transaction, due to the negotiations involved. It is extremely important to ask for more commission and reduce your time invested. It can easily be done by being more selective with the short sales you choose to work."

Tuesday, June 17, 2008

NAHB - "Housing Starts Decline 3.3 Percent In May" (6-17-08)

"Providing the latest evidence of the ongoing downturn in the nation’s housing market, the U.S. Commerce Department reported today that new-home starts declined 3.3 percent to a seasonally adjusted annual rate of 975,000 units in May. This was the lowest total starts number since March of 1991. Single-family starts declined 1.0 percent to a rate of 674,000 units, their lowest since January of 1991."

Bloomberg - "John Kukral's Northwood Raises $1.25 Billion for Real Estate" (6-17-08)

"Northwood Investors LLC, the firm started by former Blackstone Group LP executive John Kukral last year, raised about $1.25 billion for property investments, a person with knowledge of the fund-raising said. The cash was divided into a main fund of $750 million and a side fund of $500 million after Greenwich, Connecticut-based Northwood surpassed its $500 million goal, said the person, who asked not to be identified because the capital-raising is private."

Bloomberg - "AIG's Wilmington Stops Home Lending Through Brokers" (6-17-08)

"American International Group Inc., the world's largest insurer by assets, said its Wilmington Finance Inc. unit will stop originating mortgages through brokers and reduce the number of loans it makes directly to homebuyers. Wilmington will eliminate 335 jobs by year-end, the unit said today in a statement. The move will cost New York-based AIG $27 million before taxes in the second quarter as it pays to end leases, according to a regulatory filing."

Bloomberg - "Standard Pacific Falls as Second-Quarter Orders Drop" (6-17-08)

"The company lost 83 percent of its value in the past year because most of its home sales are in California, where the foreclosure rate in May was the second highest in the U.S. One in every 183 homes in the state received a foreclosure filing in May, according to data provider RealtyTrac of Irvine, California."

Orange County Register - "Calif. seen as No. 1 destination for movers" (6-17-08)

"California and Texas are the two most popular states for people to move in 2007, based on interstate and intrastate moves combined. Surveys over the past decade have shown that California (the largest state by population) has always ranked first in terms of destination state for people changing residences. This trend continues, despite the growing mortgage crisis, which has heavily affected many areas of California. The effect of declining home values combined with the high cost of living has not kept consumers away. Only 43 percent of people moving to a new location in California currently live in California; thus 57 percent of all moves to California are people moving from other states. Therefore, California is the number one destination state with 6 percent of the total sample moving from another state to California"

Orange County Register - "North County suffers smallest home-sales slump" (6-17-08)

"DataQuick identified 679 home sales last month in ZIPs in north inland communities, a drop of 6% from a year ago. In these 23 ZIPs, last month’s median price change was -17.8% vs. a year ago. In fact, Fullerton’s 92835 was one of just two of O.C.’s 83 ZIPs with rising selling prices (+11.4%) and rising sales (+35%)."

Realty Times - "New Homes: A Silver Lining in Today's Housing Market?" (6-17-08)

"While it seems no one has a crystal ball about the housing market, you'd assume it's a bad time to build that dream home – at least until the market comes into some kind of balance. But the truth is, it may never be a better time to build. The silver lining in all this is that land prices have been and continue to go down, materials prices are competitive and there are a lot of contractors out of work, willing to resort to bargain basement prices for their services."

Inman News - "Lawsuit challenges real estate auctions" (6-17-08)

"A lawsuit filed in California Superior Court challenges real estate auction practices, charging that some auction companies engage in deceptive advertising and violate provisions of federal law related to real estate closing services."

CNN - "Housing rescue group steps up efforts" (6-17-08)

"Life may get a little bit easier for troubled borrowers. Hope Now, the alliance of lenders, mortgage servicers, investors and community advocacy groups put together to fight the foreclosure epidemic, announced new guidelines Tuesday that should help speed up the process of helping borrowers who are trying to hang onto their homes."

Monday, June 16, 2008 - "FHA Lessons 90-Day Rule to Help Lenders Sell REOs" (6-16-08)

"Lenders will no longer find themselves struggling with the Federal Housing Administration's (FHA) 90-day rule, which prevents sellers who have owned a property for less than 90-days from offloading a home to a buyer who intends to be insured by the FHA."

NAHB - "Builder Confidence Edges Down in June" (6-16-08)

"Builder confidence in the market for newly built single-family homes edged down in June, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The index slipped to 18 this month, returning to the record low that was posted in December of 2007 (the series began in January of 1985)."

DQNews - "Southland home sales back to record low; median price slips again" (6-16-08)

"A total of 16,917 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in May. That was up 8.3 percent from 15,615 in April but down 14.9 percent from 19,874 in May last year, according to DataQuick Information Systems."

Bloomberg - "Lenders Agree to Increase Anti-Foreclosure Efforts" (6-16-08)

"Citigroup Inc., Bank of America Corp. and other leading U.S. mortgage lenders agreed to expand efforts to help borrowers avert foreclosure as the Senate prepares to weigh legislation addressing the housing crisis."

Bloomberg - "Maguire Finance Chief to Leave; Company to Sell Site" (6-16-08)

"Maguire Properties Inc., the biggest office landlord in downtown Los Angeles, said its finance chief and two other top executives will leave and it plans to sell the 105-acre Park Place development in Orange County to bolster cash. The company also plans to raise up to $110 million by taking new loans against properties in Pasadena, including the Plaza Las Fuentes, Maguire said in a statement today."

The Wall Street Journal - "New Agreement Could Mean More Help for Homeowners" (6-16-08)

"The agreement among the firms in the Treasury Department-backed Hope Now alliance, which is scheduled to be announced Tuesday, comes as U.S. Senate lawmakers prepare to begin debate this week on a massive housing package aimed at slowing the record pace of foreclosures that continues to roil the economy. That legislation, which includes a program to refinance up to $300 billion in troubled mortgages, could be voted on by the Senate this week, sources said."

Realty Times - "Wild, Wild West: Few Takers In Silicon Valley Buyer's Market" (6-16-08)

"The latest report on one of the nation's most expensive housing markets, a market among the last in California and the nation to really feel the pinch, comes with a forecast for more home price declines in the near future. Things could get nasty. In Silicon Valley, the median price of single-family homes in closed sales fell 10 percent in May -- compared to last year. The May median price of $773,000 is down from the peak price of $858,000 set in April 2007, according to Richard Calhoun's Bay Area Market Newsletter."

Realty Times - "Realty Viewpoint: Banks Choke Sales, Blame Delinquencies" (6-16-08)

"If you have a client or you are a buyer getting a mortgage loan today, count your lucky stars. Mortgage loan lenders are continuing to choke the housing market to the point that even those with good credit are having a tough time getting funds. And there's lots of evidence."

Realty Times - "New Form Points Out What's Required, What Isn't In Foreclosure Properties" (6-16-08)

"It is yet another sign of the times that the California Association of Realtors (CAR) has released a form entitled 'REO Advisory'. REO stands for "real estate owned" and is the common term for property that a lender has acquired through foreclosure. Actually, CAR has released two forms – the second specifies "REO Advisory (Listing)" -- but the two are identical as to their contents."
Orange County Register - "Orange County’s mortgage market distress could soon top the U.S" (6-14-08)

"Keith Carson is a senior consultant for TransUnion, which recently published a report on loans 60 days or more past due in the first quarter of this year. The report said O.C.’s delinquency rate of 3.14 percent, was less than California’s 4.34 percent and the nation’s 3.23 percent." - "The Country’s Biggest Liar" (6-14-08)

"NAR’s chief economist, Lawrence Yun, is making his predecessor David Lereah (Liar) look like a wimp when it comes to touting the strength of the housing markets. Yun met with Realtors in Coral Gables this week and told them this is nothing more than a 'small blip on the radar screen.' He touted prices to be 20-30 percent higher in Florida in just five years."

Blogcritics Magazine - "Planned Economies Do Not Work - Part II" (6-14-08)

"The fact of the matter is that the Fed is the primary culprit for the current subprime crisis and housing bubble. Through artificially low interest rates and expansion of the money supply, the Fed caused many debt-ridden Americans to go deeper into hock by committing to loans they had no chance of repaying. For instance, in 2000, the federal funds rate, the rate set by the Fed that is related to mortgage rates, was at 6.24% (see table below). To head off a recession caused by the dot com bubble (another crisis caused or at least not prevented by the Fed) and 911 attacks, Fed chairman Alan Greenspan took the rate down to 3.88 in 2001 and into the 1% range for the next three years."

Safe Haven - "House Prices, the Wealth Effect and the Cash-in-Hand Effect" (6-14-08)

"House prices are collapsing, which means that homeowners' equity in their houses is plunging. According to Federal Reserve flow-of-funds data, homeowners' equity dropped by $399 billion quarter-to-quarter in Q1:2008 and $880 billion year-over-year - both record absolute declines (see Chart 1). The drop in homeowners' equity contributed significantly to the $1.7 trillion decline in household net worth in the first quarter (see Chart 2)."

Los Angeles Times - "Short sales: A tough road" (6-15-08)

"RESIDENTIAL short sales sound like a picnic: Owners need to sell their homes for less than they owe, lenders forgive the difference and buyers grab a good deal.If only. This is one picnic that requires a long wait for dessert. The only 'short' thing about short sales, buyers and sellers say, is one's patience." - "Hard Sell" (6-15-08)

"The glut of unsold real estate on the local market has begun to shrink, but that doesn't mean more houses are getting sold. What would appear to be a promising sign instead may reflect a trend toward giving up -- hundreds of sellers taking their homes off the market each month, unwilling to accept purchase prices that have dropped about 20 percent in the past year."

Orange County Register - "1st drop in ‘08 for O.C. distressed homes for sale" (6-15-08)

"Distressed properties, as a percent of all listed homes for sale, were 39.6% of the market last week vs. 39% two weeks earlier. Since Dec. 27, the number of distressed homes on the market has grown 2,147 while the non-distressed supply is 2,782 lower."

Friday, June 13, 2008

Bloomberg - "Treasury 10-Year Note Yields Rise to Year High on Retail Sales" (6-13-08)

"Treasuries fell, pushing the yield on the benchmark 10-year note to the highest level this year, after a larger-than-expected gain in retail sales bolstered the case for the Federal Reserve to boost interest rates."

Bloomberg - "Moody's Set to Change Municipal Bond Rating Scale" (6-13-08)

"Moody's Investors Service, under pressure from regulators and state finance officials, will change the way it rates municipal bonds and rank them on the same scale it uses for corporate and sovereign debt. Moody's said today it is asking investors and public officials to comment on changing the municipal scale it has used for decades, and will detail the transition to a new measure by July 31. Gail Sussman, managing director for public finance at the New York-based company, said the change will eventually lead to upgrades of some of its 78,000 municipal ratings."

CNN - "Housing: It'll get worse" (6-13-08)

"With home prices plunging by more than 30% in some markets, bargain-hunters are ready to pounce. But it may pay for buyers to wait. Many housing experts say that the worst-hit metro areas have even farther to fall, and could see total drops of as much as 50%."

Market Watch - "SEC proposes new rules for credit-rating firms" (6-13-08)

"The Securities and Exchange Commission voted Wednesday to propose tightening rules for credit-rating firms, calling for restrictions to attack conflicts of interest and expanded disclosure, including on ratings of structured finance products."

Bloomberg - "FBI Halts Some Cases to Investigate Mortgage Frauds" (6-13-08)

"U.S. Federal Bureau of Investigation, confronting a surge in mortgage fraud, has ordered more than two dozen of its field offices to stop probing some financial crimes so agents can focus on the subprime crisis."

Market Watch - "Thornburg swings to $3.3 bln loss" (6-13-08)

"Thornburg Mortgage Inc. on Thursday reported a quarterly loss of more than $3 billion as the company was hit hard by falling market values in its mortgage and loan portfolios."

Bloomberg - "Foreclosures Rise 48% in May as Repossessions Double" (6-13-08)

"Banks repossessed twice as many homes in May and foreclosure filings rose 48 percent from a year ago as falling house prices trapped borrowers in mortgages they couldn't afford, RealtyTrac Inc. said in a report today. One in every 483 U.S. households either lost the home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac said. That was the highest rate since the Irvine, California-based company began reporting in January 2005 and the 29th consecutive month of year-over-year increases. Nevada, California and Arizona posted the highest rates in the U.S. and New Jersey entered the top 10."

Bloomberg - "Cook Pine Buys Distressed Debt After Beating Peers" (6-13-08)

"Cook Pine is boosting allocations to hedge funds that invest in companies that are struggling to repay debt, Kuwana said. Companies with high-yield, high-risk debt defaulted at an annual rate of 2 percent worldwide in May, compared with 1.7 percent in April, the sixth consecutive month of increases, according to Moody's Investors Service. The rate may climb to 5 percent by the end of 2008, Moody's said."

Orange County Register - "Cheapest O.C. homes selling best in late-May" (6-13-08)

"DataQuick’s late-May homeselling stats show that O.C. sales are destined to be below their year-ago pace for the 32nd consecutive month when full-month figures are out early next week. And May’s median selling price will be under a half-million bucks for the first time since early 2004."

Orange County Register - "Even ‘The Chamber’ knows housing’s killing state economy" (6-13-08)

"As in the resale market, many new home builders have large inventories of mostly-completed-but-not-yet-sold homes. Construction of new homes is dropping fast and effective prices are falling, both of which will help to clear out the unsold inventories. However, this process will take a while. Industry observers do not expect any significant improvement before 2009, with some areas not reaching bottom until a year later."

Realty Times - "Investor Report: Downsides of Short Sales" (6-13-08)

"Are short sales all they're cracked up to be for real estate investors? Absolutely not -- as few as 10 percent of all attempts to buy them actually go to closing in some local markets, says Alexis McGee, California investor and founder and president of"

Realty Times - "Market Conditions: Inland Empire and High Desert, California" (6-13-08)

"Smart Move Realty's broker Joshua Beauchamp believes prices will continue their downward trend, but warns that as interest rates rise, monthly payments will be affected. Joshua says now may be a great time for buyers to see what's out there."

Thursday, June 12, 2008

Bloomberg - "Lampert Buys KB Home, Centex Stakes as Builders Fall" (6-12-08)

"Lampert's ESL Investments Inc. hedge fund purchased 747,500 shares of Centex, the fourth-largest builder, according to a May 15 filing with the U.S. Securities and Exchange Commission. The shares are valued at $10.8 million at today's closing price. The fund also acquired 605,000 shares of KB Home as of March 31, the fifth-largest, valued at $11.2 million."

Bloomberg - "Thornburg Reports Loss of $3.31 Billion on Writedowns" (6-12-08)

"Thornburg Mortgage Inc., the 'jumbo' home lender that averted bankruptcy in April, said it lost $3.31 billion in the first quarter because of writedowns on securities linked to real estate. The loss before preferred stock dividends was $20.64 a share. That compares with net income of $75 million, or 62 cents a share, a year earlier, Santa Fe, New Mexico-based Thornburg said today in a statement. Chief Executive Officer Larry Goldstone said during a conference call the lender may become profitable this year. "

Bloomberg - "`Dirt Bonds' Soil Oppenheimer in Gambits Gone Awry" (6-12-08)

"Almost $70 million of tax-exempt bonds were sold in June 2007 to build roads and sewers for thousands of new homes planned for Elk Grove, California, once the fastest growing city in the U.S. A year later, the lots are largely vacant and the bonds lost 41 percent of their value."

Orange County Register - "Sellers want more for O.C.’s pricier homes. Again!" (6-12-08)

"May numbers from HousingTracker show a growing tale of two cities for Orange County real estate. At least, from a price standpoint looking at this accompanying chart. We see at the top, so to speak, a 5-month string of sellers raising their typical listing price, as measured by the 75th percentile (median of the top half.) HousingTrack pegs this benchmark for May at $848,500 — up 0.4% from April and down 5.6% from a year ago. All told, the 75th percentile’s asking price is up 6.1% since January."

Orange County Register - "4 builders fined for run-off flaws, 15 O.C. projects cited" (6-12-08)

"Centex, KB Home, Pulte Homes, and Richmond American Homes agreed to pay a total of $4.3 million in penalties to resolve alleged violations of storm water run-off regulations at construction sites in 34 states and the District of Columbia — including 15 in O.C."

Bloomberg - "AIG Investors Seek Ouster of Sullivan After Losses" (6-12-08)

"American International Group Inc. investors holding more than 100 million shares demanded Chief Executive Officer Martin Sullivan be replaced after the world's largest insurer lost 43 percent of its value this year. Former AIG director Eli Broad, Shelby Davis of Davis Selected Advisers LP and Bill Miller of Legg Mason Inc. asked that a board member be named interim CEO while a search committee finds a new leader for New York-based AIG, according to a letter dated yesterday. Company spokesman Chris Winans confirmed AIG received the letter."

Bloomberg - "U.S. Financial Firms Cut Dividends Most in Five Years" (6-12-08)

"Citigroup Inc., Wachovia Corp. and KeyCorp are among 16 U.S. financial firms that slashed dividends this year, a tally that exceeds the previous five years combined. Goldman Sachs Group Inc. and Bank of America Corp. may follow as mortgage-related losses escalate, analysts say. Banks are trying to hang onto capital as the U.S. home market implodes and loan losses soar. KeyCorp, Ohio's third- largest bank, chopped its payout in half today -- the first decrease in 43 years -- and said it must raise $1.5 billion after losing a tax case. The world's biggest financial companies have raised $291 billion to bolster their balance sheets."

Los Angeles Times - "A cold market for jumbo loans shows signs of a thaw" (6-12-08)

"Despite the government's effort to address one of the repercussions of the sub-prime meltdown, jumbo mortgages -- those exceeding $417,000 -- have remained difficult to obtain and relatively expensive. But there are signs of normalcy returning to the jumbo market."

Realty Times - "Real Estate Outlook: Pending Home Sales Rise in April" (6-12-08)

"For much of the past 12 months, the index has trended negative or flat. But the latest index, released this past Monday, was a big surprise. Rather than falling again -- as was widely predicted by Wall Street analysts -- it rose by 6.3 percent on sales contracts signed during April and heading for closings in the next couple of months."