Mortgage Bankers Association - "Lenders Technology Corp. Circulates Draft RFP for National Database to Track Fraud Against Mortgage Lenders" (3-31-08)
"Lender Technologies Corporation (LTC), a wholly owned subsidiary of the Mortgage Bankers Association (MBA), today circulated a draft Request for Proposal (RFP) regarding the creation of a national database to help prevent and detect mortgage fraud."
Mortgage Bankers Association - "Treasury Releases Blueprint for Stronger Regulatory Structure" (3-31-08)
"The U.S. Treasury Department released its Blueprint for an improved financial regulatory structure, one that strengthens consumer protections, improves tools for market stability and enhances financial innovation. Treasury's Blueprint for a Modernized Financial Regulatory Structure presents a series of short-, intermediate- and long-term recommendations for reform of the U.S. regulatory structure. The Blueprint, announced in June 2007, is a key part of Treasury Secretary Henry M. Paulson Jr.'s efforts to improve the competitiveness of the U.S. capital markets in the increasingly global marketplace."
The San Diego Union Tribune - "Homeowners suing agent over high purchase price" (3-31-08)
"Anyone who bought a home near the peak of the once-sizzling real estate market no doubt has found it painful to watch prices tumble with no end in sight. But in the case of one North County couple, it's not the volatile market they blame but their real estate agent, who they say duped them into overpaying."
Yahoo - "Hud Chief Resigns Amid Criminal Probe" (3-31-08)
"HUD Secretary Alphonso Jackson, his tenure tarnished by allegations of political favoritism and a criminal investigation, announced his resignation Monday amid the wreckage of the national housing crisis. He leaves behind a trail of unanswered questions about whether he tilted the Department of Housing and Urban Development toward Republican contractors and cronies.
The move comes at a shaky time for the economy, with soaring mortgage foreclosures imperiling the nation's credit markets."
Bloomberg - "Dollar Heads for Biggest Quarterly Loss Against Euro Since 2004" (3-31-08)
"The dollar was at $1.5797 per euro by 7:30 a.m. in New York, from $1.5796 on March 28, after earlier slipping to $1.5834. The European common currency has gained 8.2 percent this quarter, the most since December 2004. The euro may rise to $1.64, before declining to around $1.40 once the 15-nation economy slows and the ECB reduces interest rates, Jen predicted."
Bloomberg - "Obama Blasts Countrywide Over Bonuses, Housing Crisis" (3-31-08)
"Democratic presidential candidate Barack Obama called Countrywide Financial Corp., the biggest U.S. mortgage company, an example of what's wrong in today's economy and a political culture dominated by corporate lobbyists. Obama, campaigning in Pennsylvania, criticized Countrywide for its role in the subprime mortgage crisis and denounced the millions of dollars the company's top executives will receive even as workers lose pensions and homeowners are forced to sell."
Orange County Register - "O.C. fixed-rate home buys near 6-year high" (3-31-08)
"Looking back at DataQuick’s latest monthly report, I discovered a hint of a little mortgage sanity returning. Just see how the admittedly small group of buyers in O.C. are financing their deals. In the first two months of this year, slightly more than 70% of the buyers who financed deals used fixed-rate mortgages."
Orange County Register - "Are banks next?" (3-31-08)
"As the credit crunch and housing slump roll on, some experts say traditional banks and thrifts could be next to fail. It’s been more than a dozen years since a bank failed in Orange County — that’s not counting lenders like New Century Financial of Irvine, which never took deposits from consumers."
Orange County Register - "Mortgage oversight changes proposed by Bush Administration" (3-31-08)
"Treasury Secretary Henry Paulson today unveiled a sweeping plan to overhaul the nation’s regulation of financial markets, including home lending. He proposes scrapping the Depression-era charter for thrifts and closing the Office of Thrift Supervision."
Real Estate Journal - "FHA May Aid Those'Underwater' on Loans" (3-31-08)
"The Bush administration is considering regulatory changes to aid homeowners who owe more money on their mortgages than their homes are worth, people familiar with the proposal said.
The Department of Housing and Urban Development plan would enable homeowners who are 'underwater' on their mortgages to qualify for a partial backstop through HUD's Federal Housing Administration, these people said."
Monday, March 31, 2008
Los Angeles Times - "Tensions rising on Ventura Blvd." (3-30-08)
"Ventura Boulevard has long been a place where you went for sushi, doctor's appointments and meetings with your lawyer. Now it could become a place where you live. The storied thoroughfare of shopping centers and office towers that snakes along the San Fernando Valley's southern flank will get its first large-scale apartments and condominiums this spring, perhaps sparking a trend that could significantly transform the 18-mile commercial corridor."
Orange County Register - "77% of market pros bearish on real estate" (3-30-08)
"Russell Investments quarterly survey of money managers finds just 8% bullish on real estate investment trusts vs. 10% in the previous quarter while 77% of the money pros polled were bearish on commercial property-owning REITs. That’s equal with three months earlier. To be fair, this stock-heavy group aren’t huge fans of REITs. Bullishness for REITs peaked at 19% in the second quarter of 2005."
"Ventura Boulevard has long been a place where you went for sushi, doctor's appointments and meetings with your lawyer. Now it could become a place where you live. The storied thoroughfare of shopping centers and office towers that snakes along the San Fernando Valley's southern flank will get its first large-scale apartments and condominiums this spring, perhaps sparking a trend that could significantly transform the 18-mile commercial corridor."
Orange County Register - "77% of market pros bearish on real estate" (3-30-08)
"Russell Investments quarterly survey of money managers finds just 8% bullish on real estate investment trusts vs. 10% in the previous quarter while 77% of the money pros polled were bearish on commercial property-owning REITs. That’s equal with three months earlier. To be fair, this stock-heavy group aren’t huge fans of REITs. Bullishness for REITs peaked at 19% in the second quarter of 2005."
North County Times - "FALLBROOK: Homeowners upset by 'downsizing' plans" (3-29-08)
"On Friday, experts said many developers have decided to switch from large floor plans to smaller homes halfway through development because small houses have been selling better since the downturn began in the real estate market."
Philly.com - "Second-home sales plummeted in 2007" (3-29-08)
"Second-home sales nationally took a big hit last year as speculators disappeared from the market in the face of tightening credit, the National Association of Realtors reported yesterday.
Vacation-home sales dropped 30.6 percent in 2007, to 740,000 from a record 1.07 million in 2006, while sales of investment properties fell 18.1 percent, to 1.35 million last year from 1.65 million in 2006."
Los Angeles Times - "Countrywide execs due millions in stock" (3-29-08)
"The top two executives of beleaguered Countrywide Financial Corp. will pocket $19 million in stock next week, according to a regulatory filing. It's the start of a series of multimillion-dollar payments expected to go to the pair before and after the company's pending takeover by Bank of America Corp."
North County Times - "REGION: Housing woes feed surge in foreclosure advice" (3-29-08)
"As some real estate agents struggle and mortgage brokers close up shop, one real estate industry is booming: foreclosure advice.You Walk Away, a Carlsbad company that guides homeowners through foreclosure, plans to quintuple its staff to meet demand. HomeFreeMe, a similar company, just launched in San Diego. And a smattering of copycats has popped up ---- Walk Away Smart in Los Angeles and Walk Away Plan in Arizona."
Herald Tribune - "Tough times make for few takers at property auction" (3-29-08)
"The crowd filed in to the large white tent behind the Bahia Mar resort for Friday's real estate auction organized by Sotheby's and Daniel DeCaro Auctions as a four-piece jazz band played a peppy rendition of 'I Feel Good.' Only a handful of the properties would be selling absolute, where any bid would be accepted. The rest carried a non-disclosed reserve, or minimum bid. The auction, which was anticipated to take four to five hours, wound up clocking in at barely two. Two-thirds of the property on the block failed to garner a single bid."
"On Friday, experts said many developers have decided to switch from large floor plans to smaller homes halfway through development because small houses have been selling better since the downturn began in the real estate market."
Philly.com - "Second-home sales plummeted in 2007" (3-29-08)
"Second-home sales nationally took a big hit last year as speculators disappeared from the market in the face of tightening credit, the National Association of Realtors reported yesterday.
Vacation-home sales dropped 30.6 percent in 2007, to 740,000 from a record 1.07 million in 2006, while sales of investment properties fell 18.1 percent, to 1.35 million last year from 1.65 million in 2006."
Los Angeles Times - "Countrywide execs due millions in stock" (3-29-08)
"The top two executives of beleaguered Countrywide Financial Corp. will pocket $19 million in stock next week, according to a regulatory filing. It's the start of a series of multimillion-dollar payments expected to go to the pair before and after the company's pending takeover by Bank of America Corp."
North County Times - "REGION: Housing woes feed surge in foreclosure advice" (3-29-08)
"As some real estate agents struggle and mortgage brokers close up shop, one real estate industry is booming: foreclosure advice.You Walk Away, a Carlsbad company that guides homeowners through foreclosure, plans to quintuple its staff to meet demand. HomeFreeMe, a similar company, just launched in San Diego. And a smattering of copycats has popped up ---- Walk Away Smart in Los Angeles and Walk Away Plan in Arizona."
Herald Tribune - "Tough times make for few takers at property auction" (3-29-08)
"The crowd filed in to the large white tent behind the Bahia Mar resort for Friday's real estate auction organized by Sotheby's and Daniel DeCaro Auctions as a four-piece jazz band played a peppy rendition of 'I Feel Good.' Only a handful of the properties would be selling absolute, where any bid would be accepted. The rest carried a non-disclosed reserve, or minimum bid. The auction, which was anticipated to take four to five hours, wound up clocking in at barely two. Two-thirds of the property on the block failed to garner a single bid."
Friday, March 28, 2008
CNN - "Welcome to subprime's ghost town" (3-28-08)
"The subprime mortgage meltdown has shaken the entire U.S. economy. But nowhere might the impact be as stark as Irvine, California, a planned community nestled between Los Angeles and San Diego. A year ago at this time, Irvine was home to 18 subprime lenders, including many of the leaders in the field, such as New Century Financial and Option One. Then, in what seemed like the blink of an eye, 4,100 good-paying white collar jobs were gone, or roughly 2% of the city's work force."
NAR - "Second-Home Sales Accounted For One-Third of Transactions in 2007" (3-28-08)
"The combined total of vacation- and investment-home sales declined with the overall market in 2007, but still accounted for 33 percent of all existing- and new-home sales, which is close to historic norms, according to the National Association of Realtors®. The market share of homes purchased for investment last year was 21 percent, down from 22 percent in 2006, while another 12 percent were vacation homes, compared with a 14 percent market share in 2006. The total share of second homes declined from 36 percent of transactions in 2006. "
Bloomberg - "KB Home Reports First-Quarter Loss on Land Writedown" (3-28-08)
"KB Home, the fifth-largest U.S. homebuilder, reported a wider loss than analysts projected as the housing recession cut sales and led to land writedowns. The shares fell 4.9 percent after the fiscal first-quarter net loss was $268.2 million, or $3.47 a share, more than twice what analysts expected."
CNN - "Lots Of Uncertainty Developing In The Market For New Homes" (3-28-08)
"Sparkling granite countertops, state-of-the-art appliances, fresh paint, never-walked-on carpets: The lure of a brand new home is undeniable. And bargains appear to abound, relative to pre-downturn values. But today this market is rife with risks. Developers are putting some communities on hold for lack of demand, incentives may not provide good value, and prices are still falling. Census data released Wednesday show that new home sales plunged nearly 30% in February to a 13-year low. The median price fell 2.7% from a year earlier. Buyer beware, real estate agents say. Be informed and very, very cautious. What looks like a bargain might be a bad bet."
Reuters - "Fremont General given deadline to fix bank" (3-28-08)
"Fremont General Corp said on Friday that U.S. banking regulators declared its banking unit undercapitalized and has required the company to raise money or find a buyer in two months. Fremont, which earlier this month received default notices related to $3.15 billion of subprime mortgages and said its survival could be threatened if it were sued, said that on Wednesday the company received a directive from the U.S. Federal Deposit Insurance Corp (FDIC) requiring it to take corrective action by May 26."
Market Watch - "Somber outlook from Fed officials" (3-28-08)
"Uncertainty was the watchword of the day. One Fed official said hopes of a short and shallow downturn were probably misguided. Another said that the Fed's hands-off approach to asset bubbles not might be such a good idea as the turmoil from the collapse of the housing market boom threatens to choke off the financial oxygen needed for a healthy economy."
Reuters - "Banks must come clean so Fed can help" (3-28-08)
"The Federal Reserve must exercise its supervisory authority over banks in order to gain access to confidential financial information that will enable it to make sound decisions, a top central bank official said. Boston Fed President Eric Rosengren said in prepared remarks on Friday that public earnings statements often do not offer enough of a basis for prudent policy."
Orange County Register - "Calif. home prices down 20.67%, nation’s worst" (3-28-08)
"First American LoanPerformance says California home prices in February were falling at a 20.67% annual rate, worst in the nation again. The state’s seen the largest depreciation in home values, by this math, since May. Just behind California in this sad list, ranked by mid-month results, is Florida (-15.74%); Nevada (-15.68%); Arizona (-13.67%); Minnesota (-9.42%) and politically key Pennsylvania (-7.75%.)"
Real Estate Journal - "Should First-Time Buyers Take The Plunge in Today's Market?" (3-28-08)
"Everyone likes a bargain. So it's no surprise that as home prices fall in many markets, those who have been priced out of owning a home are beginning to take notice. And some in the real-estate industry are saying that factors are aligning to make this a good time for first-time buyers to be in the market because they don't have to face the challenge of selling a home in order to buy another."
"The subprime mortgage meltdown has shaken the entire U.S. economy. But nowhere might the impact be as stark as Irvine, California, a planned community nestled between Los Angeles and San Diego. A year ago at this time, Irvine was home to 18 subprime lenders, including many of the leaders in the field, such as New Century Financial and Option One. Then, in what seemed like the blink of an eye, 4,100 good-paying white collar jobs were gone, or roughly 2% of the city's work force."
NAR - "Second-Home Sales Accounted For One-Third of Transactions in 2007" (3-28-08)
"The combined total of vacation- and investment-home sales declined with the overall market in 2007, but still accounted for 33 percent of all existing- and new-home sales, which is close to historic norms, according to the National Association of Realtors®. The market share of homes purchased for investment last year was 21 percent, down from 22 percent in 2006, while another 12 percent were vacation homes, compared with a 14 percent market share in 2006. The total share of second homes declined from 36 percent of transactions in 2006. "
Bloomberg - "KB Home Reports First-Quarter Loss on Land Writedown" (3-28-08)
"KB Home, the fifth-largest U.S. homebuilder, reported a wider loss than analysts projected as the housing recession cut sales and led to land writedowns. The shares fell 4.9 percent after the fiscal first-quarter net loss was $268.2 million, or $3.47 a share, more than twice what analysts expected."
CNN - "Lots Of Uncertainty Developing In The Market For New Homes" (3-28-08)
"Sparkling granite countertops, state-of-the-art appliances, fresh paint, never-walked-on carpets: The lure of a brand new home is undeniable. And bargains appear to abound, relative to pre-downturn values. But today this market is rife with risks. Developers are putting some communities on hold for lack of demand, incentives may not provide good value, and prices are still falling. Census data released Wednesday show that new home sales plunged nearly 30% in February to a 13-year low. The median price fell 2.7% from a year earlier. Buyer beware, real estate agents say. Be informed and very, very cautious. What looks like a bargain might be a bad bet."
Reuters - "Fremont General given deadline to fix bank" (3-28-08)
"Fremont General Corp said on Friday that U.S. banking regulators declared its banking unit undercapitalized and has required the company to raise money or find a buyer in two months. Fremont, which earlier this month received default notices related to $3.15 billion of subprime mortgages and said its survival could be threatened if it were sued, said that on Wednesday the company received a directive from the U.S. Federal Deposit Insurance Corp (FDIC) requiring it to take corrective action by May 26."
Market Watch - "Somber outlook from Fed officials" (3-28-08)
"Uncertainty was the watchword of the day. One Fed official said hopes of a short and shallow downturn were probably misguided. Another said that the Fed's hands-off approach to asset bubbles not might be such a good idea as the turmoil from the collapse of the housing market boom threatens to choke off the financial oxygen needed for a healthy economy."
Reuters - "Banks must come clean so Fed can help" (3-28-08)
"The Federal Reserve must exercise its supervisory authority over banks in order to gain access to confidential financial information that will enable it to make sound decisions, a top central bank official said. Boston Fed President Eric Rosengren said in prepared remarks on Friday that public earnings statements often do not offer enough of a basis for prudent policy."
Orange County Register - "Calif. home prices down 20.67%, nation’s worst" (3-28-08)
"First American LoanPerformance says California home prices in February were falling at a 20.67% annual rate, worst in the nation again. The state’s seen the largest depreciation in home values, by this math, since May. Just behind California in this sad list, ranked by mid-month results, is Florida (-15.74%); Nevada (-15.68%); Arizona (-13.67%); Minnesota (-9.42%) and politically key Pennsylvania (-7.75%.)"
Real Estate Journal - "Should First-Time Buyers Take The Plunge in Today's Market?" (3-28-08)
"Everyone likes a bargain. So it's no surprise that as home prices fall in many markets, those who have been priced out of owning a home are beginning to take notice. And some in the real-estate industry are saying that factors are aligning to make this a good time for first-time buyers to be in the market because they don't have to face the challenge of selling a home in order to buy another."
Thursday, March 27, 2008
Financial Times - "Washington sends in cavalry to fight off full-blown crisis" (3-27-08)
"The US is sending in the -cavalry to fight the crisis in the credit and housing markets - unleashing government-sponsored enterprises to buy and hold mortgage-backed securities (MBS) for which there is little private demand. The move marks a new stage in the policy response to the credit crisis, in which the US government is increasingly deploying all the tools at its disposal - short of an outright public purchase of mortgage securities - to prevent a full-blown credit crunch."
Bloomberg - "Fed Actions Defuse Subprime ARM Rate Reset Bomb" (3-27-08)
"Many analysts and public officials have said that foreclosures of subprime adjustable-rate mortgages would soar this year as owners' monthly payments jumped when interest rates reset to a higher level. Not only is that unlikely to happen, this year's resets of earlier vintages of subprime mortgages may even reduce some payments that increased in 2007."
Yahoo - "Lennar Swings to Loss, Sales Skid" (3-27-08)
"Lennar Corp., one of the nation's largest homebuilders, said Thursday it swung to a loss in the first quarter as it absorbed charges to adjust land values, while new home sales and prices sank amid the stumbling real estate market."
The San Diego Union Tribune - "KPMG tied to subprime lender's fall" (3-27-08)
"A sweeping five-month investigation into the collapse of one of the nation's largest subprime lenders points a finger at a possible new culprit in the mortgage mess: the accountants. New Century Financial, whose failure just a year ago was the start of the crisis, engaged in 'significant improper and imprudent practice' that were condoned and enabled by auditors at the accounting firm KPMG, according to an independent report commissioned by the Justice Department."
Bloomberg - "Banks Fail to Lower Mortgage Rates as Bernanke Cuts" (3-27-08)
"The difference between the 10-year government bond yield and the average U.S. fixed mortgage rate was 2.7 percentage points last month, the widest spread since 1986, data compiled by Bloomberg show. Banks are defying Bernanke and hoarding cash after writing down the value of more than $200 billion of mortgage-related securities since July. The banking industry's earnings fell to a 16-year low of $5.8 billion in the fourth quarter of 2007, ending six years of record profits, according to the Federal Deposit Insurance Corp. in Washington."
CNN - "100 best places to live and launch" (3-27-08)
"Are job worries tempting you to start your own company? We canvassed the country to find towns with the best mix of business advantages and lifestyle appeal. Check out our 100 top picks and find the perfect place to build your dream."
Bloomberg - "Fed May Gain Influence From Crisis at SEC's Expense" (3-27-08)
"America's financial system faces its biggest overhaul since the Great Depression as officials weigh lessons from the credit-market rout and the near collapse of Bear Stearns Cos. Federal Reserve policy makers are redefining which companies are vital to the flow of credit, an area once the sole domain of commercial banks, and which institutions pose risks to the entire economy if they fail. Treasury Secretary Henry Paulson said in a speech yesterday that the Fed should broaden its oversight to include Wall Street investment firms, now regulated by the Securities and Exchange Commission."
Bloomberg - "Merrill May Write Down $4.5 Billion on Assets, Bernstein Says" (3-27-08)
"Merrill had about $30.4 billion in collateralized debt obligations on its balance sheet at the end of 2007, the most among its peers, analysts led by Brad Hintz in New York wrote today in a note to clients. The value of the CDOs fell sharply in March, which was a 'poor' month for fixed income businesses and asset valuations, Hintz said."
Orange County Register - "2009 loan limit — and beyond — back to $417,000, says OFHEO" (3-27-08)
"Let’s first recall Orange County’s new conforming limit is nearly $730,000 — theoretically that means consumers can soon get the lowest possible mortgage rates on loans up to that amount (Fannie Mae has said it will start buying loans up to the new limit on April 1). However, some mortgage brokers say rates above the old limit of $417,000 and up to the new limit are likely to remain elevated except for loans insured by the Federal Housing Administration."
Los Angeles Times - "New home sales fall to a 13-year low in February" (3-27-08)
"Sales of new homes fell in February for the fourth straight month, pushing activity down to a 13-year low as the steep slump in housing continued. The Commerce Department reported that new home sales dropped 1.8% last month to a seasonally adjusted annual rate of 590,000 units, the slowest sales pace since February 1995. The decline was slightly worse than expected."
Real Estate Journal - "Foreclosure Rate Outpaces Bank Sales" (3-27-08)
"Foreclosures are occurring at the highest rate in decades -- and as a result, lenders are acquiring homes faster than they can sell them off. Last year, sales of foreclosed homes rose just 4.4%, while the supply more than doubled, according to First American CoreLogic."
"The US is sending in the -cavalry to fight the crisis in the credit and housing markets - unleashing government-sponsored enterprises to buy and hold mortgage-backed securities (MBS) for which there is little private demand. The move marks a new stage in the policy response to the credit crisis, in which the US government is increasingly deploying all the tools at its disposal - short of an outright public purchase of mortgage securities - to prevent a full-blown credit crunch."
Bloomberg - "Fed Actions Defuse Subprime ARM Rate Reset Bomb" (3-27-08)
"Many analysts and public officials have said that foreclosures of subprime adjustable-rate mortgages would soar this year as owners' monthly payments jumped when interest rates reset to a higher level. Not only is that unlikely to happen, this year's resets of earlier vintages of subprime mortgages may even reduce some payments that increased in 2007."
Yahoo - "Lennar Swings to Loss, Sales Skid" (3-27-08)
"Lennar Corp., one of the nation's largest homebuilders, said Thursday it swung to a loss in the first quarter as it absorbed charges to adjust land values, while new home sales and prices sank amid the stumbling real estate market."
The San Diego Union Tribune - "KPMG tied to subprime lender's fall" (3-27-08)
"A sweeping five-month investigation into the collapse of one of the nation's largest subprime lenders points a finger at a possible new culprit in the mortgage mess: the accountants. New Century Financial, whose failure just a year ago was the start of the crisis, engaged in 'significant improper and imprudent practice' that were condoned and enabled by auditors at the accounting firm KPMG, according to an independent report commissioned by the Justice Department."
Bloomberg - "Banks Fail to Lower Mortgage Rates as Bernanke Cuts" (3-27-08)
"The difference between the 10-year government bond yield and the average U.S. fixed mortgage rate was 2.7 percentage points last month, the widest spread since 1986, data compiled by Bloomberg show. Banks are defying Bernanke and hoarding cash after writing down the value of more than $200 billion of mortgage-related securities since July. The banking industry's earnings fell to a 16-year low of $5.8 billion in the fourth quarter of 2007, ending six years of record profits, according to the Federal Deposit Insurance Corp. in Washington."
CNN - "100 best places to live and launch" (3-27-08)
"Are job worries tempting you to start your own company? We canvassed the country to find towns with the best mix of business advantages and lifestyle appeal. Check out our 100 top picks and find the perfect place to build your dream."
Bloomberg - "Fed May Gain Influence From Crisis at SEC's Expense" (3-27-08)
"America's financial system faces its biggest overhaul since the Great Depression as officials weigh lessons from the credit-market rout and the near collapse of Bear Stearns Cos. Federal Reserve policy makers are redefining which companies are vital to the flow of credit, an area once the sole domain of commercial banks, and which institutions pose risks to the entire economy if they fail. Treasury Secretary Henry Paulson said in a speech yesterday that the Fed should broaden its oversight to include Wall Street investment firms, now regulated by the Securities and Exchange Commission."
Bloomberg - "Merrill May Write Down $4.5 Billion on Assets, Bernstein Says" (3-27-08)
"Merrill had about $30.4 billion in collateralized debt obligations on its balance sheet at the end of 2007, the most among its peers, analysts led by Brad Hintz in New York wrote today in a note to clients. The value of the CDOs fell sharply in March, which was a 'poor' month for fixed income businesses and asset valuations, Hintz said."
Orange County Register - "2009 loan limit — and beyond — back to $417,000, says OFHEO" (3-27-08)
"Let’s first recall Orange County’s new conforming limit is nearly $730,000 — theoretically that means consumers can soon get the lowest possible mortgage rates on loans up to that amount (Fannie Mae has said it will start buying loans up to the new limit on April 1). However, some mortgage brokers say rates above the old limit of $417,000 and up to the new limit are likely to remain elevated except for loans insured by the Federal Housing Administration."
Los Angeles Times - "New home sales fall to a 13-year low in February" (3-27-08)
"Sales of new homes fell in February for the fourth straight month, pushing activity down to a 13-year low as the steep slump in housing continued. The Commerce Department reported that new home sales dropped 1.8% last month to a seasonally adjusted annual rate of 590,000 units, the slowest sales pace since February 1995. The decline was slightly worse than expected."
Real Estate Journal - "Foreclosure Rate Outpaces Bank Sales" (3-27-08)
"Foreclosures are occurring at the highest rate in decades -- and as a result, lenders are acquiring homes faster than they can sell them off. Last year, sales of foreclosed homes rose just 4.4%, while the supply more than doubled, according to First American CoreLogic."
Wednesday, March 26, 2008
NAHB - "Builders Applaud OFHEO Decision On Conforming Loan Limits" (3-26-08)
"The National Association of Home Builders (NAHB) today applauded the Office of Federal Housing Enterprise Oversight (OFHEO) for its decision not to decrease conforming loan limits from the current level of $417,000 in 2009 and subsequent years."
CBIA - "Total New-Home Starts Decline Again in February, CBIA Announces" (3-26-08)
"New-home starts in California continued to decline in February as homebuilders continued to grapple with problems in the housing and credit markets, the California Building Industry Association reported today. According to housing permit data supplied by the Construction Industry Research Board, total housing starts in California, as measured by building permits issued, dropped 28 percent in February when compared to the same month a year ago to 6,855 units. Production of single-family homes fell 60 percent while construction of multifamily units increased 36 percent when compared to February of 2007."
Mortgage Bankers Association - "Mortgage Applications Spike In Latest MBA Weekly Survey; Refis Up 82 Percent" (3-26-08)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 21, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 965.9, an increase of 48.1 percent on a seasonally adjusted basis from 652.0 one week earlier. On an unadjusted basis, the Index increased 46.1 percent compared with the previous week and was up 41.1 percent compared with the same week one year earlier."
Bloomberg - "Paulson Urges Broader Fed Oversight of Wall Street" (3-26-08)
"Treasury Secretary Henry Paulson said the Federal Reserve should broaden its oversight to include Wall Street investment firms in a shakeup of the supervisory system set up during the Great Depression. In a speech to the U.S. Chamber of Commerce, Paulson praised the Fed's decision last week to lend to securities dealers and said the policy should be reserved for times of market stress. 'Certainly, any regular access to the discount window should involve the same type of regulation and supervision,' he said in the remarks today in Washington."
Bloomberg - "Bear Stearns Sale to JPMorgan to Be Probed by Senate" (3-26-08)
"The top lawmakers on the Senate Finance Committee said they are reviewing the terms of the taxpayer-backed sale of Bear Stearns Cos. to JPMorgan Chase & Co."
Market Watch - "Paulson resists Congressional effort to stem mortgage crisis" (3-26-08)
"Treasury Secretary Henry Paulson on Wednesday continued to resist Congressional efforts to stem the negative consequences to homeowners of the housing market collapse. Opposition from the White House could make it difficult for Congress to pass any legislation to help homeowners battling the mortgage crisis."
Bloomberg - "Taxpayers May Be Liable From Bear, Mortgage Rescue" (3-26-08)
"Even as the Bush administration insists it won't risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis. History suggests the Fed may not recover some of the almost $30 billion investment in illiquid mortgage securities it received from Bear Stearns Cos., said Joe Mason, a Drexel University professor who has written on banking crises. Treasury's push to have Fannie Mae and Freddie Mac buy more mortgage bonds reduces the capital the government-chartered companies hold in reserve at a time when foreclosures and defaults are surging. Senators are promising to investigate."
Orange County Register - "New Century’s bankruptcy report blames KPMG, executives for misstatements" (3-26-08)
"A bankruptcy examiner’s report on New Century Financial Corp. accuses the Irvine company’s auditor, KPMG, of allowing the company to change its accounting practices so it could report a profit rather than a loss in the second half of 2006."
Real Estate Journal - "U.S. Officials Warn of ScamsTargeting Homeowners" (3-26-08)
"Federal officials say a wave of opportunistic scams are targeting homeowners trying to avoid foreclosure in the current housing downturn. Monday, prosecutors in California unsealed twin cases against 19 people who, according to agents from the Federal Bureau of Investigation and the Internal Revenue Service, skimmed nearly $13 million in equity from 115 homeowners coast to coast under the guise of a mortgage rescue."
"The National Association of Home Builders (NAHB) today applauded the Office of Federal Housing Enterprise Oversight (OFHEO) for its decision not to decrease conforming loan limits from the current level of $417,000 in 2009 and subsequent years."
CBIA - "Total New-Home Starts Decline Again in February, CBIA Announces" (3-26-08)
"New-home starts in California continued to decline in February as homebuilders continued to grapple with problems in the housing and credit markets, the California Building Industry Association reported today. According to housing permit data supplied by the Construction Industry Research Board, total housing starts in California, as measured by building permits issued, dropped 28 percent in February when compared to the same month a year ago to 6,855 units. Production of single-family homes fell 60 percent while construction of multifamily units increased 36 percent when compared to February of 2007."
Mortgage Bankers Association - "Mortgage Applications Spike In Latest MBA Weekly Survey; Refis Up 82 Percent" (3-26-08)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 21, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 965.9, an increase of 48.1 percent on a seasonally adjusted basis from 652.0 one week earlier. On an unadjusted basis, the Index increased 46.1 percent compared with the previous week and was up 41.1 percent compared with the same week one year earlier."
Bloomberg - "Paulson Urges Broader Fed Oversight of Wall Street" (3-26-08)
"Treasury Secretary Henry Paulson said the Federal Reserve should broaden its oversight to include Wall Street investment firms in a shakeup of the supervisory system set up during the Great Depression. In a speech to the U.S. Chamber of Commerce, Paulson praised the Fed's decision last week to lend to securities dealers and said the policy should be reserved for times of market stress. 'Certainly, any regular access to the discount window should involve the same type of regulation and supervision,' he said in the remarks today in Washington."
Bloomberg - "Bear Stearns Sale to JPMorgan to Be Probed by Senate" (3-26-08)
"The top lawmakers on the Senate Finance Committee said they are reviewing the terms of the taxpayer-backed sale of Bear Stearns Cos. to JPMorgan Chase & Co."
Market Watch - "Paulson resists Congressional effort to stem mortgage crisis" (3-26-08)
"Treasury Secretary Henry Paulson on Wednesday continued to resist Congressional efforts to stem the negative consequences to homeowners of the housing market collapse. Opposition from the White House could make it difficult for Congress to pass any legislation to help homeowners battling the mortgage crisis."
Bloomberg - "Taxpayers May Be Liable From Bear, Mortgage Rescue" (3-26-08)
"Even as the Bush administration insists it won't risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis. History suggests the Fed may not recover some of the almost $30 billion investment in illiquid mortgage securities it received from Bear Stearns Cos., said Joe Mason, a Drexel University professor who has written on banking crises. Treasury's push to have Fannie Mae and Freddie Mac buy more mortgage bonds reduces the capital the government-chartered companies hold in reserve at a time when foreclosures and defaults are surging. Senators are promising to investigate."
Orange County Register - "New Century’s bankruptcy report blames KPMG, executives for misstatements" (3-26-08)
"A bankruptcy examiner’s report on New Century Financial Corp. accuses the Irvine company’s auditor, KPMG, of allowing the company to change its accounting practices so it could report a profit rather than a loss in the second half of 2006."
Real Estate Journal - "U.S. Officials Warn of ScamsTargeting Homeowners" (3-26-08)
"Federal officials say a wave of opportunistic scams are targeting homeowners trying to avoid foreclosure in the current housing downturn. Monday, prosecutors in California unsealed twin cases against 19 people who, according to agents from the Federal Bureau of Investigation and the Internal Revenue Service, skimmed nearly $13 million in equity from 115 homeowners coast to coast under the guise of a mortgage rescue."
Tuesday, March 25, 2008
FBI - "HOUSE STEALING" (3-25-08)
"Last year, a real estate business owner in southeast Los Angeles pled guilty to leading a scam that defrauded more than 100 homeowners and lenders out of some $12 million. She promised to help struggling homeowners pay their mortgages by refinancing their loans. Instead, she and her partners in crime used stolen identities or 'straw buyers' (people who are paid for the illegal use of their personal information) to purchase these homes. They then pocketed the money they borrowed but never made any mortgage payments. In the process, the true owners lost the title to their homes and the banks were out the money they had loaned to fake buyers."
CNN - "California gives mortgage debtors a tax break" (3-25-08)
"The state Senate has approved a bill to help California homeowners whose lenders have forgiven part of their mortgage debt. The bill would end a requirement that homeowners report that part of the loan that was forgiven as income on their tax returns. Senator Mike Machado, a Democrat from Linden, says the bill would help in cases where there is a short sale, a loan modification or a loan refinance in which part or all of the debt is forgiven."
Bloomberg - "Dollar Falls on Speculation U.S. Consumer Confidence Is Waning" (3-25-08)
"The dollar fell the most against the euro in two weeks on speculation industry reports will show U.S. consumer confidence dropped to a five-year low and the housing slump deepened. The dollar dropped from a one-week high against the yen as Deutsche Bank AG economists joined those forecasting the economy will suffer a recession. The U.S. currency also weakened against the Australian and New Zealand dollars, favorite targets of so- called carry trades, as a rally in European and Asian stocks encouraged investors to buy higher-yielding assets."
Bloomberg - "Junk Bond Losses Top $35 Billion, JPMorgan Sees More" (3-25-08)
"High-yield, high-risk bonds are off to their worst start ever, and the biggest investors say there's no recovery in sight. Junk bonds have fallen an average 3.9 percent this year, losing about $35 billion, according to data from Merrill Lynch & Co. indexes. Some funds managed by John Hancock Advisers LLC, OppenheimerFunds Inc. and Fidelity Investments are down more than 7 percent, showing that even the largest investors were caught off guard by the collapse."
Bloomberg - "Gold Climbs in London as Dollar Declines; Silver, Platinum Rise" (3-25-08)
"Gold rose the most in more than two weeks in London after the dollar fell before a U.S. consumer confidence report that may indicate slower economic growth, spurring demand for precious metals as an alternative to stocks. U.S. consumer confidence probably fell this month to the lowest since March 2003, at 73.5, the median of 61 economists surveyed by Bloomberg News. Before today, gold fell 11 percent from a record $1,032.70 an ounce last week as the dollar rebounded from an all-time low against the euro."
Market Watch - "Home prices fall a record 10.7% in past year" (3-25-08)
"The 20-city Case-Shiller home price index fell a record 2.4% from December to January, the 18th consecutive decline in prices. For 10 major cities, prices fell 2.3% in January and 11.4% for the past 12 months."
Bloomberg - "MGIC Sells $745 Million in Stock, Debt to Raise Cash" (3-25-08)
"MGIC Investment Corp., the largest U.S. mortgage insurer, raised $745 million, more than it projected, with the sale of stock and convertible debt after a record fourth-quarter loss. The insurer dropped 7.9 percent in New York trading to reach its lowest close in more than 15 years. Underwriters sold 37.3 million shares of MGIC for $11.25 each, and the company also agreed to sell $325 million in debt, Milwaukee-based MGIC said in statements today. The company had estimated it would sell about $350 million of shares."
Bloomberg - "Fed Expands Role by Aiding JPMorgan's Purchase of Bear Stearns" (3-25-08)
"The Federal Reserve further expanded its role as a backstop to Wall Street dealers, setting up a new company to manage and sell $30 billion of Bear Stearns Cos. assets. In disclosing terms of a financing arrangement to speed JPMorgan Chase & Co.'s purchase of Bear Stearns, the Fed said yesterday it hired BlackRock Inc. to oversee and sell the assets, which will be placed in a new company created by the central bank."
Bloomberg - "Wall Street May Face $460 Bln in Losses, Goldman Says" (3-25-08)
"Wall Street banks, brokerages and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market, or almost four times the amount already disclosed, according to Goldman Sachs Group Inc. Profits will continue to wane, other analysts said."
Bloomberg - "Thornburg Offers $1.35 Billion of Debt Paying 18%" (3-25-08)
"Thornburg Mortgage Inc., the 'jumbo' mortgage lender trying to stave off bankruptcy, rose by more than half after disclosing plans to raise $1.35 billion. The rescue plan gives new investors debt that pays 18 percent and the chance to own a 90 percent stake, according to terms of the private placement outlined by Santa Fe, New Mexico- based Thornburg in a statement today. Thornburg is asking the New York Stock Exchange for permission to issue new securities without a shareholder vote because delay 'would seriously jeopardize the financial viability of the company.'"
Orange County Register - "Borrowing costs drop, press asleep" (3-25-08)
"In addition to the subprime borrowers and other homeowners with toxic loans, there has been a great deal of concern expressed about the potential damage to the economy due to resetting of other types of adjustable-rate mortgages (ARMs). This concern was well warranted back in 2007 when the index values that these loans were tied to were all high."
"Last year, a real estate business owner in southeast Los Angeles pled guilty to leading a scam that defrauded more than 100 homeowners and lenders out of some $12 million. She promised to help struggling homeowners pay their mortgages by refinancing their loans. Instead, she and her partners in crime used stolen identities or 'straw buyers' (people who are paid for the illegal use of their personal information) to purchase these homes. They then pocketed the money they borrowed but never made any mortgage payments. In the process, the true owners lost the title to their homes and the banks were out the money they had loaned to fake buyers."
CNN - "California gives mortgage debtors a tax break" (3-25-08)
"The state Senate has approved a bill to help California homeowners whose lenders have forgiven part of their mortgage debt. The bill would end a requirement that homeowners report that part of the loan that was forgiven as income on their tax returns. Senator Mike Machado, a Democrat from Linden, says the bill would help in cases where there is a short sale, a loan modification or a loan refinance in which part or all of the debt is forgiven."
Bloomberg - "Dollar Falls on Speculation U.S. Consumer Confidence Is Waning" (3-25-08)
"The dollar fell the most against the euro in two weeks on speculation industry reports will show U.S. consumer confidence dropped to a five-year low and the housing slump deepened. The dollar dropped from a one-week high against the yen as Deutsche Bank AG economists joined those forecasting the economy will suffer a recession. The U.S. currency also weakened against the Australian and New Zealand dollars, favorite targets of so- called carry trades, as a rally in European and Asian stocks encouraged investors to buy higher-yielding assets."
Bloomberg - "Junk Bond Losses Top $35 Billion, JPMorgan Sees More" (3-25-08)
"High-yield, high-risk bonds are off to their worst start ever, and the biggest investors say there's no recovery in sight. Junk bonds have fallen an average 3.9 percent this year, losing about $35 billion, according to data from Merrill Lynch & Co. indexes. Some funds managed by John Hancock Advisers LLC, OppenheimerFunds Inc. and Fidelity Investments are down more than 7 percent, showing that even the largest investors were caught off guard by the collapse."
Bloomberg - "Gold Climbs in London as Dollar Declines; Silver, Platinum Rise" (3-25-08)
"Gold rose the most in more than two weeks in London after the dollar fell before a U.S. consumer confidence report that may indicate slower economic growth, spurring demand for precious metals as an alternative to stocks. U.S. consumer confidence probably fell this month to the lowest since March 2003, at 73.5, the median of 61 economists surveyed by Bloomberg News. Before today, gold fell 11 percent from a record $1,032.70 an ounce last week as the dollar rebounded from an all-time low against the euro."
Market Watch - "Home prices fall a record 10.7% in past year" (3-25-08)
"The 20-city Case-Shiller home price index fell a record 2.4% from December to January, the 18th consecutive decline in prices. For 10 major cities, prices fell 2.3% in January and 11.4% for the past 12 months."
Bloomberg - "MGIC Sells $745 Million in Stock, Debt to Raise Cash" (3-25-08)
"MGIC Investment Corp., the largest U.S. mortgage insurer, raised $745 million, more than it projected, with the sale of stock and convertible debt after a record fourth-quarter loss. The insurer dropped 7.9 percent in New York trading to reach its lowest close in more than 15 years. Underwriters sold 37.3 million shares of MGIC for $11.25 each, and the company also agreed to sell $325 million in debt, Milwaukee-based MGIC said in statements today. The company had estimated it would sell about $350 million of shares."
Bloomberg - "Fed Expands Role by Aiding JPMorgan's Purchase of Bear Stearns" (3-25-08)
"The Federal Reserve further expanded its role as a backstop to Wall Street dealers, setting up a new company to manage and sell $30 billion of Bear Stearns Cos. assets. In disclosing terms of a financing arrangement to speed JPMorgan Chase & Co.'s purchase of Bear Stearns, the Fed said yesterday it hired BlackRock Inc. to oversee and sell the assets, which will be placed in a new company created by the central bank."
Bloomberg - "Wall Street May Face $460 Bln in Losses, Goldman Says" (3-25-08)
"Wall Street banks, brokerages and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market, or almost four times the amount already disclosed, according to Goldman Sachs Group Inc. Profits will continue to wane, other analysts said."
Bloomberg - "Thornburg Offers $1.35 Billion of Debt Paying 18%" (3-25-08)
"Thornburg Mortgage Inc., the 'jumbo' mortgage lender trying to stave off bankruptcy, rose by more than half after disclosing plans to raise $1.35 billion. The rescue plan gives new investors debt that pays 18 percent and the chance to own a 90 percent stake, according to terms of the private placement outlined by Santa Fe, New Mexico- based Thornburg in a statement today. Thornburg is asking the New York Stock Exchange for permission to issue new securities without a shareholder vote because delay 'would seriously jeopardize the financial viability of the company.'"
Orange County Register - "Borrowing costs drop, press asleep" (3-25-08)
"In addition to the subprime borrowers and other homeowners with toxic loans, there has been a great deal of concern expressed about the potential damage to the economy due to resetting of other types of adjustable-rate mortgages (ARMs). This concern was well warranted back in 2007 when the index values that these loans were tied to were all high."
Monday, March 24, 2008
NAR - "Existing Home Sales Rise In February" (3-24-08)
"including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate (1) of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September."
CAR - "C.A.R. reports sales decrease 28.5 percent, median home price falls 26.2 percent in February" (3-24-08)
"Home sales decreased 28.5 percent in February in California compared with the same period a year ago, while the median price of an existing home fell 26.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today."
NAHB - "Builders Support Federal Housing Finance Board Mortgage Relief Proposal" (3-24-08)
"The National Association of Home Builders (NAHB) today applauded a decision by the Federal Housing Finance Board to allow the Federal Home Loan Banks to temporarily increase their holdings of Fannie Mae and Freddie Mac securities to help stabilize the mortgage finance market."
CNN - "PennyMac to invest in shaky mortgages" (3-24-08)
"The new company, Private National Mortgage, also known as PennyMac, intends to help borrowers restructure loans so they can avoid foreclosure and maintain payments. Mortgage delinquency and default rates have risen rapidly since the middle of 2007, leading to a growing number of foreclosures."
Yahoo - "JPMorgan to raise offer for Bear Stearns" (3-24-08)
"JPMorgan Chase & CO (JPM.N) is in talks to increase its offer for Bear Stears COs (BSC.N) to $10 per share in an effort to pacify angry shareholders of Bear Stearns, the New York Times reported in its online edition."
Bloomberg - "Wall Street Firms Cut 34,000 Jobs, Most Since 2001 Dot-Com Bust" (3-24-08)
"Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001. Citigroup Inc., Lehman Brothers Holdings Inc. and Morgan Stanley are among the firms that have disclosed headcount reductions so far. After the Internet bubble burst, 39,800 jobs were eliminated during the same period; the number climbed to 90,000 in the next two years, according to the Securities Industry and Financial Markets Association."
Bloomberg - "Fed May Buy Mortgages Next, Treasury Investors Bet" (3-24-08)
"Forget lower interest rates. For the Federal Reserve to keep the financial markets from imploding it needs to buy troubled mortgage bonds from banks and securities firms, say the world's biggest Treasury investors. Even after cutting rates by 3 percentage points since September, expanding the range of securities it accepts as collateral for loans and giving dealers access to its discount window, the Fed has been unable to promote confidence. The difference between what the government and banks pay for three- month loans almost doubled in the past month to 1.69 percentage points."
Market Watch - "Ex-Countrywide execs forming mortgage firm" (3-24-08)
"A number of former Countrywide Financial Corp. executives are forming a firm to take advantage of the massive unwinding of the mortgage-securitization business, The Wall Street Journal reported."
CNN - "Why it's not too late to refinance" (3-24-08)
"Earlier this year, when mortgage rates dipped below 6% for the first time since 2005, homeowners rushed to refinance costlier loans. In fact, more than six out of 10 mortgage applications so far this year have been for refis. But lately mortgage rates have been on an uptick - the average 30-year fixed mortgage hit 6.2% by the end of February, up from 5.6% a month earlier."
Orange County Register - "Standard Pacific gets credit extension — too little too late?" (3-24-08)
"Standard Pacific Corp. said its bankers granted a 45-day waiver of any default arising from non-compliance with financial covenants — meaning the company can stave off a major showdown with creditors until at least May 14. The troubled Irvine homebuilder’s waiver was originally scheduled to expire March 30. As part of the deal, Standard Pacific said its revolving credit facility was slashed to $700 million from $900 million. The company said it had $90 million in borrowings and $49 million in letters of credit under the revolving credit facility as of March 21."
Orange County Register - "Carrington said to seek $200 million in funding" (3-24-08)
"Carrington Capital Management, which last year bought Irvine-based New Century Financial’s loan servicing operation, is trying to persuade investors to lend it $200 million to replace bank loans, according to the Web site of the UK’s Financial Times."
Orange County Register - "Bigger loan limits help 75% of O.C. home inventory" (3-24-08)
"Home market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo reports, 'Lenders are scrambling in preparation for the new conventional and the FHA loan limits of $729,750, which are just beginning to hit the market. The new loan limits will have a profound impact on demand. At 10% down, the old $417,000 limit only covers 37% of the current active inventory. The new limits now encompass a staggering 75% of the inventory.'"
"including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate (1) of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September."
CAR - "C.A.R. reports sales decrease 28.5 percent, median home price falls 26.2 percent in February" (3-24-08)
"Home sales decreased 28.5 percent in February in California compared with the same period a year ago, while the median price of an existing home fell 26.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today."
NAHB - "Builders Support Federal Housing Finance Board Mortgage Relief Proposal" (3-24-08)
"The National Association of Home Builders (NAHB) today applauded a decision by the Federal Housing Finance Board to allow the Federal Home Loan Banks to temporarily increase their holdings of Fannie Mae and Freddie Mac securities to help stabilize the mortgage finance market."
CNN - "PennyMac to invest in shaky mortgages" (3-24-08)
"The new company, Private National Mortgage, also known as PennyMac, intends to help borrowers restructure loans so they can avoid foreclosure and maintain payments. Mortgage delinquency and default rates have risen rapidly since the middle of 2007, leading to a growing number of foreclosures."
Yahoo - "JPMorgan to raise offer for Bear Stearns" (3-24-08)
"JPMorgan Chase & CO (JPM.N) is in talks to increase its offer for Bear Stears COs (BSC.N) to $10 per share in an effort to pacify angry shareholders of Bear Stearns, the New York Times reported in its online edition."
Bloomberg - "Wall Street Firms Cut 34,000 Jobs, Most Since 2001 Dot-Com Bust" (3-24-08)
"Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001. Citigroup Inc., Lehman Brothers Holdings Inc. and Morgan Stanley are among the firms that have disclosed headcount reductions so far. After the Internet bubble burst, 39,800 jobs were eliminated during the same period; the number climbed to 90,000 in the next two years, according to the Securities Industry and Financial Markets Association."
Bloomberg - "Fed May Buy Mortgages Next, Treasury Investors Bet" (3-24-08)
"Forget lower interest rates. For the Federal Reserve to keep the financial markets from imploding it needs to buy troubled mortgage bonds from banks and securities firms, say the world's biggest Treasury investors. Even after cutting rates by 3 percentage points since September, expanding the range of securities it accepts as collateral for loans and giving dealers access to its discount window, the Fed has been unable to promote confidence. The difference between what the government and banks pay for three- month loans almost doubled in the past month to 1.69 percentage points."
Market Watch - "Ex-Countrywide execs forming mortgage firm" (3-24-08)
"A number of former Countrywide Financial Corp. executives are forming a firm to take advantage of the massive unwinding of the mortgage-securitization business, The Wall Street Journal reported."
CNN - "Why it's not too late to refinance" (3-24-08)
"Earlier this year, when mortgage rates dipped below 6% for the first time since 2005, homeowners rushed to refinance costlier loans. In fact, more than six out of 10 mortgage applications so far this year have been for refis. But lately mortgage rates have been on an uptick - the average 30-year fixed mortgage hit 6.2% by the end of February, up from 5.6% a month earlier."
Orange County Register - "Standard Pacific gets credit extension — too little too late?" (3-24-08)
"Standard Pacific Corp. said its bankers granted a 45-day waiver of any default arising from non-compliance with financial covenants — meaning the company can stave off a major showdown with creditors until at least May 14. The troubled Irvine homebuilder’s waiver was originally scheduled to expire March 30. As part of the deal, Standard Pacific said its revolving credit facility was slashed to $700 million from $900 million. The company said it had $90 million in borrowings and $49 million in letters of credit under the revolving credit facility as of March 21."
Orange County Register - "Carrington said to seek $200 million in funding" (3-24-08)
"Carrington Capital Management, which last year bought Irvine-based New Century Financial’s loan servicing operation, is trying to persuade investors to lend it $200 million to replace bank loans, according to the Web site of the UK’s Financial Times."
Orange County Register - "Bigger loan limits help 75% of O.C. home inventory" (3-24-08)
"Home market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo reports, 'Lenders are scrambling in preparation for the new conventional and the FHA loan limits of $729,750, which are just beginning to hit the market. The new loan limits will have a profound impact on demand. At 10% down, the old $417,000 limit only covers 37% of the current active inventory. The new limits now encompass a staggering 75% of the inventory.'"
The San Diego Union Tribune - "Investors rode housing boom, and now many are going bust" (3-23-08)
"Just how big a role investors played in inflating San Diego's real estate bubble is unclear. Experts have widely varied estimates – with some putting the number as low as 10 percent of overall buyers in the last couple years while others speculate that it was closer to 30 percent."
"Just how big a role investors played in inflating San Diego's real estate bubble is unclear. Experts have widely varied estimates – with some putting the number as low as 10 percent of overall buyers in the last couple years while others speculate that it was closer to 30 percent."
Yahoo - "Fed's Moves Bring Praise, New Scrutiny" (3-22-08)
"The Federal Reserve has taken its boldest action since the Great Depression, invoking rarely used powers in an effort to contain a panic threatening to undermine the economy. The central bank acted with speed the White House and Congress only could envy. For now, the steps orchestrated by Chairman Ben Bernanke, in the first critical test of his leadership since succeeding Alan Greenspan in early 2006, are earning praise from the Bush administration, Congress and presidential contenders Barack Obama, Hillary Rodham Clinton and John McCain."
Bloomberg - "Bank of America May Take $6.5 Billion Loss Provision" (3-22-08)
"Bank of America Corp., the second biggest U.S. bank by assets, may take a record $6.5 billion provision in the first quarter to cover possible future losses in its home equity and mortgage portfolios, Punk Ziegel and Co. analyst Richard Bove wrote. Whether the two portfolios have that level of loss will depend on the economy and developments in the housing markets, Bove wrote in his e-mailed March 24 report. The bank, meanwhile, will experience only a shift in equity and still report a profit, he wrote. The Charlotte, North Carolina-based bank plans to release first-quarter results April 21."
Bloomberg - "Fed Denies Report It's Involved in Talks on Buying Mortgages" (3-22-08)
"A Federal Reserve official denied a newspaper report that the Fed is in talks with foreign central banks about the feasibility of using taxpayer money to buy mortgage-backed securities. The Financial Times reported today that the discussions among officials at the Fed, the Bank of England and the European Central Bank are part of broader talks about how to ease turmoil in global financial markets. The newspaper didn't say where it got the information."
Orange County Register - "What Spitzer incident teaches us about government and banking" (3-22-08)
"Federal investigators began watching Eliot Spitzer, the former governor of New York who resigned amid a call-girl scandal, after noticing some allegedly irregular banking activity, according to various press reports. The New York Times has an interesting story on the government’s tactics in the case here."
North County Times - "Real estate prosecutions increase" (3-23-08)
"A pair of recent FBI raids in Murrieta illustrates caseloads that are growing as homeowners allege recent ---- and not-so-recent --- incidents of real estate fraud, law-enforcement officials said in interviews this month. It has been a year or more since Southern California's most recent real estate wave began to ebb, and court dockets are still filling up with allegations of fraud from the boom. And reports of identity theft and bogus reverse mortgages continue to roll in."
"The Federal Reserve has taken its boldest action since the Great Depression, invoking rarely used powers in an effort to contain a panic threatening to undermine the economy. The central bank acted with speed the White House and Congress only could envy. For now, the steps orchestrated by Chairman Ben Bernanke, in the first critical test of his leadership since succeeding Alan Greenspan in early 2006, are earning praise from the Bush administration, Congress and presidential contenders Barack Obama, Hillary Rodham Clinton and John McCain."
Bloomberg - "Bank of America May Take $6.5 Billion Loss Provision" (3-22-08)
"Bank of America Corp., the second biggest U.S. bank by assets, may take a record $6.5 billion provision in the first quarter to cover possible future losses in its home equity and mortgage portfolios, Punk Ziegel and Co. analyst Richard Bove wrote. Whether the two portfolios have that level of loss will depend on the economy and developments in the housing markets, Bove wrote in his e-mailed March 24 report. The bank, meanwhile, will experience only a shift in equity and still report a profit, he wrote. The Charlotte, North Carolina-based bank plans to release first-quarter results April 21."
Bloomberg - "Fed Denies Report It's Involved in Talks on Buying Mortgages" (3-22-08)
"A Federal Reserve official denied a newspaper report that the Fed is in talks with foreign central banks about the feasibility of using taxpayer money to buy mortgage-backed securities. The Financial Times reported today that the discussions among officials at the Fed, the Bank of England and the European Central Bank are part of broader talks about how to ease turmoil in global financial markets. The newspaper didn't say where it got the information."
Orange County Register - "What Spitzer incident teaches us about government and banking" (3-22-08)
"Federal investigators began watching Eliot Spitzer, the former governor of New York who resigned amid a call-girl scandal, after noticing some allegedly irregular banking activity, according to various press reports. The New York Times has an interesting story on the government’s tactics in the case here."
North County Times - "Real estate prosecutions increase" (3-23-08)
"A pair of recent FBI raids in Murrieta illustrates caseloads that are growing as homeowners allege recent ---- and not-so-recent --- incidents of real estate fraud, law-enforcement officials said in interviews this month. It has been a year or more since Southern California's most recent real estate wave began to ebb, and court dockets are still filling up with allegations of fraud from the boom. And reports of identity theft and bogus reverse mortgages continue to roll in."
Friday, March 21, 2008
Business Week - "Architects' Billings Sharply Down in 2008" (3-21-08)
"As economists track mounting evidence of a recession in the U.S., data released yesterday reveal that a key measure of the market for architectural services, the Architectural Billings Index (ABI), a survey of firms' billings compiled by the American Institute of Architects (AIA), fell steeply during the month of February—the second tumble in as many months and the largest consecutive decrease in the ABI's 13-year history. From its score of 55 in December 2007, the ABI dropped 4.3 points in January, ending the month at 50.7. This was followed in February by an 8.9-point plunge, for a score of 41.8. An ABI number over 50 indicates an increase in billing activity, below 50 represents a decrease. February's numbers marked the biggest monthly decline since October 2001, when the nation's economy was last in a recession. Studies suggest that the ABI is a good predictor of construction activity nine months to one year in the future."
The New York Sun - "Congress Eyes Collapse of Bear Stearns" (3-21-08)
"Capitol Hill is finally taking notice of the Federal Reserve and its unprecedented programs to pour liquidity into the market. As banks borrowed a staggering $19 billion a day from the Fed this week — an increase of more than 1,800% over last week — and adjusted to the fact that the Fed had helped shield Bear Stearns from insolvency, members of Congress are beginning to question the impact of these decisions."
The Washington Post - "Greenspan Stands His Ground" (3-21-08)
"In an interview yesterday, Greenspan said the Fed wasn't to blame. He said that global forces beyond the control of the Federal Reserve had kept long-term interest rates low, fueling the housing bubble earlier this decade. 'Those who argue that you can incrementally increase interest rates to defuse bubbles ought to try it some time,' he said. 'I don't know of a single example of when interest rate policy has been successful in suppressing gains in asset prices.'"
Orange County Register - "Early March O.C. home price 20% below ‘07 peak" (3-21-08)
"DataQuick’s freshest housing stats show a continued painfully slow O.C. market with weak pricing. For the 22 business days ended March 7, sales totaled 1,530 — a hint that March could be the seventh-straight month with less than 2,000 homes purchased. Before last August, when the credit crunch put a clamp on the market, only three months since 1988 had such slow homebuying in O.C."
Orange County Register - "Commercial real estate prepares for ’slow burn’" (3-21-08)
"80.3% of bankers said in a recent survey that they were tightening their lending standards. The volume of commercial mortgage-backed securities dropped from $47.8 billion in the first quarter of 2007 to $3.6 billion so far this year. CMBS and another mortgage security, collateralized debt obligations or CDO’s, made up 57% of all commercial real estate loans in the summer of 2007, before the credit crunch."
Orange County Register - "Schwarzenegger on jobs" (3-21-08)
"Gov. Arnold Schwarzenegger said he’s attempting to stimulate job creation by tapping $29 billion in unallocated revenue from infrastructure bonds that were approved by voters in 2006."
Los Angeles Times - "As Southland counties reassess home values, tax bills fall" (3-21-08)
"The tumbling housing market has prompted county tax officials around Southern California to begin reducing the assessed value of many houses, resulting in lower tax bills for homeowners but less-than-expected revenue for already cash-strapped governments. The values of more than 41,000 homes have been reassessed downward so far in Los Angeles County, resulting in an average tax saving of $660. Other counties have barely begun the reassessment process but promise to get the job done before property tax bills are mailed in October."
Real Estate Journal - "U.S. Puts Faith In Fannie, Freddie" (3-21-08)
"Federal regulators, in an effort to contain financial turmoil, are handing government-sponsored companies an even bigger role in propping up the mortgage market. Officials affirmed Wednesday that government-sponsored mortgage investors Fannie Mae and Freddie Mac will enjoy loosened capital requirements, allowing them to pile more mortgage securities onto their balance sheets. Fannie and Freddie could purchase an additional $200 billion of mortgage securities, equivalent to about 10% of expected U.S. home-mortgage lending this year. The two also plan to raise new capital."
"As economists track mounting evidence of a recession in the U.S., data released yesterday reveal that a key measure of the market for architectural services, the Architectural Billings Index (ABI), a survey of firms' billings compiled by the American Institute of Architects (AIA), fell steeply during the month of February—the second tumble in as many months and the largest consecutive decrease in the ABI's 13-year history. From its score of 55 in December 2007, the ABI dropped 4.3 points in January, ending the month at 50.7. This was followed in February by an 8.9-point plunge, for a score of 41.8. An ABI number over 50 indicates an increase in billing activity, below 50 represents a decrease. February's numbers marked the biggest monthly decline since October 2001, when the nation's economy was last in a recession. Studies suggest that the ABI is a good predictor of construction activity nine months to one year in the future."
The New York Sun - "Congress Eyes Collapse of Bear Stearns" (3-21-08)
"Capitol Hill is finally taking notice of the Federal Reserve and its unprecedented programs to pour liquidity into the market. As banks borrowed a staggering $19 billion a day from the Fed this week — an increase of more than 1,800% over last week — and adjusted to the fact that the Fed had helped shield Bear Stearns from insolvency, members of Congress are beginning to question the impact of these decisions."
The Washington Post - "Greenspan Stands His Ground" (3-21-08)
"In an interview yesterday, Greenspan said the Fed wasn't to blame. He said that global forces beyond the control of the Federal Reserve had kept long-term interest rates low, fueling the housing bubble earlier this decade. 'Those who argue that you can incrementally increase interest rates to defuse bubbles ought to try it some time,' he said. 'I don't know of a single example of when interest rate policy has been successful in suppressing gains in asset prices.'"
Orange County Register - "Early March O.C. home price 20% below ‘07 peak" (3-21-08)
"DataQuick’s freshest housing stats show a continued painfully slow O.C. market with weak pricing. For the 22 business days ended March 7, sales totaled 1,530 — a hint that March could be the seventh-straight month with less than 2,000 homes purchased. Before last August, when the credit crunch put a clamp on the market, only three months since 1988 had such slow homebuying in O.C."
Orange County Register - "Commercial real estate prepares for ’slow burn’" (3-21-08)
"80.3% of bankers said in a recent survey that they were tightening their lending standards. The volume of commercial mortgage-backed securities dropped from $47.8 billion in the first quarter of 2007 to $3.6 billion so far this year. CMBS and another mortgage security, collateralized debt obligations or CDO’s, made up 57% of all commercial real estate loans in the summer of 2007, before the credit crunch."
Orange County Register - "Schwarzenegger on jobs" (3-21-08)
"Gov. Arnold Schwarzenegger said he’s attempting to stimulate job creation by tapping $29 billion in unallocated revenue from infrastructure bonds that were approved by voters in 2006."
Los Angeles Times - "As Southland counties reassess home values, tax bills fall" (3-21-08)
"The tumbling housing market has prompted county tax officials around Southern California to begin reducing the assessed value of many houses, resulting in lower tax bills for homeowners but less-than-expected revenue for already cash-strapped governments. The values of more than 41,000 homes have been reassessed downward so far in Los Angeles County, resulting in an average tax saving of $660. Other counties have barely begun the reassessment process but promise to get the job done before property tax bills are mailed in October."
Real Estate Journal - "U.S. Puts Faith In Fannie, Freddie" (3-21-08)
"Federal regulators, in an effort to contain financial turmoil, are handing government-sponsored companies an even bigger role in propping up the mortgage market. Officials affirmed Wednesday that government-sponsored mortgage investors Fannie Mae and Freddie Mac will enjoy loosened capital requirements, allowing them to pile more mortgage securities onto their balance sheets. Fannie and Freddie could purchase an additional $200 billion of mortgage securities, equivalent to about 10% of expected U.S. home-mortgage lending this year. The two also plan to raise new capital."
Thursday, March 20, 2008
Mortgage Bankers Association - "Volume of Maturing Commercial/Multifamily Mortgages to Be Low in Coming Years" (3-20-08)
"The Mortgage Bankers Association (MBA) is today reporting that the commercial and multifamily mortgage market faces limited exposure to refinance risks stemming from the current credit crunch through the release of its Research DataNote. The report notes that relatively few commercial/multifamily mortgages will mature in the next two years."
Bloomberg - "Credit Suisse Drops as Bank Sees Loss After Writedown" (3-20-08)
"Credit Suisse Group fell 6.4 percent in Swiss trading after the company said it may post a first- quarter loss because of writedowns on debt securities deliberately mispriced by employees. Switzerland's second-largest bank dropped 3.30 francs to 48.50 francs, bringing declines this year to 29 percent. The Zurich-based company said today it will write down $2.65 billion over the fourth quarter of 2007 and the first three months of 2008, making a profit this quarter 'unlikely.'"
CNN - "Brokers who lie, and more subprime nightmares" (3-20-08)
"Yolanda Cruz knew soon after she refinanced her home two and a half years ago she had a problem. She thought the $1,478 monthly payment quoted by her mortgage broker included taxes and insurance. In fact, Cruz says she asked the broker repeatedly if those costs were included and was reassured they were."
Business Week - "Fannie and Freddie Set Free" (3-20-08)
"Another stone fell into place in the federal government's plan to build a path to credit market recovery. On Mar. 19, the Office of Federal Housing Enterprise Oversight, or OFHEO, said it was reducing the amount of capital it requires Fannie Mae (FNM) and Freddie Mac (FRE) to maintain on their balance sheets above statutory requirements. By reducing the capital surplus level from 30% to 20%, the regulator will provide up to $200 billion in immediate liquidity to the distressed mortgage-backed securities market."
Bloomberg - "Dollar Rises Against Euro, Yen as Oil, Commodity Prices Decline" (3-20-08)
"The dollar rose to its strongest in a week against the euro as speculation a global economic slowdown will reduce demand for raw materials pushed gold and oil lower. Europe's common currency declined after Credit Suisse Group said it may have a loss this quarter because of writedowns on debt securities. The dollar climbed to the highest level in more than a week versus the currencies of its major trade partners as crude, which is priced in the U.S. currency, dropped after a government report showed weaker demand for fuel."
Bloomberg - "Citigroup Cuts 2,000 More Jobs in Securities Division" (3-20-08)
"Citigroup Inc. will cut 2,000 more trading and investment-banking jobs than previously announced as the collapse of the subprime mortgage market puts the biggest U.S. bank on track for its second-straight quarterly loss. The reductions are on top of about 4,000 disclosed in January, a person familiar with the plan said. They add up to about 10 percent of the securities division's 60,000 people and will be spread across offices in New York and London as well as smaller sites in Asia and Europe, said the person, who declined to be identified because the bank hasn't formally announced the decision. Most of the cuts will take place by the end of March."
Bloomberg - "California Leads U.S. in Defaults, Price Drop, Slowing Growth" (3-20-08)
"Sacramento may eliminate up to 600 jobs in the city's first staff reductions in half a century, and the police and fire departments in the California capital may have their budgets cut by 20 percent. The culprit is the collapse of the U.S. housing market. California, the birthplace of the subprime mortgage industry, is paying the highest price of any state as the housing meltdown persists. Its gross domestic product will drop 1.5 percent in the first half of 2008, the most in the U.S., analysts at Lexington, Massachusetts-based Global Insight Inc. estimate."
Bloomberg - "Former Countrywide President Forms Mortgage Company" (3-20-08)
"Countrywide Financial Corp.'s ex- president is starting a mortgage company that will initially focus on distressed assets, joined by at least nine senior former employees from the largest U.S. home lender."
Orange County Register - "Big Orange property index’s biggest fall since ‘95" (3-20-08)
"One very telling credit-crunch stat in this mix: O.C. real estate lending now runs 40% below its 2003 peak. Other Big O real estate tidbits: jobs are off 6.2% in a year; home sales are down 36%; and permits to build new housing has fallen 3.5%. The lone positive? Rents, up 4.9% in 12 months."
Orange County Register - "Fremont’s woes mount" (3-20-08)
"Things may be coming to a head with Brea-based Fremont General, owner of Fremont Investment & Loan. Last year I wrote about nondepository mortgage banks failing — New Century Financial and so on — and this year I fear lenders that actually take deposits from consumers could be at risk. Fremont, which issues certificates of deposit, last reported $7 billion in deposits to the Federal Deposit Insurance Corp."
Real Estate Journal - "Housing Bust FuelsBlame Game" (3-20-08)
"As the falling housing market shakes financial institutions and pummels Americans in an election year, the nation's economic woes have surged to the top of voters' minds. The timely question: To what extent are politicians and regulators at fault?"
Real Estate Journal - "Mortgage Brokers Take JobsAdvising Anxious Borrowers" (3-20-08)
"Mortgage brokers like Bill Whitehouse thrived on commissions during the housing boom amid lax lending standards. Now, with mortgage defaults soaring and lending volumes plunging, some former brokers and loan officers have converted to a new occupation: counseling borrowers who are trying to avert foreclosure."
Bloomberg - "California Leads U.S. in Defaults, Home-Price Decline" (3-20-08)
"Sacramento may eliminate up to 600 jobs in the city's first staff reductions in half a century, and the police and fire departments in the California capital may have their budgets cut by 20 percent. The culprit is the collapse of the U.S. housing market. California, the birthplace of the subprime mortgage industry, is paying the highest price of any state as the housing meltdown persists. Its gross domestic product will drop 1.5 percent in the first half of 2008, the most in the U.S., analysts at Lexington, Massachusetts-based Global Insight Inc. estimate."
"The Mortgage Bankers Association (MBA) is today reporting that the commercial and multifamily mortgage market faces limited exposure to refinance risks stemming from the current credit crunch through the release of its Research DataNote. The report notes that relatively few commercial/multifamily mortgages will mature in the next two years."
Bloomberg - "Credit Suisse Drops as Bank Sees Loss After Writedown" (3-20-08)
"Credit Suisse Group fell 6.4 percent in Swiss trading after the company said it may post a first- quarter loss because of writedowns on debt securities deliberately mispriced by employees. Switzerland's second-largest bank dropped 3.30 francs to 48.50 francs, bringing declines this year to 29 percent. The Zurich-based company said today it will write down $2.65 billion over the fourth quarter of 2007 and the first three months of 2008, making a profit this quarter 'unlikely.'"
CNN - "Brokers who lie, and more subprime nightmares" (3-20-08)
"Yolanda Cruz knew soon after she refinanced her home two and a half years ago she had a problem. She thought the $1,478 monthly payment quoted by her mortgage broker included taxes and insurance. In fact, Cruz says she asked the broker repeatedly if those costs were included and was reassured they were."
Business Week - "Fannie and Freddie Set Free" (3-20-08)
"Another stone fell into place in the federal government's plan to build a path to credit market recovery. On Mar. 19, the Office of Federal Housing Enterprise Oversight, or OFHEO, said it was reducing the amount of capital it requires Fannie Mae (FNM) and Freddie Mac (FRE) to maintain on their balance sheets above statutory requirements. By reducing the capital surplus level from 30% to 20%, the regulator will provide up to $200 billion in immediate liquidity to the distressed mortgage-backed securities market."
Bloomberg - "Dollar Rises Against Euro, Yen as Oil, Commodity Prices Decline" (3-20-08)
"The dollar rose to its strongest in a week against the euro as speculation a global economic slowdown will reduce demand for raw materials pushed gold and oil lower. Europe's common currency declined after Credit Suisse Group said it may have a loss this quarter because of writedowns on debt securities. The dollar climbed to the highest level in more than a week versus the currencies of its major trade partners as crude, which is priced in the U.S. currency, dropped after a government report showed weaker demand for fuel."
Bloomberg - "Citigroup Cuts 2,000 More Jobs in Securities Division" (3-20-08)
"Citigroup Inc. will cut 2,000 more trading and investment-banking jobs than previously announced as the collapse of the subprime mortgage market puts the biggest U.S. bank on track for its second-straight quarterly loss. The reductions are on top of about 4,000 disclosed in January, a person familiar with the plan said. They add up to about 10 percent of the securities division's 60,000 people and will be spread across offices in New York and London as well as smaller sites in Asia and Europe, said the person, who declined to be identified because the bank hasn't formally announced the decision. Most of the cuts will take place by the end of March."
Bloomberg - "California Leads U.S. in Defaults, Price Drop, Slowing Growth" (3-20-08)
"Sacramento may eliminate up to 600 jobs in the city's first staff reductions in half a century, and the police and fire departments in the California capital may have their budgets cut by 20 percent. The culprit is the collapse of the U.S. housing market. California, the birthplace of the subprime mortgage industry, is paying the highest price of any state as the housing meltdown persists. Its gross domestic product will drop 1.5 percent in the first half of 2008, the most in the U.S., analysts at Lexington, Massachusetts-based Global Insight Inc. estimate."
Bloomberg - "Former Countrywide President Forms Mortgage Company" (3-20-08)
"Countrywide Financial Corp.'s ex- president is starting a mortgage company that will initially focus on distressed assets, joined by at least nine senior former employees from the largest U.S. home lender."
Orange County Register - "Big Orange property index’s biggest fall since ‘95" (3-20-08)
"One very telling credit-crunch stat in this mix: O.C. real estate lending now runs 40% below its 2003 peak. Other Big O real estate tidbits: jobs are off 6.2% in a year; home sales are down 36%; and permits to build new housing has fallen 3.5%. The lone positive? Rents, up 4.9% in 12 months."
Orange County Register - "Fremont’s woes mount" (3-20-08)
"Things may be coming to a head with Brea-based Fremont General, owner of Fremont Investment & Loan. Last year I wrote about nondepository mortgage banks failing — New Century Financial and so on — and this year I fear lenders that actually take deposits from consumers could be at risk. Fremont, which issues certificates of deposit, last reported $7 billion in deposits to the Federal Deposit Insurance Corp."
Real Estate Journal - "Housing Bust FuelsBlame Game" (3-20-08)
"As the falling housing market shakes financial institutions and pummels Americans in an election year, the nation's economic woes have surged to the top of voters' minds. The timely question: To what extent are politicians and regulators at fault?"
Real Estate Journal - "Mortgage Brokers Take JobsAdvising Anxious Borrowers" (3-20-08)
"Mortgage brokers like Bill Whitehouse thrived on commissions during the housing boom amid lax lending standards. Now, with mortgage defaults soaring and lending volumes plunging, some former brokers and loan officers have converted to a new occupation: counseling borrowers who are trying to avert foreclosure."
Bloomberg - "California Leads U.S. in Defaults, Home-Price Decline" (3-20-08)
"Sacramento may eliminate up to 600 jobs in the city's first staff reductions in half a century, and the police and fire departments in the California capital may have their budgets cut by 20 percent. The culprit is the collapse of the U.S. housing market. California, the birthplace of the subprime mortgage industry, is paying the highest price of any state as the housing meltdown persists. Its gross domestic product will drop 1.5 percent in the first half of 2008, the most in the U.S., analysts at Lexington, Massachusetts-based Global Insight Inc. estimate."
Wednesday, March 19, 2008
Mortgage Bankers Association - "OFHEO, Fannie Mae And Freddie Mac Announce Initiative To Increase Mortgage Market Liquidity" (3-19-08)
"OFHEO, Fannie Mae and Freddie Mac announced a major initiative to increase liquidity in support of the U.S. mortgage market. The initiative is expected to provide up to $200 billion of immediate liquidity to the mortgage-backed securities market."
Bloomberg - "Subprime Mortgage Meltdown Renews Urban Blight" (3-19-08)
"There is no shortage of regret over the failure of regulators and the Bush administration to heed the warning signs about the extent of the subprime housing crisis. A new regret is on the horizon: The failure to take action to prevent the descent into disrepair, economic distress and crime of revitalized urban neighborhoods across the nation."
Business Week - "The Fed's Too Easy on Wall Street" (3-19-08)
"Think about what the Fed has done in recent months: cut its benchmark interest rate by 3 percentage points (including a 75-basis-point easing on Mar. 18), injected massive amounts of liquidity into the financial system, set up an alphabet soup of funding mechanisms for big U.S. banks (a Term Auction Facility, or TAF; a Term Security Lending Facility, or TSLF; and a Primary Dealer Credit Facility, or PDCF), and wielded extraordinary powers to engineer the rescue of investment bank Bear Stearns (BSC)."
Bloomberg - "Dollar Falls on Speculation Housing Slump to Swell Bank Losses" (3-19-08)
"The dollar fell against the euro, erasing most of yesterday's gains, on speculation the worst U.S. housing slump in a quarter of a century will swell credit-market losses. The currency weakened against the Japanese yen and the Swiss franc after Bank of America Corp. predicted the Federal Reserve will lower its target rate by another 75 basis points this year following a reduction to 2.25 percent yesterday. Reports this week on U.S. mortgage demand and manufacturing will probably show the economy is slowing."
CNN - "Forex - Dollar sheds post Fed gains" (3-19-08)
"The dollar has shed most of yesterday's gains in the wake of Wall Street's sharp rally following the US Federal Reserve's decision to lower its benchmark interest rate by three quarters of a percentage point to 2.25 pct. After the Fed's rate cut, which was slightly less than the market consensus for a full 100 basis point reduction, the Dow Jones index of leading US shares enjoyed its best day in five years, helping the US currency to rally too. The euro fell down towards the 1.56 usd mark while the dollar climbed back above 100 yen."
The Arizona Republic - "Lower rates can hurt savers, thrifty retirees" (3-19-08)
"Falling interest rates may be a boon to borrowers, but they can be hard on savers and retirees on fixed incomes. The Federal Reserve on Tuesday cut its key short-term interest rate three-quarters of a percentage point to 2.25 percent - a move designed to spur banks, credit-card issuers and other financial institutions to lower their rates as well."
Orange County Register - "Lumber prices half of ‘04 peak" (3-19-08)
"Want to see how housing weakness ripples through the economy? A key benchmark of lumber prices fell again last week, putting the Random Lengths Framing Lumber Composite price off 13% already this year and at virtually half its 2004 peak. Typical framing lumber went for $238 per 1,000 board feet as of Friday, the Random Lengths newsletter reports. That’s a far cry from August 2004, as the national building boom was nearing its zenith. Then, the same lumber was going for $474 for the same amount."
"OFHEO, Fannie Mae and Freddie Mac announced a major initiative to increase liquidity in support of the U.S. mortgage market. The initiative is expected to provide up to $200 billion of immediate liquidity to the mortgage-backed securities market."
Bloomberg - "Subprime Mortgage Meltdown Renews Urban Blight" (3-19-08)
"There is no shortage of regret over the failure of regulators and the Bush administration to heed the warning signs about the extent of the subprime housing crisis. A new regret is on the horizon: The failure to take action to prevent the descent into disrepair, economic distress and crime of revitalized urban neighborhoods across the nation."
Business Week - "The Fed's Too Easy on Wall Street" (3-19-08)
"Think about what the Fed has done in recent months: cut its benchmark interest rate by 3 percentage points (including a 75-basis-point easing on Mar. 18), injected massive amounts of liquidity into the financial system, set up an alphabet soup of funding mechanisms for big U.S. banks (a Term Auction Facility, or TAF; a Term Security Lending Facility, or TSLF; and a Primary Dealer Credit Facility, or PDCF), and wielded extraordinary powers to engineer the rescue of investment bank Bear Stearns (BSC)."
Bloomberg - "Dollar Falls on Speculation Housing Slump to Swell Bank Losses" (3-19-08)
"The dollar fell against the euro, erasing most of yesterday's gains, on speculation the worst U.S. housing slump in a quarter of a century will swell credit-market losses. The currency weakened against the Japanese yen and the Swiss franc after Bank of America Corp. predicted the Federal Reserve will lower its target rate by another 75 basis points this year following a reduction to 2.25 percent yesterday. Reports this week on U.S. mortgage demand and manufacturing will probably show the economy is slowing."
CNN - "Forex - Dollar sheds post Fed gains" (3-19-08)
"The dollar has shed most of yesterday's gains in the wake of Wall Street's sharp rally following the US Federal Reserve's decision to lower its benchmark interest rate by three quarters of a percentage point to 2.25 pct. After the Fed's rate cut, which was slightly less than the market consensus for a full 100 basis point reduction, the Dow Jones index of leading US shares enjoyed its best day in five years, helping the US currency to rally too. The euro fell down towards the 1.56 usd mark while the dollar climbed back above 100 yen."
The Arizona Republic - "Lower rates can hurt savers, thrifty retirees" (3-19-08)
"Falling interest rates may be a boon to borrowers, but they can be hard on savers and retirees on fixed incomes. The Federal Reserve on Tuesday cut its key short-term interest rate three-quarters of a percentage point to 2.25 percent - a move designed to spur banks, credit-card issuers and other financial institutions to lower their rates as well."
Orange County Register - "Lumber prices half of ‘04 peak" (3-19-08)
"Want to see how housing weakness ripples through the economy? A key benchmark of lumber prices fell again last week, putting the Random Lengths Framing Lumber Composite price off 13% already this year and at virtually half its 2004 peak. Typical framing lumber went for $238 per 1,000 board feet as of Friday, the Random Lengths newsletter reports. That’s a far cry from August 2004, as the national building boom was nearing its zenith. Then, the same lumber was going for $474 for the same amount."
Tuesday, March 18, 2008
NAHB - "Single-Family Housing Starts Decline 6.7 Percent In February" (3-18-08)
"Single-family housing starts continued on a downward trajectory in February, posting a 6.7 percent decline to a seasonally adjusted annual rate of 707,000 units, according to figures released today by the U.S. Commerce Department. Meanwhile, production in the more volatile multifamily sector registered a 14.4 percent gain to 358,000 units, limiting the decline in total housing starts to a rate of 1.065 million units -- 0.6 percent below the revised January pace."
Bloomberg - "U.S. Economy: Housing Starts, Permits Decline as Slump Deepens" (3-18-08)
"Housing starts in the U.S. dropped in February and building permits fell to the lowest level in more than 16 years, signaling the paucity of construction will continue to hurt economic growth. Builders broke ground on homes at an annual rate of 1.065 million, down 0.6 percent from January, the Commerce Department said today in Washington. Permits, a guide to future activity, sank a greater-than-forecast 7.8 percent. At the same time, the Labor Department reported that producer prices excluding food and energy rose 0.5 percent, more than economists estimated."
Orange County Register - "Foreclosures 33% of Feb. O.C. home deals" (3-18-08)
"My analysis of DataQuick’s home sales and foreclosures data shows that bankers’ repossessions of O.C. homes were equal to 33% of all February deals where homes changed ownership, both traditional sales plus foreclosures. That’s down from 38% in January BUT as you can see in the accompanying chart February’s rate is well above the 13% monthly average we saw during the last foreclosure rush of 1994-96. (Click on chart to view larger version.) February also looks ugly when pondering 2006, when this foreclosure ratio ran at 2%."
Orange County Register - "Lehman bounces back" (3-18-08)
"Lehman Brothers, the Wall Street investment bank that shut down Irvine-based BNC Mortgage last year, today reported a 57% drop in first-quarter earnings, but it managed to beat analyst expectations and its stock is up more than 17% as I write this to trade around $37. After Bear Stearns verged on the brink of insolvency, rumors spread quickly to Lehman, another Wall Street player with current or former ties to subprime in Orange County. (Bear still has loan servicing folks in Irvine.)"
Los Angeles Times - "Why a bailout is inevitable" (3-18-08)
"The Bush administration's oft-stated opposition to a housing bailout for lenders and borrowers is under assault from many corners today. The Fed-backed, administration-brokered weekend bailout of Bear Stearns' debt makes it nearly impossible for the administration to continue to argue against more government aid to borrowers."
Real Estate Journal - "A Home-Equity Line of CreditCan Be Your Safety Net" (3-18-08)
"Now is the time to consider a home-equity line of credit if you haven't already. Think of it as a safety net -- one that could be particularly valuable in a weakening economy. With a home-equity credit line, you can borrow up to a specified limit, as you can on a credit card; in this case, the maximum is based on the equity you have in your home. You can borrow a lump sum or in small increments or never use the credit line."
"Single-family housing starts continued on a downward trajectory in February, posting a 6.7 percent decline to a seasonally adjusted annual rate of 707,000 units, according to figures released today by the U.S. Commerce Department. Meanwhile, production in the more volatile multifamily sector registered a 14.4 percent gain to 358,000 units, limiting the decline in total housing starts to a rate of 1.065 million units -- 0.6 percent below the revised January pace."
Bloomberg - "U.S. Economy: Housing Starts, Permits Decline as Slump Deepens" (3-18-08)
"Housing starts in the U.S. dropped in February and building permits fell to the lowest level in more than 16 years, signaling the paucity of construction will continue to hurt economic growth. Builders broke ground on homes at an annual rate of 1.065 million, down 0.6 percent from January, the Commerce Department said today in Washington. Permits, a guide to future activity, sank a greater-than-forecast 7.8 percent. At the same time, the Labor Department reported that producer prices excluding food and energy rose 0.5 percent, more than economists estimated."
Orange County Register - "Foreclosures 33% of Feb. O.C. home deals" (3-18-08)
"My analysis of DataQuick’s home sales and foreclosures data shows that bankers’ repossessions of O.C. homes were equal to 33% of all February deals where homes changed ownership, both traditional sales plus foreclosures. That’s down from 38% in January BUT as you can see in the accompanying chart February’s rate is well above the 13% monthly average we saw during the last foreclosure rush of 1994-96. (Click on chart to view larger version.) February also looks ugly when pondering 2006, when this foreclosure ratio ran at 2%."
Orange County Register - "Lehman bounces back" (3-18-08)
"Lehman Brothers, the Wall Street investment bank that shut down Irvine-based BNC Mortgage last year, today reported a 57% drop in first-quarter earnings, but it managed to beat analyst expectations and its stock is up more than 17% as I write this to trade around $37. After Bear Stearns verged on the brink of insolvency, rumors spread quickly to Lehman, another Wall Street player with current or former ties to subprime in Orange County. (Bear still has loan servicing folks in Irvine.)"
Los Angeles Times - "Why a bailout is inevitable" (3-18-08)
"The Bush administration's oft-stated opposition to a housing bailout for lenders and borrowers is under assault from many corners today. The Fed-backed, administration-brokered weekend bailout of Bear Stearns' debt makes it nearly impossible for the administration to continue to argue against more government aid to borrowers."
Real Estate Journal - "A Home-Equity Line of CreditCan Be Your Safety Net" (3-18-08)
"Now is the time to consider a home-equity line of credit if you haven't already. Think of it as a safety net -- one that could be particularly valuable in a weakening economy. With a home-equity credit line, you can borrow up to a specified limit, as you can on a credit card; in this case, the maximum is based on the equity you have in your home. You can borrow a lump sum or in small increments or never use the credit line."
Monday, March 17, 2008
NAHB - "Builder Confidence Remains Unchanged In March" (3-17-08)
"Builder confidence in the market for new single-family homes remained unchanged in March, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), released today. The HMI held firm at 20, which is near its historic low of 18 set in December of 2007 (the series began in January of 1985)."
Yahoo - "Bear fire sale sparks rout on eve of Fed rate cut" (3-17-08)
"A fire sale of Bear Stearns Cos Inc stunned Wall Street and pummeled global financial stocks on the eve of an expected U.S. interest rate cut aimed at preventing a meltdown of the financial system."
The Washington Post - "Housing Crunch Flattens More Companies" (3-17-08)
"As the housing and credit markets continue to spiral downward, business casualties are rising rapidly in bankruptcy courts across the Washington region. The number of corporations that have filed for Chapter 11 protection to reorganize so far this year in Maryland, Eastern Virginia and the District has more than doubled, compared with the same time period last year, court records show. The number of mostly smaller firms filing to liquidate under Chapter 7 increased far faster during that time frame, growing more than 12-fold."
The Washington Post - "What Auction Bargains?" (3-17-08)
"Given the bulging inventory of foreclosed properties that banks need to unload, an auction seems like an efficient, fair way to move the goods fast. And a rational buyer, cash in pocket and ready to commit to a no-contingencies sales contract on the spot, would only sit through such hoopla because he expects a bargain. But what I saw at the foreclosure auction left me skeptical about the availability of auction bargains. Sellers, the banks that own the foreclosures, seem to be unduly optimistic about the prices they can get for foreclosures, which are, after all, damaged goods"
Bloomberg - "Brokerages May Drop 50%, Oppenheimer's Whitney Says" (3-17-08)
"Banks and brokerages may fall by half because Bear Stearns Cos.'s sale to JPMorgan Chase & Co. for about 93 percent less than its closing price last week will create a 'major negative revaluation' of financial shares, Oppenheimer & Co.'s Meredith Whitney said."
Bloomberg - "U.S. Futures, Global Stocks, Dollar Decline After Fed Cuts Rate" (3-17-08)
"U.S. stock index futures, Asian and European equities and the dollar tumbled after the Federal Reserve cut its discount interest rate at an emergency meeting and JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. for $2 a share. Bonds, gold and crude oil climbed."
Bloomberg - "Bernanke Plays `Whac-A-Mole' With Turmoil in Markets" (3-17-08)
"Federal Reserve Chairman Ben S. Bernanke may be facing something worse than a loss of personal credibility on Wall Street and in Washington: waning faith in the ability of the institution he leads to turn around the economy and the financial markets anytime soon. Bernanke has reached deep into the Fed's toolkit to come up with innovative ways to head off a recession and restore some calm in credit markets. While many have initially been greeted with rallies in stocks, cumulatively they haven't yet had lasting impact on bringing down credit costs and setting the stage for economic recovery."
Orange County Register - "Option One’s loan servicing gets $1.1 billion buyout deal" (3-17-08)
"H&R Block said today it inked a deal to sell the troubled loan servicing unit of Irvine-based Option One Mortgage Corp. to billionaire investor Wilbur Ross for a potential price of roughly $1.1 billion. The tax preparer said Ross has agreed to offer jobs to a 'substantial number' of employees."
Orange County Register - "Shopping for jumbo loans? FHA your best bet, broker says" (3-17-08)
"Fannie Mae and Freddie Mac recently published info on what loans they will buy between the old conforming limit of $417,000 and the temporarily increased one in Orange County of nearly $730,000. The rules don’t make the loans any easier to get and the rates will likely be nearly as high as on jumbo loans, which are larger than conforming loans, says Al Hensling, head of broker-banker United American Mortgage in Irvine (Shown in photo)."
Real Estate Journal - "Older Homeowners Cautioned On Use of Reverse Mortgages" (3-17-08)
"The Financial Industry Regulatory Authority urged homeowners over the age of 60 to carefully weigh their options before tapping into their home equity through reverse mortgages to obtain additional income for their retirement years. The group, formed by a merger of the NASD and some regulatory functions of New York Stock Exchange parent NYSE Group Inc., warned that a reverse mortgage -- an interest-bearing loan secured by the equity in a home -- can jeopardize their financial futures."
"Builder confidence in the market for new single-family homes remained unchanged in March, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), released today. The HMI held firm at 20, which is near its historic low of 18 set in December of 2007 (the series began in January of 1985)."
Yahoo - "Bear fire sale sparks rout on eve of Fed rate cut" (3-17-08)
"A fire sale of Bear Stearns Cos Inc stunned Wall Street and pummeled global financial stocks on the eve of an expected U.S. interest rate cut aimed at preventing a meltdown of the financial system."
The Washington Post - "Housing Crunch Flattens More Companies" (3-17-08)
"As the housing and credit markets continue to spiral downward, business casualties are rising rapidly in bankruptcy courts across the Washington region. The number of corporations that have filed for Chapter 11 protection to reorganize so far this year in Maryland, Eastern Virginia and the District has more than doubled, compared with the same time period last year, court records show. The number of mostly smaller firms filing to liquidate under Chapter 7 increased far faster during that time frame, growing more than 12-fold."
The Washington Post - "What Auction Bargains?" (3-17-08)
"Given the bulging inventory of foreclosed properties that banks need to unload, an auction seems like an efficient, fair way to move the goods fast. And a rational buyer, cash in pocket and ready to commit to a no-contingencies sales contract on the spot, would only sit through such hoopla because he expects a bargain. But what I saw at the foreclosure auction left me skeptical about the availability of auction bargains. Sellers, the banks that own the foreclosures, seem to be unduly optimistic about the prices they can get for foreclosures, which are, after all, damaged goods"
Bloomberg - "Brokerages May Drop 50%, Oppenheimer's Whitney Says" (3-17-08)
"Banks and brokerages may fall by half because Bear Stearns Cos.'s sale to JPMorgan Chase & Co. for about 93 percent less than its closing price last week will create a 'major negative revaluation' of financial shares, Oppenheimer & Co.'s Meredith Whitney said."
Bloomberg - "U.S. Futures, Global Stocks, Dollar Decline After Fed Cuts Rate" (3-17-08)
"U.S. stock index futures, Asian and European equities and the dollar tumbled after the Federal Reserve cut its discount interest rate at an emergency meeting and JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. for $2 a share. Bonds, gold and crude oil climbed."
Bloomberg - "Bernanke Plays `Whac-A-Mole' With Turmoil in Markets" (3-17-08)
"Federal Reserve Chairman Ben S. Bernanke may be facing something worse than a loss of personal credibility on Wall Street and in Washington: waning faith in the ability of the institution he leads to turn around the economy and the financial markets anytime soon. Bernanke has reached deep into the Fed's toolkit to come up with innovative ways to head off a recession and restore some calm in credit markets. While many have initially been greeted with rallies in stocks, cumulatively they haven't yet had lasting impact on bringing down credit costs and setting the stage for economic recovery."
Orange County Register - "Option One’s loan servicing gets $1.1 billion buyout deal" (3-17-08)
"H&R Block said today it inked a deal to sell the troubled loan servicing unit of Irvine-based Option One Mortgage Corp. to billionaire investor Wilbur Ross for a potential price of roughly $1.1 billion. The tax preparer said Ross has agreed to offer jobs to a 'substantial number' of employees."
Orange County Register - "Shopping for jumbo loans? FHA your best bet, broker says" (3-17-08)
"Fannie Mae and Freddie Mac recently published info on what loans they will buy between the old conforming limit of $417,000 and the temporarily increased one in Orange County of nearly $730,000. The rules don’t make the loans any easier to get and the rates will likely be nearly as high as on jumbo loans, which are larger than conforming loans, says Al Hensling, head of broker-banker United American Mortgage in Irvine (Shown in photo)."
Real Estate Journal - "Older Homeowners Cautioned On Use of Reverse Mortgages" (3-17-08)
"The Financial Industry Regulatory Authority urged homeowners over the age of 60 to carefully weigh their options before tapping into their home equity through reverse mortgages to obtain additional income for their retirement years. The group, formed by a merger of the NASD and some regulatory functions of New York Stock Exchange parent NYSE Group Inc., warned that a reverse mortgage -- an interest-bearing loan secured by the equity in a home -- can jeopardize their financial futures."
Yahoo - "Paulson: Govt Will Act to Aid Economy" (3-16-08)
"The Bush administration will 'do what its takes' to stabilize chaotic markets and minimize the economic damage, Treasury Secretary Henry Paulson said Sunday after a tumultuous week capped by the government rescue of a teetering investment bank."
The San Diego Union Tribune - "State seeks ways to resolve disputes in homeowner associations" (3-16-08)
"Homeowners who feel they've been wronged by the associations that oversee many of California's housing developments may find solace in proposed legislation that would establish a state-level bureau for resolving such disputes. On the other hand, volunteer boards are thrust into the job of running what are essentially minigovernments and managing budgets that can run in the hundreds of thousands of dollars, yet they receive no formal training."
Yahoo - "JPMorgan to Buy Bear for $2 a Share" (3-16-08)
"Just four days after Bear Stearns Chief Executive Alan Schwartz assured Wall Street that his company was not in trouble, he was forced on Sunday to sell the investment bank to competitor JPMorgan Chase for a bargain-basement price of $2 a share, or $236.2 million."
Orange County Register - "Bush says housing’s ‘correcting itself’" (3-16-08)
"the temptation of Washington is to say that anything short of a massive government intervention in the housing market amounts to inaction. I strongly disagree with that sentiment. I believe there ought to be action, but I’m deeply concerned about law and regulation that will make it harder for the markets to recover — and when they recover, make it harder for this economy to be robust. And so we got to be careful and mindful that any time the government intervenes in the market, it must do so with clear purpose and great care. Government actions are — have far-reaching and unintended consequences."
"The Bush administration will 'do what its takes' to stabilize chaotic markets and minimize the economic damage, Treasury Secretary Henry Paulson said Sunday after a tumultuous week capped by the government rescue of a teetering investment bank."
The San Diego Union Tribune - "State seeks ways to resolve disputes in homeowner associations" (3-16-08)
"Homeowners who feel they've been wronged by the associations that oversee many of California's housing developments may find solace in proposed legislation that would establish a state-level bureau for resolving such disputes. On the other hand, volunteer boards are thrust into the job of running what are essentially minigovernments and managing budgets that can run in the hundreds of thousands of dollars, yet they receive no formal training."
Yahoo - "JPMorgan to Buy Bear for $2 a Share" (3-16-08)
"Just four days after Bear Stearns Chief Executive Alan Schwartz assured Wall Street that his company was not in trouble, he was forced on Sunday to sell the investment bank to competitor JPMorgan Chase for a bargain-basement price of $2 a share, or $236.2 million."
Orange County Register - "Bush says housing’s ‘correcting itself’" (3-16-08)
"the temptation of Washington is to say that anything short of a massive government intervention in the housing market amounts to inaction. I strongly disagree with that sentiment. I believe there ought to be action, but I’m deeply concerned about law and regulation that will make it harder for the markets to recover — and when they recover, make it harder for this economy to be robust. And so we got to be careful and mindful that any time the government intervenes in the market, it must do so with clear purpose and great care. Government actions are — have far-reaching and unintended consequences."
Yahoo - "More Rate Cuts From Fed Expected Tuesday" (3-15-08)
"Desperate to aid an economy in crisis, the Federal Reserve is ready to deliver yet another big interest rate cut. How big? One-half of a percentage point, some economists say. Investors and others hope for even more, a three-quarters cut or perhaps a full point, given the turmoil on Wall Street. It will be a close call, Fed watchers say."
Orange County Register - "Are mortgage ‘cramdowns’ really so bad?" (3-15-08)
"Republicans in the Senate so far have successfully blocked a plan by Democrats to grant bankruptcy court judges the power to modify terms of primary home mortgages, including reducing the principal balance. The big fear: such a change to bankruptcy law would lead to higher interest rates on mortgages. The thinking is investors will need to be compensated for the risk a mortgage they purchase will later be reduced by a judge – such reductions are dubbed 'cramdowns.'"
"Desperate to aid an economy in crisis, the Federal Reserve is ready to deliver yet another big interest rate cut. How big? One-half of a percentage point, some economists say. Investors and others hope for even more, a three-quarters cut or perhaps a full point, given the turmoil on Wall Street. It will be a close call, Fed watchers say."
Orange County Register - "Are mortgage ‘cramdowns’ really so bad?" (3-15-08)
"Republicans in the Senate so far have successfully blocked a plan by Democrats to grant bankruptcy court judges the power to modify terms of primary home mortgages, including reducing the principal balance. The big fear: such a change to bankruptcy law would lead to higher interest rates on mortgages. The thinking is investors will need to be compensated for the risk a mortgage they purchase will later be reduced by a judge – such reductions are dubbed 'cramdowns.'"
Friday, March 14, 2008
Bloomberg - "Insurer Losses From Subprime Approach Katrina Claims" (3-14-08)
"The collapse of the subprime mortgage market will lead to record losses for insurance companies, overtaking Hurricane Katrina, the worst natural disaster in U.S. history. The amount of asset writedowns and credit losses reported by the industry has reached at least $38 billion, just short of the $41.1 billion in claims from Katrina, which killed more than 1,500 people and left more than half of New Orleans homeless in 2005, data compiled by Bloomberg show."
Mortgage Bankers Association - "Rep. Frank Announces New Economic, Mortgage and Housing Rescue Proposal" (3-14-08)
"House Financial Services Committee Chairman Barney Frank today announced new legislation to stem the significant rise in mortgage foreclosures by allowing the Federal Housing Administration to insure and guarantee refinanced mortgages that have been significantly written down by mortgage holders and lenders. The following of a summary of the proposed draft and the full text will be available later today on the Financial Services Committee website at financialservices.house.gov. Mr. Frank announced the proposal today, but warned that the bill text could change before introduction. Mr. Frank will be seeking input and comments regarding this proposal over the next few weeks."
CAR - "How to Survive & Thrive in ’08" (3-14-08)
"If the business you were using two years ago isn’t working for you anymore, you’re not alone. California real estate professionals have been forced to rethink their strategies and ferret out new opportunities in places that they probably wouldn’t have considered just a couple of years ago."
Bloomberg - "Borrowers Find What Citigroup Says Isn't What It Does" (3-14-08)
"Real estate developer John Wimmer paid Citigroup Global Markets Realty Corp. almost $1 million last year to lock in a 5.6 percent mortgage rate on the refinancing of six commercial properties. At the November closings, Citigroup, citing plummeting demand for mortgage bonds, boosted the rate to 7.123 percent."
Bloomberg - "Fed Efforts Foiled By Banks as Residential Mortgage Rates Rise" (3-14-08)
"Ben S. Bernanke can't revive the housing market and the banks aren't helping him. The U.S. Federal Reserve has cut interest rates five times, pumped $200 billion into the financial system this week, and today its New York branch provided funds to help rescue Bear Stearns Cos."
Bloomberg - "Bear Stearns Gets Emergency Funds From JPMorgan, Fed" (3-14-08)
"Bear Stearns Cos., teetering on the brink of collapse from a lack of cash, got emergency funding from the Federal Reserve and JPMorgan Chase & Co. in the largest government bailout of a U.S. securities firm."
Orange County Register - "Apartment vacancies a problem? Not in O.C." (3-14-08)
"As the Apartment Association of Orange County gathered this week, the local rental market looked like the next target of a softening economy, based on recent reports. But landlords, property managers and rental service providers at the AAOC’s 37th annual trade show and conference in Costa Mesa Wednesday aren’t seeing it."
Orange County Register - "SoCal rent-cost hike at 4-year-plus low" (3-14-08)
"Renters had a better month in February in SoCal with year-over-year rental costs for a primary residence rising 5.3%, down from the 6.7% annual increase they saw in February 2007, according to the latest CPI report. Annual rent cost increases haven’t been this low in the Los Angeles-Orange-Riverside county area since July 2003, when they were up 5%."
"The collapse of the subprime mortgage market will lead to record losses for insurance companies, overtaking Hurricane Katrina, the worst natural disaster in U.S. history. The amount of asset writedowns and credit losses reported by the industry has reached at least $38 billion, just short of the $41.1 billion in claims from Katrina, which killed more than 1,500 people and left more than half of New Orleans homeless in 2005, data compiled by Bloomberg show."
Mortgage Bankers Association - "Rep. Frank Announces New Economic, Mortgage and Housing Rescue Proposal" (3-14-08)
"House Financial Services Committee Chairman Barney Frank today announced new legislation to stem the significant rise in mortgage foreclosures by allowing the Federal Housing Administration to insure and guarantee refinanced mortgages that have been significantly written down by mortgage holders and lenders. The following of a summary of the proposed draft and the full text will be available later today on the Financial Services Committee website at financialservices.house.gov. Mr. Frank announced the proposal today, but warned that the bill text could change before introduction. Mr. Frank will be seeking input and comments regarding this proposal over the next few weeks."
CAR - "How to Survive & Thrive in ’08" (3-14-08)
"If the business you were using two years ago isn’t working for you anymore, you’re not alone. California real estate professionals have been forced to rethink their strategies and ferret out new opportunities in places that they probably wouldn’t have considered just a couple of years ago."
Bloomberg - "Borrowers Find What Citigroup Says Isn't What It Does" (3-14-08)
"Real estate developer John Wimmer paid Citigroup Global Markets Realty Corp. almost $1 million last year to lock in a 5.6 percent mortgage rate on the refinancing of six commercial properties. At the November closings, Citigroup, citing plummeting demand for mortgage bonds, boosted the rate to 7.123 percent."
Bloomberg - "Fed Efforts Foiled By Banks as Residential Mortgage Rates Rise" (3-14-08)
"Ben S. Bernanke can't revive the housing market and the banks aren't helping him. The U.S. Federal Reserve has cut interest rates five times, pumped $200 billion into the financial system this week, and today its New York branch provided funds to help rescue Bear Stearns Cos."
Bloomberg - "Bear Stearns Gets Emergency Funds From JPMorgan, Fed" (3-14-08)
"Bear Stearns Cos., teetering on the brink of collapse from a lack of cash, got emergency funding from the Federal Reserve and JPMorgan Chase & Co. in the largest government bailout of a U.S. securities firm."
Orange County Register - "Apartment vacancies a problem? Not in O.C." (3-14-08)
"As the Apartment Association of Orange County gathered this week, the local rental market looked like the next target of a softening economy, based on recent reports. But landlords, property managers and rental service providers at the AAOC’s 37th annual trade show and conference in Costa Mesa Wednesday aren’t seeing it."
Orange County Register - "SoCal rent-cost hike at 4-year-plus low" (3-14-08)
"Renters had a better month in February in SoCal with year-over-year rental costs for a primary residence rising 5.3%, down from the 6.7% annual increase they saw in February 2007, according to the latest CPI report. Annual rent cost increases haven’t been this low in the Los Angeles-Orange-Riverside county area since July 2003, when they were up 5%."
Thursday, March 13, 2008
DQNews - "Southland home sales still ultra-low; median price slips again" (3-13-08)
"Southern California home sales limped along last month at the slowest pace ever for a February, the result of a market crippled by uncertainty and credit constraints. The median sale price dropped by a record 17.6 percent from a year ago, a real estate information service reported. A total of 10,777 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in February. That was up 8 percent from 9,983 the previous month but down 39 percent from 17,680 in February last year, according to DataQuick Information Systems."
DQNews - "Bay Area home sales remain at two-decade low" (3-13-08)
"The waiting game between Bay Area buyers, sellers and lending institutions continued last month as sales dipped below 4,000 for the second month in a row, a real estate information service reported. A total of 3,989 new and resale houses and condos sold in the nine- county Bay Area in February. That was up 11.2 percent from 3,586 in January, and down 36.7 percent from 6,305 for February 2007, DataQuick Information Systems reported."
Mortgage Bankers Association - "MBA’s Quinn Commends Introduction of Mortgage Relief Bill" (3-13-08)
"Kieran P. Quinn, CMB, Chairman of the Mortgage Bankers Association today welcomed Congressman Barney Frank’s proposal for legislation to help stabilize the mortgage and housing markets and assist borrowers. Legislative language was introduced today, though Chairman Frank warned that it could change before the bill was officially introduced."
Mortgage Bankers Association - "MBA 2007 MARI Report Exposes and Explores Residential Mortgage Fraud Against Lenders in US" (3-13-08)
"The Mortgage Bankers Association (MBA) today announced that the Mortgage Asset Research Institute, LLC (MARISM), a ChoicePoint® (NYSE: CPS) company, has completed its 10th Periodic Mortgage Fraud Case Report to MBA. The report examines the current state of residential mortgage fraud and misrepresentation in the U.S. based on participating subscribers’ reports to MARI."
CNN - "Foreclosures up 60% in February" (3-13-08)
"Foreclosure filings nationwide jumped 60% in February compared with the same month last year, but they decreased slightly versus January, according to a report released Thursday. RealtyTrac, an online marketer of foreclosure properties, said 223,651 homes got hit with foreclosure filings last month, which include default notices, auction sale notices and bank repossessions. 46,508 of those were lost to bank repossessions, which more than doubled over last year."
CNN - "Countrywide's foreclosures rise again" (3-13-08)
"Mortgage lender and servicer Countrywide Financial Corp. said Thursday delinquency rates declined slightly in February compared with the previous month, while foreclosure rates continued to rise. Delinquencies rates on loans serviced by Countrywide fell to 7.44% in February, from 7.47% in January. Delinquencies rates are still much higher than the year ago-period, when delinquencies totaled 4.48% in February 2007."
Bloomberg - "Bernanke's Rate Cuts Endanger Fed's Inflation Outlook" (3-13-08)
"Federal Reserve officials are staking their credibility on a bet that the fastest interest- rate cuts in two decades won't endanger their forecast for inflation to slow in the next two years. Investors have pushed gold, oil, wheat and corn prices to records since the Fed lowered its benchmark rate by 1.25 percentage point in January and indicated it's ready to do more when policy makers meet next week. Inflation-linked bonds also rallied as traders anticipated the Fed will ditch the ``rapid reversal'' of rate cuts discussed at their Jan. 29-30 meeting."
CNN - "The next shoe to drop in housing" (3-13-08)
"The credit crunch has finally hit the traditional mortgage market. Investors are now shunning mortgage-backed securities issued by government sponsored enterprises Fannie Mae and Freddie Mac, which have been critical in keeping the real estate market from completely falling apart."
CNN - "Mortgage rates rise" (3-13-08)
"Mortgage rates rose across the board this week as lower home prices and mortgage rates contributed to a more affordable market for homebuyers, Freddie Mac reported Thursday. The government-sponsored loan buyer said 30-year fixed-rate loans averaged 6.13% for the week ending Thursday, up from 6.03% last week. Last year at this time, the 30-year rate averaged 6.14%, Freddie Mac said."
Bloomberg - "S&P Says End in Sight for Writedowns on Subprime Debt" (3-13-08)
"Standard & Poor's, the ratings company criticized for missing the beginning of the mortgage collapse, now says the end of subprime writedowns is in sight. Writedowns from subprime-tied securities will probably rise to $285 billion, or $20 billion more than S&P forecast two months ago, S&P said today in a report. More than $150 billion have been reported already by banks, brokers and insurers, the firm said. S&P raised its estimate as it assumes deeper losses on collateralized debt obligations."
Reuters - "Regulators unveil plan to revamp mortgage rules" (3-13-08)
"Financial regulators pledged on Thursday to toughen rules for mortgage brokers, lenders, and credit agencies, to try to restore investor confidence and prevent a recurrence of credit-market problems that threaten to slow the economy. U.S. Treasury Secretary Henry Paulson, unveiling a 20-page set of recommendations from the top-level President's Working Group on Financial Markets, blamed a 'dramatic weakening' of underwriting standards for lower-quality home loans that have trigged turmoil in credit markets around the globe."
"Southern California home sales limped along last month at the slowest pace ever for a February, the result of a market crippled by uncertainty and credit constraints. The median sale price dropped by a record 17.6 percent from a year ago, a real estate information service reported. A total of 10,777 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in February. That was up 8 percent from 9,983 the previous month but down 39 percent from 17,680 in February last year, according to DataQuick Information Systems."
DQNews - "Bay Area home sales remain at two-decade low" (3-13-08)
"The waiting game between Bay Area buyers, sellers and lending institutions continued last month as sales dipped below 4,000 for the second month in a row, a real estate information service reported. A total of 3,989 new and resale houses and condos sold in the nine- county Bay Area in February. That was up 11.2 percent from 3,586 in January, and down 36.7 percent from 6,305 for February 2007, DataQuick Information Systems reported."
Mortgage Bankers Association - "MBA’s Quinn Commends Introduction of Mortgage Relief Bill" (3-13-08)
"Kieran P. Quinn, CMB, Chairman of the Mortgage Bankers Association today welcomed Congressman Barney Frank’s proposal for legislation to help stabilize the mortgage and housing markets and assist borrowers. Legislative language was introduced today, though Chairman Frank warned that it could change before the bill was officially introduced."
Mortgage Bankers Association - "MBA 2007 MARI Report Exposes and Explores Residential Mortgage Fraud Against Lenders in US" (3-13-08)
"The Mortgage Bankers Association (MBA) today announced that the Mortgage Asset Research Institute, LLC (MARISM), a ChoicePoint® (NYSE: CPS) company, has completed its 10th Periodic Mortgage Fraud Case Report to MBA. The report examines the current state of residential mortgage fraud and misrepresentation in the U.S. based on participating subscribers’ reports to MARI."
CNN - "Foreclosures up 60% in February" (3-13-08)
"Foreclosure filings nationwide jumped 60% in February compared with the same month last year, but they decreased slightly versus January, according to a report released Thursday. RealtyTrac, an online marketer of foreclosure properties, said 223,651 homes got hit with foreclosure filings last month, which include default notices, auction sale notices and bank repossessions. 46,508 of those were lost to bank repossessions, which more than doubled over last year."
CNN - "Countrywide's foreclosures rise again" (3-13-08)
"Mortgage lender and servicer Countrywide Financial Corp. said Thursday delinquency rates declined slightly in February compared with the previous month, while foreclosure rates continued to rise. Delinquencies rates on loans serviced by Countrywide fell to 7.44% in February, from 7.47% in January. Delinquencies rates are still much higher than the year ago-period, when delinquencies totaled 4.48% in February 2007."
Bloomberg - "Bernanke's Rate Cuts Endanger Fed's Inflation Outlook" (3-13-08)
"Federal Reserve officials are staking their credibility on a bet that the fastest interest- rate cuts in two decades won't endanger their forecast for inflation to slow in the next two years. Investors have pushed gold, oil, wheat and corn prices to records since the Fed lowered its benchmark rate by 1.25 percentage point in January and indicated it's ready to do more when policy makers meet next week. Inflation-linked bonds also rallied as traders anticipated the Fed will ditch the ``rapid reversal'' of rate cuts discussed at their Jan. 29-30 meeting."
CNN - "The next shoe to drop in housing" (3-13-08)
"The credit crunch has finally hit the traditional mortgage market. Investors are now shunning mortgage-backed securities issued by government sponsored enterprises Fannie Mae and Freddie Mac, which have been critical in keeping the real estate market from completely falling apart."
CNN - "Mortgage rates rise" (3-13-08)
"Mortgage rates rose across the board this week as lower home prices and mortgage rates contributed to a more affordable market for homebuyers, Freddie Mac reported Thursday. The government-sponsored loan buyer said 30-year fixed-rate loans averaged 6.13% for the week ending Thursday, up from 6.03% last week. Last year at this time, the 30-year rate averaged 6.14%, Freddie Mac said."
Bloomberg - "S&P Says End in Sight for Writedowns on Subprime Debt" (3-13-08)
"Standard & Poor's, the ratings company criticized for missing the beginning of the mortgage collapse, now says the end of subprime writedowns is in sight. Writedowns from subprime-tied securities will probably rise to $285 billion, or $20 billion more than S&P forecast two months ago, S&P said today in a report. More than $150 billion have been reported already by banks, brokers and insurers, the firm said. S&P raised its estimate as it assumes deeper losses on collateralized debt obligations."
Reuters - "Regulators unveil plan to revamp mortgage rules" (3-13-08)
"Financial regulators pledged on Thursday to toughen rules for mortgage brokers, lenders, and credit agencies, to try to restore investor confidence and prevent a recurrence of credit-market problems that threaten to slow the economy. U.S. Treasury Secretary Henry Paulson, unveiling a 20-page set of recommendations from the top-level President's Working Group on Financial Markets, blamed a 'dramatic weakening' of underwriting standards for lower-quality home loans that have trigged turmoil in credit markets around the globe."
Wednesday, March 12, 2008
NAR - "Fundamentals Holding in Commercial Real Estate" (3-12-08)
"Commercial real estate market fundamentals are fairly stable, although investment is waning following a record year in 2007, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors®."
Mortgage Bankers Association - "FHA Apps Up, Purchase Apps Unchanged, Refi Apps Down In Latest MBA Weekly Survey" (3-12-08)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 7, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 671.7, a decrease of 1.9 percent on a seasonally adjusted basis from 684.9 one week earlier. On an unadjusted basis, the Index decreased 1.4 percent compared with the previous week and was down 3.4 percent compared with the same week one year earlier."
Mortgage Bankers Association - "Record Increase in Multifamily Mortgage Debt Outstanding Led By GSEs" (3-12-08)
"The level of commercial/multifamily mortgage debt outstanding grew by 2.6 percent in the fourth quarter, exceeding $3.3 trillion, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data. The total was an increase of $356 billion or 12 percent from the end of 2006."
Bloomberg - "Dollar Trades at Record Low Versus Euro as Fed Plan Disappoints" (3-12-08)
"The dollar traded at a record low against the euro as firms from Citigroup Inc. to Goldman Sachs Group Inc. said the Federal Reserve's plan to inject $200 billion into the banking system may fail to break the freeze in money-market lending. The U.S. currency plunged yesterday against the euro, yen and Swiss franc, erasing a rally from March 11 when the Fed said it would lend Treasuries to financial institutions and take mortgage debt as collateral. Traders bet the Fed will cut rates by as much as three quarters of a percentage point next week to avert a recession, while the European Central Bank keeps borrowing costs unchanged at 4 percent."
Philly.com - "Toll Bros. hints at joint-venture problems" (3-12-08)
"Toll Bros. Inc., the Horsham luxury-home builder, said it might face 'significant' losses if its joint-venture partners on a number of projects were unable to meet their financial obligations. 'As a result of the continued downturn in the home-building industry, some of these joint ventures or their participants have or may become unable or unwilling to fulfill their respective obligations,' the company said in a Securities and Exchange Commission filing Monday in advance of its annual stockholders' meeting today."
Market Watch - "Freddie Mac sees home prices falling further" (3-12-08)
"Already under pressure, U.S. home prices have much further to fall, the chief executive of major mortgage-buyer Freddie Mac said Wednesday. Speaking to analysts on a conference call, CEO Richard Syron estimated that housing prices, from peak to trough, have dropped only a third as far as he thinks they're going to. The McLean, Va.-based company's expecting a peak-to-trough decline of 15% in all."
Orange County Register - "Apartments’ investment outlook ‘very strong’" (3-12-08)
"The National Multi Housing Council says it’s about demographics. Apartments look like the place to be for real estate investors thanks to a growing demand for rentals, says the organization representing the industry’s largest firms."
Los Angeles Times - "A tale of two markets: High end holding steady" (3-12-08)
"This is a trend that has been with us for a while, and a couple of you reminded me in comments to revisit it. The trend is this: even as foreclosures pile up and prices collapse in less desirable neighborhoods of Los Angeles, prices continue to hold steady -- or even rise -- in higher-priced neighborhoods."
Real Estate Journal - "Credit Scorers FindNew Ways to Judge You" (3-12-08)
"Now, lenders increasingly are looking at other factors, such as rent and utility payments, to determine whether potential borrowers will make good on their loans. The financial-services industry began this push so it could lend more to the estimated 50 million Americans -- including many immigrants, young adults and seniors -- with little or no credit history. But as the economy slows and default rates soar for home mortgages, more lenders are using these same tools to evaluate the credit-worthiness of the broader population."
"Commercial real estate market fundamentals are fairly stable, although investment is waning following a record year in 2007, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors®."
Mortgage Bankers Association - "FHA Apps Up, Purchase Apps Unchanged, Refi Apps Down In Latest MBA Weekly Survey" (3-12-08)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 7, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 671.7, a decrease of 1.9 percent on a seasonally adjusted basis from 684.9 one week earlier. On an unadjusted basis, the Index decreased 1.4 percent compared with the previous week and was down 3.4 percent compared with the same week one year earlier."
Mortgage Bankers Association - "Record Increase in Multifamily Mortgage Debt Outstanding Led By GSEs" (3-12-08)
"The level of commercial/multifamily mortgage debt outstanding grew by 2.6 percent in the fourth quarter, exceeding $3.3 trillion, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data. The total was an increase of $356 billion or 12 percent from the end of 2006."
Bloomberg - "Dollar Trades at Record Low Versus Euro as Fed Plan Disappoints" (3-12-08)
"The dollar traded at a record low against the euro as firms from Citigroup Inc. to Goldman Sachs Group Inc. said the Federal Reserve's plan to inject $200 billion into the banking system may fail to break the freeze in money-market lending. The U.S. currency plunged yesterday against the euro, yen and Swiss franc, erasing a rally from March 11 when the Fed said it would lend Treasuries to financial institutions and take mortgage debt as collateral. Traders bet the Fed will cut rates by as much as three quarters of a percentage point next week to avert a recession, while the European Central Bank keeps borrowing costs unchanged at 4 percent."
Philly.com - "Toll Bros. hints at joint-venture problems" (3-12-08)
"Toll Bros. Inc., the Horsham luxury-home builder, said it might face 'significant' losses if its joint-venture partners on a number of projects were unable to meet their financial obligations. 'As a result of the continued downturn in the home-building industry, some of these joint ventures or their participants have or may become unable or unwilling to fulfill their respective obligations,' the company said in a Securities and Exchange Commission filing Monday in advance of its annual stockholders' meeting today."
Market Watch - "Freddie Mac sees home prices falling further" (3-12-08)
"Already under pressure, U.S. home prices have much further to fall, the chief executive of major mortgage-buyer Freddie Mac said Wednesday. Speaking to analysts on a conference call, CEO Richard Syron estimated that housing prices, from peak to trough, have dropped only a third as far as he thinks they're going to. The McLean, Va.-based company's expecting a peak-to-trough decline of 15% in all."
Orange County Register - "Apartments’ investment outlook ‘very strong’" (3-12-08)
"The National Multi Housing Council says it’s about demographics. Apartments look like the place to be for real estate investors thanks to a growing demand for rentals, says the organization representing the industry’s largest firms."
Los Angeles Times - "A tale of two markets: High end holding steady" (3-12-08)
"This is a trend that has been with us for a while, and a couple of you reminded me in comments to revisit it. The trend is this: even as foreclosures pile up and prices collapse in less desirable neighborhoods of Los Angeles, prices continue to hold steady -- or even rise -- in higher-priced neighborhoods."
Real Estate Journal - "Credit Scorers FindNew Ways to Judge You" (3-12-08)
"Now, lenders increasingly are looking at other factors, such as rent and utility payments, to determine whether potential borrowers will make good on their loans. The financial-services industry began this push so it could lend more to the estimated 50 million Americans -- including many immigrants, young adults and seniors -- with little or no credit history. But as the economy slows and default rates soar for home mortgages, more lenders are using these same tools to evaluate the credit-worthiness of the broader population."
Tuesday, March 11, 2008
Inman News - "Forecast: Perfect storm of financial problems, but no recession" (3-11-08)
"Despite the hard-hit housing market, with falling home prices, rising foreclosures, a subprime mortgage market meltdown and a credit crunch, Leamer's forecast for avoiding an economic recession is based upon a disconnect between housing and the overall labor market and a disconnect between the manufacturing and construction employment cycles."
NAHB - "Builder Confidence In Condo Market Declines Again" (3-11-08)
"The Multifamily Condo Market Index (MCMI) ended 2007 on a low note, with the component of the index tracking builder confidence in current conditions standing at 18.8, down nearly 11 points from the same time a year ago, according to the National Association of Home Builders (NAHB)."
Bloomberg - "Moody's Cuts Revenue, Profit Forecast Amid Slump" (3-11-08)
"Moody's Corp., the world's second- largest credit-rating company, cut its 2008 forecast and said the slump in credit markets will go on longer than previously anticipated. Moody's dropped as much as 6.7 percent in New York Stock Exchange composite trading after Chief Executive Officer Raymond McDaniel said per-share profit will fall to $1.90 to $2, compared with a February forecast of $2.17 to $2.25. Revenue will decline in the mid-to-high teens, down from a previous estimate of 'low double digits,' McDaniel said."
Bloomberg - "Hedge Funds Reel From Margin Calls Even on Treasuries" (3-11-08)
"The hedge-fund industry is reeling from its worst crisis in a decade as banks are now demanding more money pledged to support outstanding loans even when the investment is backed by the full faith and credit of the United States. Since Feb. 15, at least six hedge funds, totaling more than $5.4 billion, have been forced to liquidate or sell holdings because their lenders -- staggered by almost $190 billion of asset writedowns and credit losses caused by the collapse of the subprime-mortgage market -- raised borrowing rates by as much as 10-fold with new claims for extra collateral."
CNN - "Six months after the first rate cut" (3-11-08)
"Despite five interest rate cuts in the past six months, Wall Street has remained impervious to the Federal Reserve's wooing, with investors taking a 'thanks, but...' attitude to Ben Bernanke & Co.'s attempt to recharge the economy and stock market. Since September, the central bank has lowered its federal funds rate, a key overnight bank lending rate, to 3% from 5.25%. This included a 75 basis point emergency cut in January. There are 100 basis points in one percentage point."
Bloomberg - "U.S. States Revolt Against Muni Credit-Rating System" (3-11-08)
"The municipal bond market doesn't have enough to worry about with the bond insurers struggling to keep their AAA ratings, bond and closed-end fund share auctions failing, swaps and derivatives backfiring and a criminal investigation into the investment of proceeds business. No, that's not enough. Let's have a national debate on credit ratings, in particular about why the companies that rate municipal bonds see fit to grade most of them lower than corporations, although they almost never default."
USA Today - "401(k)s tapped to save homes" (3-11-08)
"Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills — and getting slammed with taxes and penalties in the process, according to retirement plan administrators."
Bloomberg - "Fed to Lend $200 Billion, Take on Mortgage Securities" (3-11-08)
"The Federal Reserve, struggling to contain a crisis of confidence in credit markets, will for the first time lend Treasuries in exchange for debt that includes mortgage-backed securities. The Fed said in a statement in Washington it plans to make up to $200 billion available through weekly auctions. Officials told reporters on condition of anonymity that the program may be increased as needed. The Fed coordinated the effort with central banks in Europe and Canada, which plan to inject up to $45 billion into their banking systems."
The San Diego Union Tribune - "Experts' forecast sees no recession" (3-11-08)
"UCLA's Anderson Forecast, which previously has been ahead of the curve in forecasting the downturn of the California housing market and the resulting decline in the economy, predicted yesterday that the state and nation would not fall into a recession."
Orange County Register - "Construction worker shortage coming?" (3-11-08)
"It’s a hard to fathom this thesis when recent jobs data showed the U.S. construction worker unemployment rate at 11.4% for February, up from 10.4% the year before. (O.C.’s lost 11,700 construction jobs, or 10.6%, since its recent peak in September ‘06.)"
Real Estate Journal - "A Good Time to Buy a House If You Can Afford One" (3-11-08)
"For years rapidly rising prices kept many first-time home buyers out of the housing market. But as home values slide further downward and interest rates hover at relatively low levels, it may be time to start looking to buy that first house. That is, if you have a secure job, can afford higher down payments than were required a few years ago and can meet lenders' much stricter income and credit requirements."
Real Estate Journal - "No Money Down? You're Out of Luck" (3-11-08)
"Falling prices in many parts of the country have improved affordability for those interested in becoming homeowners for the first time, but financing the purchase has become a bigger challenge. Lenders, in general, are requiring larger down payments and higher credit scores, criteria that can trip up first-time buyers."
"Despite the hard-hit housing market, with falling home prices, rising foreclosures, a subprime mortgage market meltdown and a credit crunch, Leamer's forecast for avoiding an economic recession is based upon a disconnect between housing and the overall labor market and a disconnect between the manufacturing and construction employment cycles."
NAHB - "Builder Confidence In Condo Market Declines Again" (3-11-08)
"The Multifamily Condo Market Index (MCMI) ended 2007 on a low note, with the component of the index tracking builder confidence in current conditions standing at 18.8, down nearly 11 points from the same time a year ago, according to the National Association of Home Builders (NAHB)."
Bloomberg - "Moody's Cuts Revenue, Profit Forecast Amid Slump" (3-11-08)
"Moody's Corp., the world's second- largest credit-rating company, cut its 2008 forecast and said the slump in credit markets will go on longer than previously anticipated. Moody's dropped as much as 6.7 percent in New York Stock Exchange composite trading after Chief Executive Officer Raymond McDaniel said per-share profit will fall to $1.90 to $2, compared with a February forecast of $2.17 to $2.25. Revenue will decline in the mid-to-high teens, down from a previous estimate of 'low double digits,' McDaniel said."
Bloomberg - "Hedge Funds Reel From Margin Calls Even on Treasuries" (3-11-08)
"The hedge-fund industry is reeling from its worst crisis in a decade as banks are now demanding more money pledged to support outstanding loans even when the investment is backed by the full faith and credit of the United States. Since Feb. 15, at least six hedge funds, totaling more than $5.4 billion, have been forced to liquidate or sell holdings because their lenders -- staggered by almost $190 billion of asset writedowns and credit losses caused by the collapse of the subprime-mortgage market -- raised borrowing rates by as much as 10-fold with new claims for extra collateral."
CNN - "Six months after the first rate cut" (3-11-08)
"Despite five interest rate cuts in the past six months, Wall Street has remained impervious to the Federal Reserve's wooing, with investors taking a 'thanks, but...' attitude to Ben Bernanke & Co.'s attempt to recharge the economy and stock market. Since September, the central bank has lowered its federal funds rate, a key overnight bank lending rate, to 3% from 5.25%. This included a 75 basis point emergency cut in January. There are 100 basis points in one percentage point."
Bloomberg - "U.S. States Revolt Against Muni Credit-Rating System" (3-11-08)
"The municipal bond market doesn't have enough to worry about with the bond insurers struggling to keep their AAA ratings, bond and closed-end fund share auctions failing, swaps and derivatives backfiring and a criminal investigation into the investment of proceeds business. No, that's not enough. Let's have a national debate on credit ratings, in particular about why the companies that rate municipal bonds see fit to grade most of them lower than corporations, although they almost never default."
USA Today - "401(k)s tapped to save homes" (3-11-08)
"Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills — and getting slammed with taxes and penalties in the process, according to retirement plan administrators."
Bloomberg - "Fed to Lend $200 Billion, Take on Mortgage Securities" (3-11-08)
"The Federal Reserve, struggling to contain a crisis of confidence in credit markets, will for the first time lend Treasuries in exchange for debt that includes mortgage-backed securities. The Fed said in a statement in Washington it plans to make up to $200 billion available through weekly auctions. Officials told reporters on condition of anonymity that the program may be increased as needed. The Fed coordinated the effort with central banks in Europe and Canada, which plan to inject up to $45 billion into their banking systems."
The San Diego Union Tribune - "Experts' forecast sees no recession" (3-11-08)
"UCLA's Anderson Forecast, which previously has been ahead of the curve in forecasting the downturn of the California housing market and the resulting decline in the economy, predicted yesterday that the state and nation would not fall into a recession."
Orange County Register - "Construction worker shortage coming?" (3-11-08)
"It’s a hard to fathom this thesis when recent jobs data showed the U.S. construction worker unemployment rate at 11.4% for February, up from 10.4% the year before. (O.C.’s lost 11,700 construction jobs, or 10.6%, since its recent peak in September ‘06.)"
Real Estate Journal - "A Good Time to Buy a House If You Can Afford One" (3-11-08)
"For years rapidly rising prices kept many first-time home buyers out of the housing market. But as home values slide further downward and interest rates hover at relatively low levels, it may be time to start looking to buy that first house. That is, if you have a secure job, can afford higher down payments than were required a few years ago and can meet lenders' much stricter income and credit requirements."
Real Estate Journal - "No Money Down? You're Out of Luck" (3-11-08)
"Falling prices in many parts of the country have improved affordability for those interested in becoming homeowners for the first time, but financing the purchase has become a bigger challenge. Lenders, in general, are requiring larger down payments and higher credit scores, criteria that can trip up first-time buyers."
Monday, March 10, 2008
Bloomberg - "Hedge Funds Reel From Margin Calls Even on Treasuries" (3-10-08)
"The hedge-fund industry is reeling from its worst crisis in a decade as banks are now demanding more money pledged to support outstanding loans even when the investment is backed by the full faith and credit of the United States. Since Feb. 15, at least six hedge funds, totaling more than $5.4 billion, have been forced to liquidate or sell holdings because their lenders -- staggered by almost $190 billion of asset writedowns and credit losses caused by the collapse of the subprime-mortgage market -- raised borrowing rates by as much as 10-fold with new claims for extra collateral."
Bloomberg - "TIPS' Yields Show Fed Has Lost Control of Inflation" (3-10-08)
"Bond investors have never been so sure that the Federal Reserve will lose control of inflation. They're so convinced that they're giving up yields just to buy debt securities that protect against rising consumer prices. The yield on the five-year Treasury Inflation-Protected Security due in 2012 has been negative since Feb. 29, and traded today at minus 0.17 percent. The notes, which were first sold in 1997, have never before traded below zero. Even so, firms from Deutsche Asset Management to Vanguard Group Inc., the second- biggest U.S. mutual fund company, say TIPS are a bargain."
Bloomberg - "John Galt Plan Might Save U.S. Financial System" (3-10-08)
"By late last week, events seemed to be spinning out of control. Credit spreads were blowing out, with tax-exempt municipal bonds out-yielding Treasuries by a record and the spread between Fannie Mae mortgage-backed securities and government bonds hitting a 22-year high. Treasury bill yields were collapsing (further). The U.S. dollar was sinking like a stone. And commodity prices, in their lofty ascent, had all the makings of a market unhinged from the fundamentals, which, after all, is the definition of a bubble."
Bloomberg - "Bear Stearns Shares Fall on Liquidity Speculation" (3-10-08)
"Bear Stearns Cos. denied that the firm lacked sufficient access to capital, after speculation about a liquidity crisis pushed the stock down 11 percent in New York trading, the most since the 1987 stock market crash. Bear Stearns, the second-biggest underwriter of mortgage- backed bonds, said in a statement that 'there is absolutely no truth to the rumors of liquidity problems.'' The shares declined $7.78 to $62.30 in composite trading on the New York Stock Exchange at 4:08 p.m., the lowest level since March 2003."
Bloomberg - "Ambac, Thornburg Reverse Last Week's Last-Minute Rise" (3-10-08)
"Ambac Financial Group Inc. and Thornburg Mortgage Inc. erased last week's last-minute surge that was spurred by transactions on the New York Stock Exchange totaling at least 10 million shares. Ambac, whose March 7 gain went from 0.5 percent to 28 percent with the trades, slipped to $7.29 as of 4 p.m. in New York. That's 23 percent less than its closing price last week. Thornburg, which swung from a 24 percent tumble to an 8.5 percent rally late on March 7, declined 60 percent today to 71 cents."
Bloomberg - "Bank of America Plans to Proceed With Countrywide Bid" (3-10-08)
"Bank of America Corp., the largest U.S. bank by market value, plans to press ahead with its $4 billion takeover of Countrywide Financial Corp., the mortgage lender under FBI investigation for possible securities fraud. The Federal Bureau of Investigation, based in Washington, is scrutinizing whether Countrywide officials misrepresented the company's financial position and the quality of its mortgage loans in regulatory filings, said a person with knowledge of the probe on March 8. Bank of America spokesman Scott Silvestri said the acquisition of Calabasas, California-based Countrywide remains on track."
Orange County Register - "Foreclosure sales 23% of fresh O.C. home deals" (3-10-08)
"Every two weeks Thomas calculates 'market time,' a benchmark of how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of last Thursday, it would take 8.14 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 8.46 months two weeks earlier and vs. 5.26 months a year ago."
Los Angeles Times - "Auction action: Big real estate auctions this weekend" (3-10-08)
"The auction schedule is heating up -- there are several big real estate auctions scheduled this weekend. Details: On Saturday at the Pomona Fairplex, Catalist Homes and DoveBid will auction 75 homes. You can see the inventory here. Registration opens at 8:30 a.m., the bidding starts at 10 a.m. Coverage note: It's likely I'll cover this auction. If you are heading to Pomona on Saturday to bid, I'd like to talk. Shoot me an e-mail at peter.viles@latimes.com."
Real Estate Journal - "Housing, Bank TroublesContinue to Deepen" (3-10-08)
"Two crucial barometers of the nation's housing market have worsened markedly in recent months, ratcheting up pressure on policy makers in Washington for action to stem the growing housing crisis and its widening impact on the nation's financial system. Among the latest trouble signals, the number of American homes entering foreclosure rose to the highest level on record in the fourth quarter of 2007. Meanwhile, homeowners' share of the equity in their homes fell to a post-World War II low."
Money News - "Hedge Funds Bet Big on Massive Foreclosures" (3-10-08)
"A major hedge fund may have attempted to manipulate the housing market by funding a consumer advocacy group whose work would potentially help the fund’s positions in the market. Shorting subprime mortgage-backed securities proved to be the winning ticket for Paulson & Co. which quadrupled its assets to $29 billion and became one of the 10 largest hedge funds last year. The fund’s bets against subprime mortgages pay off only if lenders with defaulted don’t recoup losses through foreclosure sales."
"The hedge-fund industry is reeling from its worst crisis in a decade as banks are now demanding more money pledged to support outstanding loans even when the investment is backed by the full faith and credit of the United States. Since Feb. 15, at least six hedge funds, totaling more than $5.4 billion, have been forced to liquidate or sell holdings because their lenders -- staggered by almost $190 billion of asset writedowns and credit losses caused by the collapse of the subprime-mortgage market -- raised borrowing rates by as much as 10-fold with new claims for extra collateral."
Bloomberg - "TIPS' Yields Show Fed Has Lost Control of Inflation" (3-10-08)
"Bond investors have never been so sure that the Federal Reserve will lose control of inflation. They're so convinced that they're giving up yields just to buy debt securities that protect against rising consumer prices. The yield on the five-year Treasury Inflation-Protected Security due in 2012 has been negative since Feb. 29, and traded today at minus 0.17 percent. The notes, which were first sold in 1997, have never before traded below zero. Even so, firms from Deutsche Asset Management to Vanguard Group Inc., the second- biggest U.S. mutual fund company, say TIPS are a bargain."
Bloomberg - "John Galt Plan Might Save U.S. Financial System" (3-10-08)
"By late last week, events seemed to be spinning out of control. Credit spreads were blowing out, with tax-exempt municipal bonds out-yielding Treasuries by a record and the spread between Fannie Mae mortgage-backed securities and government bonds hitting a 22-year high. Treasury bill yields were collapsing (further). The U.S. dollar was sinking like a stone. And commodity prices, in their lofty ascent, had all the makings of a market unhinged from the fundamentals, which, after all, is the definition of a bubble."
Bloomberg - "Bear Stearns Shares Fall on Liquidity Speculation" (3-10-08)
"Bear Stearns Cos. denied that the firm lacked sufficient access to capital, after speculation about a liquidity crisis pushed the stock down 11 percent in New York trading, the most since the 1987 stock market crash. Bear Stearns, the second-biggest underwriter of mortgage- backed bonds, said in a statement that 'there is absolutely no truth to the rumors of liquidity problems.'' The shares declined $7.78 to $62.30 in composite trading on the New York Stock Exchange at 4:08 p.m., the lowest level since March 2003."
Bloomberg - "Ambac, Thornburg Reverse Last Week's Last-Minute Rise" (3-10-08)
"Ambac Financial Group Inc. and Thornburg Mortgage Inc. erased last week's last-minute surge that was spurred by transactions on the New York Stock Exchange totaling at least 10 million shares. Ambac, whose March 7 gain went from 0.5 percent to 28 percent with the trades, slipped to $7.29 as of 4 p.m. in New York. That's 23 percent less than its closing price last week. Thornburg, which swung from a 24 percent tumble to an 8.5 percent rally late on March 7, declined 60 percent today to 71 cents."
Bloomberg - "Bank of America Plans to Proceed With Countrywide Bid" (3-10-08)
"Bank of America Corp., the largest U.S. bank by market value, plans to press ahead with its $4 billion takeover of Countrywide Financial Corp., the mortgage lender under FBI investigation for possible securities fraud. The Federal Bureau of Investigation, based in Washington, is scrutinizing whether Countrywide officials misrepresented the company's financial position and the quality of its mortgage loans in regulatory filings, said a person with knowledge of the probe on March 8. Bank of America spokesman Scott Silvestri said the acquisition of Calabasas, California-based Countrywide remains on track."
Orange County Register - "Foreclosure sales 23% of fresh O.C. home deals" (3-10-08)
"Every two weeks Thomas calculates 'market time,' a benchmark of how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. By this Thomas logic, as of last Thursday, it would take 8.14 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 8.46 months two weeks earlier and vs. 5.26 months a year ago."
Los Angeles Times - "Auction action: Big real estate auctions this weekend" (3-10-08)
"The auction schedule is heating up -- there are several big real estate auctions scheduled this weekend. Details: On Saturday at the Pomona Fairplex, Catalist Homes and DoveBid will auction 75 homes. You can see the inventory here. Registration opens at 8:30 a.m., the bidding starts at 10 a.m. Coverage note: It's likely I'll cover this auction. If you are heading to Pomona on Saturday to bid, I'd like to talk. Shoot me an e-mail at peter.viles@latimes.com."
Real Estate Journal - "Housing, Bank TroublesContinue to Deepen" (3-10-08)
"Two crucial barometers of the nation's housing market have worsened markedly in recent months, ratcheting up pressure on policy makers in Washington for action to stem the growing housing crisis and its widening impact on the nation's financial system. Among the latest trouble signals, the number of American homes entering foreclosure rose to the highest level on record in the fourth quarter of 2007. Meanwhile, homeowners' share of the equity in their homes fell to a post-World War II low."
Money News - "Hedge Funds Bet Big on Massive Foreclosures" (3-10-08)
"A major hedge fund may have attempted to manipulate the housing market by funding a consumer advocacy group whose work would potentially help the fund’s positions in the market. Shorting subprime mortgage-backed securities proved to be the winning ticket for Paulson & Co. which quadrupled its assets to $29 billion and became one of the 10 largest hedge funds last year. The fund’s bets against subprime mortgages pay off only if lenders with defaulted don’t recoup losses through foreclosure sales."
ABC - "Vallejo homeowners get much needed help" (3-9-08)
"The high number of home foreclosures in Vallejo is one of the reasons why the city is facing budget problems. Today, on Mare Island, homeowners in danger of losing their property are getting help from real estate experts."
The Washington Post - "Some Once-Crowded Homes Now Stand Vacant" (3-9-08)
"The four-bedroom, 1950s rambler on Hanover Avenue in Springfield was an illegal boardinghouse, neighbors complained in February 2007. Some called it the "Hanover Hotel," a home with too many people, too much noise and a lot of cars. County inspectors, under pressure from residents and elected officials to deal with a growing number of cases of residential overcrowding, found that the basement had been improperly divided into four rooms and that the house was set up for as many as 15 occupants."
The San Diego Union Tribune - "Many ideas, but few are helping fix mortgages" (3-9-08)
"Last week, Federal Reserve Chairman Ben Bernanke asked lenders to cut the principal on troubled mortgages to make payments cheaper for borrowers. Fed officials signaled they will probably cut interest rates again next week. Fannie Mae, Freddie Mac and the Federal Housing Administration eased the lending limits on their loans. And legislators kicked around the idea of reviving a New Deal program to help people buy their homes out of foreclosure. Unfortunately, some of the ideas that are getting the most attention will do little to fix the crisis. In fact, a cut in interest rates could make things worse. The best idea – re-creating a New Deal housing program – has not yet made it to the drawing board."
The San Diego Union Tribune - "HUD a dud at FHA refund payouts" (3-9-08)
"More than half a billion dollars owed to U.S. citizens sits unclaimed and under the department's control. And while HUD says it makes 'extensive efforts' to return the money, the number of people owed refunds has climbed in the past two years."
Los Angeles Times - "Building wealth by paying off mortgage debt" (3-9-08)
"It doesn't have to be, said Allen Fishbein, director of housing and credit policy at the Washington, D.C.-based advocacy group Consumer Federation of America, who believes the best way to build home equity and wealth is paying down -- and eventually paying off -- the mortgage."
"The high number of home foreclosures in Vallejo is one of the reasons why the city is facing budget problems. Today, on Mare Island, homeowners in danger of losing their property are getting help from real estate experts."
The Washington Post - "Some Once-Crowded Homes Now Stand Vacant" (3-9-08)
"The four-bedroom, 1950s rambler on Hanover Avenue in Springfield was an illegal boardinghouse, neighbors complained in February 2007. Some called it the "Hanover Hotel," a home with too many people, too much noise and a lot of cars. County inspectors, under pressure from residents and elected officials to deal with a growing number of cases of residential overcrowding, found that the basement had been improperly divided into four rooms and that the house was set up for as many as 15 occupants."
The San Diego Union Tribune - "Many ideas, but few are helping fix mortgages" (3-9-08)
"Last week, Federal Reserve Chairman Ben Bernanke asked lenders to cut the principal on troubled mortgages to make payments cheaper for borrowers. Fed officials signaled they will probably cut interest rates again next week. Fannie Mae, Freddie Mac and the Federal Housing Administration eased the lending limits on their loans. And legislators kicked around the idea of reviving a New Deal program to help people buy their homes out of foreclosure. Unfortunately, some of the ideas that are getting the most attention will do little to fix the crisis. In fact, a cut in interest rates could make things worse. The best idea – re-creating a New Deal housing program – has not yet made it to the drawing board."
The San Diego Union Tribune - "HUD a dud at FHA refund payouts" (3-9-08)
"More than half a billion dollars owed to U.S. citizens sits unclaimed and under the department's control. And while HUD says it makes 'extensive efforts' to return the money, the number of people owed refunds has climbed in the past two years."
Los Angeles Times - "Building wealth by paying off mortgage debt" (3-9-08)
"It doesn't have to be, said Allen Fishbein, director of housing and credit policy at the Washington, D.C.-based advocacy group Consumer Federation of America, who believes the best way to build home equity and wealth is paying down -- and eventually paying off -- the mortgage."
Voice of San Diego - "Median Home Prices Pummeled in February" (3-8-08)
"With that said let's have a quick look at the median-based price indicators for last month. They were, in a word, horrifying. (So far so good on the brevity). Between January and February, the size-adjusted median price declined 5.7 percent for single family homes and 7.7 percent for condos."
Yahoo - "Banks face 'systemic margin call,' $325 billion hit: JPM" (3-8-08)
"Wall Street banks are facing a "systemic margin call" that may deplete banks of $325 billion of capital due to deteriorating subprime U.S. mortgages, JPMorgan Chase & Co (JPM.N), said in a report late on Friday. JPMorgan, which sent a default notice to Thornburg Mortgage Inc. (TMA.N) after the lender missed a $28 million margin call, said more default notices and margin calls were likely. The Carlyle Group's mortgage fund also failed to meet $37 million in margin calls this week."
Market Watch - "FBI probes Countrywide for possible fraud: report" (3-8-08)
"Besieged subprime lender Countrywide Financial Corp. is being investigated by the Federal Bureau of Investigation for possible securities fraud, according to a news report Saturday. The Wall Street Journal report said the probe focuses on whether Countrywide's management misrepresented the quality of its mortgages in routine securities filings, which may have led investors to overvalue the loans it then securitized into more than $100 billion worth investment vehicles between 2004 and 2007."
"With that said let's have a quick look at the median-based price indicators for last month. They were, in a word, horrifying. (So far so good on the brevity). Between January and February, the size-adjusted median price declined 5.7 percent for single family homes and 7.7 percent for condos."
Yahoo - "Banks face 'systemic margin call,' $325 billion hit: JPM" (3-8-08)
"Wall Street banks are facing a "systemic margin call" that may deplete banks of $325 billion of capital due to deteriorating subprime U.S. mortgages, JPMorgan Chase & Co (JPM.N), said in a report late on Friday. JPMorgan, which sent a default notice to Thornburg Mortgage Inc. (TMA.N) after the lender missed a $28 million margin call, said more default notices and margin calls were likely. The Carlyle Group's mortgage fund also failed to meet $37 million in margin calls this week."
Market Watch - "FBI probes Countrywide for possible fraud: report" (3-8-08)
"Besieged subprime lender Countrywide Financial Corp. is being investigated by the Federal Bureau of Investigation for possible securities fraud, according to a news report Saturday. The Wall Street Journal report said the probe focuses on whether Countrywide's management misrepresented the quality of its mortgages in routine securities filings, which may have led investors to overvalue the loans it then securitized into more than $100 billion worth investment vehicles between 2004 and 2007."
Friday, March 07, 2008
Mortgage Bankers Association - "Fannie Mae Announces Temporary Increase to Our Conventional Loan Limits" (3-7-08)
"The purpose of this Announcement is to outline Fannie Mae’s requirements for the origination, underwriting, delivery and servicing of 'jumbo-conforming' mortgage loans. A jumbo-conforming mortgage loan is any conventional conforming mortgage loan for which the original principal balance exceeds our conforming loan limits in effect prior to the temporary increase up to the new limits set by HUD for the area in which the property is located. Unless otherwise stated in this Announcement, all requirements of Fannie Mae’s Selling Guide and Servicing Guide apply to jumbo-conforming mortgage loans."
Yahoo - "Fed Takes New Steps on Credit Crisis" (3-7-08)
"The Federal Reserve is taking bigger steps to ease the nation's credit crisis, including increasing the amount of loans it plans to make available to banks this month to $100 billion. The Federal Reserve announced Friday that it will boost the size of auctions planned for March 10 and March 24 to $50 billion each. That is up from the $30 billion limits it had previously announced. The auctions serve as short-term loans to get banks the cash they need to keep lending to their customers."
The Boston Globe - "College loans see subprime fallout" (3-7-08)
"The fallout from the subprime mortgage crisis is sending shock waves through the college loan industry in New England, limiting options for some students seeking assistance for the fall semester. Amid a deepening credit squeeze and cutbacks in federal loan subsidies, New Hampshire's nonprofit student-loan agency said this week that it will no longer offer private loans. The Massachusetts Educational Financing Authority, which lent money to 42,000 college students last year, has so far failed to secure any financing for its loans, as skittish investors shy away from taking on debt."
The San Diego Union Tribune - "Housing data bad news for economy" (3-7-08)
"Nervous homeowners and economic analysts have been wondering how much worse the housing market could get. Yesterday, they got an answer: plenty. Foreclosures are at a record high. Home equity is at a record low. The housing market is spiraling down – and taking people's sense of economic security with it."
The Washington Post - "Investors Dump Securities From Fannie, Freddie" (3-7-08)
"The prices of mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac have plunged lately as supply has grown faster than demand. That indicates that their ability to prop up the lending system has declined. Fannie Mae, based in the District, and McLean-based Freddie Mac package mortgages into securities for sale to investors, guaranteeing to pay the principal and interest if the borrowers default. That enables lenders to move mortgages off their books and replenish the funds they use to issue new mortgages."
Yahoo - "Congress panel rips lavish pay of subprime CEOs" (3-7-08)
"The stunning pay packages of executives at financial groups hammered by the U.S. mortgage crisis came in for stinging criticism from Democratic lawmakers and investor advocates at a congressional hearing on Friday."
Reuters - "RPT-Foreign buyers see U.S. property as currency play" (3-7-08)
"For over a year, U.S. real estate has offered bargains to foreign buyers as the euro or British pound gets ever more bang against the sinking buck. Now, however, a shopping mall, office building, high-rise condominium, or hotel is, to some foreign investors, a vehicle to bet on the dollar."
Orange County Register - "Orange County home prices and sales, mid-February" (3-7-08)
"For the 22 business days ended Feb. 22, 2008, sales for all types of Orange County home sales decreased 45.2 percent. The median sales price decreased 16.3 percent. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change."
Orange County Register - "Only 4 O.C. ZIPs see home sales gains in late Feb." (3-7-08)
"Latest home-selling stats from DataQuick for 22 business days ended Feb. 22 show that only four O.C. ZIPs out of 83 with buying activity above the year-ago period: Orange 92867; Villa Park 92861; Huntington Beach 92647 and Dana Point 92624. All told, those four ZIPs had just 65 sales."
Los Angeles Times - "Bailout watch: The Republicans are coming" (3-7-08)
"News item: Republican Sen. Kit Bond of Missouri (pictured) today proposed a $10 billion-plus housing bailout plan that includes $15,000 tax credits for buyers of foreclosed homes and tax breaks for mortgage companies that have lost money recently."
"The purpose of this Announcement is to outline Fannie Mae’s requirements for the origination, underwriting, delivery and servicing of 'jumbo-conforming' mortgage loans. A jumbo-conforming mortgage loan is any conventional conforming mortgage loan for which the original principal balance exceeds our conforming loan limits in effect prior to the temporary increase up to the new limits set by HUD for the area in which the property is located. Unless otherwise stated in this Announcement, all requirements of Fannie Mae’s Selling Guide and Servicing Guide apply to jumbo-conforming mortgage loans."
Yahoo - "Fed Takes New Steps on Credit Crisis" (3-7-08)
"The Federal Reserve is taking bigger steps to ease the nation's credit crisis, including increasing the amount of loans it plans to make available to banks this month to $100 billion. The Federal Reserve announced Friday that it will boost the size of auctions planned for March 10 and March 24 to $50 billion each. That is up from the $30 billion limits it had previously announced. The auctions serve as short-term loans to get banks the cash they need to keep lending to their customers."
The Boston Globe - "College loans see subprime fallout" (3-7-08)
"The fallout from the subprime mortgage crisis is sending shock waves through the college loan industry in New England, limiting options for some students seeking assistance for the fall semester. Amid a deepening credit squeeze and cutbacks in federal loan subsidies, New Hampshire's nonprofit student-loan agency said this week that it will no longer offer private loans. The Massachusetts Educational Financing Authority, which lent money to 42,000 college students last year, has so far failed to secure any financing for its loans, as skittish investors shy away from taking on debt."
The San Diego Union Tribune - "Housing data bad news for economy" (3-7-08)
"Nervous homeowners and economic analysts have been wondering how much worse the housing market could get. Yesterday, they got an answer: plenty. Foreclosures are at a record high. Home equity is at a record low. The housing market is spiraling down – and taking people's sense of economic security with it."
The Washington Post - "Investors Dump Securities From Fannie, Freddie" (3-7-08)
"The prices of mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac have plunged lately as supply has grown faster than demand. That indicates that their ability to prop up the lending system has declined. Fannie Mae, based in the District, and McLean-based Freddie Mac package mortgages into securities for sale to investors, guaranteeing to pay the principal and interest if the borrowers default. That enables lenders to move mortgages off their books and replenish the funds they use to issue new mortgages."
Yahoo - "Congress panel rips lavish pay of subprime CEOs" (3-7-08)
"The stunning pay packages of executives at financial groups hammered by the U.S. mortgage crisis came in for stinging criticism from Democratic lawmakers and investor advocates at a congressional hearing on Friday."
Reuters - "RPT-Foreign buyers see U.S. property as currency play" (3-7-08)
"For over a year, U.S. real estate has offered bargains to foreign buyers as the euro or British pound gets ever more bang against the sinking buck. Now, however, a shopping mall, office building, high-rise condominium, or hotel is, to some foreign investors, a vehicle to bet on the dollar."
Orange County Register - "Orange County home prices and sales, mid-February" (3-7-08)
"For the 22 business days ended Feb. 22, 2008, sales for all types of Orange County home sales decreased 45.2 percent. The median sales price decreased 16.3 percent. The median is where half the homes sold for more and half for less. Types of homes selling, as well as home value changes, cause the median to change."
Orange County Register - "Only 4 O.C. ZIPs see home sales gains in late Feb." (3-7-08)
"Latest home-selling stats from DataQuick for 22 business days ended Feb. 22 show that only four O.C. ZIPs out of 83 with buying activity above the year-ago period: Orange 92867; Villa Park 92861; Huntington Beach 92647 and Dana Point 92624. All told, those four ZIPs had just 65 sales."
Los Angeles Times - "Bailout watch: The Republicans are coming" (3-7-08)
"News item: Republican Sen. Kit Bond of Missouri (pictured) today proposed a $10 billion-plus housing bailout plan that includes $15,000 tax credits for buyers of foreclosed homes and tax breaks for mortgage companies that have lost money recently."
Thursday, March 06, 2008
NAR - "Flat Existing-Home Sales Likely Before Gradual Recovery" (3-6-08)
"The volume of existing-home sales is expected to hold steady through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by the National Association of Realtors®. Lawrence Yun, NAR chief economist, said many buyers have been waiting for higher mortgage loan limits. 'The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,' he said. 'Therefore, a notable rise in home sales can be anticipated in the second half of the year.'"
NAR - "REALTORS® Urge Increased National Loan Limit as Vital to Housing Market" (3-6-08)
"The National Association of Realtors® today called on the U.S. Senate to enact reform legislation for the nation’s government-sponsored enterprises (GSEs) that will protect the vibrancy, liquidity and stability of the U.S. housing finance system. In testimony before the Senate Committee on Banking, Housing and Urban Affairs, NAR urged the Senate to permanently raise the national GSE conforming loan limits to $625,000 with an additional increase of 125 percent of the local median home-sales price in high-cost areas."
Reuters - "UBS shares sink anew on writedown fears" (3-6-08)
"Swiss bank UBS AG came under renewed pressure on Thursday due to speculation it had sold a huge portfolio of risky mortgages at a deep discount and that the scale of its subprime losses was rapidly mounting. Analysts said they believed UBS had sold its Alt-A investments -- U.S. mortgages ranked between prime and subprime -- to bond manager Pimco for 70 cents to the dollar, taking a deep discount on a 26.6 billion Swiss franc ($25.7 billion) portfolio."
New York Post - "WHY FED CHIEF WILL BE TOSSING & TURNING TONIGHT" (3-6-08)
"The Fed, of course, has been cutting interest rates for more than eight months with little to show for the effort. And another reduction in borrowing costs - maybe the heftiest yet - is expected when the central bankers meet later this month. All of this activity is predicated on the fact that the economy is doing lousy. And there's little doubt that it is."
Yahoo - "Report: Minorities Hit by Foreclosures" (3-6-08)
"Subprime lenders that went out of business with the industry's collapse targeted minority neighborhoods, leaving them to struggle disproportionately with foreclosures and crumbling home values, according to a new report."
Bloomberg - "U.S. Mortgage Foreclosures Rise as Owners `Give Up'" (3-6-08)
"U.S. mortgage foreclosures rose to an all-time high at the end of 2007 as borrowers with adjustable-rate loans walked away from properties before their payments increased, the Mortgage Bankers Association said today. New foreclosures jumped to 0.83 percent of all home loans in the fourth quarter from 0.54 percent a year earlier. Late payments rose to a 23-year high, the organization said in a report today."
The San Diego Union Tribune - "FHA raises housing loan limits in county" (3-6-08)
"In a move that could help thousands of distressed San Diego homeowners, the Federal Housing Administration yesterday announced that it will raise the limits on mortgages it guarantees to $697,500 within the county."
Orange County Register - "64% of bankers don’t see real estate bottom soon" (3-6-08)
"Accountancy Grant Thornton’s 15th annual survey of bank executives found 64% of those polled do not anticipate their local real estate market to hit bottom for six months or more. In addition, 31% of the 356 bankers polled think the Federal Reserve is doing a good job in managing the economy; 21% did not agree."
Real Estate Journal - "Blacklisting Hits Home Sellers" (3-6-08)
"In the nation's worst-hit real-estate markets, home sellers are suffering a new blow: They are being blacklisted by lenders. As property values decline and credit markets contract, home lenders nationwide are growing ever more unwilling to finance home purchases in sharply declining housing markets, driving prices down further. In some cases, lenders have ruled out entire geographic regions and property types altogether, most notably high-rise condominiums in South Florida and Las Vegas."
"The volume of existing-home sales is expected to hold steady through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by the National Association of Realtors®. Lawrence Yun, NAR chief economist, said many buyers have been waiting for higher mortgage loan limits. 'The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,' he said. 'Therefore, a notable rise in home sales can be anticipated in the second half of the year.'"
NAR - "REALTORS® Urge Increased National Loan Limit as Vital to Housing Market" (3-6-08)
"The National Association of Realtors® today called on the U.S. Senate to enact reform legislation for the nation’s government-sponsored enterprises (GSEs) that will protect the vibrancy, liquidity and stability of the U.S. housing finance system. In testimony before the Senate Committee on Banking, Housing and Urban Affairs, NAR urged the Senate to permanently raise the national GSE conforming loan limits to $625,000 with an additional increase of 125 percent of the local median home-sales price in high-cost areas."
Reuters - "UBS shares sink anew on writedown fears" (3-6-08)
"Swiss bank UBS AG came under renewed pressure on Thursday due to speculation it had sold a huge portfolio of risky mortgages at a deep discount and that the scale of its subprime losses was rapidly mounting. Analysts said they believed UBS had sold its Alt-A investments -- U.S. mortgages ranked between prime and subprime -- to bond manager Pimco for 70 cents to the dollar, taking a deep discount on a 26.6 billion Swiss franc ($25.7 billion) portfolio."
New York Post - "WHY FED CHIEF WILL BE TOSSING & TURNING TONIGHT" (3-6-08)
"The Fed, of course, has been cutting interest rates for more than eight months with little to show for the effort. And another reduction in borrowing costs - maybe the heftiest yet - is expected when the central bankers meet later this month. All of this activity is predicated on the fact that the economy is doing lousy. And there's little doubt that it is."
Yahoo - "Report: Minorities Hit by Foreclosures" (3-6-08)
"Subprime lenders that went out of business with the industry's collapse targeted minority neighborhoods, leaving them to struggle disproportionately with foreclosures and crumbling home values, according to a new report."
Bloomberg - "U.S. Mortgage Foreclosures Rise as Owners `Give Up'" (3-6-08)
"U.S. mortgage foreclosures rose to an all-time high at the end of 2007 as borrowers with adjustable-rate loans walked away from properties before their payments increased, the Mortgage Bankers Association said today. New foreclosures jumped to 0.83 percent of all home loans in the fourth quarter from 0.54 percent a year earlier. Late payments rose to a 23-year high, the organization said in a report today."
The San Diego Union Tribune - "FHA raises housing loan limits in county" (3-6-08)
"In a move that could help thousands of distressed San Diego homeowners, the Federal Housing Administration yesterday announced that it will raise the limits on mortgages it guarantees to $697,500 within the county."
Orange County Register - "64% of bankers don’t see real estate bottom soon" (3-6-08)
"Accountancy Grant Thornton’s 15th annual survey of bank executives found 64% of those polled do not anticipate their local real estate market to hit bottom for six months or more. In addition, 31% of the 356 bankers polled think the Federal Reserve is doing a good job in managing the economy; 21% did not agree."
Real Estate Journal - "Blacklisting Hits Home Sellers" (3-6-08)
"In the nation's worst-hit real-estate markets, home sellers are suffering a new blow: They are being blacklisted by lenders. As property values decline and credit markets contract, home lenders nationwide are growing ever more unwilling to finance home purchases in sharply declining housing markets, driving prices down further. In some cases, lenders have ruled out entire geographic regions and property types altogether, most notably high-rise condominiums in South Florida and Las Vegas."
Wednesday, March 05, 2008
MBA - "Mortgage Applications Increase In Latest MBA Weekly Survey" (3-5-08)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 29, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 684.9, an increase of 3.0 percent on a seasonally adjusted basis from 665.1 one week earlier. On an unadjusted basis, the Index increased 15.3 percent compared with the previous President’s Day holiday shortened week and was up 1.1 percent compared with the same week one year earlier."
Yahoo - "Ratings Agencies Differ on Ambac Plan" (3-5-08)
"Credit rating agencies Standard & Poor's and Moody's said Wednesday Ambac Financial Group Inc.'s plan to raise $1.5 billion by selling stock would be enough to avert a downgrade, but competitor Fitch Ratings was less upbeat."
Washington Post - "The Housing Fix" (3-5-08)
"Even many economists -- who should know better -- describe the present situation as an oversupply of unsold homes. True, there is about 10 months' supply of existing homes as opposed to four months' a few years ago. But the real problem is insufficient demand. There aren't more homes than there are Americans who want homes; that would be a true surplus. There's so much supply because many prospective customers can't buy at today's prices."
Bloomberg - "Auction Bond Failures Near 70%; No Sign of Abating" (3-5-08)
"Auction-rate bond failures show no sign of abating after investors abandoned the market for variable-rate municipal securities. Almost 70 percent of the periodic auctions in the $330 billion market failed this week as investment banks stopped buying the securities investors didn't want. Yields on the debt averaged 6.52 percent as of Feb. 28, up from 3.63 percent before demand evaporated in January."
Yahoo - "WaMu protects exec bonuses from subprime fallout" (3-5-08)
"Washington Mutual Inc's board of directors approved a plan which helps protect its management's bonus targets from the impact of the subprime loan fallout, according to a filing with U.S. regulators. The board's human resources committee on February 26 approved bonus targets, some of which will be calculated to exclude expenses related to business re-sizing or restructuring, foreclosed real estate assets and loan loss provisions other than related to its credit card business."
Reuters - "Fraud compounds woes of housing crisis" (3-5-08)
"As the U.S. housing meltdown forces hundreds of thousands of Americans from their homes, the extent to which fraud was a factor in the crisis is just coming to light. Products such as stated-income loans -- known as 'liar loans' because no proof of income was needed -- led to widespread misrepresentation by borrowers about their earnings."
USA Today - "Realtors' spring marketing reflects market realities" (3-5-08)
"As housing prices continue to fall, real estate agencies are responding with a marketing onslaught to try to entice reluctant shoppers to get off the fence and buy. As the spring buying and selling season opens with a backlog of unsold homes, national franchisers RE/Max, Coldwell Banker and Century 21 and the industry's trade association have mounted TV ads, local messages and Web marketing."
Orange County Register - "HUD says LA/OC apartment market hit by rental houses" (3-5-08)
"The latest recap by the U.S. Housing and Urban Development Department suggests the so-called “shadow market” of home rentals appears to be hitting O.C. and L.A. apartment occupancy. HUD says vacancy rates in O.C. and L.A. increased to 4.5% in the fourth quarter of 2007 from 4% in the same period the year before."
Real Estate Journal - "Lenders Working to Help Homeowners Stay in Homes" (3-5-08)
"In a report released yesterday, the Hope Now Alliance, the group coordinating the mortgage industry's response to the nation's mounting wave of foreclosures, said its members helped work out 1.04 million mortgage loans between July 1 and Jan. 31. The methods ranged from rescheduling borrowers' payments to easing the terms of their loans."
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending February 29, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 684.9, an increase of 3.0 percent on a seasonally adjusted basis from 665.1 one week earlier. On an unadjusted basis, the Index increased 15.3 percent compared with the previous President’s Day holiday shortened week and was up 1.1 percent compared with the same week one year earlier."
Yahoo - "Ratings Agencies Differ on Ambac Plan" (3-5-08)
"Credit rating agencies Standard & Poor's and Moody's said Wednesday Ambac Financial Group Inc.'s plan to raise $1.5 billion by selling stock would be enough to avert a downgrade, but competitor Fitch Ratings was less upbeat."
Washington Post - "The Housing Fix" (3-5-08)
"Even many economists -- who should know better -- describe the present situation as an oversupply of unsold homes. True, there is about 10 months' supply of existing homes as opposed to four months' a few years ago. But the real problem is insufficient demand. There aren't more homes than there are Americans who want homes; that would be a true surplus. There's so much supply because many prospective customers can't buy at today's prices."
Bloomberg - "Auction Bond Failures Near 70%; No Sign of Abating" (3-5-08)
"Auction-rate bond failures show no sign of abating after investors abandoned the market for variable-rate municipal securities. Almost 70 percent of the periodic auctions in the $330 billion market failed this week as investment banks stopped buying the securities investors didn't want. Yields on the debt averaged 6.52 percent as of Feb. 28, up from 3.63 percent before demand evaporated in January."
Yahoo - "WaMu protects exec bonuses from subprime fallout" (3-5-08)
"Washington Mutual Inc's board of directors approved a plan which helps protect its management's bonus targets from the impact of the subprime loan fallout, according to a filing with U.S. regulators. The board's human resources committee on February 26 approved bonus targets, some of which will be calculated to exclude expenses related to business re-sizing or restructuring, foreclosed real estate assets and loan loss provisions other than related to its credit card business."
Reuters - "Fraud compounds woes of housing crisis" (3-5-08)
"As the U.S. housing meltdown forces hundreds of thousands of Americans from their homes, the extent to which fraud was a factor in the crisis is just coming to light. Products such as stated-income loans -- known as 'liar loans' because no proof of income was needed -- led to widespread misrepresentation by borrowers about their earnings."
USA Today - "Realtors' spring marketing reflects market realities" (3-5-08)
"As housing prices continue to fall, real estate agencies are responding with a marketing onslaught to try to entice reluctant shoppers to get off the fence and buy. As the spring buying and selling season opens with a backlog of unsold homes, national franchisers RE/Max, Coldwell Banker and Century 21 and the industry's trade association have mounted TV ads, local messages and Web marketing."
Orange County Register - "HUD says LA/OC apartment market hit by rental houses" (3-5-08)
"The latest recap by the U.S. Housing and Urban Development Department suggests the so-called “shadow market” of home rentals appears to be hitting O.C. and L.A. apartment occupancy. HUD says vacancy rates in O.C. and L.A. increased to 4.5% in the fourth quarter of 2007 from 4% in the same period the year before."
Real Estate Journal - "Lenders Working to Help Homeowners Stay in Homes" (3-5-08)
"In a report released yesterday, the Hope Now Alliance, the group coordinating the mortgage industry's response to the nation's mounting wave of foreclosures, said its members helped work out 1.04 million mortgage loans between July 1 and Jan. 31. The methods ranged from rescheduling borrowers' payments to easing the terms of their loans."
Tuesday, March 04, 2008
NAHB - "Simple Steps Can Keep Local Governments In Compliance With Fair Housing Act" (3-4-08)
"The recent resolution of litigation in South Carolina demonstrates that local governments can run afoul of the federal Fair Housing Act even when government officials do not intend to discriminate. The effect of a local government action related to development can trigger serious fair housing concerns for racial or ethnic minorities. Fortunately, local governments can take steps to make sure they are in compliance with the federal Fair Housing Act. The key is to be attentive to the needs of minorities and families within the community and to work closely with developers who seek to meet those needs by producing affordable housing."
CNN - "Fremont received defaults on $3.15B in loans" (3-4-08)
"Fremont General Corp. said Tuesday it received default notices on about $3.15 billion of loans it sold in March 2007. The bank received notices from two investors who purchased the loans, saying it violated sales terms when its tangible net worth fell below $250 million. Tangible net worth is the sum of all assets minus liabilities."
Bloomberg - "Bank of Montreal Profit Declines on Debt Writedowns" (3-4-08)
"Bank of Montreal, Canada's fourth- biggest bank, reported profit that fell more than analysts expected because of trading losses and writedowns on debt tied to the U.S. subprime mortgage market. First-quarter net income fell 27 percent to C$255 million ($258 million), or 47 cents a share, from C$348 million, or 67 cents, a year earlier, the Toronto-based bank said today in a statement. The company said it won't meet its profit targets for the year because of the credit losses and slower economic growth."
Yahoo - "Fed Chief: Mortgage Crisis to Continue" (3-4-08)
"Battling a dangerous wave of home foreclosures, Federal Reserve Chairman Ben Bernanke called Tuesday for additional relief and urged lenders to help distressed owners by lowering the amount of their loans. Even with some relief efforts under way by industry and government, foreclosures and late payments on home mortgages are likely to rise 'for a while longer,' Bernanke warned."
Orlando Sentinel - "BofA chief sees simpler world for home loans" (3-4-08)
"Chief Executive Officer Ken Lewis, 60, of Bank of America, the nation's largest bank, which will also become the largest U.S. home lender later this year when it completes its $4.1 billion acquisition of troubled Countrywide Financial Corp. Lewis spoke recently with Paul Owers of the South Florida Sun-Sentinel."
Bloomberg - "Bernanke Urges Banks to Forgive Portion of Mortgages" (3-4-08)
"Federal Reserve Chairman Ben S. Bernanke, battling the worst housing recession in a quarter century, urged lenders to forgive portions of mortgages held by homeowners at risk of defaulting. 'Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done,' Bernanke said in a speech to bankers in Orlando, Florida, today. 'Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure.'"
Palm Beach Post - "Recovery of housing market will take years, banker says" (3-4-08)
"Still falling: Median asking prices in greater L.A. fell another $900 over the past week and have now declined $111,000, or 19%, from their peak in April 2006, according to Housing Tracker's analysis of homes and condos for sale on the MLS."
Orange County Register - "Calif. worst U.S. home market with 18.65% loss" (3-4-08)
"First American LoanPerformance reports that, by its math, California home values in mid-January are off 18.65% from a year ago, the nation’s worst. It’s an unwanted crown the state has worn since May. In January 2007, California prices were falling at a 2.5% annual rate. Next worst was Florida (-13.87%), followed by Nevada (-11.83%) and Arizona (-11.06%.)"
"The recent resolution of litigation in South Carolina demonstrates that local governments can run afoul of the federal Fair Housing Act even when government officials do not intend to discriminate. The effect of a local government action related to development can trigger serious fair housing concerns for racial or ethnic minorities. Fortunately, local governments can take steps to make sure they are in compliance with the federal Fair Housing Act. The key is to be attentive to the needs of minorities and families within the community and to work closely with developers who seek to meet those needs by producing affordable housing."
CNN - "Fremont received defaults on $3.15B in loans" (3-4-08)
"Fremont General Corp. said Tuesday it received default notices on about $3.15 billion of loans it sold in March 2007. The bank received notices from two investors who purchased the loans, saying it violated sales terms when its tangible net worth fell below $250 million. Tangible net worth is the sum of all assets minus liabilities."
Bloomberg - "Bank of Montreal Profit Declines on Debt Writedowns" (3-4-08)
"Bank of Montreal, Canada's fourth- biggest bank, reported profit that fell more than analysts expected because of trading losses and writedowns on debt tied to the U.S. subprime mortgage market. First-quarter net income fell 27 percent to C$255 million ($258 million), or 47 cents a share, from C$348 million, or 67 cents, a year earlier, the Toronto-based bank said today in a statement. The company said it won't meet its profit targets for the year because of the credit losses and slower economic growth."
Yahoo - "Fed Chief: Mortgage Crisis to Continue" (3-4-08)
"Battling a dangerous wave of home foreclosures, Federal Reserve Chairman Ben Bernanke called Tuesday for additional relief and urged lenders to help distressed owners by lowering the amount of their loans. Even with some relief efforts under way by industry and government, foreclosures and late payments on home mortgages are likely to rise 'for a while longer,' Bernanke warned."
Orlando Sentinel - "BofA chief sees simpler world for home loans" (3-4-08)
"Chief Executive Officer Ken Lewis, 60, of Bank of America, the nation's largest bank, which will also become the largest U.S. home lender later this year when it completes its $4.1 billion acquisition of troubled Countrywide Financial Corp. Lewis spoke recently with Paul Owers of the South Florida Sun-Sentinel."
Bloomberg - "Bernanke Urges Banks to Forgive Portion of Mortgages" (3-4-08)
"Federal Reserve Chairman Ben S. Bernanke, battling the worst housing recession in a quarter century, urged lenders to forgive portions of mortgages held by homeowners at risk of defaulting. 'Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done,' Bernanke said in a speech to bankers in Orlando, Florida, today. 'Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure.'"
Palm Beach Post - "Recovery of housing market will take years, banker says" (3-4-08)
"Treasury Secretary Henry Paulson told economists Monday that no matter what the government does, recovery from the mortgage meltdown is 'going to take some time.' Paulson made his remarks at the National Association for Business Economics convention."
Los Angeles Times - "Still falling: L.A. asking prices down $111K from peak" (3-4-08)"Still falling: Median asking prices in greater L.A. fell another $900 over the past week and have now declined $111,000, or 19%, from their peak in April 2006, according to Housing Tracker's analysis of homes and condos for sale on the MLS."
Orange County Register - "Calif. worst U.S. home market with 18.65% loss" (3-4-08)
"First American LoanPerformance reports that, by its math, California home values in mid-January are off 18.65% from a year ago, the nation’s worst. It’s an unwanted crown the state has worn since May. In January 2007, California prices were falling at a 2.5% annual rate. Next worst was Florida (-13.87%), followed by Nevada (-11.83%) and Arizona (-11.06%.)"
Monday, March 03, 2008
Mortgage Bankers Association - "Fannie, Freddie To Buy Loans Only Under New Standards" (3-3-08)
"Attorney General Andrew M. Cuomo and the nation’s two largest purchasers of home loans, Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), have entered into cooperation agreements requiring them to only buy loans from banks that meet new standards designed to ensure independent and reliable appraisals."
Bloomberg - "Most U.S. Stocks Gain, Led by Commodity Producers; Banks Drop" (3-3-08)
"The S&P 500 swung between gains and losses at least 37 times as a smaller-than-forecast drop in manufacturing offset a decline in construction spending. The S&P 500 added 0.71 point, or 0.1 percent, to 1,331.34. The Dow Jones Industrial Average slid 7.49, or 0.1 percent, to 12,258.9. The Nasdaq Composite Index lost 12.88, or 0.6 percent, to 2,258.6. On the New York Stock Exchange, 949 stocks rose and 930 fell."
Big Builder Online - "US Manufacturing Contracted in February" (3-3-08)
"U.S. manufacturing activity declined in February to its weakest level in nearly five years, an industry group survey showed Monday, heralding more instability in the job market and frailty in the overall economy. After reporting modest growth for January, the Institute for Supply Management said its February manufacturing index registered at 48.3 - its weakest reading since April 2003, but above Wall Street's even poorer expectations."
Minyanville - "Losses Threaten Countrywide Deal" (3-3-08)
"In Countrywide's 10K, filed last Friday, the company detailed the abysmal performance of option adjustable-rate mortgages, or Option ARMs. Option ARMs allow borrowers to choose between monthly payment options, the lowest of which result in principal being added to the balance of the loan, known as negative amortization (see number five). Option ARMs more than 90 days delinquent increased to 5.4%, up 900% from a year ago. In Countrywide's $28 billion Option ARM portfolio, 71% of borrowers are only making the minimum payment and 80% of the loans did not require borrowers to verify their income."
Bloomberg - "Auction Supply 'Tsunami' Portends Municipal Losses" (3-3-08)
"U.S. states and local governments may extend the worst slump in municipal bonds on record as they replace as much as $166 billion of auction-rate securities. California, Boston's biggest hospital and Duke Energy Corp. are converting bonds to other types of tax-exempt debt after auction failures drove rates as high as 20 percent. The potential supply equals almost 40 percent of the municipal securities sold last year, overwhelming a market that tumbled 4.9 percent last month, according to indexes maintained by Merrill Lynch & Co., which began compiling market data in 1989."
Yahoo - "Credit crunch worries economists" (3-3-08)
"The cascading fallout from the subprime loan crisis, barely a cloud on the horizon a year ago, is now viewed by experts as the economy's gravest threat. In a survey being released Monday, 34 percent of the members of the National Association for Business Economics ranked the financial market turmoil from those loan defaults as the No. 1 threat to the economy over the next two years."
Bloomberg - "MBIA, Ambac Filings Show Subprime Losses Continued" (3-3-08)
"MBIA Inc. and Ambac Financial Group Inc., the bond insurers hobbled by $10 billion of writedowns on subprime debt last year, said losses continued into 2008. Ambac marked down the value of derivative contracts linked to subprime mortgages by $650 million in January, according to a regulatory filing on Feb. 29. Armonk, New York-based MBIA said it couldn't estimate January's losses."
CNN - "HSBC profits hit by subprime fallout" (3-3-08)
"HSBC Holdings PLC says profit rose 21 percent in 2007 despite taking a beating in North America. The company reports a profit of $19.1 billion compared with $15.8 billion in 2006. Pretax profits in North America fell 98 percent to $91 million compared to 4.67 billion in 2006."
Bloomberg - "Plosser Signals Rate-Cut Reversal Needed When Markets Stabilize" (3-3-08)
"Federal Reserve Bank of Philadelphia President Charles Plosser said the benchmark interest rate is now below the level recommended by 'many' monetary-policy theories and should be raised when financial markets stabilize. 'We are now, perhaps, in a period of extraordinary circumstances and have deviated from the benchmarks suggested by simple rules,' Plosser said in prepared remarks to a conference in Arlington, Virginia. 'Such deviations should be temporary and limited and promptly reversed when conditions return to normal.'"
MSNBC - "The argument against home ownership" (3-3-08)
"Americans may disagree about nearly everything, but few contest the idea that owning your home is a good thing. Paeans to homeownership are a commonplace for American politicians, and, since the nineteen-thirties, public policy has been designed to make home buying cheaper and easier. Homeownership, the argument goes, has tremendous social benefits, stabilizing neighborhoods and making people more willing to invest in their communities. And it has economic benefits, too, serving as a forced-savings program that allows people to leverage their incomes and build wealth. Homeownership 'provides financial security for families,' Mel Martinez, the former H.U.D. Secretary, has said, and it 'generates economic strength that fuels the entire nation.'"
Real Estate Journal - "Borrowers AbandonMortgages as Prices Drop" (3-3-08)
"As home prices plummet, growing numbers of borrowers are winding up owing more on their homes than the homes are worth, raising concerns that a new group of homeowners -- those who can afford to pay their mortgages but have decided not to -- are starting to walk away from their homes."
"Attorney General Andrew M. Cuomo and the nation’s two largest purchasers of home loans, Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), have entered into cooperation agreements requiring them to only buy loans from banks that meet new standards designed to ensure independent and reliable appraisals."
Bloomberg - "Most U.S. Stocks Gain, Led by Commodity Producers; Banks Drop" (3-3-08)
"The S&P 500 swung between gains and losses at least 37 times as a smaller-than-forecast drop in manufacturing offset a decline in construction spending. The S&P 500 added 0.71 point, or 0.1 percent, to 1,331.34. The Dow Jones Industrial Average slid 7.49, or 0.1 percent, to 12,258.9. The Nasdaq Composite Index lost 12.88, or 0.6 percent, to 2,258.6. On the New York Stock Exchange, 949 stocks rose and 930 fell."
Big Builder Online - "US Manufacturing Contracted in February" (3-3-08)
"U.S. manufacturing activity declined in February to its weakest level in nearly five years, an industry group survey showed Monday, heralding more instability in the job market and frailty in the overall economy. After reporting modest growth for January, the Institute for Supply Management said its February manufacturing index registered at 48.3 - its weakest reading since April 2003, but above Wall Street's even poorer expectations."
Minyanville - "Losses Threaten Countrywide Deal" (3-3-08)
"In Countrywide's 10K, filed last Friday, the company detailed the abysmal performance of option adjustable-rate mortgages, or Option ARMs. Option ARMs allow borrowers to choose between monthly payment options, the lowest of which result in principal being added to the balance of the loan, known as negative amortization (see number five). Option ARMs more than 90 days delinquent increased to 5.4%, up 900% from a year ago. In Countrywide's $28 billion Option ARM portfolio, 71% of borrowers are only making the minimum payment and 80% of the loans did not require borrowers to verify their income."
Bloomberg - "Auction Supply 'Tsunami' Portends Municipal Losses" (3-3-08)
"U.S. states and local governments may extend the worst slump in municipal bonds on record as they replace as much as $166 billion of auction-rate securities. California, Boston's biggest hospital and Duke Energy Corp. are converting bonds to other types of tax-exempt debt after auction failures drove rates as high as 20 percent. The potential supply equals almost 40 percent of the municipal securities sold last year, overwhelming a market that tumbled 4.9 percent last month, according to indexes maintained by Merrill Lynch & Co., which began compiling market data in 1989."
Yahoo - "Credit crunch worries economists" (3-3-08)
"The cascading fallout from the subprime loan crisis, barely a cloud on the horizon a year ago, is now viewed by experts as the economy's gravest threat. In a survey being released Monday, 34 percent of the members of the National Association for Business Economics ranked the financial market turmoil from those loan defaults as the No. 1 threat to the economy over the next two years."
Bloomberg - "MBIA, Ambac Filings Show Subprime Losses Continued" (3-3-08)
"MBIA Inc. and Ambac Financial Group Inc., the bond insurers hobbled by $10 billion of writedowns on subprime debt last year, said losses continued into 2008. Ambac marked down the value of derivative contracts linked to subprime mortgages by $650 million in January, according to a regulatory filing on Feb. 29. Armonk, New York-based MBIA said it couldn't estimate January's losses."
CNN - "HSBC profits hit by subprime fallout" (3-3-08)
"HSBC Holdings PLC says profit rose 21 percent in 2007 despite taking a beating in North America. The company reports a profit of $19.1 billion compared with $15.8 billion in 2006. Pretax profits in North America fell 98 percent to $91 million compared to 4.67 billion in 2006."
Bloomberg - "Plosser Signals Rate-Cut Reversal Needed When Markets Stabilize" (3-3-08)
"Federal Reserve Bank of Philadelphia President Charles Plosser said the benchmark interest rate is now below the level recommended by 'many' monetary-policy theories and should be raised when financial markets stabilize. 'We are now, perhaps, in a period of extraordinary circumstances and have deviated from the benchmarks suggested by simple rules,' Plosser said in prepared remarks to a conference in Arlington, Virginia. 'Such deviations should be temporary and limited and promptly reversed when conditions return to normal.'"
MSNBC - "The argument against home ownership" (3-3-08)
"Americans may disagree about nearly everything, but few contest the idea that owning your home is a good thing. Paeans to homeownership are a commonplace for American politicians, and, since the nineteen-thirties, public policy has been designed to make home buying cheaper and easier. Homeownership, the argument goes, has tremendous social benefits, stabilizing neighborhoods and making people more willing to invest in their communities. And it has economic benefits, too, serving as a forced-savings program that allows people to leverage their incomes and build wealth. Homeownership 'provides financial security for families,' Mel Martinez, the former H.U.D. Secretary, has said, and it 'generates economic strength that fuels the entire nation.'"
Real Estate Journal - "Borrowers AbandonMortgages as Prices Drop" (3-3-08)
"As home prices plummet, growing numbers of borrowers are winding up owing more on their homes than the homes are worth, raising concerns that a new group of homeowners -- those who can afford to pay their mortgages but have decided not to -- are starting to walk away from their homes."
Orange County Register - "O.C. condo projects switching to apartments" (3-2-08)
"Register reporter Mary Ann Milbourn tracked down four, one-time O.C. condo projects that are switching to becoming rental apartments due to the sluggish home-purchase pace."
Orange County Register - "Convertible condos" (3-2-08)
"with sales of all new Orange County residences down nearly 63 percent from January 2007 and sales of existing condos off 39 percent, developers are beginning to reverse course."
"Register reporter Mary Ann Milbourn tracked down four, one-time O.C. condo projects that are switching to becoming rental apartments due to the sluggish home-purchase pace."
Orange County Register - "Convertible condos" (3-2-08)
"with sales of all new Orange County residences down nearly 63 percent from January 2007 and sales of existing condos off 39 percent, developers are beginning to reverse course."
The San Diego Union Tribune - "Helping homeowners tripped up by mortgage" (3-1-08)
"You Walk Away LLC has found a way to profit from the ongoing mortgage crisis, but co-founder Jon Maddux says the Carlsbad-based company also is providing a valuable service to borrowers who took out risky adjustable-rate loans during the fevered housing boom. Launched in January, the business helps distressed homeowners navigate their way through the foreclosure process for a fee of $995. Although it has served about 200 clients so far, Maddux says the potential market is largely untapped."
The San Diego Union Tribune - "Jobless data raise fears of recession in California" (3-1-08)
"In January, California lost more than 20,000 jobs, keeping the unemployment rate at nearly 6 percent, according to data released yesterday by the state Employment Development Department."
CNN - "Say good-bye to granite countertops" (3-1-08)
"During the housing boom, updating a kitchen with high end materials like cherry wood cabinets and a Viking stove was a sure bet to boost a home's value. Homeowners often recovered about 80% of the cost when the house was later sold. But with so much more inventory on the market for buyers to choose from, they just aren't as impressed with the bells and whistles. Now most upscale renovations are returning less than 70% of their cost, according to a recent survey from the National Association of Realtors (NAR) and Remodeling magazine."
Los Angeles Times - "The Contrarian: Housing values are not falling" (3-1-08)
"Case-Shiller is designed to magnify home-price declines. Mr. Shiller ... has spent the last several years misapplying financial-market principles to real estate, gleefully predicting a 30-40% national crash in home prices. The design flaw: it captures only sales of homes, obviously heavy with distressed transactions. For the authentic story and great methodology, visit www.OFHEO.gov and its All-Transactions House Price Index, which includes repeat appraisals in refinances, by definition free of distress. By that measure, national home prices in the 4th quarter rose by .8%. Prices fell in only 11 states, and in only five of those were declines in excess of one percent. See page 21 of the report for its critique of Case-Shiller."
"You Walk Away LLC has found a way to profit from the ongoing mortgage crisis, but co-founder Jon Maddux says the Carlsbad-based company also is providing a valuable service to borrowers who took out risky adjustable-rate loans during the fevered housing boom. Launched in January, the business helps distressed homeowners navigate their way through the foreclosure process for a fee of $995. Although it has served about 200 clients so far, Maddux says the potential market is largely untapped."
The San Diego Union Tribune - "Jobless data raise fears of recession in California" (3-1-08)
"In January, California lost more than 20,000 jobs, keeping the unemployment rate at nearly 6 percent, according to data released yesterday by the state Employment Development Department."
CNN - "Say good-bye to granite countertops" (3-1-08)
"During the housing boom, updating a kitchen with high end materials like cherry wood cabinets and a Viking stove was a sure bet to boost a home's value. Homeowners often recovered about 80% of the cost when the house was later sold. But with so much more inventory on the market for buyers to choose from, they just aren't as impressed with the bells and whistles. Now most upscale renovations are returning less than 70% of their cost, according to a recent survey from the National Association of Realtors (NAR) and Remodeling magazine."
Los Angeles Times - "The Contrarian: Housing values are not falling" (3-1-08)
"Case-Shiller is designed to magnify home-price declines. Mr. Shiller ... has spent the last several years misapplying financial-market principles to real estate, gleefully predicting a 30-40% national crash in home prices. The design flaw: it captures only sales of homes, obviously heavy with distressed transactions. For the authentic story and great methodology, visit www.OFHEO.gov and its All-Transactions House Price Index, which includes repeat appraisals in refinances, by definition free of distress. By that measure, national home prices in the 4th quarter rose by .8%. Prices fell in only 11 states, and in only five of those were declines in excess of one percent. See page 21 of the report for its critique of Case-Shiller."
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