Friday, January 30, 2009
"The economy shrank at a 3.8 percent pace at the end of 2008, the worst showing in a quarter-century, as the deepening recession forced consumers and businesses to throttle back spending. Although the initial result was better than economists expected, the figure is likely to be revised even lower in the months ahead and some believe the economy is contracting in the current quarter at a pace of around 5 percent. The current January-March period, they said, will probably turn out to be the worst quarter for the recession."
The San Diego Union Tribune - "Freddie Mac to rent foreclosed properties" (1-30-09)
"Mortgage finance company Freddie Mac said it will allow some borrowers to rent out their homes after losing them to foreclosure. The goal of the new policy, announced Friday, is to prevent properties from becoming vacant so they won't fall into disrepair. Freddie Mac also said it will allow renters to remain in their homes even if their landlord enters foreclosure. The McLean, Va.-based company currently has about 8,500 properties in the foreclosure process, but many of those are vacant."
Bloomberg - "Wells Fargo, Others Tighten Government-Mortgage Rules" (1-30-09)
"Wells Fargo & Co., the second-largest U.S. home lender, and Taylor, Bean & Whitaker Mortgage Corp., the biggest privately held mortgage company, are raising credit score requirements and other standards for government-insured loans."
Bloomberg - "Home Prices Fell in 24 U.S. Metro Areas as Foreclosures Rose" (1-30-09)
"Home prices fell in 24 of 25 U.S. metropolitan areas in November from a year earlier as the recession and tighter lending spurred record foreclosures.The San Francisco area saw the biggest drop, with the average price per square foot falling 36.8 percent, New York- based Radar Logic Inc. said in a report today. Phoenix had the next biggest decline, falling 34.6 percent, and Las Vegas slumped 32.4 percent. Milwaukee, Wisconsin was the only area where prices rose, gaining 2.4 percent, Radar Logic said."
Bloomberg - "Simon Falls on Plan to Pay Part of Dividend in Stock" (1-30-09)
"Simon Property Group Inc., the biggest U.S. shopping mall owner, fell in New York trading after announcing it will pay 90 percent of its quarterly dividend in stock to save money."
Orange County Register - "O.C. home pricing falls $250,000 from top" (1-30-09)
"How painful has it been? O.C. home losses — as measured by the median selling price — are now down a quarter-million bucks from the peak! $395,000 median selling price that is -29.0% vs. a year ago and $250,000 (-39%) below June 2007’s peak of $645,000. Single family homes sell for 42% less than their peak pricing (June ‘07) while condos sell 44% below their peak in March 2006. Builder prices for new homes are 43% below their February ‘05 top."
Orange County Register - "A call for 3% mortgages rates" (1-30-09)
"Lennar Corp. Chief Investment Officer Emile Haddad told a business breakfast in Irvine Thursday that Fannie Mae and Freddie Mac should buy 30-year fixed-rate mortgages at prices that allow banks to offer consumers a 3% interest rate. He said doing that for six months would help stimulate homebuying and help stabilize the U.S. economy."
Realty Times - "Investor Report: Self-Storage Facilities" (1-30-09)
"It's not a high-glamour, high profile niche in real estate investing, but it could be one of the safer, cash-flow producers in tough economic times: We're talking about self-storage facilities for small-scale investors. Yes, there are lots of them out there -- more than 52,000 nationwide. But the industry racks up $20 billion a year in sales, according to Self Storage Association, the major trade group in the field, and people always need a place to keep their extra 'stuff.'"
Realty Times - "How to Add Over Six Figures to Your Income Prospecting FSBO's" (1-30-09)
"In working FSBOs, I subscribe to the three P's theory: Picky, Patience, and Persistence. You must work these three P's in some combination to be successful in FSBOs. The first, and I believe the most important, P is being picky. You must be highly selective when working FSBOs. One of the first mistakes I made early in my career was trying to work too many FSBOs at a time. FSBOs must be screened very carefully and completely. "
Realty Times - "100 Stable Housing Markets" (1-30-09)
"Chances are, these towns don't ring a bell, but perhaps they should. They are among a list of 100 metro areas across the nation that have housing markets worth serious consideration. Over the past year, housing dollars spent in these towns have faced little if any risk, according to San Juan Capistrano, CA-based HomeSmartReports.com, a number-crunching company that examines property values and housing market risks."
Thursday, January 29, 2009
"CBIA said just 65,380 permits were issued statewide last year for new homes, condominiums, townhomes and apartments, down 42 percent from 2007 and down a staggering 69 percent - 147,580 units – compared to 2004, the peak of the current cycle."
Wall Street Journal - "New-Home Sales Tumbled in December" (1-29-09)
"Sales of single-family homes decreased by 14.7% to a seasonally adjusted annual rate of 331,000, the Commerce Department said Thursday. November new-home sales fell 4.4% to an annual rate to 388,000; originally, the government said November sales dropped 2.9% to 407,000. Economists surveyed by Dow Jones Newswires forecast a 2.9% decrease in December sales to a 395,000 annual rate. The drop was the fifth in a row."
Luce Forward - "SEC Rules Sale of Tenant in Common (TIC) Interests Must Comply With Securities Law" (1-29-09)
"A TIC is an ownership structure where two or more persons own undivided interests in a single piece of real property, such as an office or retail building. Through the modern TIC model, small real estate investors have the ability to purchase fractional interests in institutional quality property allowing them to take advantage of the tax free exchange rules under IRC Section 1031 by exchanging currently held real estate for their TIC interests."
Los Angeles Times - "Record number of Americans getting jobless benefits" (1-29-09)
"The number of Americans receiving jobless benefits set a record, the federal government announced today, even as more companies said they would dial back their workforces. The grim labor market numbers came during a week when tens of thousands of employees received pink slips and the House of Representatives approved a $819-billion stimulus package that now heads to the Senate."
Yahoo - "'No bad bank please,' says analyst Whitney" (1-29-09)
"The idea of creating a 'bad bank' is unlikely to address the root problem of contracting system capital as simply removing 'toxic' assets from bank balance sheets would not cause banks to increase lending, veteran banking analyst Meredith Whitney said. President Barack Obama's administration is increasingly focused on the possible creation of a 'bad bank' that would let U.S. financial institutions move toxic assets off their books and could potentially take trillions of dollars of assets off banks' balance sheets."
Yahoo - "30-year mortgage rates fall this week" (1-29-09)
"The average rate on a 30-year fixed mortgage dipped to 5.10 percent this week from 5.12 percent last week. At this time last year, the 30-year, fixed-rate mortgage averaged 5.68 percent. Mortgage rates have been declining since the Federal Reserve said in late November it would buy up to $500 billion in mortgage-backed securities to get banks to lend more money in hopes of bolstering the troubled housing market. Rates hit 4.96 percent two weeks ago, the lowest level since Freddie Mac started its survey in April 1971."
Bloomberg - "Starwood Says ‘Significant’ Dividend Cut Likely on Forecast" (1-29-09)
"Starwood Hotels & Resorts Worldwide Inc., the third-largest U.S. lodging company, said it will probably have to cut its dividend this year after projecting that 2009 earnings will decline."
Bloomberg - "Fed Buys Mortgage Bonds, Confronts Treasury Yields" (1-29-09)
"The Federal Reserve bought $16.8 billion of Fannie Mae, Freddie Mac and Ginnie Mae mortgage bonds, as the central bank’s program aimed at keeping home-loan rates low confronts rising Treasury yields. "
Bloomberg - "Wells Fargo Boosts Loans as Rivals Struggle in Crisis" (1-29-09)
"Wells Fargo & Co., the biggest bank on the U.S. West Coast, is using the year-old U.S. recession and deepening financial crisis as a chance to boost lending and take customers from troubled competitors. While JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. reduced lending in the fourth quarter by a combined $86.4 billion, Wells Fargo said yesterday that loans increased $9.7 billion in the period, not including assets acquired in the purchase of Wachovia Corp"
Wednesday, January 28, 2009
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 23, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 732.1, a decrease of 38.8 percent on a seasonally adjusted basis from 1195.3 one week earlier. This week’s results included an adjustment to account for the shortened week due to the Martin Luther King Jr. holiday. On an unadjusted basis, the Index decreased 46.5 percent compared with the previous week and 40.4 percent compared with the same week one year earlier."
Washington Post - "Fed Adopts Program To Stem Foreclosures" (1-28-09)
"With its bailouts of Bear Stearns and American International Group, the Federal Reserve took a vast portfolio of mortgages onto its books. Now, it is trying to use its control of billions of dollars worth of home loans to help prevent foreclosures. The Fed will seek to renegotiate mortgages it owns that might otherwise enter foreclosure, Chairman Ben S. Bernanke told congressional leaders in a letter yesterday. The decision won praise from congressional Democrats, who took it as a sign that the central bank's leaders are cooperating with efforts to use government power to try to stem the number of foreclosures."
CNN - "Snag a great deal on a short sale" (1-28-09)
"If you're in the market for a home today, you're almost guaranteed to be looking at some short sales. Nationwide, 14% of homeowners are currently underwater on their mortgages, calculates real estate website Zillow.com. And in many areas, it's far more: In the Gavitts' zip code, for example, over half of homeowners would owe more than their home is worth if they sold today, calculates Dee Schwindt, the Gavitts' realtor."
Bloomberg - "Fannie Mae Foreclosure Sale at 50 Cents on $1 Shows Price Reset" (1-28-09)
"Auctions are the best way to determine the true value of real estate, says Dean Williams, 47, the owner of the auction house that bears his name. Sales through agents promote the owners’ asking prices, while lenders emphasize the affordability of monthly payments, he says, during an interview in Tulsa"
Bloomberg - "Fed Keeps Rate Near Zero, Is Ready to Buy Treasuries" (1-28-09)
"The Federal Reserve left the benchmark interest rate as low as zero, said it’s prepared to purchase Treasury securities to resuscitate lending and warned inflation may recede too quickly."
Bloomberg - "FDIC May Run ‘Bad Bank’ in Plan to Purge Toxic Assets" (1-28-09)
"FDIC Chairman Sheila Bair is pushing to run the operation, which would buy the toxic assets clogging banks’ balance sheets, one of the people said. Bair is arguing that her agency has expertise and could help finance the effort by issuing bonds guaranteed by the FDIC, a second person said. President Barack Obama’s team may announce the outlines of its financial-rescue plan as early as next week, an administration official said."
Bloomberg - "Homebuilder in Worst Markets Wins Favored Rating" (1-28-09)
"M.D.C. Holdings Inc. is unique among homebuilders: most analysts recommend buying the stock. The builder is the top-rated stock in the industry not for the double ovens it puts in its gourmet kitchens or the Spanish tile roofs but for the $1.4 billion in cash and investments it holds. Six of eight analysts advise buying M.D.C., giving it a 75 percent positive rating. Toll Brothers Inc. ranks second with a 44 percent favorable outlook."
Bloomberg - "REITs in U.S. Consider Paying Dividends in Stock to Save Cash" (1-28-09)
"U.S. real estate investment trusts may pay more of their dividends in 2009 in stock rather than cash to save $10 billion a year in the credit crisis"
Tuesday, January 27, 2009
"Lending institutions sent homeowners 75,230 default notices during the October-through-December period. That was down 20.2 percent from 94,240 for the prior three months, and down 7.7 percent from 81,550 for fourth-quarter 2007, according to MDA DataQuick."
San Francisco Chronicle - "Consumer confidence darkens further in January" (1-27-09)
"The Conference Board said its Consumer Confidence Index edged down to 37.7 from a revised 38.6 in December, lower than the reading of 39 that economists surveyed by Thomson Reuters had expected. In recent months the index has hit its lowest troughs since it began in 1967, and is hovering at less than half its level of January 2007, when it was 87.3."
Yahoo - "Home prices plunge record 18.2 percent" (1-27-09)
"Home prices plunged a record 18.2 percent in November from a year earlier as the country's housing market remains in the throes of a deep recession, according to an index from Standard & Poor's. Prices in 20 metropolitan areas tracked by S&P fell 2.2 percent from October as housing continues to suffer from a huge supply of unsold homes, tighter lending standards and record foreclosures."
Orange County Register - "O.C. home sales up 66%" (1-27-09)
"Orange County home sales shot up a whopping 66 percent in December, while the median price for existing single-family homes dropped 32 percent, to $442,640, the California Association of Realtors reported today. The median price was down 2 percent from November. Home sales in the county were up 13.5% from that month."
Bloomberg - "Wells Fargo Says Mortgage Demand Slows Fall in Rates" (1-27-09)
"Wells Fargo & Co., the second-biggest U.S. home lender, has been prevented from lowering mortgage rates faster because it can’t keep up with demand and the costs of making home loans are rising, an executive said."
Orange County Register - "Countrywide asking $1.25 million for H.B. foreclosure" (1-27-09)
"According to a recent report from Steven Thomas, president of Altera Real Estate, there are about 870 houses and condos for sale in Orange County in the range of $1 million to $1.5 million. He estimates it would take nearly 18 months to sell them all at the current pace of sales, a sign of a slow market."
Orange County Register - "Homebuilders told housing bottom to be in late 2011" (1-27-09)
"Forecasters from Beacon Economics told homebuilders last night that the median price of an Orange County house will hit bottom in the third quarter of 2011, dropping to $323,000 in just under three years."
Orange County Register - "O.C. real estate jobs at 5-year low" (1-27-09)
"O.C. real estate and finance companies have trimmed 36,000 jobs — or 1-in-7 of the workers — since falling off its 2006 peak. Employment in real estate/finance industries — from brokers to lenders to construction workers — to lumberyard employees to janitors — at 225,000 in December. The last time real estate/finance employment was this low in O.C. was in January 2004. Employment in these property-related niches topped out at 261,000 jobs in September 2006."
Orange County Register - "Bank’s job cuts skip O.C., mostly" (1-27-09)
"FirstFed Financial, parent of First Federal Bank of California, is cutting 10% of its workforce, or 62 jobs, but only two are in Orange County. The Los Angeles-based thrift will stop nearly all lending under a cease-and-desist order revealed Monday by the company and the Office of Thrift Supervision. Babette Heimbuch, CEO of FirstFed, said there will be no changes at bank branches, included the five in Orange County (Anaheim, Buena Park, Irvine, Laguna Hills, and Mission Viejo)."
Monday, January 26, 2009
"Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate1 of 4.74 million units in December from a downwardly revised pace of 4.45 million units in November, but are 3.5 percent below the 4.91 million-unit pace in December 2007."
Bloomberg - "House Prices Dropped in 70% of U.S. States in 2008, Report Says" (1-26-09)
"Home prices fell in 34 U.S. states in 2008 as it became harder to get a mortgage and foreclosures hammered property values, First American CoreLogic said. Prices for single-family detached houses fell a record 10.6 percent nationally, the biggest annual decline in data that goes back to 1976, Santa Ana, California-based First American said today in its year-end report."
Bloomberg - "Bernanke Risks ‘Very Unstable’ Market as He Weighs Buying Bonds" (1-26-09)
"Federal Reserve Chairman Ben S. Bernanke and his colleagues may try once again to cure the aftermath of a bubble in one kind of asset by overheating the market for another. Fed policy makers meeting tomorrow and the day after are exploring the purchase of longer-dated Treasury securities in an effort to push up their price and bring down their yield. Behind the potential move: a desire to reduce long-term borrowing costs at a time when the Fed can’t lower short-term interest rates any further because they are effectively at zero."
Bloomberg - "Caterpillar, Sprint, Pfizer Slash Jobs as Sales Fall" (1-26-09)
"Caterpillar Inc., Sprint Nextel Corp., Home Depot Inc. and ING Groep NV led companies today announcing at least 74,000 job cuts as sales withered and construction slowed amid a global economic recession that may persist through 2009."
Bloomberg - "Banks Sell Bad Residential Project Debt, DebtX Says" (1-26-09)
"Banks are selling troubled loans on land and residential construction debt at a faster pace as property prices plummet, according to Debt Exchange Inc. Chief Executive Officer Kingsley Greenland. Banks and other sellers used the Boston-based company’s online marketplace to dispose of more than $1 billion of U.S. debt last quarter, triple the amount from a year earlier, including 'hundreds of millions' of dollars of land loans and housing construction and development debt, Greenland said. Buyers pay at least 50 percent less than the face amount, he said."
Bloomberg - "Geithner to Press Mortgage, Bank Relief in Growing Rescue Plan" (1-26-09)
"President Barack Obama’s financial rescue plan will be unveiled soon and is likely to be larger and more ambitious than originally planned as the economy and banking system worsen. The last procedural roadblock is set to be removed today, congressional Democrats said, when the Senate confirms Obama’s choice for Treasury secretary, Timothy Geithner, who will speed the rescue program out the door as soon as this week. Administration officials and members of Congress said yesterday the second $350 billion of the Troubled Asset Relief Program, released by Congress earlier this month, may not be enough to shore up lenders and pull the economy out of recession."
Orange County Register - "9 keys to housing’s bottom" (1-26-09)
"In 2007-2008, DataQuick found 54,000 Orange County homes were sold — roughly what was sold in 2004 alone. Homebuying in the last six months, best since mid-2007, was still 30 percent below the average pace since 1988. Banks took back 11,500 Orange County homes in 2008, more than double ‘07. Can we, at least, hold at this pace?"
Orange County Register - "Half of SoCal homes for sale are distressed" (1-26-09)
"As a percent of all listed homes for sale, distressed properties were 44.2% of the O.C. market last week vs. 50% for the 5-county SoCal region. Other So Cal counties: LA (41% distressed); San Diego (46%); San Bernardino (60%); and Riverside (68%). "
"California's unemployment rate surged to 9.3 percent in December as employers cut 78,200 jobs, pushing joblessness to a level not seen since 1994, the state Employment Development Department said Friday."
San Francisco Chronicle - "Property tax revenue plummets with home values" (2-25-09)
"California could pay the price for the foreclosure crisis for years to come, thanks to Proposition 13, the 1978 voter initiative that caps property taxes. As banks feverishly dump foreclosed homes at cut-rate prices, and as neighboring homes change hands at similar bargain-basement rates, those amounts are enshrined as the new basis for determining property tax until the homes are sold again. Under Prop. 13, that basis can rise a maximum of just 2 percent a year, even if the home is worth significantly more. The consequence is likely to be a revenue crunch for the public services funded by property tax revenues."
Mr Mortgage - "Mortgage Rates Soar - Fed Better Buy More" (2-24-09)
"Rates have shot up considerably in the past week and a half from roughly 5% at 1 point to 5.5%-5.625% at 1 point to the borrower. This was despite the Fed in the market buying $19 billion in Agency MBS last week. In the months leading up to the Fed announcing their QE plans, rates got under 6% several times — the mid’s 5%’s really is not that great. One would hope that with the Fed in there buying Agency MBS at the pace it is, rates could hold — but they have not been able to. This spike in rates will have a serious impact on the weekly MBA mortgage applications data that come out each Wednesday. My guess is that they are down this Wed and plunge the Wed after next."
Yahoo - "Fed expected to keep rates at record lows" (2-24-09)
"With the country stuck in a painful recession, the Federal Reserve is widely expected to keep its key interest rate at an all-time low this week and examine other unconventional ways to lift the economy."
Friday, January 23, 2009
"Prospective home buyers are staying out of the market primarily because they cannot sell their existing homes and because of concerns about employment and the economy, according to a recent survey conducted by the National Association of Home Builders (NAHB)."
San Francisco Chronicle - "Condo developers in S.F. hurting for buyers" (1-23-09)
"Most developers unlucky enough to be marketing San Francisco condominiums today are scrambling for customers, dropping prices, boosting concessions or putting up 'for rent' signs in an effort to fill their buildings. Condos in the city have outperformed the real estate market as a whole throughout the downturn, especially on the luxury end, but tight lending and relentless economic gloom have spread the pain across the region and price spectrum."
CNN - "More homeowners see prices fall" (1-23-09)
"Nearly two of every three U.S. households said their house price fell in 2008, double the number who said that a year earlier and up five times from 2006, and they expect prices to fall faster this year, according a Reuters/University of Michigan survey on Friday. Homeowners expected an annual average 2.2% drop in the year ahead, twice the rate of decline they expected in a survey conducted in the fourth quarter, the survey found."
Bloomberg - "Small Banks Move Into Mortgages as JPMorgan Retreats" (1-23-09)
"Small banks with little or no exposure to the toxic debt that crippled Wall Street have money to lend as U.S. homebuyers struggle to find credit. While the largest lenders retrenched in the third quarter, loan volume for institutions with less than $1 billion in assets rose 6.8 percent, according to Pacific Coast Bankers’ Bank, a San Francisco-based trade group. Barry James, chief executive officer of James Investment Research Inc. in Xenia, Ohio, says that trend will continue."
Bloomberg - "Fannie Cuts Hundreds of Jobs in Washington Office" (1-23-09)
"Fannie Mae, the mortgage-finance company under federal control, cut several hundred jobs today at its Washington headquarters as it adds workers elsewhere to combat rising foreclosures. Brian Faith, a spokesman, didn’t immediately have a precise figure for the cuts. Fannie, the largest U.S. mortgage-finance company, will add about as many employees to its loss-mitigation team in Dallas. The company has about 5,500 employees. "
Bloomberg - "Fannie, Freddie, FHLBs Face New Requirements, Lockhart Says" (1-23-09)
"The Federal Housing Finance Agency plans to propose new financial requirements next week for Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. The regulatory agency may place new restrictions on Fannie and Freddie’s investments and will revamp capital requirements for the home loan banks, director James Lockhart said in an interview."
Orange County Register - "Beach homes were O.C.’s slowest sellers in 2008" (1-23-09)
"4,257 homes selling in beach cities’ ZIP codes last year, off 17% from 2007. In these 17 ZIPs, last year’s median price change was -14.0% vs. ‘07."
Orange County Register - "Is it time to buy a rental property?" (1-23-09)
"I would certainly consider buying an investment property in this market. We may not have reached the bottom yet, but you won’t be able to tell where the bottom was until well after things are on the upswing. If you find a property that appeals to you at an attractive price, I would move now rather than wait. The good news is that you will be more likely to get a good cash flow as rents haven’t fallen as much as property values. On another note, the pricing structure for non-owner occupied loans has worsened. The best pricing is for buyers putting down more than 30% and with your $25,000 CD, you are a bit away from that."
Thursday, January 22, 2009
"In today's challenging economy, the National Association of Realtors® is taking action to make workforce housing more available. Through the Ira Gribin Workforce Housing Grants, NAR will award as much as $5.23 million to state Realtor® associations or their housing foundations to support workforce housing initiatives in their states. One-time grants will be awarded on a sliding scale to state Realtor® programs that promote safe, decent housing for people with low and moderate incomes who cannot afford to live in the communities where they work. The grants are named in honor of Ira Gribin, a former NAR president who was a tireless advocate for fair and affordable housing for diverse populations."
DQNews - "California December 2009 Home Sales" (1-22-09)
"An estimated 37,836 new and resale houses and condos were sold in California last month. That was up 17.6 percent from 32,163 in November and up 47.9 percent from 25,585 for December 2007. Sales have increased on a year-over-year basis for the last six months. California sales for the month of December have varied from last year's low to a peak of 66,503 in 2003, while the average is 44,844. MDA DataQuick's statistics go back to 1988."
Mortgage Bankers Association - "Mortgage Applications Decrease in Latest MBA Weekly Survey" (1-22-09)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 16, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 1195.3, a decrease of 9.8 percent on a seasonally adjusted basis from 1324.8 one week earlier. On an unadjusted basis, the Index decreased 10.3 percent compared with the previous week and increased 23.1 percent compared with the same week one year earlier."
Yahoo - "Housing starts post larger than expected drop" (1-22-09)
"New-home construction plunged to an all-time low in December, capping the worst year for builders on records dating back to 1959. The Commerce Department reported Thursday that construction of new homes and apartments fell 15.5 percent to an annual rate of 550,000 units last month. That shattered the previous low set in November."
Bloomberg - "Freddie Mac Says Fixed Mortgages Rose to 5.12 Percent" (1-22-09)
"The average U.S. rate on a 30-year fixed mortgage rose this week as government data showed the housing recession intensified. The rate rose to 5.12 percent from 4.96 percent a week earlier, Freddie Mac said in a report today. Last week's number was the lowest since the McLean, Virginia-based mortgage buyer began keeping records in 1971. The average rate for a 15-year mortgage rose to 4.8 percent from 4.65 percent."
Bloomberg - "Apartment Rents, Occupancies Drop in U.S. as Job Losses Mount" (1-22-09)
"The average monthly rent dropped to $993 in the three months ended Dec. 31 from $1,002 in the previous quarter, Novato, California-based RealFacts said in a survey of 60 metropolitan areas. The occupancy rate fell to 92.2 percent from 92.9 percent"
Orange County Register - "Will banks offer foreclosures for rent?" (1-22-09)
"Fannie Mae, the mortgage giant now owned by taxpayers, said earlier this month it would allow renters to stay in their homes, if the owner lost it to foreclosure by the company. 'Renters in foreclosed properties have often been a casualty of the foreclosure crisis the country is facing,' said Michael Williams, chief operating officer of Fannie Mae. 'This policy will allow qualified renters to remain in Fannie Mae-owned properties should they choose to do so, mitigate the disruption of personal lives that foreclosures can cause, and help bring a measure of stability to communities impacted by high foreclosure rates.'"
Realty Times - "Builders Using Real Estate Auctions to Stimulate Business" (1-22-08)
"Out West, online real estate auction marketing firm, LFC Group of Companies, recently launched a new auction campaign of brand new homes in Denver, Colorado. The auction, a builder closeout of high-end properties in the master-planned community of Stapleton and the charming town of Golden, features four boutique townhomes and four large estate homes. They are the last remaining inventory of a well-respected local developer, and is further evidence that online auctions are becoming popular again as an alternative for healthy builders and developers eager to accelerate sales. The LFC Group of Companies also launched another new auction for Brava, 16 luxury condominiums located in the heart of Palm Desert, California, where Patrick Veiling, president and founder of Brea-based Real Data Strategies Inc., said, '2009 will be the absolute best purchase opportunity in the desert that we have seen for a long time.'"
Realty Times - "Where's Your Pooled 1031 Exchange Account Invested?" (1-22-08)
"If your exchange account isn't in a separate account, do you know what it's invested in? Recently one of the largest title companies in the United States filed for bankruptcy; a $1.5 billion (with a B!) publicly held company brought down by its 1031 exchange operation. I'm adamantly against pooling, yet most intermediaries pool their client's money. By pooling, I mean the placing of all the client's exchange funds into one account. The reason they pool is that by investing a larger amount of money, they're able to obtain a greater return. Of course the intermediary is going to keep most of the interest, which is the whole point of pooling to begin with. In fact, the more the account earns, the more they earn."
Wednesday, January 21, 2009
"Concerns about the faltering economy and reluctant home buyers pushed builder confidence in the market for newly built single-family homes down further in January, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI edged down a single point to a new record low of 8 in January."
DQNews - "Bargain hunting dominates Bay Area home sales in December" (1-21-09)
"Bargain hunting dominated the Bay Area housing market last month as the purchase of foreclosure properties accounted for more than half of all resales for the first time. Sales patterns also reflected continued problems for buyers looking to finance purchases in the upper half of the market's price range, a real estate information service reported."
Wall Street Journal - "Revived Plan Could Boost Home Sales" (1-21-09)
"With a new administration at the helm, a Texas congressman aims to revive seller-funded housing down-payment assistance -- a campaign that, if successful, could jump-start stalled sales and offer ailing home builders a glimmer of hope. Rep. Al Green, D-Texas, is championing HR 600 to reinstate a program that the government, concerned about default rates, halted in the fall. We didn't have to end it; we could have amended it and maintained it,' Rep. Green said."
Inman News - "Fewer reverse mortgage options in '09" (1-21-09)
"Most reverse mortgage options have left the market, victims of the global credit crunch. Yet the biggest player with the longest history still remains, and it pushed the industry into positive growth territory for the 19th straight year. While the 4.3 percent increase in the number of FHA-insured Home Equity Conversion Mortgages (HECMs) was down significantly from previous years, it bettered the negative numbers of conventional, or 'forward,' loans. The Federal Housing Administration is a component of the Department of Housing and Urban Development and now the main player in the conventional (forward) and reverse mortgage market."
Bloomberg - "Bankruptcy Bill May Hurt Banks on Mortgage-Bond Quirk" (1-21-09)
"A proposed change to bankruptcy law to allow judges to reduce homeowners’ mortgages may boost the capital needs of banks and insurers by hundreds of billions of dollars, First Pacific Advisors LLC’s Julian Mann said. The issue, identified by investors such as Mann and analysts at JPMorgan Chase & Co., stems from language buried in the more than one hundred pages of prospectuses for many 'prime jumbo' and 'Alt-A' home-loan securities."
Orange County Register - "BofA chief buys stock, price jumps 30%" (1-21-09)
"Bank of America CEO Kenneth Lewis on Tuesday spent about $1.2 million to buy 200,000 common shares of the bank, reports Reuters. Other directors bought more than 300,000 shares, according to a separate report in the Wall Street Journal. Other investors appear to have reacted favorably to insiders buying BofA stock; its price rose more than 30% today to close at $6.68. (Of course, the 30% gain equates to $1.58.)"
Orange County Register - "O.C. homebuilding at post-World War II low" (1-21-09)
"Orange County governments issued 3,156 building permits to homebuilders in 2008, the slowest year in a stream of figures dating back to 1946. The non-profit Construction Industry Research Board reports that the level of homebuilding here has fallen to just 7% of the amount in 1963 — O.C. homebuilding’s pinnacle — when residential construction peaked at 44,656 units."
Orange County Register - "O.C. furniture mall loses $63 million in value" (1-21-09)
"The South Coast Home Furnishings Centre in Costa Mesa — conceived as a one-stop outlet for home remodelers — has lost customers, tenants and finally ended up in receivership after rents failed to cover loan payments and operating expenses. The 20-acre property off the I-405, which sold for $98 million in the summer of 2007, went up for sale for $65 million in September, just as the economy began to implode. By December, the receiver and the lender concurred that a $35 million offer was the best they could get for the 300,000-square-foot center."
Tuesday, January 20, 2009
"The Obama administration moves into the White House with the authority to implement the second half of the $700 billion Toxic Asset Relief Program, or TARP. In a 52-42 vote, the Senate last week shot down a resolution that would have blocked further borrowing to fund the program. Both the House and Senate would have had to approve their own resolutions to cap TARP borrowing at $350 billion. With the Senate declining to stand in the way, the issue has largely been resolved -- although Congress could still place limitations on how the next round of TARP funds is used."
CNN - "The lowdown on getting a low down payment loan" (1-20-08)
"The credit crunch has made it hard for anyone to get a loan these days - and borrowers who can only make a small down payment are facing even tougher odds. But it's not impossible to land a low-down payment loan. The Federal Housing Administration (FHA) is actually still offering 3.5%-down mortgages to qualified buyers, even as the subprime loans that these types of borrowers had traditionally relied upon have dried up."
Bloomberg - "Roubini Predicts U.S. Losses May Reach $3.6 Trillion" (1-20-08)
"U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is 'effectively insolvent,' said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis."
Bloomberg - "Obama Becomes Banker-in-Chief in Credit Market Freeze" (1-20-08)
"Since the Bush administration and Congress last year approved the $700 billion Troubled Asset Relief Program that injected capital into Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co., individuals and companies aren’t getting any of it as fourth-quarter lending by the biggest banks by assets plummeted. The asset-backed market, which is supposed to enable banks to keep lending by transforming loans into tradable securities, remains frozen, leaving would-be lenders unable to package and sell mortgages, credit-card debt and auto loans."
Orange County Register - "Builder Laing confirms layoffs, ponders all options" (1-20-08)
"Emaar paid $1 billion for Laing in June 2006, just as the U.S. home market was peaking. The builder has cut an undisclosed number of jobs, particularly in California and Colorado, quoting a spokeswoman who added that the builder may stop sales on certain projects and shut some of its offices. Emaar’s borring $2 billion after its share splunged 85% last year."
Orange County Register - "Foreclosures make up smaller share of O.C. home sales" (1-20-08)
"Numbers are up dramatically from a year ago. In December 2007, just 20 percent of the 1,300 resales, or 260 homes, had been foreclosed upon in the previous year, DataQuick reported. Foreclosures made up just 6 percent of resales in August 2007."
Realty Times - "Real Estate Outlook: Change Anticipated" (1-20-08)
"The national economic headlines continue to be bearish, but some of the underlying fundamentals for real estate are pointing to better days ahead. Take home mortgage rates: Last week thirty year fixed rates dropped below the seemingly-unbreakable five percent barrier for the first time on record, according to the Mortgage Bankers Association. New thirty year loans went for an average 4.89 percent, while fifteen year loans were just above 4.6 percent."
Realty Times - "Washington Report: Will the Stimulus Help Housing?" (1-20-08)
"The House Democrats' massive $825 billion stimulus package unveiled on Capitol Hill last week is -- as expected -- mainly focused on non-real estate issues. It did, however, offer a little tax improvement for first-time homebuyers using the current $7,500 tax credit by making it non-repayable."
Monday, January 19, 2009
"President-elect Barack Obama is likely to back a financial-rescue effort that channels capital to banks and deals with troubled assets clogging balance sheets, according to people familiar with the matter. Obama’s team will also use part of the $350 billion remaining from the Troubled Asset Relief Program to help stem foreclosures and assist municipalities that are having trouble borrowing, the people said. The Federal Reserve and Federal Deposit Insurance Corp. are advocating a government-backed 'bad' or 'aggregator' bank to acquire hundreds of billions of dollars of troubled securities now held by lenders."
Bloomberg - "Housing Starts Probably at Record Low: U.S. Economy Preview" (1-18-08)
"American builders probably broke ground in December on the fewest houses on record as sales and credit dried up, economists said before reports this week. Housing starts fell 2.7 percent last month to an annual rate of 605,000, the lowest level since the Commerce Department started compiling data in 1959, according to the median estimate in a Bloomberg News survey. Building permits, a sign of future projects, also probably dropped to a record low."
DQNews - "California November 2008 Home Sales" (1-19-08)
"An estimated 32,163 new and resale houses and condos were sold statewide last month. That was down 24.0 percent from 42,293 in October and up 25.7 percent from 25,578 for November last year. Sales have increased on a year-over-year basis the last five months. California sales for the month of November have varied from last year's low to a peak of 60,326 in 2004, the average is 40,592. MDA DataQuick's statistics go back to 1988."
DQNews - "Southland home sales off bottom" (1-19-08)
"A total of 19,926 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 19.2 percent from 16,720 for November, and up 50.5 percent from 13,240 for December 2007, according to MDA DataQuick."
Saturday, January 17, 2009
"NAR expressed support for Chairman Barney Frank’s, D-Mass., proposal, H.R. 384, the TARP Reform and Accountability Act, introduced last week. This bill contains key components of NAR’s Housing Stimulus Plan, including enacting a mortgage buy-down program to reduce interest rates below prevailing rates, increasing foreclosure prevention and mitigation efforts, and providing needed liquidity to the residential and commercial mortgage markets to ensure that financing is available. 'We also applaud the chairman’s efforts to strengthen accountability and increase transparency in the use of TARP funds,' McMillan said."
Yahoo - "Inflation slows to half-century low in 2008" (1-16-08)
"Inflation slowed to a half-century low last year and industrial output fell for the first time since 2002, data showed on Friday, as the recession deepened toward year-end, raising the specter of deflation.With consumer confidence remaining at depressed levels, the reports suggested the economy could take longer to pull out of a downturn that is on track to be the longest and possibly deepest since World War Two"
Washington Post - "Multiple Applications for Mortgages" (1-16-08)
"As mortgage interest rates continue falling to new lows, a growing number of borrowers are applying to more than one lender to increase their chances of getting approved for refinancing. Anecdotal evidence suggests that only about half of the borrowers trying to refinance are getting approved, down from 60 to 70 percent during previous refinancing booms, said Doug Duncan, chief economist at mortgage financier Fannie Mae. As a result, borrowers are getting frustrated and anxious."
Bloomberg - "GE Capital May Cut as Many as 11,000 Jobs This Year" (1-16-08)
"General Electric Co.’s finance arm may cut 7,500 to 11,000 jobs, or at least 10 percent of its workforce, because of the global financial slump, people familiar with the company’s plans said."
Bloomberg - "Bank of America Slides After Quarterly Loss, Bailout" (1-16-08)
"Bank of America Corp., the largest U.S. bank by assets, slid 14 percent in New York trading after posting its first loss since 1991 and receiving emergency government funds to ease the acquisition of Merrill Lynch & Co."
Thursday, January 15, 2009
"The drop in mortgage loan limits for conventional financing at the end of 2008 is hurting home sales and trade-up activity in higher price ranges across the country, according to the National Association of Realtors®. The latest existing-home sales data shows transactions under $400,000 are 3 percent below a year ago. However, sales of homes priced at $750,000 or more have declined a whopping 47 percent."
CBIA - "Frozen Credit Markets Keep California New Home Market Cold in November, CBIA Announces" (1-15-08)
"The pace of home sales at California new-home communities remained glacially slow in November following the October credit freeze, the California Building Industry Association reported today. Robert Rivinius, CBIA’s President and CEO, said the continued depression in the state’s homebuilding industry will only improve if state and federal lawmakers quickly deal with the foreclosure situation and pass economic stimulus measures that have been proposed to jump-start the crucial economic sector. "
Chicago Tribune - "Fixed-mortgage rates fall below 5%" (1-15-08)
"Rates on 30-year mortgages set a record for a fifth straight week by dropping to below 5 percent, the lowest mark since Freddie Mac started tracking the data in 1971. Mortgage rates have been dropping since late November, when the Federal Reserve said it was going to pump money into the banking system by buying $500 billion in mortgage-backed securities to get banks to lend more money and perhaps aid the ailing U.S. housing market"
The San Diego Union Tribune - "New jobless claims rise, economy keeps shrinking" (1-15-08)
"The number of newly laid off workers seeking unemployment benefits rose more than expected last week, the latest sign the economy is shrinking and unlikely to rebound anytime soon. The figures came a day after the government said retail sales dropped sharply in December and the Federal Reserve issued a gloomy economic assessment."
CNN - "Foreclosures up a record 81% in 2008" (1-15-08)
"foreclosure filings spiked by more than 81% in 2008, a record, according to a report released Thursday, and they're up 225% compared with 2006. A total of 861,664 families lost their homes to foreclosure last year, according to RealtyTrac, which released its year-end report Thursday. There were more than 3.1 million foreclosure filings issued during 2008, which means that one of every 54 households received a notice last year"
Wednesday, January 14, 2009
"If all home buyers become eligible for a tax credit without a repayment feature, it could result in an additional 555,000 home sales – enough to meaningfully draw down excess housing inventory, according to the National Association of Realtors®. An evaluation of options for a home buyer tax credit by NAR shows wide ranging implications and benefits. A full credit to all buyers means an additional 2.22 million households would meet the income requirements for purchasing a home, but only one in four of those households would actually make a purchase."
Mortgage Bankers Association - "Record Low Mortgage Rates Boost Refinance Activity in Latest MBA Weekly Survey" (1-14-08)
"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 9, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 1324.8, an increase of 15.8 percent on a seasonally adjusted basis from 1143.8 one week earlier. On an unadjusted basis, the Index increased 95.7 percent compared with the previous week and was up 52.4 percent compared with the same week one year earlier."
Bloomberg - "Bankruptcy Law Changes May Not Cut Home Foreclosures" (1-14-08)
"A proposed change to bankruptcy laws that would allow judges to reduce consumers’ mortgages may not succeed in reducing the foreclosures that have been dragging down property prices, according to a Barclays Capital strategist. Some borrowers would later default on their reworked loans while others, who wouldn’t benefit by filing because their incomes are high enough to handle their debts, would face 'a greater temptation' to abandon their obligations if their neighbors get bailed out, Glenn Boyd, head of U.S. asset-backed securities strategy at Barclays in New York, said yesterday."
Inman News - "Fannie Mae won't evict renters" (1-14-08)
"Fannie Mae will allow qualified renters to sign month-to-month leases and stay on in homes it forecloses on -- without requiring a security deposit, credit check or payment history -- while it markets the homes for sale."
Bloomberg - "U.S. Home Prices Will Continue to Tumble Until 2010, PMI Says" (1-14-08)
"U.S. home prices, already down 23 percent from their July 2006 peak, will continue to fall until the third quarter of next year, PMI Mortgage Insurance Co. said in a report."
Bloomberg - "Commercial Building in U.S. to Drop 11% Percent, Architects Say" (1-14-08)
"Construction spending on offices, shopping centers, hotels and industrial buildings in the U.S. will fall this year and next as the recession prompts businesses to delay or cancel plans, the American Institute of Architects said. Non-residential construction likely will drop 11 percent this in 2009 and 5 percent in 2010, the Washington-based group said today in its semi-annual Consensus Construction Forecast. The declines will follow an estimated 8 percent to 9 percent gain in non-residential construction spending last year, the institute said."
Bloomberg - "Lennar Adds Minkow and Fraud Discovery to Libel Suit" (1-14-08)
"The amended complaint, filed yesterday in the 11th Judicial Circuit Court in Miami-Dade County, Florida, claims Minkow and his company were hired by Nicolas Marsch III, a former partner with Lennar in a joint venture construction project in California. In a deposition yesterday, Marsch said he recently paid Minkow $50,000 to $100,000 for unnamed services, Lennar said today in a statement."
CNN - "Taming inflated home appraisals" (1-14-08)
"Now, the Federal Housing Finance Agency (FHFA), the government agency created to oversee Fannie Mae and Freddie Mac, has announced a plan to curb the influence that loan originators exert on appraisers to overvalue homes. A new Home Valuation Code of Conduct, which will take effect this May, is an attempt to improve the reliability of appraisals for mortgages sold to the two companies. The guidelines prohibit lenders from coercing, extorting, colluding with, intimidating or bribing appraisers into making inaccurate appraisals."
Orange County Register - "O.C. pre-foreclosure filings hit four-month high" (1-14-08)
"Foreclosureradar.com reports banks filed 2,423 notices of default in December in Orange County, up 96% from the prior month. It was the highest monthly total since August’s peak of 2,539."
Tuesday, January 13, 2009
"As Congress considers releasing the second half of the Treasury’s $700 billion Troubled Asset Relief Program (TARP), the National Association of Home Builders (NAHB) today urged lawmakers to use a portion of the funds to stem the rising tide of foreclosures and increase the flow of credit for housing production. NAHB also urged passage of legislation to stimulate housing demand."
The Boston Globe - "Calif. losing golden allure" (1-13-08)
"The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period - more than any other state, according to census estimates. That is about equal to the population of Syracuse, N.Y."
The Washington Post - "America Hunkers Down: A Nation of Savers?" (1-13-08)
"There's evidence to suggest that more consumers are hunkering down. After hovering near zero for much of the decade, savings as a portion of disposable income rose from 2.4 percent in October to 2.8 percent in November, according to the Bureau of Labor Statistics. Also in November, auto loans, credit cards and other forms of consumer borrowing fell by $7.9 billion, the largest dollar amount since recordkeeping began, more than 50 years ago."
Bloomberg - "State Pensions’ $865 Billion Loss Affects New Workers" (1-13-08)
"State governments from Rhode Island to California have run up estimated pension-fund losses of $865.1 billion, forcing some to cut benefits for new hires. Assets for 109 state funds declined 37 percent to $1.46 trillion over the 14 months ended Dec. 16, according to the Center for Retirement Research at Boston College. The Standard & Poor’s 500 Index of stocks fell 41 percent in the period."
Bloomberg - "Hedge Funds Lost $350 Billion in 2008 Amid Global Market Rout" (1-13-08)
"Hedge funds lost $350 billion globally in 2008, the most on record, as the biggest financial crisis since the Great Depression crippled returns and caused investors to pull money out, according to an industry report. About 90 percent of the money was lost in the three months to the end of November, according to a preliminary report published today by Singapore-based data provider Eurekahedge Pte. Funds that invested in North America declined the most, posting a drop of $183 billion for the year, the report said."
Bloomberg - "Bernanke Urges ‘Strong Measures’ to Stabilize Banks" (1-13-08)
"Federal Reserve Chairman Ben S. Bernanke warned that a fiscal stimulus won’t be enough to spur an economic recovery and that the government may need to buy or guarantee banks’ tainted assets to revive growth."
Bloomberg - "Synovus, Comerica May See Commercial Real Estate Bust" (1-13-08)
"Synovus Financial Corp.,Comerica Inc. and Huntington Bancshares Inc. are among regional banks that may face a second wave of real-estate loan losses, this time for shopping centers and residential construction projects. Losses in commercial real estate excluding construction are expected to increase 10-fold, Deutsche Bank AG analyst Mike Mayo said in a Jan. 5 research note. Moody’s Investors Service said yesterday it’s considering a downgrade of Synovus because of commercial real-estate losses."
Bloomberg - "Seattle FHLB Likely Short of Capital on Mortgage Debt" (1-13-08)
"The Federal Home Loan Bank of Seattle said it will suspend dividends and 'excess' stock repurchases, becoming the second of the government-chartered lending cooperatives to say its capital may be running low. The likely capital shortfall as of Dec. 31 was caused by 'unrealized market value losses' on residential mortgage bonds without government backing, the bank said in a U.S. Securities and Exchange Commission filing today. Washington Mutual Inc. and Merrill Lynch & Co. had been the biggest stakeholders and borrowers in the Seattle Federal Home Loan Bank, or FHLB."
Orange County Register - "Only 4% of O.C. buyers using adjustable mortgages" (1-13-08)
"In November, DataQuick figures show that just 4% of the homes bought using mortgaged were financed with adjustable-rate terms on the first mortgage."
Orange County Register - "House bargains hit Villa Park" (1-13-08)
"Buyers could find more houses offered for less than$1 million – considered bargains in one of the wealthiest cities in Orange County. In 2007, just two houses were purchased for that amount. Last year, there were 14 such houses, the lowest selling for about $600,000. Higher-priced houses – those more than $2 million – are selling at a slower pace. One $2.3 million house has been on the market for more than 800 days. Of the nine sales since November, six were of foreclosed properties."
Orange County Register - "Chase halts home lending via brokers; could lay off 100" (1-13-08)
"Chase, a unit of JPMorgan Chase, said today it’s closing its unit that makes home loans via mortgage brokers and will instead focus entirely on its retail branches, including 2,200 it picked up by acquiring the assets of failed Washington Mutual. The change jeopardizes more than 100 jobs at Chase’s Orange office. That office is one of four nationwide operations centers tied to brokers, said company spokesman Tom Kelly said."
Monday, January 12, 2009
"Federal regulators are asking financial institutions to monitor their use of government money received under the $700 billion rescue plan and other support. Banks and other financial institutions should track how the federal money or guarantees they received helped them boost 'prudent lending' and efforts to help at-risk borrowers avoid foreclosures, the Federal Deposit Insurance Corp. said Monday in a directive issued to the roughly 5,100 state-chartered banks and savings and loans for which it is the primary regulator."
Bloomberg - "U.S. Housing Market Still Offers Hidden Value" (1-12-08)
"If you were searching for pockets of optimism in the U.S. housing market, where would you look? Easy guesses would be to avoid Detroit, Cleveland or any cities with domestic automobile plants or troubled manufacturers. Then there are the foreclosure gulches of Central and Southern California, which include the Modesto, Stockton, Bakersfield, Riverside and Sacramento areas. Those cities will take a long time to recover. Too many homes there were sold at bubble prices to people with dodgy finances."
Bloomberg - "Gross Bets on Washington After Housing Collapse Wager" (1-12-08)
"The collapse of the U.S. housing market helped Bill Gross outperform 99 percent of his fund- manager peers over the past five years. Now he’s betting on securities that may benefit from rescue efforts in Washington. The 64-year-old co-chief investment officer at Pacific Investment Management Co. is urging investors to anticipate which assets will benefit as the government struggles to boost the economy. Last week he recommended municipal bonds, inflation- protected Treasuries and debt the U.S. government plans to buy. In the past six months, Gross bought senior bank debt, agency mortgage securities and preferred shares in financial companies, all before the government did the same"
Yahoo - "Bush agrees to Obama entreaty for bailout funds" (1-12-08)
"Acting at Barack Obama's behest, President George W. Bush on Monday asked Congress for the final $350 billion in the financial bailout fund, effectively ceding economic reins to the president-elect in an extraordinary display of transition teamwork."
Orange County Register - "O.C. distressed homes for sale at 10-month low" (1-12-08)
"The distressed inventory, foreclosures and short sales, dropped by 401 homes over the past month, bringing the total to 5,118, its lowest point since March of last year. That’s a 7.2% drop. Distressed properties now make up 45.3% of the inventory, a slight drop over the past couple of weeks. 69% of all pending sales are distressed sales right now. Obviously, the distressed inventory is helping fuel demand. 79% of all distressed homes are isolated below $500,000 and 92% are found below $750,000. It is no wonder that the lower end of the market has been a lot hotter than the rest of the market."
"When you apply for a mortgage to buy or refinance a house, should you be concerned that your appraiser is being paid much less -- maybe just half -- of the $300 to $600 you're charged on your settlement sheet? Should you know who pockets the rest or that cut-rate fees are too low to attract the most experienced, highly trained appraisers? Should you care that the appraiser might be pushed to come up with a number so fast -- almost overnight in some cases -- that he or she doesn't have the time to do a proper inspection and accurate evaluation of comparable properties, pending sales contracts and local market trends?"
Ashes Ashes All Fall Down - "He's No Longer Doctor Doom. Now He's Doctor Death." (9-11-08)
"When people take on increasing amounts of debt, they begin to feel hopeless. In fact, an increasing debt load with no way to pay it off is indicative of hopelessness. The overwhelming majority of folks who take on increasing amounts of debt know that they will not, in fact, win the lottery or have some other financial windfall which will allow them, at some point in the future, to get out of debt. And so with this reality bearing down on them, why do so many people nevertheless run up credit card debts into the tens if not hundreds of thousands of dollars? The most widely accepted argument is that people need to employ debt in their struggle to survive: Individual or familial deficit spending as a way to pay the bills and put food on the table."
Seeking Alpha - "Wealth Watch: Redefining Rich and Poor In a Shrinking Global Economy" (1-11-08)
"Many people fear the word depression, thinking back to how bad things were during the Great Depression. From 1929-1933, GDP fell about 1/3, and then it fell from mid-1937 to mid-1938 by another 18%. The worst GDP decline since then was a 6% cumulative loss in the 1974-75 recession. Given the current set of circumstances, it would seem to me that though things aren't likely to be as bad as the Great Depression, they will certainly be worse than the 1974-1975 recession by far. I expect GDP to decline by 10-15% ultimately. How it plays out will depend on many factors that are unknown, but one that could have the most meaningful impact is the actions of our government and those of other nations as well. We can't count on government to fix this problem, but we can hope that it helps minimize the imbalances without policy errors that lead to unintended consequences and potentially worse outcomes."
Orange County Register - "Realtor eyes no O.C. condo bottom in 2009" (1-10-08)
"2009 is going to be another good year for buyers; but not a hot year for condo sellers. Prices are continuing to decline and distressed condo inventory has grown to more than 50% of the active inventory. On the average most condo owners stay in their condos on an average of 3 to 5 years, so most would-be sellers will have purchased peak of market or pre-construction condos. Most of the condo owners that purchased a condo between 2004 and 2006 will look to sell within the next couple years, so supply will continue to outpace demand over the next couple years. High-rise condos will take a bigger beating than any other segment of the condo market because of cost of ownership and the difficulty to get a loan in these buildings, especially with the new loan guidelines. Many of the high-rise buyers are buying second homes may not be willing to plop down the 30% to 35% down payment requirements many lenders are requiring and are certainly being cautious about overpaying in any event."
Orange County Register - "Treasury yields seen rising, mortgage rates flat" (1-10-08)
"With congressional budget analysts predicting a $1.2 trillion deficit this year and a government stimulus package in the works, there is no doubt a huge supply of Treasuries is going to hit the market. If O’Donnell is correct and demand is flat, then bond yields should rise. Traditionally, rates on 30-year fixed-rate mortgages have loosely moved up or down in relation to 10-year Treasury yields"
Friday, January 09, 2009
"FHA’s market share has increased from a low of 2 percent in 2006 and is expected to grow to over 30 percent in 2009. FHA loans are rapidly becoming the only source of funding for many consumers, particularly those who are first-time home buyers and borrowers with low downpayments or less than perfect credit."
The Boston Globe - "Banks' mortgage rates fall below 5%" (1-9-08)
"JPMorgan Chase & Co. is advertising 30-year mortgages as low as 4.75 percent on its website, Wells Fargo & Co. has an offer for 4.875 percent, and Bank of America Corp. has rates at 5 percent. The offers are for borrowers with excellent credit who put 20 percent down."
The Washington Post - "Lenders Backlogged By Refinancing Rush" (1-9-08)
"Bank of America, which started shedding 7,500 employees after its July merger with Countrywide, recently yanked 300 workers from its home equity line department to help deal with refinancing requests, said Matt Vernon, the bank's national sales executive"
Bloomberg - "Congressional Panel Blasts U.S. for Failing to Aid Homeowners" (1-9-08)
"The panel set up by Congress to oversee the U.S. Treasury’s $700 billion financial markets rescue criticized the Bush administration for failing to stem mortgage foreclosures while bailing out banks. The Congressional Oversight Panel, headed by Harvard Law Professor Elizabeth Warren, also said a lack of transparency about the fund 'erodes the very confidence' the program is supposed to restore. The group reiterated criticisms of Treasury Secretary Henry Paulson’s shifting strategy for the Troubled Asset Relief Program."
Bloomberg - "Paulson Bailout Didn’t Give Taxpayers Buffett’s Terms" (1-9-08)
"The Treasury secretary has made 174 purchases of banks’ preferred shares that include certificates to buy stock at a later date. He invested $10 billion in Goldman Sachs in October, twice as much as Buffett did the month before, yet gained warrants worth one-fourth as much as the billionaire, according to data compiled by Bloomberg. The Goldman Sachs terms were repeated in most of the other bank bailouts."
Bloomberg - "U.S. Economy: 2008 Payrolls Drop Biggest Since 1945" (1-9-08)
"The U.S. lost more jobs in 2008 than in any year since 1945 as employers fired another 524,000 people in December, indicating a free-fall in the economy just days before President-elect Barack Obama takes office."
Bloomberg - "Mortgage Servicing Loses Luster as Bad Loans Mount" (1-9-08)
"Bank of America Corp., GMAC LLC, and WL Ross & Co. are among mortgage servicers that have endured billions of dollars in unexpected costs and added thousands of workers to handle rising foreclosures, denting a business once viewed as a safe haven from the housing market’s collapse. Loan servicers send out bills, collect debts and keep records, tasks that analysts predicted would provide a steady stream of fees even if home sales dropped. The companies didn’t count on the U.S. push to modify up to 2 million defaulted home loans, and contracts that require them to cover mortgage investors when homeowners miss payments."
Bloomberg - "KB Home Drops as Builder's Loss Exceeds Estimates" (1-9-08)
"KB Home, the fourth-largest U.S. homebuilder, reported a fourth-quarter loss exceeding analysts' estimates, sending shares down as much as 14 percent as the company predicted more pain for the housing market in 2009. The builder had a net loss of $307.3 million, or $3.96 a share, compared with a median estimated loss of $96.9 million, or $1.19 a share, by 10 analysts in a Bloomberg survey. The loss narrowed from $772.7 million, or $9.99 a share, a year earlier, Los Angeles-based KB Home said today in a statement. Revenue fell 56 percent to $919 million."
Bloomberg - "Lennar Declines After Minkow Alleges ‘Ponzi Scheme’" (1-9-08)
"Lennar Corp., the third-largest U.S. builder by market value, fell as much as 28 percent in New York trading after Barry Minkow’s Fraud Discovery Institute alleged that the company operates joint ventures “like a Ponzi scheme.” Lennar denied the allegations"
Bloomberg - "Frank Says Obama Backs $729,750 Fannie, Freddie Limit" (1-9-08)
"President-elect Barack Obama agreed with House Democrats to increase the limit on loans Fannie Mae and Freddie Mac can purchase back to $729,750 in high-cost areas, House Financial Services Chairman Barney Frank said."