June 2010
2 posts
13 Markets That Can't Recover...
SOURCE: 24-7 Wall Street
New RealtyTrac numbers show that in April there were well over 300,000 foreclosures and the figure in on track to be higher in 2010 than in 2009. Several research firms say that underwater mortgages have moved above 11 million. The National Association of Realtors found that “in the first quarter, 91 out of 152 metropolitan statistical areas showed higher median existing...
Low Mortgage Rates...and Low Demand
Source: Calculated Risk
The Refinance Index decreased 14.3 percent from the previous week and the seasonally adjusted Purchase Index decreased 5.7 percent from one week earlier. … “Purchase and refinance applications dropped this week, even after an adjustment for the Memorial Day holiday. Purchase applications are now 35 percent below their level of four weeks ago, ashomebuyers have not...
May 2010
3 posts
Hong Kong Genius: 24 Rooms in One
Amazing example of human innovation at work. They emphasize the “Green” angle in this short documentary, but it’s the design that will have you in awe. This guy grew up in the exact same apartment with 3 other people, so he’s had a LOT of time to think about this design…
The "Saw-Tooth" Effect
Source: CNN
Some housing experts are predicting what one calls a “saw-tooth bottom” to the housing market driven by a shadow inventory that may include up to 4.5 million properties. This issue isn’t just bank-owned homes that aren’t yet on the market, but sellers who would like to sell but fear they can’t. “These sidelined sellers closely watch the market for signs of a possible...
Single Women Buying More Homes
SOURCE: WSJ
For Mother’s Day, flowers and chocolate are nice, but watching your single daughter take the lead in the real-estate market may be even nicer.
Unmarried women accounted for 21% of home purchases in 2009, while unwed males were 10% of the buyers, according to a National Association of Realtors report in November. It’s a dramatic shift from 1981, the first year the...
April 2010
17 posts
The Steep Cost of the Homebuyer Tax Credit
SOURCE: NYT
Realtors, home buyers and sellers are rushing to complete sales agreements before the tax credit for home purchases expires this week.
Home buyers must have a deal by April 30 and close by June 30 to qualify for the federal tax break, up to $8,000 for first-timers and $6,500 for those merely moving to a different residence.
Though the Treasury Department and the real estate...
Signs of Life: Employment on the Rise?
SOURCE: BusinessWeek
More U.S. companies plan to boost payrolls as sales strengthen and the outlook for economic growth brightens, a quarterly survey of economists showed.
The percentage of businesses planning on increasing staff in the next six months exceeded the share projecting more firings by 21 points, up from 6 points in January, according to a survey by the National Association for...
Why Banks Delay Your Short Sales
Source: Herald-Tribune
‘A rolling loan gathers no loss” was the play on words often used throughout the savings and loan association debacle during the 1980s. Back then it was the way that financial institutions delayed reporting problem loans. The devious technique allowed thrift institutions to stay afloat a bit longer.
Thrifts extend large, commercial real estate loans in...
FLASHBACK: John Paulson in 2008
SOURCE: WSJ
The Treasury plan to buy illiquid financial assets has been widely criticized as being unfair to taxpayers, who will have to bear losses ahead of shareholders of the institutions that will be bailed out.
There is a better alternative to stabilize the markets: Invest the $700 billion of taxpayer money in senior preferred stock of the troubled financial institutions that pose...
75% of Modified Loans Still Underwater
SOURCE: HuffPo
More than three-quarters of homeowners who have had their monthly mortgage payments reduced under the Obama administration’s primary foreclosure-prevention program owe more on their mortgage than their house is worth, according to a new report by government auditors.
Over half of the roughly 170,000 distressed borrowers who have gone through the program are seriously...
Bank of America: Foreclosing California
SOURCE: North Country News
“Bank of America, the nation’s largest mortgage lender, ramped up its foreclosure activity in March, sending hundreds of letters warning delinquent borrowers in the region that it could sell their homes at auction in as little as three weeks, according to North County Times analysis of data from ForeclosureRadar.
The bank said the increased activity was...
Morgan Stanley's $5.4 Billion Real Estate Loss
SOURCE: WSJ
“Morgan Stanley has told investors in its $8.8 billion real-estate fund that it may lose nearly two-thirds of its money from bum property investments, according to fund documents reviewed by The Wall Street Journal.
That would likely make it the biggest dollar loss—$5.4 billion—in the history of private-equity real-estate investing. Over the past 20 years, Morgan...
Short Sales as Percentage of Total Sales
EDITOR’S NOTE: A picture that’s worth 100,000 words. Minimum.
Robert Shiller on the "Recovery"
SOURCE: New York Times
“Much hope has been pinned on the recovery in home prices that began about a year ago. A long-lasting housing recovery might provide a balm to households, mortgage lenders and the entire United States economy. But will the recovery be sustained?
Alas, the evidence is equivocal at best.
The most obvious reason for hope is that, unlike stock prices, home prices tend...
Fannie Mae Execs Before Congress
SOURCE: NYT
“Two disparate portraits of Fannie Mae — one as the victim of an unprecedented dislocation in the housing market, the other as an example of a deeply rooted culture of arrogance and greed — were presented to the Financial Crisis Inquiry Commission on Friday, as the commission wrestled with the causes and consequences of the housing crisis.
On the third day of the...
"Rates for 30-year home loans surge"
SOURCE: WaPo
“Interest rates for 30-year home loans surged this week to the highest level in eight months because of the improving economy and the end of a government push to keep rates low.
The average rate on a 30-year, fixed-rate mortgage was 5.21 percent, up from 5.08 percent a week earlier, mortgage company Freddie Mac reported Thursday. That’s the highest since mid-August, when...
OUCH: Underwater Until 2020?
SOURCE: WSJ Developments
“So-called “underwater” homeowners who owe more than their homes are worth could be holding their breath for much of the next decade.
A new study by First American CoreLogic finds that it could take until late 2015 or early 2016 for the typical underwater borrower to have positive home equity, and that homeowners in some of the nation’s hardest hit markets,...
Big Banks Bracing for the Foreclosure Surge
SOURCE: Housing Wire
“Two major banks are expecting major increases in foreclosures, by the end of 2010.
According to the Irvine Housing blog, Bank of America, which currently forecloses on 7,500 homes every month will see that number rise to 45,000 by December 2010 as one senior executive pointed out at a recent trade show. However, a spokesman for BofA told HousingWire, he could not...
"Housing Slump: Nowhere Near Over"
SOURCE: Mark Gimein
“Spring is the season of spring, of optimism and new beginnings, a good time for dreamy reveries and wishful thinking. Which means that it’s a good time to talk about housing.
In late March, the Treasury Department unveiled its new foreclosure relief plan. Like the previous lackluster plan rolled out a year ago, the new program is built to fail. The premise...
Fannie and Freddie...and Goldman Sachs
SOURCE: The Atlantic
“Fannie Mae and Freddie Mac will begin using a clearing house to trade their interest-rate swaps by year’s end, according to a Wall Street Journal report. The nice thing about trading through a clearing house is that it shields counterparties from losses that would otherwise result if a firm can’t cover its derivative obligations. If such potential...
"The Short Sale Wrinkle"
Source: INMAN
“Are you wondering why it takes so long to get short sales approved? The real reasons may be very different from what you might believe.
It would seem when prices are down and millions of homeowners owe more than their home is worth that it is in everyone’s best interest to approve a short sale. All the more so when Mortgage Bankers Association statistics show that a...
The Cruel Fate of "Opportunity Funds"
SOURCE: Reuters Wire
“Opportunistic funds are rapidly losing their status as kingpins of the distressed real estate market, likely hurting their fundraising abilities in the next market cycle, as banks get savvy with problem property debts.
While managers such as Blackstone and Orion Capital raised hundreds of billions of dollars to capitalize on the worst market slump in years, most...
March 2010
25 posts
The Five Year Foreclosure Tail
EDITOR’S NOTE: This is an interesting read, but remember, we’re not endorsing their “5 year” prediction…it’s just food for thought. After all, Housing Predictor was radically wrong about Short Sales earlier this year, so take their announcements with a few dozen grains of salt. For an alternative forecast, the ratings agency Standard & Poor claims the...
Fannie and Freddie and Changing Everything
SOURCE: Wall Street Journal
“Fannie Mae and Freddie Mac won’t be allowed to return to a precrisis structure that rewarded shareholders with big profits for years but ultimately saddled taxpayers with massive losses, Treasury Secretary Timothy Geithner will tell a congressional panel Tuesday.
The administration will outline broad principles for the future of the mortgage market...
Straight Talk on HAFA from Bankers
SOURCE: American Banker
“As an alternative to foreclosure, the government’s forthcoming program to spur short sales may prove just as ineffectual as the push to modify loans. In a short sale, the borrower sells the home for less than the amount owed on the mortgage and the lender accepts a discounted payoff. They can be far less costly to the lender than foreclosures. But experts in...
Home Inventories Jump, NAR is Spooked
SOURCE: Diana Olick | REALTY CHECK
“It could be a good thing or a very bad thing, depending on how you look at it.
Existing home inventories jumped, on an absolute basis, 9.5 percent from January to February.
That translates into 312,000 new properties added to an existing market, to total 3.59 million homes for sale.
Given the slow sales pace, that translates into an 8.6-month...
MBS Pools Need Transparency...Now
SOURCE: New York Times
“LAST week, the Federal Home Loan Bank of San Francisco sued a throng of Wall Street companies that sold the agency $5.4 billion in residential mortgage-backed securities during the height of the mortgage melee. The suit, filed March 15 in state court in California, seeks the return of the $5.4 billion as well as broader financial damages.
The case also provides...
AP: Housing Market Recovery at Risk
SOURCE: Associated Press @ Google
“The recovery in the housing market is at risk of collapsing.
Home sales are sliding, prices are stalling and foreclosures are rising. And mortgage rates are likely to go up after next week, when the Federal Reserve ends a program that has driven them down.
The trend could threaten the broader economy, economists warn. People whose home equity is...
Another Time Bomb: Option ARMs
SOURCE: LA Times
“Home values are slowly rising, and interest rates are still at low tide. But some analysts see a hidden reef that could sink the housing market: option-ARM loans.
Option ARMs are adjustable-rate mortgages that give borrowers the option to make minimum payments that don’t even cover the interest owed, much less the principal. That unpaid interest gets tacked...
More Rumbles of a Housing Shortage
SOURCE: Philadelphia Inquirer
“Mortgage delinquencies and foreclosures maintain a high profile as the economy feels its way through a mostly jobless recovery. The home-building business continues to struggle, with several U.S. companies in bankruptcy. Yet some observers believe they are seeing the emerging signs of a housing shortage. The current overabundance of available homes may...
Foreclosures Flooding Florida Courts
SOURCE: Herald Tribune
A crushing backlog of foreclosure cases has pushed Florida’s courts to request a one-time payment of $9.6 million to help purge the system and quicken a market recovery.
The Florida State Courts Administration estimates 500,000 property foreclosures are pending.
Without additional resources to clear the cases, judges fear the bottleneck will continue to drag down...
Stiglitz Warns About Housing Recovery
SOURCE: Seeking Alpha
“Nobel prize winning economist Joseph Stiglitz has warned that the Federal Reserve’s decision to end its $1.4 trillion mortgage debt purchase program this month is going to worsen the slump in the US housing market by driving up interest rates.
There has been no recovery in the US housing market this year, the biggest item of expenditure in the world’s biggest...
Power Brokers Roundtable on Short Sales
SOURCE: RIS Media
“Moderator: Steve Brown, Special Liaison for Large Firm Relations, NAR
Participants: Terry Hankner, President Comey & Shepherd REALTORS®, Cincinnati, Ohio Helen Hanna Casey, President, Howard Hanna Real Estate Services, Pittsburgh, Pennsylvania Larry Hibler, Broker, RE/MAX Achievers, Phoenix, Arizona
Steve Brown: While sales dropped slightly in December of...
Barclays Report on Foreclosure Backlogs
SOURCE: Wall Street Journal
“A recent report from analysts at Barclays Capital sheds light on how court procedures and efforts to delay foreclosures have swelled the backlog of busted home mortgages in some of the nation’s hardest-hit housing markets.
Unsurprisingly, foreclosure backlogs remain the longest in so-called judicial states, including Florida, Illinois and New York, where...
Proving Hardship Ain't Easy
EDITOR’S NOTE: This is a short “article” - just a transcript of a TV news piece - but I thought it was very significant because it shows us there’s been a big hole in the public education campaign about Short Sales. If it’s news to people that they cannot pursue a Short Sale without first being financially distressed, that’s a clear indicator we’ve...
2010 Survey: Short Sales vs. REO
EDITOR’S NOTE: The original headline on this article is “Number of Short Sales Outpacing REO Sales,” but as you’ll quickly see, that’s Not Exactly True. The accounting trick involves taking the total for REO sales and dividing it into two figures — one for REOs in livable/sellable condition, and one for REOs that are damaged goods. Without altering the numbers...
REPORT: Alabama Short Sales
SOURCE: Press-Register
“Realtor Donna Fitts sold her client’s three-bedroom, gulf-front condominium unit at Enclave for $325,000, almost half of the original price.
The seller used the short sale to get out from under the debt and stop the bleeding, said Fitts of REMAX of Orange Beach.
Short sales and foreclosure sales are as hot as the pre-Hurricane Katrina condo market,...
Experts Unsure About Gov. Short Sales
SOURCE: RIS Media
“With the highly touted federal mortgage-modification program falling short of its target numbers, the government has looked into alternatives to foreclosure and come up with a possible, though not original, solution: the short sale, a transaction in which the lender accepts less than the balance owed on the mortgage.
Beginning April 5, 2010, under new Treasury...
Bill Gross on the 2010 Double Dip
SOURCE: Time Magazine - January 5th, 2010
“Not only does Pimco managing director Bill Gross oversee the world’s biggest bond fund, his views often sway markets. In a late December interview with TIME’s John Curran, Gross pointed to the second half of 2010 as a period when investors large and small will reckon with a new reality of poor economic growth and a Federal Reserve...
Brian Wesbury: Housing Shortage in 2011
SOURCE: MSN Real Estate
“The focus of the U.S. real-estate market lately has been the number of foreclosures and people trying to purchase cheap housing. But Brian Wesbury, chief economist at First Trust Advisors, says that if Americans don’t start focusing on building new houses, the market will have a much bigger problem on its hands.
“We need one and a half million houses per year just...
Short Sales as "Kafka-esque Nightmare"
EDITORS NOTE: Wow, these people really need to start using the Short Sale Engine. 99% of their problems and complaints are because they don’t have the right tools to run a Short Sale transaction efficiently.
SOURCE: The Ledger
“Short sales are not fun,” said Pete Howlett, a Four Corners Realtor. “It’s a frustrating process.”
Short sales have become very popular with buyers,...
NAR Plan to Reduce Short Sale Stress
SOURCE: NAR Press Release
“According to the most recent Realtors® Confidence Index, buyers continue to be discouraged with the extended short sale process, resulting in foreclosures that could have been prevented. New resources from the National Association of Realtors® aim to help Realtors® and consumers successfully navigate the short sale process to help more homeowners avoid...
48 Hour Short Sales? LRC's New Model
SOURCE: DSNews Wire
“Loan Resolution Corporation said Wednesday that it is implementing a pre-approved short sale program to help the 8 million homeowners who are currently delinquenton their mortgages. The company says its streamlined process can turn a short sale decision within 48 hours.
Loan Resolution Corporation is headquartered in Arizona, where elevated foreclosure numbers...
What to Expect When the Fed Drops MBS Support in...
SOURCE: Housing Wire
“The United States government’s support of the agency mortgage-backed securitization (MBS) industry, like the training wheels on a child’s bicycle, cannot keep the vehicle stable forever.
The Federal Reserve for months has been winding down its weekly purchases of agency mortgage-backed securities from Freddie Mac, Fannie Mae and Ginnie Mae in preparation of a...
68% of US Wants Housing Stimulus Continued
SOURCE: Real Estate Channel
“According to a new poll by the National Association of Home Builders (NAHB), Americans remain strongly committed to federal support for home buyers. Roughly 68 percent of those polled said the government should continue to support housing, and 65 percent believe the government should be doing more to keep families from losing their homes to foreclosure....
Another Bank of America Horror Story
SOURCE: St. Petersberg Times
“Charlie and Maria Cardoso are among the millions of Americans who have experienced the misery and embarrassment that come with home foreclosure.
Just one problem: The Massachusetts couple paid for their future retirement home in Spring Hill with cash in 2005, five years before agents for Bank of America seized the house, removed belongings and changed...
FDIC Testing Principal Reduction (Finally)
SOURCE: Washington Post
“The Federal Deposit Insurance Corp. is developing a program to test whether cutting the mortgage balances of distressed borrowers who owe significantly more than their homes are worth is an effective method for saving homeowners from foreclosure.
The program would be aimed at a growing population of homeowners who are underwater on their loans, estimated at...
February 2010
46 posts
Warren Buffett on 2010 Real Estate
EDITOR’S NOTE: Expect to see 10,000 lazy bloggers and bad journalists present this as “WARREN BUFFET PREDICTS REAL ESTATE RECOVERY IN 2010” — but it’s not that, at all. His remarks are specific, and limited to the manufactured housing companies that his investment trust, Berkshire Hathaway, has (currently un-profitable) holdings in. Oracles speak carefully.
...
"Modification is Not for Every Borrower"
SOURCE: HousingWire
“Seth Wheeler, senior adviser to the US Treasury Department, said that one of the main goals of the Obama Administration is to fix the mortgage market in the United States, although federally subsidized modifications may not be appropriate for many borrowers.
Speaking at the American Securitization Forum (ASF) 2010 conference in Washington DC, Wheeler said the focus of...
Temporary Lull in Mortgage Defaults
SOURCE: WSJ Developments
“The Mortgage Bankers Association had some surprising news today: Fewer people fell behind on their home-mortgage payments in last year’s fourth quarter than in third quarter.
The trade group, known for having its own mortgage woes, said 3.63% of mortgage borrowers were between 30 and 59 days overdue in the fourth quarter, according to its latest survey of...