Real Estate News & Updates

Call for FDIC Increase Aimed at Reassuring Bank Customers

2008-10-01T11:22:00.000-07:00

It seems miraculous, but on Tuesday when Senator Barack Obama called for an increase in federal deposit insurance deposit levels, no one disagreed with him. In fact the other major party political candidate Senator John McCain reiterated the need for an increase, even crediting Obama for the idea, as did President Bush. In the late afternoon Federal Deposit Insurance Corporation (FDIC) chairperson Sheila Bair also called for the increase.

The proposal would raise the level of insurance from $100,000 per depositor to $250,000. The latter amount is also the level at which the government recently agreed to insure money market accounts following runs on those funds.

The last increase in FDIC insurance limits was 28 years ago when the amount was raised from $40,000 to the current $100,000 to adjust for inflation. Before that accounts were insured for $15,000.

Source: Mortgage News Daily
dated Wednesday, October 1, 2008

To read more, go to: http://www.mortgagenewsdaily.com/10012008_fdic_increase.asp

President Signs Historic Housing Bill!!

2008-08-13T14:11:00.000-07:00

Thank You to Everyone Who Has Worked So Hard to Increase Loan Limits!

This morning President Bush signed the "Housing and Economic Recovery Act of 2008." For the past several years, C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® have aggressively lobbied for Congress to pass numerous provisions found in this historic bill. Many of you participated in these efforts by communicating with your Members of Congress.

Thank you to all of you who responded to these Calls-for-Action. Your efforts have made a difference. This federal housing bill is a significant move in the right direction for California homeowners. It will aid in stabilizing our economy and help stem foreclosures, while also providing support to first-time homeowners.

The legislation will assist an estimated 400,000 homeowners facing foreclosure, many of whom reside in California, by allowing them to refinance their current mortgages with a Federal Housing Administration (FHA)-backed loan. The bill also will permanently increase FHA, Fannie Mae, and Freddie Mac loan limits in high-cost areas.

The bill permanently increases the conforming loan limit to $625,500. C.A.R. has long advocated for higher conforming loan limits. In February, the Economic Stimulus Act of 2008 was signed, temporarily raising the conforming loan limit in high-cost areas to $729,750 from $417,000 until December 31, 2008.

Although we would have liked Congress to make permanent the current $729,750 loan limit, C.A.R. is pleased with the new permanent loan limit of $625,500. It will allow California homeowners to refinance their loans into safe affordable loan products and allow first-time home buyers to enter the market.

The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area’s median home price, up to $625,500. The new FHA loan limit will be the greater of $271,050 or 115 percent of an area’s median home price, up to $625,500. Both new loan limits will be effective at the expiration of the economic stimulus limits on December 31, 2008.

C.A.R. also supports the following bill provisions:
A temporary increase in mortgage revenue bonds to refinance subprime mortgages.
New regulator for Government Sponsored Enterprises to restore investor confidence in GSE loans and help the market and economy stabilize.
First-time home buyer tax credit, which allows first-time home buyers to receive a tax refund worth up to 10 percent of a home’s purchase price, up to a maximum of $7,500. The refund serves as an interest-free loan and the homeowner is required to repay it in equal installments over 15 years.
Temporary raise in the loan limit for the Veterans Affairs home loan guarantee program to the same level as the economic stimulus limits until the end of 2008.
Adjustment to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), allowing sellers to provide the non-foreign affidavit to a qualified closing entity and not just the buyer.
The setting of minimum requirements for mortgage originators, which mandates fingerprinting of loan originators and establishes a nationwide loan originator licensing and registration system. The requirements do not apply to those only performing real estate brokerage activities unless they are compensated by a lender, mortgage broker, or other loan originator. States will have the ability to implement more stringent laws.
The creation of a National Affordable Housing Trust Fund to help cover the cost of the FHA rescue plan for the first five years and develop affordable housing in subsequent years.

Other provisions in the legislation:
The Treasury Department’s proposal to create a federal backstop program to insure the financial well-being of Fannie Mae and Freddie Mac.
The FHA’s inability to insure loans that utilize a seller-funded down-payment assistance program. Down-payment assistance from family, employers and other nonprofits is still allowed.
The Community Development Block Grant Programs’ $4 billion allotment for communities to purchase and refurbish foreclosed homes.

C.A.R. wishes to thank those California Members of Congress who supported the bill:

Senator Barbara Boxer, Senator Diane Feinstein, and Representatives Joe Baca, Xavier Becerra, Howard Berman, Mary Bono Mack, Ken Calvert, John Campbell, Lois Capps, Dennis Cardoza, Jim Costa, Susan Davis, David Dreier, Anna Esho, Sam Farr, Bob Filner, Elton Gallegly, Jane Harman, Mike Honda, Duncan Hunter, Barbara Lee, Jerry Lewis, Zoe Lofgren, Dan Lungren, Doris Matsui, Howard "Buck" McKeon, Jerry McNerney, Gary Miller, George Miller, Grace Napolitano, Nancy Pelosi, Laura Richardson, Lucille Roybal-Allard, Linda Sanchez, Loretta Sanchez, Adam Schiff, Brad Sherman, Hilda Solis, Jackie Speier, Pete Stark, Ellen Tausher, Mike Thompson, Maxine Waters, Diane Watson, Henry Waxman and Lynn Woolsey.

Thank you everyone for your efforts in support of this bill!

Source: redalerts@car.org
dated Wed, 30 Jul 2008 15:39:53 +0000

C.A.R. Opposed Point-Of-Sale Bill Fails to Clear Committee

2008-08-13T14:07:00.000-07:00

C.A.R. continues to OPPOSE AB 2204 (De La Torre), which would require county lawyers to review every deed and other related documents, like CC&Rs, and remove obsolete, illegal and unenforceable restrictions from historic title record in connection with a transfer of property. County recorders will have to charge as much as $1,000 per transaction and the bill would not protect anyone from discrimination.
Existing law already invalidates any provision in a deed of real property that restricts the right of a person to lease, rent, sell, or occupy the property based on race, color, religion, sex, marital status, national origin, ancestry, familial status, disability, source of income, or sexual orientation.
C.A.R.'s Senate Key Contacts have been working with Senators to urge them to oppose the bill.

Last Monday C.A.R. issued a Red Alert to REALTORS® living in districts of Senators serving on the Appropriations committee, where AB 2204 was scheduled for a vote Thursday.

After more than 1000 REALTORS® called their Senators to oppose the bill, and after reflecting on the enormous cost of imposing these new requirements, the committee decided to to take no action for the time being. C.A.R. learned Friday afternoon that the committee will only meet once more before the end of the month and it is not likely they will vote on the bill. If AB 2204 is not brought up, it will "die."

This is great news for REALTORS® and their clients!

We will provide another update as soon as the final fate of AB 2204 is known. For the time being, no further calls to Senators are necessary!
Thank you to everyone who participated by calling your Senator!
For More Information
Please contact DeAnn Kerr at deannk@car.org.

Source: redalerts@car.org
dated Mon, 11 Aug 2008 15:15:42 +0000

The Economy Sucks. But Is It ’92 Redux?

2008-01-14T13:50:00.000-08:00

For the first time since Bill Clinton took the White House, the economy could be the deciding factor

The Economy, Stupid: (Clockwise from top left) Consumer spending and unemployment are up; Wall Street is wobbly; home sales are slumping; the price of gas is sky high

Clinton makes a gritty, unexpected comeback in . The contentious primaries pivot from a war in Iraq to economics. Business people fret about recession. What is this, 1992?

Source--By Daniel Gross NEWSWEEK
Jan 21, 2008 Issue

To read more, go to: http://www.newsweek.com/id/91655

Harney: Mortgage industry failing to help distressed borrowers

2008-01-14T10:17:00.000-08:00

The rolling tsunami of home loan delinquencies and foreclosures is exposing serious problems in the mortgage industry's capacity to quickly handle borrowers' requests for help - whether loan modifications, short sales to ward off foreclosure, or much-ballyhooed rate freezes.

It is also bringing to light impediments to quick resolutions that may surprise some borrowers, such as the presence of home equity lines or second mortgages on the property. People with popular "piggyback" combinations of first and second mortgages, and hundreds of thousands of consumers with outstanding equity lines, could face complications they never imagined.

Listen to real estate attorney Nancy Gusman of Largo, Md., who represents financially distressed homeowners seeking ways to avoid foreclosure: "It's insane," she said in an interview. "(Mortgage) servicers tell everybody, 'Call us as soon as you have problems making the monthly payment.' But then the borrowers call and are told, 'Oh no, we can't talk to you about a loan modification. Your file is in the collections department (not the loss-mitigation department where loan modifications and short sales are handled) because you're only 30 days late.' "

Source--By Kenneth Harney
The Mercury News Article Launched: 01/11/2008 10:37:39 AM PST
http://www.mercurynews.com//ci_7944204?IADID=Search-www.mercurynews.com-www.mercurynews.com
To read more, go to:

How to play your cards

2008-01-14T10:13:00.000-08:00

ALWAYS EMOTIONAL, MAKING DECISION BECOMING HARDER

For home sellers, right now is a tricky time to set a price. The local market is divided, with homes selling faster in some places than in others. Homes are often going for less than they would have one or two years ago, but it's not always clear how much less.

This means sellers must first clear a psychological hurdle, coming to terms with how much their home is likely worth today - a figure that may be less than they remember their neighbors getting for a similar home last year. And once sellers figure out what they can reasonably expect to get for their home, they face another decision: whether to set the asking price above, below or right at that amount.

A home is an emotional investment as well as a financial one. Sellers may be parting not only with a piece of property but with the scene of years of family memories.

"It's the home you love; you've got your sweat and blood and tears in this home," said Rick Geha, an agent with Keller Williams Realty in Fremont.

Source--By Margaret SteenFor the Mercury News
Article Launched: 01/11/2008 10:37:22 AM PST

To read more, go to: http://www.mercurynews.com/ci_7944202?IADID=Search-www.mercurynews.com-www.mercurynews.com&nclick_check=1

Study: U.S. Home Prices Must Drop to Get Back In Sync with Rents

2008-01-04T10:25:00.000-08:00

House prices would have to lower by a significant amount to rebalance with U.S. rents, according to a study by two current and one prior Federal Reserve economists.

Assuming rents rose 4 percent a year, home prices would need to drop 15 percent over the next five years, The Wall Street Journal reports.

The study, which tracks rents and home prices back to 1960, is by Andreas Lehnert and Robert F. Martin, staff economists at the Fed, and Morris Davis, an economist at the University of Wisconsin-Madison and a staff economist at the Fed until 2006.

Rents historically have been around 5 to 5.25 percent of home prices--until 1995, when the average annual rent hit $6,600 and the average home price settled around $134,000.

From 1996 on, home prices began to increase faster than rents; by the close of 2006, home prices had more than doubled to $282,000. However, during the same period, the average rent was up only 48 percent to $818, decreasing the rent/price ratio to 3.48 percent--roughly a third below its long-standing average.

A correction would require home prices to drop and rents to rise. The survey suggests home prices would need to decrease 3 percent a year if rents continue their current 4 percent annual growth rate.

Source--Multi-Housing News
Published: January 03, 2008

For the Bay Area real estate industry, 2007 went from boom to tizzy

2008-01-03T10:15:00.000-08:00

As 2007 comes to a close, most people in the Bay Area real estate industry are happy to bid it farewell. And don't let the door hit you on the way out.

It became clear this year that the real estate boom of the first part of the decade had officially gone bust as lenders tightened standards, sending sales volume skidding and squelching price appreciation. The number of homes sold fell 23 percent through November in the Bay Area's nine counties compared with the same period in 2006, according to DataQuick Information Systems.

Source--Marni Leff Kottle, Special to The Chronicle
Sunday, December 30, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/30/RE96U4RAF.DTL

Experts expect real estate slump to last well into 2008

2008-01-03T09:48:00.000-08:00

While 2007 slides into the record books as a real estate industry train wreck, few are predicting that 2008 will be much better.

For clues, economists say they will be watching the health of the national economy, the situation with foreclosures and the availability of credit next year. But even under the best of circumstances, a speedy turnaround in the market is unlikely, economists said.

"A real recovery in the housing market is probably at least a year off," said Robert Kleinhenz, deputy chief economist for the California Association of Realtors. The scarcity of credit right now is of particular concern, Kleinhenz said.

Source--Marni Leff Kottle
Special to the Chronicle dated Sunday, December 30, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/30/RE96U4RBK.DTL

Housing, Growth and the Economy: What Will 2008 Hold?

2008-01-03T09:44:00.000-08:00

How much longer can economic growth continue? Thanks to the housing decline and other economic threats, it's unclear, The New York Times reported Wednesday.

Housing prices could drop, consumers would stop spending and declining business would prompt companies to cut jobs--that's the negative 2008 scenario many economists feel is most possible, according to the Times.

In 2007, job growth slowed and inflation concern increased--but consumer spending stayed solid and unemployment remained level.

Yet housing, which posed a serious threat to the economy last year, is an ongoing fear. Currently 2.1 million homes--2.6 percent of the U.S. housing inventory--remain vacant and on the market, which is more than the housing recessions of the 1980s and 1990s.

Economists forecast that the housing supply won't drop to normal levels until home prices fall nationally by at least 15 percent from their 2006 high points. Prices thus far have fallen less than 5 percent according to the Standard & Poor’s Case-Shiller home price index.

Source--Multi-Housing News
Published: January 02, 2008

To read more, go to: http://www.multi-housingnews.com/multihousing/content_display/industry-news/e3i9bec9b085abfbfbfff751ea8db2ec34b

Slow growth, but no recession, seen for 2008

2007-12-19T09:30:00.000-08:00

Economists offer sobering outlook in msnbc.com year-end survey

With the housing market still in decline and consumers tightening their belts, the economy is likely to slow substantially in the coming year but will skirt an all-out recession. That, at least, is the consensus view of economists polled for msnbc.com’s sixth year-end economic roundtable.

While the 10 forecasters on our panel believe the economy will avoid a recession, much depends on how the Federal Reserve responds, how many more homeowners get swamped by higher mortgage payments and whether oil prices stay below $100 a barrel.

Source--ANALYSIS
By John W. Schoen
Senior Producer
MSNBC

To read more, go to: http://www.msnbc.msn.com/id/22207239/from/ET/

Growing number of Americans expect recession

2007-12-19T09:28:00.000-08:00

Poll finds housing slump, rising food and energy prices souring sentiment

A growing number of Americans expect a U.S. recession in the next year as the housing slump and steep food and energy prices sour sentiment, a Reuters/Zogby poll released on Wednesday shows.

Of the likely voters surveyed, 43.4 percent said they expect a recession, up from 40 percent a month earlier. The worsening mood was apparent across nearly every age and ethnic group, and both sides of the political spectrum, pollster John Zogby said.

Source--Reuters
dated 12/19/2007 updated 2 hours ago

To read more, go to: http://www.msnbc.msn.com/id/22324221/from/ET/

Housing slump hits home in East San Jose

2007-12-18T09:43:00.000-08:00

The wave of foreclosures sweeping Santa Clara County has hit its Latino residents the hardest, stripping many first-time buyers of their homes and sending financial shock waves through the South Bay's largest minority community.

Nearly 60 percent of the 1,429 properties in the county taken back by lenders from Jan. 1 to Nov. 15 were owned by people with Hispanic surnames, according to a Mercury News analysis of data provided by ForeclosureRadar. In San Jose, that figure was 69 percent.

Latinos comprise 26 percent of the county's population and 32 percent of the city's, according to census data.

Source--Pete Carey-Mercury News
Article Launched: 12/16/2007 01:37:42 AM PST

To read more, go to: http://www.mercurynews.com/ci_7736239?IADID=Search-www.mercurynews.com-www.mercurynews.com&nclick_check=1

No housing bubble popped in Ohio, Michigan

2007-12-18T09:41:00.000-08:00

Economy, not speculators and adjustable mortgages, is depressing market

Michigan and Ohio share something with Florida and California — some of the nation's highest rates of foreclosed homes and delinquent mortgages. But the reasons for their woes are as different as their climates.

Battered by a declining manufacturing base, stagnant population growth and low demand for housing, Michigan and Ohio rank No. 1 and 2 on mortgage finance company Fannie Mae's list of states with the largest credit losses through Sept. 30.

Source--Associated Press
updated 6:13 p.m. CT, Mon., Dec. 17, 2007

To read more, go to: http://www.msnbc.msn.com/id/22300698/from/ET/

Fed Funds Rate Cut Should Reduce Borrowing Costs, Says Grubb & Ellis Chief Economist

2007-12-14T13:42:00.000-08:00

Action by the Federal Reserve to lower the federal funds rate by a quarter percent to 4.25 percent should further lower the cost of loans for multifamily borrowers.

"By lowering the cost of money for banks, the move is expected to reduce banks’ risks of lending to consumers and businesses of all types, including real estate investors, who should be able to borrow at slightly more generous terms,” states Bob Bach, senior vice president and chief economist at Grubb and Ellis.

Another key rate, the discount rate, was also cut on Dec. 11, to 4.75 percent, from 5 percent.

Bach maintains, however, that although the 25-basis-point Federal funds rate reduction is a step in the right direction, it will “likely have only a marginal impact on the economy and financial markets because lenders and borrowers have become far more risk-averse since last summer.

“It is likely to take more easing by the Fed next year to help businesses regain the confidence to plan ahead for growth and expansion,” he says.

Source: Keat Foong, Executive Editor
Multi Housing News Published: December 12, 2007

Fed, Global Banks Confront Credit Crisis with New Plan

2007-12-14T13:39:00.000-08:00

The Fed and several central banks outside of the U.S. announced a new strategy Wednesday to battle the global liquidity crisis that includes the Fed inserting money into the global financial network, The New York Times reports.

The Fed said it would lend up to $20 billion to the European Central Bank and $4 billion to the Swiss National Bank and also hold two auctions, on Dec. 17 and Dec. 20, to lend a total of $40 billion to banks.

The Fed will hold two more auctions in January involving an undisclosed amount.

Source--Multi Housing News
Published: December 12, 2007

Stocks up as Fed moves on credit crisis

2007-12-12T11:54:00.000-08:00

U.S. central bank will work with others to ease credit squeeze

Stocks rose on Wednesday, but came well off their highs, after an enthusiastic response to a Federal Reserve plan to work with other central banks to alleviate the global credit crisis. The Dow Jones industrials, which at one point had been up more than 270 points, rose about 115.

The Fed said as the market opened that it has agreed with the European Central Bank and the central banks of England, Canada and Switzerland to confront what it called elevated pressures in the credit markets. The Fed said it will create a temporary auction facility to make funds available to banks and set up lines of credit with the European and Swiss central banks for additional resources.

Source--Associated Press
updated 1:42 p.m. CT, Wed., Dec. 12, 2007

To read more, go to: http://www.msnbc.msn.com/id/3683270/from/ET/

Greenspan: Global growth spurred credit crisis

2007-12-12T11:33:00.000-08:00

Former Fed chief says subprime loans were an "accident waiting to happen"

The U.S. subprime mortgage crisis was an "accident waiting to happen" as a period of unprecedented global growth seduced investors into underpricing risk, former Federal Reserve Chairman Alan Greenspan argued in an article published by The Wall Street Journal on Wednesday.

While acknowledging the low U.S. interest rates set under his leadership may have contributed to the bubble in U.S. home prices, Greenspan said he felt the roots of the subprime mortgage crisis actually lie with global economic expansion.

Source--Reuters
updated 6:44 a.m. CT, Wed., Dec. 12, 2007

To read more, go to: http://www.msnbc.msn.com/id/22214191/from/ET/

Fed cuts key interest rate a quarter-point

2007-12-12T11:15:00.000-08:00

Central bank reacts to widening mortgage crisis with third drop of the year

The Federal Reserve gave borrowers a rate cut present for the holidays. Wall Street’s response: Bah humbug!

Fed Chairman Ben Bernanke and all but one of his colleagues agreed Tuesday to trim the central bank’s most important interest rate by one-quarter percentage point to 4.25 percent. That left the federal funds rate at a nearly two-year low. The action is aimed at preventing a housing and credit meltdown from pushing the economy into recession.

Source--Associated Press
updated 4:43 p.m. CT, Tues., Dec. 11, 2007

To read more, go to: http://www.msnbc.msn.com/id/22202624/from/ET/

Fed teams with central banks on credit crisis

2007-12-12T11:07:00.000-08:00

U.S. central bank plans to offer banks $40 billion in emergency funds

The Federal Reserve on Wednesday announced a novel approach to injecting money into the banking system as it struggles to combat a severe credit crunch that threatens to drag the country into a recession.

The announcement helped dispel the sour mood on Wall Street, where investors had pushed the Dow Jones industrial average down by 294 points on Tuesday out of disappointment with what was seen as a timid interest rate cut. After Wednesday’s announcement, stocks recouped a part of the previous day’s losses.

Source--Associated Press
updated 12:56 p.m. CT, Wed., Dec. 12, 2007

To read more, go to: http://www.msnbc.msn.com/id/22215792/from/ET/

Buffett: Bank mortgage plan won’t solve crisis

2007-12-12T11:03:00.000-08:00

Investor says a plan to buy tarnished mortgage securities is not a cure

Investor Warren Buffett on Tuesday told CNBC television that a plan by some large banks to create a fund to buy tarnished mortgage securities is unlikely to cure what ails financial markets.

“You can’t turn a financial toad [into a prince] by kissing it or by securitizing it or by transferring its ownership to somebody else,” he said.

On U.S. President George W. Bush’s plan to negotiate rate freezes on some mortgages at risk of default, Buffett said it was the right course of action but “not revolutionary.”

Source--Reuters
updated 10:19 a.m. CT, Tues., Dec. 11, 2007

To read more, go to: http://www.msnbc.msn.com/id/22200291/from/ET/

Survey sees flat job growth in first quarter of ’08

2007-12-12T10:58:00.000-08:00

Fewer than 22 percent of companies adding positions, similar to this year

Fewer than a quarter of employers expect to add positions in the first quarter of the new year, almost the same as a year ago, according to a survey of 14,000 companies being released Tuesday.

Twelve percent of companies said they expect to reduce employment in the three-month period starting in January, while 22 percent said they’ll add jobs, according to the survey by Milwaukee-based global staffing firm Manpower Inc.

Source--Associated Press
updated 11:01 p.m. CT, Mon., Dec. 10, 2007

To read more, go to: http://www.msnbc.msn.com/id/22189247/from/ET/

Washington Mutual to lay off more than 3,000

2007-12-12T10:53:00.000-08:00

Due to mortgage problems savings and loan will also shut down offices

Washington Mutual Inc., the nation’s largest savings and loan, said Monday that problems in the mortgage and credit markets are forcing it to close offices, lay off more than 3,000 workers and set aside up to $1.6 billion for loan losses in the fourth quarter.

WaMu is also slashing its quarterly dividend 73 percent and plans a $2.5 billion offering of preferred stock that is convertible to common shares. WaMu has not yet priced the offering, but increasing the total number of company shares will dilute their value for existing stockholders. In after-hours trading, WaMu shares fell $1.76, or nearly 9 percent, to $18.12 following the company’s announcement.

Source--Associated Press
updated 7:30 a.m. CT, Tues., Dec. 11, 2007

To read more, go to: http://www.msnbc.msn.com/id/22189126/from/ET/

Fannie, Freddie CEOs warn of tough 2008

2007-12-12T10:49:00.000-08:00

One says there will still be up to $7.5 billion in additional losses

The chief executives of Fannie Mae and Freddie Mac on Tuesday warned their ailing mortgage-finance companies will suffer further in 2008 due to a weakening housing market and rising home-loan defaults.

Freddie's CEO, Richard Syron, said the government-sponsored company could lose an additional $5.5 billion to $7.5 billion over the next few years from soured home loans.

"I honestly think it's going to get tougher before it gets better," Syron said in a discussion with financial analysts in New York. His company has already logged about $4.5 billion in projected losses during the first nine months of this year.

Source--Associated Press
updated 5:00 p.m. CT, Tues., Dec. 11, 2007

To read more, go to: http://www.msnbc.msn.com/id/22205399/from/ET/

Bank of America closing money-market fund

2007-12-12T10:44:00.000-08:00

BofA blames subprime mortgage crisis for dwindling losses

Bank of America Corp. is liquidating a privately placed, enhanced institutional cash fund amid withering losses on complex asset-backed securities, the bank said Monday.

The Columbia Strategic Cash Portfolio fund for institutional investors that was worth $34 billion on Nov. 30, currently has about $12 billion in assets, the Charlotte-based bank said. The fund will be closed off to new investors, it added.

The loss is related to the subprime-mortgage crisis that has rippled across the globe, Goldstein said.

Source--Associated Press
updated 6:45 p.m. CT, Mon., Dec. 10, 2007

To read more, go to: http://www.msnbc.msn.com/id/22185736/from/ET/

UBS writes off $10 billion in subprime losses

2007-12-12T10:36:00.000-08:00

Move comes in addition to $3.4 billion in bad debt announced in October

Swiss banking giant UBS AG said Monday it will write off a further $10 billion on losses in the U.S. subprime lending market and will raise capital by selling substantial stakes to Singapore and an unnamed investor in the Middle East.

UBS will now record a loss for the fourth quarter and said “it is now possible that UBS will record a net loss attributable to shareholders for the full year 2007.”

Source--Associated Press
updated 12:27 p.m. CT, Mon., Dec. 10, 2007

To read more, go to: http://www.msnbc.msn.com/id/22180574/from/ET/

Stocks up as Fed moves on credit crisis

2007-12-12T10:25:00.000-08:00

U.S. central bank will work with others to ease credit squeeze

Stocks rose but came well off their highs Wednesday after a burst of enthusiasm dissipated over a Federal Reserve plan to work with other central banks to alleviate a global credit crisis. The Dow Jones industrials, which at one point had been up more than 270 points, rose about 60.

The Fed said early Wednesday it had agreed with the European Central Bank and the central banks of England, Canada and Switzerland to confront what it called elevated pressures in the credit markets. The Fed said it will create a temporary auction facility to make funds available to banks and set up lines of credit with the European and Swiss central banks for additional resources.

Source--Associated Press
updated 12:26 p.m. CT, Wed., Dec. 12, 2007

To read more, go to: http://www.msnbc.msn.com/id/3683270/from/ET/

What interest rate cuts mean to you

2007-12-12T09:43:00.000-08:00

WHAT RATE CUTS MEAN TO YOU

Homeowners: You could save hundreds of dollars a month if your loan is pegged to Treasury rates, which have fallen considerably thanks to the Fed's recent cuts. But many buyers in expensive areas like Silicon Valley resort to so-called jumbo loans, which are typically pegged to slower-moving indexes that remain elevated.

Borrowers: Several banks lowered their prime rate, which forms the foundation for car loans, home equity lines and other loans. But you must carry a whopping $5,000 credit card balance to save just $12.50 annually from a quarter-point rate cut.

Consumers: Lower rates threaten to boost inflation and the price of imports. So far, inflation has been held in check, and foreign companies generally are holding the line on prices.

Savers: Falling interest rates normally would whack rates on CDs and other savings. But the cash crunch has spurred many banks to prop up such rates. "They're going lower, but yields are falling like a feather rather than dropping like rock," said Bankrate.com analyst Greg McBride.

Travelers: International vacations and business trips cost more because the dollar has sagged in the wake of the Fed's cuts. But it could be buoyed if other central banks trim rates, McBride said.

Source--Mercury News
Article Launched: 12/11/2007 05:57:30 PM PST

How much help will Fed's 0.25% rate cut be?

2007-12-12T09:38:00.000-08:00

The Federal Reserve trimmed two short-term interest rates yet again Tuesday, a sign that its previous rate cuts weren't enough to keep the widening mortgage crisis from freezing up global credit markets and possibly triggering a recession.

Still, the effectiveness of the Fed's move is much in doubt. Some economists said the cut fell short of what's needed, including one Fed governor who preferred a bolder, half-percentage-point cut.

Moreover, many mortgage borrowers will see little immediate savings, and the rate cuts could fuel inflation and push up the price of imported goods, experts say.

The Fed hopes its latest quarter-point cuts will inject cash into the financial system and make it easier for financial institutions to make loans to businesses and consumers.

Source--Mark Schwanhausser
Mercury News Article Launched: 12/12/2007 01:34:31 AM PST

To read more, go to: http://www.mercurynews.com/search/ci_7698903?IADID=Search-www.mercurynews.com-www.mercurynews.com&nclick_check=1

Trade group lifts outlook for 2008 home sales

2007-12-11T09:18:00.000-08:00

Realtors insist U.S. housing market is stabilizing

Bucking conventional wisdom, a trade group for real estate agents on Monday said the battered housing market is on the verge of stabilizing and inched-up its outlook for 2007 and 2008 home sales.

The revised monthly forecast from the National Association of Realtors, which followed nine straight months of downward revisions, calls for U.S. existing home sales to fall 12.5 percent this year to 5.67 million — the lowest level since 2002. Last month, the association predicted 5.66 million existing homes would be sold this year.

Source--Associated Press
updated 12:28 p.m. CT, Mon., Dec. 10, 2007

To read more, go to: http://www.msnbc.msn.com/id/22183591/from/ET/

Bush unveils plan to help subprime borrowers

2007-12-11T09:06:00.000-08:00

Lenders, investors agree to freeze rates on some adjustable mortgages

Hundreds of thousands of strapped homeowners could get some relief from a plan negotiated by the Bush administration to freeze interest rates on subprime mortgages that are scheduled to rise in the coming months.

“There is no perfect solution,” President Bush said Thursday as he announced an agreement hammered out with the mortgage industry. “The homeowners deserve our help. The steps I’ve outlined today are a sensible response to a serious challenge.”

Source--Associated Press
updated 3:19 p.m. CT, Thurs., Dec. 6, 2007

To read more, go to: http://www.msnbc.msn.com/id/22132648/from/ET/

Fed to flex its mortgage-relief muscle

2007-12-10T15:06:00.000-08:00

Central bank expected to tighten rules on subprime mortgage lenders

The Federal Reserve is finalizing a far-reaching mortgage proposal that would ban certain lending practices and apply to the lightly regulated subprime mortgage specialists that proliferated during the recent housing boom.

The proposal, expected in two weeks, is emerging as the most muscular use of regulatory power at the central bank since Fed Chairman Ben Bernanke took office in early 2006.

Source--Associated Press
updated 1:36 p.m. CT, Fri., Dec. 7, 2007

To read more, go to: http://www.msnbc.msn.com/id/22150106/from/ET/

Getting a home loan just got harder

2007-12-10T14:52:00.000-08:00

As some lenders collapse under the weight of bad mortgages, others are getting pickier. Now you have to have a real down payment -- and actually be able to afford the house.

With the news full of stories about the collapse of lenders that sell mortgages to people with less-than-perfect credit, the survivors are clamping down, leaving first-time homebuyers to wonder, "Will I still be able to buy a house?" People with loans nearing the end of low-interest introductory periods are asking themselves, "Can I qualify for a refinance I can afford?"

The short answer, of course, is that it depends.

Source--Marilyn Lewis-MSN Money
Published March 20, 2007

To read more, go to: http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/GettingAHomeLoanJustGotHarder.aspx

Moody's Report States Housing To Drop Until 2009

2007-12-10T09:32:00.000-08:00

A report from Moody's Economy.com released Thursday predicts the housing market decline will last through early 2009.

The report also says that housing markets in some areas could see value decreases of more than 30 percent and sales, construction and pricing will not noticeably improve until 2010, according to Reuters.

Punta Gorda, Fla., and Stockton, Calif., will be the most affected, according to the "Aftershock: Housing in the Wake of the Mortgage Meltdown," report, which forecasts a 35.3 percent price drop for Punta Gorda and 31.6 percent fall for Stockton.Washington and Detroit are forecast to see more than a 15 percent peak-to-trough decline; major declines are also predicted for large areas in Arizona, California, Florida and Nevada.However, home sales should bottom out in early 2008, marking a 40 percent drop from peak-to-trough.

Source--Multi-Housing News
Published: December 07, 2007

To read more, go to: http://www.multi-housingnews.com/multihousing/content_display/industry-news/e3i2b2de0172fdbe9132b4a26bef28178cc

Rental Market May Reap Benefits from the Housing Slump

2007-12-10T09:27:00.000-08:00

Today's multi-housingnews.com news included an item about California affordable housing builder AMCAL focusing efforts on market-value apartments.

The company plans to build two this year. Why? According to Sid Paul, AMCAL Equities' Vice President of For-Sale Housing, mortgage restrictions and dwindling loan options in California--which saw some of the greatest increases in property values before the housing slump and some of the biggest declines during it--are prompting more and more residents to rent.

"We're seeing a void for workforce earners who may not be low wage earners, but who may have a need for rental properties," Paul told multi-housingnews.com.

Source--Multi-Housing News Blog
dated 12/5/2007

To read more, go to: http://cpnmhn.typepad.com/out_and_about/2007/12/rental-market-m.html

Government-Backed Mortgage Rescue Plan Announced

2007-12-10T09:13:00.000-08:00

President Bush today announced the highly anticipated interest rate freeze program, designed to help prevent further waves of home foreclosures.

The voluntary, private-sector arrangement involves no government funding and will only affect mortgages for owner-occupied homes. You can't have missed any payments, and the loan has to have been taken out between 2005 and July 30, 2007 and be set to reset in 2008 or 2009, according to MSNBC.

Source--Multi-Housing News Blog
dated 12/6/2007

To read more, go to: http://cpnmhn.typepad.com/out_and_about/2007/12/government-back.html

Three Factors That Will Influence the Fed's Decision Next Week

2007-12-10T09:10:00.000-08:00

The past two weeks have provided us with a dizzying array of economic information--new job data, construction spending results, forecasts from Fannie Mae and Moody's.

And it's all fueled the ongoing speculation about whether or not the Fed will change the interest rate next week when it meets.

Last week, it looked like that was a strong possibility; and now, economists aren't so sure.

It is, of course, impossible to know what the Fed will decide. But we can predict some of the key information they'll likely consider:

Home Prices. The housing slump will undoubtedly influence the Fed's decision, even though it will consider housing along with other government reports and data--and gauge its own housing data against that of the private sector.

Source--Multi-Housing News Blog
dated 12/7/2007

To read more, go to: http://cpnmhn.typepad.com/out_and_about/2007/12/three-factors-t.html

Bush to unveil details of mortgage plan

2007-12-06T12:57:00.000-08:00

Rates would be frozen for five years on many adjustable loans

President Bush is set to unveil details of a plan Thursday to help head off a wave of mortgage foreclosures hitting homeowners whose adjustable-rate loans are resetting to monthly payment they can’t afford.

Under terms of an agreement hammered out between the administration and lenders, interest rates would be frozen for five years on certain subprime mortgages, congressional aides said. Bush is expected to make a statement at 1:40 p.m. ET.

Source--By John W. Schoen
Senior Producer
MSNBC
updated 2 hours, 11 minutes ago

To read more, go to: http://www.msnbc.msn.com/id/22116043/from/ET/

Mortgage Mess: Is Relief in Sight?

2007-12-06T12:46:00.000-08:00

Why Bush's bailout will leave many borrowers out in the cold.

A few weeks ago I wrote a column about a condo owner named Hyacinth O'Meally. When she bought her home in 2005 she took out an adjustable-rate subprime mortgage. She paid exorbitant closing costs and was surprised to find out her monthly mortgage payment didn't include her property taxes of more than $300 per month. That confusion, compounded by a drop in income, made her monthly payment more than she can handle. Now, even after the bank has modified her loan, she's behind on her mortgage and may lose her home.

Source--RESIDENT EXPERT
Daniel McGinn-Newsweek
Dec 6, 2007 Updated: 11:53 a.m. ET Dec 6, 2007

To read more, go to: http://www.newsweek.com/id/73995

Clinton blames Wall Street for subprime mess

2007-12-06T12:22:00.000-08:00

Senator calls on investment community to back her mortgage reforms

Democratic presidential candidate Hillary Clinton on Wednesday said Wall Street was partly to blame for the subprime mortgage mess and urged the investment community to support her proposals aimed at preventing home loan foreclosures.

In a speech in New York, Sen. Clinton said Wall Street was not solely responsible for the wave of foreclosures that threatens to crimp U.S. economic growth but “certainly had a hand in making it worse.”

Source--Reuters
updated 3:01 p.m. CT, Wed., Dec. 5, 2007

To read more, go to: http://www.msnbc.msn.com/id/22117171/from/ET/

Wall St. firms subpoenaed by N.Y. prosecutors

2007-12-06T12:00:00.000-08:00

Information sought about companies' deals related to risky mortgages

New York state prosecutors have sent subpoenas to Wall Street firms seeking information related to the packaging and selling of debt tied to high-risk mortgages, a person familiar with the matter said on Wednesday.

The subpoenas, sent by the office of New York Attorney General Andrew Cuomo, requested information from a number of Wall Street firms.

Source--Reuters
updated 3:05 p.m. CT, Wed., Dec. 5, 2007

To read more, go to: http://www.msnbc.msn.com/id/22110589/from/ET/

Holiday real estate doldrums are more myth than reality these days

2007-12-03T12:36:00.000-08:00

The 5 1/2 weeks between Thanksgiving and New Year's used to be a time for agents, brokers and others in the real estate industry - at least the ones who have had a good year - to pack their bags and head to the Caribbean.

The thing is, this hasn't been a very good year.

Conventional wisdom has dictated that sellers don't want their holidays interrupted by open houses and buyers, aware that inventory typically shrinks toward the end of the year, use the winter months to take a break.
"That's the rule of thumb: don't bring a house on the market over the holidays," said Lamisse Droubi, who works with a team of agents at Coldwell Banker in Noe Valley. "People are very distracted - they have parties to go to, family to visit and people are out of town."

Source--Marni Leff Kottle Special to the Chronicle
Sunday, December 2, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/02/RETATLELJ.DTL&hw=home+for+the+holidays&sn=008&sc=428

Volatile stock market a dangerous place for investors

2007-12-03T12:27:00.000-08:00

It's up. It's down. Then it's up and down all over again.

Such is the U.S. stock market these days, the spooky, late 2007 version during which the always-risky business of trading company shares has turned downright treacherous.

"We're seeing tremendously violent mood swings on almost a daily basis," said Mark Lehmann, director of equities at JMP Securities in San Francisco.

Source--Sam Zuckerman, Chronicle Staff Writer
Sunday, December 2, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/02/BUB4TLE4R.DTL&hw=market+settling+down&sn=007&sc=543

Daniel Mudd Fannie Mae president and CEO

2007-12-03T12:21:00.000-08:00

"Rates were low for a long period of time. Home prices accelerated for a long period. Both lenders and borrowers had a huge amount of confidence that ultimately led to overconfidence."

Daniel Mudd, 48, is president and chief executive officer of Fannie Mae, the giant government-sponsored entity that, along with Freddie Mac, buys and packages billions of dollars of mortgage loans for resale in secondary markets, which helps to keep interest rates low.

Mudd moved to Fannie Mae from General Electric Co. in 2000 and has previously served as chief operating officer, responsible for the origination, systems and administration areas of the company. At GE, he spent most of his career leading financial-services corporations in the United States, Asia and Europe.

Source--San Francisco Chronicle
dated 12/2/2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/02/BUOVTHTL1.DTL&hw=on+the+record+daniel+mudd&sn=001&sc=1000

Banks, U.S. near deal on subprime mortgages

2007-11-30T12:59:00.000-08:00

Plan is to extend lower, introductory rates on loans before they reset

The Bush administration is working with industry on a plan to extend lower, introductory interest rates on home loans before they reset at higher levels.

The talks come amid hints from Federal Reserve Chairman Ben Bernanke of another cut in a key interest rate to keep the economy from sliding into a recession.

Source--Associated Press
updated 1:38 p.m. CT, Fri., Nov. 30, 2007

To read more, go to: http://www.msnbc.msn.com/id/22039594/from/ET/

U.S. economic growth fastest in four years

2007-11-29T12:20:00.000-08:00

GDP for third quarter steamed ahead at revised 4.9 percent rate

The economy barreled ahead in the summer, growing at a 4.9 percent pace. The performance was the strongest in four years, but isn’t expected to last through the current quarter amid the continuing housing slump and credit crunch.

The Commerce Department’s new reading of the gross domestic product from July through September, released Thursday, was even better than the government’s initial estimate of a brisk 3.9 percent growth rate for period. Stronger U.S. exports to overseas buyers and more inventory investment by businesses were the main reasons for the improvement.

Source--Associated Press
updated 1:54 p.m. CT, Thurs., Nov. 29, 2007

To read more, go to: http://www.msnbc.msn.com/id/22023090/from/ET/

Existing home sales fall for eighth month

2007-11-28T12:22:00.000-08:00

Median U.S. home price dropped by record amount in October

Sales of existing homes fell for the eighth consecutive month in October, with median home prices falling by a record amount. Analysts blamed the worsening housing slump on the credit crunch that hit in August.

The National Association of Realtors reported that sales of existing single-family homes and condominiums dropped by 1.2 percent last month to a seasonally adjusted annual rate of 4.97 million units.

Source--Associated Press
updated 2 hours, 4 minutes ago 11/28/2007

To read more, go to: http://www.msnbc.msn.com/id/22006839/from/ET/

Rate Lock Advisory - Tuesday Nov. 20th

2007-11-26T09:10:00.000-08:00

Tuesday's bond market has opened in negative territory following early stock strength. The stock markets are rebounding form yesterday's losses with the Dow currently up 104 points while the Nasdaq has gained 31 points. The bond market is currently down 11/32, which will likely keep this morning's mortgage rates near yesterday's levels. Strength in bonds late yesterday prevented an increase in this morning's rates.

The first report of the week was October's Housing Starts that was posted early this morning. It showed an increase in starts of new homes of 3.0%, exceeding forecasts of a 1.5% decline. This is somewhat bad news for the bond market, however, this data is of relatively low importance to the market. In addition, a portion of the report that tracks new permits pulled for future starts actually dropped to a 14-year low. Overall, this hasn't helped or hurt bond prices this morning and had little impact on mortgage pricing.

The minutes to the last FOMC meeting will be posted at 2:00 PM ET today. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed's next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher Tuesday afternoon. However, if they indicate a likelihood of another rate cut in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.

The next data is the Conference Board's Leading Economic Indicators (LEI) late tomorrow morning. This index attempts to measure economic activity over the next three to six months and can directly affect the bond market and mortgage rates. It is expected to show a decline from last month's reading. The forecasted 0.3% drop would indicate slower economic activity over the next few months, which is considered to be good news for the bond market.

The revised November reading to the University of Michigan Index of Consumer Sentiment will also be posted late tomorrow morning. Analysts are expecting to see no revision to the preliminary reading of 75.0. Unless we see a significant variance from the forecasted reading, I don't think this data will cause much movement in mortgage rates tomorrow.

Also tomorrow is an early close in the bond market ahead of the Thanksgiving Day holiday. This could lead to additional volatility and thin trading as traders begin the holiday. If tomorrows data shows any major surprises, we could see a bigger move than usual in bonds due to the light trading.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

Source--upto100percentpayout@yahoo.com
dated 11/20/2007

Stocks struggle after Citigroup warning

2007-11-26T09:07:00.000-08:00

Outlook for homebuilders dampens investors’ holiday cheer

Wall Street was struggling Monday, having given up an early advance, as concerns about a weakening credit market unraveled some enthusiasm over reports of strong electronics sales over the holiday weekend.

The New York Federal Reserve, acknowledging “heightened pressures” in money markets that are expected to last through the rest of the year, said it plans to conduct a series of term repurchase agreements aimed at boosting liquidity in the credit markets. The New York Fed, which carries out monetary policy set by the U.S. Federal Reserve, said it would inject $8 billion to the banking system on Wednesday.

Source--Associated Press
updated 11:02 a.m. CT, Mon., Nov. 26, 2007

To read more, go to: http://www.msnbc.msn.com/id/3683270/from/ET/

Tax on Forgiven Mortgage Debt Hits Home Owners While Down

2007-11-20T09:04:00.000-08:00

Ongoing efforts in the housing finance industry to keep home owners from losing their homes, limit the amount of inventory returning to the market and help check further housing price declines are being hampered by federal tax law that legislators on Capitol Hill are attempting to change, according to NAHB economist Robert Dietz.

“The Internal Revenue Service treats all debt amounts that are reduced, forgiven or eliminated as part of a mortgage restructuring or foreclosure as taxable income,” Dietz writes in a special study for NAHB Housing Economics.

“For home owners struggling to make their regular mortgage payments, this phantom income taxation creates a disincentive against restructuring an existing mortgage to ensure continued payment and avoid foreclosure,” he says. “To prevent this tax from applying to home owners and lenders seeking to restructure existing mortgages, Congress must modify the nation’s tax code.”

H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, which would eliminate the tax consequences associated with debt forgiveness, has been approved by the House of Representatives.

With the exception of taxpayers who are insolvent or subject to Title 112 bankruptcy proceedings, Section 108 of the Internal Revenue Code requires all discharges of indebtedness to be included in gross income, including interest rate reductions of more than 25 basis points.

Source--NAHB
Week of November 19, 2007

To read more, go to: http://www.nbnnews.com/NBN/issues/2007-11-19/Front+Page/index.html

The Economy on the Edge

2007-11-19T13:51:00.000-08:00

Will the U.S. succumb to a debt crisis brought on by years of profligate lending—or keep growing? Here are some markers to mind in figuring out where we're headed

No, it's not just you—the U.S. economy really is bewildering. The government says gross domestic product expanded at an annual rate of nearly 4% in the third quarter, the fastest pace in a year and a half. The stock market is still up by 4% for this year, despite a sharp 3% drop on Nov. 7. On the other hand, growth in consumer borrowing slowed unexpectedly in September. Some economists argue that the U.S. is teetering on the brink of a recession, if it isn't in one already.

Source--Peter Coy
BusinessWeek dated 11/19/2007

To read more, go to: http://www.businessweek.com/magazine/content/07_47/b4059054.htm?chan=search

On the Subprime Endangered List

2007-11-19T13:40:00.000-08:00

Who's next for the Prince treatment? Bear Stearns' Jimmy Cayne may be vulnerable

Which CEO will be catching subprime heat next now that Citigroup's Chuck Prince is out? It will likely come down to whose losses are biggest.

Given the $24 billion in writedowns from Citi, Merrill Lynch (MER ), and UBS (UBS ), Wall Street's nervous eyes are now fixed on Bear Stearns (BSC ), Lehman Brothers (LEH ), Goldman Sachs (GS ), and Morgan Stanley (MS ), all of which are due to report earnings soon. The firms have had relatively small subprime writedowns so far, but there's a growing sense that more are coming—a worry that continues to weigh on the market.

Source--Matthew Goldstein and David Henry
BusinessWeek dated 11/19/2007

To read more, go to: http://www.businessweek.com/magazine/content/07_47/b4059046.htm?chan=search

Crunch Time in Heaven

2007-11-19T13:29:00.000-08:00

The subprime jitters have rocked the housing market. How will they affect your dream golf home?$deck Michigan struggles while High Carolina is hot

When fellow real-estate agents and home-buyers around the country start telling the war stories about their local housing markets, Kim Tofferi listens sympathetically. But she has a hard time feeling their pain.

She knows that home prices nationwide have fallen more than 10% in a number of areas from their 2005 highs. Houses for sale are sitting on the market longer than they have in a decade. And record numbers of defaults and foreclosures have made lenders leery about writing new loans for those without the most bulletproof credit scores, further constricting the pool of eligible buyers.

Source--Matthew Rudy
BusinessWeek dated 11/12/2007

To read more, go to: http://www.businessweek.com/magazine/content/07_46/b4058086.htm?chan=search

On Guard Against Recession

2007-11-19T12:37:00.000-08:00

All signs suggest meager growth—if that—in the fourth quarter, with little improvement in early 2008. So the Fed is taking preemptive action

The goods news: The government says the economy grew 3.9% in the third quarter. The bad news: That's the last of the good news on growth. In the fourth quarter, look for the full brunt of the credit crunch, the latest downturn in the housing slump, $90-a-barrel oil, and growing caution by consumers and businesses to take their tolls. Most economists expect growth of only 1% to 2% this quarter, with little improvement in early 2008, and many of those folks have their fingers crossed. The risks to that somber forecast are almost all to the downside.

Source--James C Cooper
BusinessWeek dated 11/12/2007

To read more, go to: http://www.businessweek.com/magazine/content/07_46/b4058033.htm?chan=search

Opinion -- Feedback

2007-11-19T12:31:00.000-08:00

Who Built the Debtors' Prisons?

Consumer debt is a divisive issue, judging by the reactions to "Prisoners of Debt" (Cover, Nov. 12). The article described a growing business in pressuring individuals to pay obligations they no longer legally owe--debts forgiven by bankruptcy courts but still purchased in the secondary market by outfits hoping to collect payments. Many readers were disturbed by the practice--"a gross injustice," one wrote. Some who responded focused on lax regulatory enforcement and the holes in the law that allow such collectors to operate. But others sided with the creditors, saying indebted consumers are shirking their responsibilities by seeking bankruptcy protection in the first place.

The actions of Capital One [which, the article said, failed to report a discharged debt to credit bureaus] may have been improper. But I have to question the morality of those who borrow money, spend it, have the debt "erased," then feel no obligation to return anything to the lender--no matter how wealthy they become. Your "prisoner of debt" is buying a home worth close to $300,000 and has enough income to cover a $275,000 mortgage. Would any of us accept that level of greed or indifference if the lender were a relative or friend? This is why we now have bankruptcy reform. If I had made that loan from my savings account, I'd be pounding on that brand-new front door demanding my cash back. No matter what the bankruptcy court said.

Source--BusinessWeek dated 11/26/2007

To read more, go to: http://www.businessweek.com/magazine/content/07_48/c4060099.htm?chan=search

The Consumer Crunch

2007-11-19T12:20:00.000-08:00

Recession or not, American families will be forced to tighten their belts

The long-awaited, long-feared consumer crunch may finally be here. That might not mean an economywide recession, but the pain for American households will be deep.

In recent years the U.S. mostly has seen narrowly focused downturns, where a few sectors are hit hard while the rest of the economy and financial markets remain relatively unscathed. In the dot-com bust of 2001, for example, tech companies and stocks took it on the chin, while consumer spending and borrowing sailed through without a pause. This time the positions will be reversed, as consumers tank while much of the corporate sector stays on track.

Source--Michael Mandel
BusinessWeek dated 11/26/2007

To read more, go to: http://www.businessweek.com/magazine/content/07_48/b4060001.htm?chan=search

A Chain Reaction in Shaky Debt?

2007-11-19T12:17:00.000-08:00

As exotic CDOs topple, the impact could ripple through debt markets and wallop more funds and banks

The fate of one exotic security may signal more trouble ahead for the credit markets. In early November, a collateralized debt obligation called Carina CDO apparently started liquidating its $450 million portfolio filled with bonds backed by subprime mortgages and pieces of other CDOs. These sales prompted credit rating agency Standard & Poor's (MHP ) to downgrade Carina's bonds from AAA to junk in a day.

Source--David Henry-BusinessWeek
Dated 11/26/2007

To read more, go to: http://www.businessweek.com/magazine/content/07_48/b4060051.htm?chan=search

Foreclosures hit some cities harder than others

2007-11-14T10:40:00.000-08:00

Pace of those forced from homes continued to rise in the third quarter

Foreclosure rates continued to rise in the third quarter in most of the top 100 largest metropolitan areas of the country, according to the latest data from RealtyTrac, a Web site that logs foreclosure filings.

Stockton, Calif., saw the highest rate of foreclosures — with one filing for every 31 households — a rise of 32 percent from the second quarter and more than five times the rate of last year’s third quarter.

Foreclosures in Detroit were up 92 percent from the second quarter of this year; the pace in California's Riverside-San Bernardino area rose 39 percent.

Source--By John W. Schoen
Senior Producer
MSNBC dtd updated 1 hour, 20 minutes ago 11/14/2007

To read more, go to: http://www.msnbc.msn.com/id/21773741/from/ET/
Source--

Latest housing victim: Mortgage insurers

2007-11-14T10:30:00.000-08:00

Companies worrying about survival as they face billions in claims

As the housing market crumbles, homeowners are worried about mortgage payments and sellers are worried about slumping prices — but the companies that insure their loans are worrying about their very survival in the face of billions of dollars in claims.

Insurers like industry leader MGIC Investment Corp. are predicting they won't turn a profit for at least a year. The uncertainty has sent their stocks plunging and raised questions about what happens if so many loans go bad that the insurers behind them go out of business.

Source--Associated Press
dated 11/11/2007

To read more, go to: http://www.msnbc.msn.com/id/21739263/from/ET/

Fed chief shakes up market

2007-11-14T10:25:00.000-08:00

DOW PLUNGES 220 THEN CUTS ITS LOSS; BAD DAY FOR NASDAQ

The nation's top banker drew a dreary sketch of the economy Thursday, telling Congress that growth is slowing "noticeably" while risks of inflation continue.

Federal Reserve Chairman Ben Bernanke said a surge in mortgage delinquencies has contributed to "financial market volatility and strains" at a time when rising oil and commodity prices and a weaker dollar are adding to the problems.

Wall Street reacted to Bernanke's assessment with another difficult session that closed lower but well above its worst losses Thursday after a late-day rebound in financial shares lifted many other stock sectors.

Source--By Marilyn Geewax
Cox News Service dtd 11/9/2007

To read more, go to: http://www.mercurynews.com/search/ci_7414448?IADID=Search-www.mercurynews.com-www.mercurynews.com&nclick_check=1

More banks brace for subprime spanking

2007-11-14T10:22:00.000-08:00

On Wall Street, the storm unleashed by the collapse of subprime mortgages seems to be gathering strength, not abating. JPMorgan Chase (JPM), one bank that has earned praise for managing the risks associated with subprime-related assets, disclosed Friday that its fourth-quarter earnings would be hit by the deterioration of that segment.

Bank of America (BAC), which had already announced a write-off associated with subprime loans, also disclosed that its fourth-quarter earnings would suffer from the collapse in the credit markets.

Other financial institutions that warned investors Friday of further trouble ahead included Wachovia, which reported a $1.1 billion decline in the value of its subprime holdings, and E-Trade (ETFC), which said it would not meet its previously announced earnings targets.

Source--Greg Farrell
USA Today dated 11/12/2007

To read more, go to: http://www.usatoday.com/money/industries/banking/2007-11-11-subprime-fallout_N.htm?csp=34&loc=interstitialskip

Heading Off Home Foreclosure Damage on Fed’s Radar Screen

2007-11-13T09:32:00.000-08:00

In testimony before the Joint Economic Committee of the U.S. Congress, Federal Reserve Chairman Ben Bernanke last week indicated that the nation’s central bank continues to watch the fallout of problems with the subprime mortgage market on the financial markets and economic growth and is also focusing its efforts on reducing foreclosures on homes.

Echoing comments made earlier in the week by Fed Governor Randall S. Kroszner at NAHB’s Symposium on Housing Affordability (click here for NBN story in this issue), Bernanke in his Nov. 8 remarks noted that rising foreclosures could further threaten the U.S. economy as it is expected to move into a slower phase.

With 450,000 subprime mortgages per quarter scheduled to undergo their first interest rate reset from now until the end of next year, more borrowers will likely experience payment shock and become delinquent in making their monthly loan payments, he noted.

“Should the rate of foreclosure rise proportionately, communities as well as individual borrowers would be hurt because concentrations of foreclosures tend to reduce property values in surrounding areas,” he said. “A sharp increase in foreclosed properties for sale could also weaken the already struggling housing market and thus, potentially, the broader economy.”

Source: NAHB
Week of November 12, 2007

To read more, go to: http://www.nbnnews.com/NBN/issues/2007-11-12/Front+Page/index.html

Fed Governor Lists Steps to Remedy Subprime Distress

2007-11-13T09:30:00.000-08:00

With subprime mortgage delinquencies and foreclosures possibly getting worse before they get better, “a high degree of collaboration and innovation to identify solutions” is needed to help borrowers keep their homes, Federal Reserve Governor Randall S. Kroszner told NAHB’s Symposium on Housing Affordability on Nov. 5 in Washington, D.C.

“It is imperative that we work together as a financial services community to look for ways to help borrowers address their mortgage challenges, particularly those who may have fewer alternatives, such as lower-income families,” Kroszner said.

Distress among subprime borrowers has been concentrated in the variable-rate mortgages that constitute two-thirds of that market, he said, and more than 17% of those loans are now more than 90 days in arrears, a tripling of the share since mid-2005.
Contributing greatly to the problem are resets after the initial two- or three-year phase of the mortgage that are significantly increasing interest rates and monthly payments.

“In early 2007, the typical subprime mortgage experiencing a first reset had its rate increase from 7% to 9.5%, producing an increase of 25% to 30% in the monthly payment,” Kroszner told the symposium. “This increase translates into an additional monthly debt obligation of $350 per month for the average subprime variable-rate mortgage."

Source--NAHB
Week of November 12, 2007

To read more, go to: http://www.nbnnews.com/NBN/issues/2007-11-12/Front+Page/3.html

FDIC Head, Diverse Groups Tackle Housing Affordability

2007-11-06T11:21:00.000-08:00

As Congress and federal financial regulators pursue measures to prevent a recurrence of the problems besetting the secondary mortgage market, steps also need to be taken to ensure that homeownership opportunities remain for subprime borrowers, according to Sheila Bair, chairman of the Federal Deposit Insurance Corporation.

"Homeownership should be a vehicle for accumulating wealth, not stripping it," Bair said in an address before the 2007 Housing Affordability Symposium. Co-hosted by NAHB, the NAACP and the National Education Association, the Oct. 5-6 symposium is taking place on the campus of the George Washington University in Washington, D.C.

"Housing affordability is one of America's greatest social issues," Bair said, and a specific goal of her agency is "keeping people in homes they can afford." Making that job difficult in the current housing downturn are hybrid adjustable-rate loans that are readjusting at significantly higher interest rates after the second or third year of the loan.

Source--NAHB
Week of November 5, 2007

To read more, go to: http://www.nbnnews.com/NBN/issues/2007-11-05/Front+Page/index.html

Fannie Mae's New Underwriting Guidelines Give Lenders More Discretion

2007-11-06T11:13:00.000-08:00

Fannie Mae has released new underwriting guidelines that it says are intended to give its lending partners increased powers to make decisions. “For the past few years, Fannie Mae wanted to restore delegation to lenders,” Michele Evans, vice president of multifamily corporate affairs at Fannie Mae, tells MHN. “Given the amount of waivers that are coming in, the guide needs to be written in a way that lenders are given more delegation.”

The DUS Guide was released at the beginning of last month and will be made mandatory in 2008. Lenders are given a transition period through the end of this year to begin to adopt the new guidelines.

Source--By Keat Foong, Executive Editor
Multi-Housing News Published 11/5/2007

To read more, go to: http://www.multihousingnews.com/multihousing/content_display/industry-news/e3i4d5efe43d62fdc4561b4539f0e5e46d3

30-Year Mortgage Rates Fall Sharply

2007-11-05T11:38:00.000-08:00

Rates on 30-year mortgages fell to the lowest level in five months as evidence mounted that the economy is slowing down.

Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages dipped to 6.26 percent this week, down from 6.33 percent last week. It was the lowest level since 30-year mortgages were at 6.21 percent the week of May 17.

Analysts attributed this week's decline to further evidence that the steep slump in housing is getting worse and other parts of the economy are slowing as well.

Source--By MARTIN CRUTSINGER, AP Economics Writer
Thursday, November 1, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2007/11/01/national/w085642D67.DTL&hw=rates+on+30+year&sn=014&sc=478

Piggybach credit score schemes still running hog wild

2007-11-05T11:32:00.000-08:00

What are being called piggyback credit-score inflation schemes for mortgage applicants haven't been reined in, despite industry pledges to do so at the end of summer. As a result, lenders continue to be misled into treating loan applicants with poor credit as prime-credit candidates - worsening already critical fraud and delinquency problems in the mortgage market.

Fair Isaac Corp., developer of the FICO score widely used for home loan underwriting, confirmed that its "FICO '08" scoring model is not yet available at any of the three national credit bureaus. The new model, announced with fanfare in June as an antidote to piggyback fraud, was to have been activated in September at one of the bureaus, Experian.

Source--Kenneth Harney
Sunday, November 4, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/04/RE17T2PA1.DTL&hw=piggyback+credit+still&sn=001&sc=1000

Choosing the kind of roof to put over your head

2007-11-05T11:22:00.000-08:00

Shopping for a new roof might not be as much fun as picking out kitchen cabinets, but it's an unavoidable task of home ownership.

Selecting the right roof is a matter of function, architectural style and, of course, cost. Materials are sold "per square," which means for 100 square feet. When figuring out how much to buy, round up and add an additional 10 percent for waste.

Here's a look at what you can get for your money. All prices are for materials only and do not include installation costs.

Source--Mary Ellen Slayter, Washington Post
Sunday, November 4, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/04/RE2PT2T5R.DTL&hw=choosing+the+kind+of+roof&sn=002&sc=655

BAY AREA Credit union a casualty of housing crisis

2007-11-05T11:15:00.000-08:00

Real estate loan defaults force conservatorship on Cal State 9 while it stays open for business

The weight of defaults on real estate loans has forced the Bay Area-based Cal State 9 Credit Union into federal conservatorship.

The state Department of Financial Institutions announced late Friday that it was putting the National Credit Union Administration - the federal agency that regulates and insures credit agencies - in charge of Cal State 9 operations.

Member deposits are federally insured up to $100,000; IRA and KEOGH retirement accounts are insured up to $250,000.

Source--Rachel Gordon
Chronicle Staff Writer Sunday, November 4, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/04/BAJ3T65Q4.DTL&hw=credit+union+casualty&sn=001&sc=1000

Bay Area needs to rethink rules on land use, zoning

2007-11-05T11:05:00.000-08:00

The Association of Bay Area Governments projects that the nine-county Bay Area region will add nearly 1.5 million residents by 2030. That population growth will not be attributable to a wave of foreign immigration, nor to an influx of newcomers from other regions of the state or the country.

In fact, much of the region's burgeoning population will be homegrown - the children (and grandchildren) of those of us who already live here.

Source--Joseph Perkins
The Chronicle Sunday, October 21, 2007

Determining a property's proper price

2007-11-05T11:01:00.000-08:00

One of the trickiest, and most important, parts of selling or buying a home is deciding how much it is worth.

That has never been an exact science, and the unpredictability of the market in recent years has made it even less so.

Typically, real estate agents look at comparable sales, or comps - the selling prices of similar properties in the same or similar neighborhoods.

Source--Nancy Trejos, Washington Post
Sunday, October 21, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/21/REB3SIHUD.DTL&hw=determining+property&sn=010&sc=271

Home appraisers, lenders, sellers face new realities

2007-11-05T10:50:00.000-08:00

Slowing housing market reduces property valuations

Eric Schwartz, a member of the national board of directors for the Appraisal Institute, has been an appraiser since 1979 and has worked in the Washington area since 1999. The Post recently spoke to him about the changes in the real estate market and the appraisal business. The following is an edited version of the conversation.

Q: How has your job changed in this real estate market?

A: As appraisers, we've got to recognize that the marketing time of houses in our areas has increased. So when we're out there appraising a house, we've got to make sure that we take that into consideration. My approach is to spend even more time than maybe I would have a year or two ago and look at even more data on homes that are currently under contract.

Source--Allan Lengel, Washington Post
Sunday, October 21, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/21/REGVSIHUJ.DTL&hw=home+appraisers+lenders&sn=005&sc=233

Earthquake insurance in the Bay Area is expensive, risky business

2007-11-05T10:43:00.000-08:00

Almost two decades after the Loma Prieta earthquake damaged more than 40,000 homes, most Bay Area property owners don't have insurance policies that will protect them when - and experts say it's only a matter of time - the Big One hits.

Statewide, only 12 percent of California homeowners have earthquake coverage, according to the California Earthquake Authority, a publicly managed entity that sells policies through private companies. The number of Bay Area homeowners with coverage is even lower than that, although the agency doesn't have a precise figure for the region, according to Tim Richison, the earthquake authority's chief financial officer.

Source--Marni Leff Kottle, Special to The Chronicle
Sunday, October 21, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/21/REULSSAAK.DTL&hw=earthquake+insurance&sn=001&sc=1000

Home-equity loans getting tighter, too

2007-11-05T10:10:00.000-08:00

Fewer options, higher interest for borrowers

Think it's tough to find a loan for a new house? Try getting a second mortgage on the house you already own.

Such loans seem to be an endangered species, professionals say. "They're disappearing as we speak," said Andre Mitchell, the executive vice president of Lynx Mortgage Bank in Westbury, N.Y.

Mitchell says lenders are balking at most second mortgages, also known as home-equity loans, because they suddenly appear too risky for most investors who would be candidates to buy packages of these loans. "When someone runs into financial trouble, the first thing they're not going to pay is the second mortgage," he said. "And if you're second in line as a lender, good luck trying to foreclose."

Source--Bob Tedeschi, New York Times
Sunday, October 21, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/21/REEGS25CC.DTL&hw=home+equity+loans&sn=007&sc=212

New-Home Sales Rise 4.8% over September

2007-11-05T10:03:00.000-08:00

Housing market recovers some of the ground lost in August.

Sales of new single-family homes rose 4.8 percent in September, recovering a portion of the substantial ground they lost in the previous month, according to data released by the U.S. Commerce Department today. Sales reached a seasonally adjusted annual rate of 770,000 units following major downward revisions to figures for the previous three months.

"While tough conditions remain in the nation's housing markets, home builders are taking decisive action to reduce inventories through special sales incentives and sweetened deals," said NAHB president Brian Catalde, a home builder from El Segundo, Calif. "We're pulling out all the stops to entice potential buyers back into the market, and today's report suggests that those efforts are bearing some fruit."

Source--HGTV pro.com
dtd 10/25/2007

To read more, go to: http://www.hgtvpro.com/hpro/nws_econ_fin_econ_ind/article/0,2624,HPRO_26527_5731488,00.html

Economists Look for a Better Market in 2008

2007-11-05T09:57:00.000-08:00

Though there appears to be no let-up to the current housing downswing, economists participating in the National Association of Home Builders Fall Construction Forecast Conference on October 24 said they expect the industry to bottom out and to start turning around in 2008.

Acknowledging that there is definitely downward momentum in the market at this time, with starts, sales, prices and permits off, and problems in the subprime and Alt-A mortgage markets, NAHB chief economist David Seiders said that housing should nevertheless begin a modest recovery next year.

Source--HGTV pro.com
dtd 10/26/2007

To read more, go to: http://www.hgtvpro.com/hpro/nws_econ_fin_econ_ind/article/0,2624,HPRO_26527_5732556,00.html

Rate Lock Advisory - Friday Nov. 2nd

2007-11-05T09:53:00.000-08:00

Friday's bond market has opened in positive territory despite the release of stronger than expected economic news. The stock markets are currently showing sizable losses with the Dow down 95 points and the Nasdaq down 9 points. The bond market is benefiting from the stock weakness again, currently up 10/32. This should improve this morning's mortgage rates by approximately .250 of a discount point.

The Labor Department gave us today's key data with the release of October's Employment report. It showed that 166,000 new jobs were added, which exceeded forecasts of 80,000 by a wide margin. However, offsetting that news was a downward revision of 14,000 to September's jobs and smaller than expected increases in average hourly earnings for October and September. The unemployment rate remained at 4.7%, as it was expected to do.

September's Factory Orders data was also posted this morning, revealing a 0.2% rise in new orders for both durable and non-durable goods last month. The latest forecasts were calling for a slight decline in orders. However, this data is no important enough to trump the Employment report results and stock fears in the market. Therefore, it has had little impact on this morning's mortgage pricing.

After the very busy week that this was, next week is going to seem very light. There are only a couple of relevant economic reports scheduled for release and they don't start until Wednesday. This will likely mean that the stock markets will again be in the forefront and a major influence on bond trading and mortgage rates.

Look for more details on next week's events in Sunday's weekly preview. I am holding the float recommendations through today to capture the expected pricing revisions we may see later today. But, I do expect to shift to a lock recommendation, for at least the immediate term period, early next week. If closing next week, it may be a good idea to lock a rate after this afternoon's pricing is posted.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Source--upto100percentpayout@yahoo.com

Foreclosures jump 30 percent in 3rd quarter

2007-11-01T10:08:00.000-07:00

Congress, White House debate solutions to help people keep their homes

As Congress and the White House continue to work toward solutions to help embattled homeowners, home foreclosure filings took a big jump in the third quarter, according to the latest data from real estate Web site RealtyTrac.

Foreclosure actions were reported on more than 446,000 properties the three months ended Sept. 30, up 30 percent from the second quarter and double last year’s third quarter. That brings the overall foreclosure rate to one in every 196 U.S. households.

Source--By John W. Schoen
Senior Producer MSNBC
updated 4:14 a.m. CT, Thurs., Nov. 1, 2007

To read more, go to: http://www.msnbc.msn.com/id/21551909/from/ET/

Existing home sales plunged in September

2007-11-01T09:44:00.000-07:00

Record 8 percent decline puts further pressure on house prices

Sales of existing homes plunged by a record amount in September as turmoil in mortgage markets added more problems to a housing industry in its worst slump in 16 years.

The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September, the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was also the slowest pace on record.

Source--Associated Press
updated 11:39 a.m. CT, Wed., Oct. 24, 2007

New home sales rebound

2007-11-01T09:42:00.000-07:00

Unexpected September gain came after awful August

Sales of new homes posted an unexpected gain in September although the improvement came after sales had fallen to the slowest pace in more than a decade.

The Commerce Department reported Thursday that sales of new homes rose by 4.8 percent last month to a seasonally adjusted annual rate of 770,000 units. That level of activity was still 23.3 percent below a year ago, indicating that housing remains in a steep downturn.

Source--Associated Press
updated 9:49 a.m. CT, Thurs., Oct. 25, 2007

To read more, go to: http://www.msnbc.msn.com/id/21470831/from/ET/

Fed cuts interest rates a quarter-point

2007-10-31T12:59:00.000-07:00

Move by Bernanke-led panel comes in wake of strong GDP report

The Federal Reserve Wednesday cut interest rates for the second time in six weeks signifying that the central bankers — for the moment — are more concerned with the recent turmoil in the financial markets and possible weakness in the economy than with fighting inflation.

The cut had been widely anticipated by the financial markets, as futures traders had already placed bets on a quarter-point cut.

Source--By John W. Schoen
Senior Producer
MSNBC
updated 2:15 p.m. CT, Wed., Oct. 31, 2007

To read more, go to: http://www.msnbc.msn.com/id/21562810/from/ET/

Buffett: U.S. subprime woes far from over

2007-10-31T12:46:00.000-07:00

Billionaire says housing slump will affect consumers for up to 2 years

American billionaire investor Warren Buffett said Thursday that problems in the U.S. subprime mortgage market will likely weigh on consumers for up to two years, but that the U.S. economy will weather the storm.

The subprime crisis "is having an impact," Buffett said on his first visit to South Korea. "It will have more of an impact."

Source--Associated Press
updated 10:18 a.m. CT, Thurs., Oct. 25, 2007

To read more, go to: http://www.msnbc.msn.com/id/21471227/from/ET/

Hard times costing many people their homes

2007-10-31T12:42:00.000-07:00

Adjustable-rate mortgages, down economy are ingredients for foreclosure

At 14, Joan Cyman hauled wood and clutched a hammer with her father to build a deck on the back of their house.

It was one of many projects to turn the already attractive four-bedroom, three bathroom suburban house into a home. She was 12 in 1976 when they left a rough neighborhood in Detroit to be among the first families on the cul-de-sac in the gleaming new subdivision.

"It was like a family home," she said. "I felt like it was left to me and should have stayed there the rest of my life."

Source--Associated Press
updated 5:11 p.m. CT, Sun., Oct. 28, 2007

To read more, go to: http://www.msnbc.msn.com/id/21516354/from/ET/

'Modest' Housing Recovery Forecast to Begin in 2008

2007-10-30T11:01:00.000-07:00

Though there appears to be no let-up to the current housing downswing, economists participating in the NAHB Construction Forecast Conference in Washington, D.C. on Oct. 24 said they expect the industry to bottom out and to start turning around in 2008.

Acknowledging that there is definitely downward momentum in the market at this time — with starts, sales, prices and permits off and problems persisting in the subprime and Alt-A mortgage markets — NAHB Chief Economist David Seiders said that housing should nevertheless begin a modest recovery next year.

Despite the present market contraction, Seiders said that housing should begin to turn around next year for a number of reasons — the overall economy and job growth continue to move ahead at a decent pace, core inflation is under control, the late-summer credit crunch in mortgage markets is showing signs of easing since the Federal Reserve cut short-term interest rates on Sept. 18, and the supply-demand equation will be better balanced as builders begin to whittle down excess inventories.

He also noted that the evolving inflation picture gives the Fed latitude to enact more monetary stimulus to support the economy, if conditions warrant. Seiders is predicting that the Fed will cut short-term interest rates by another quarter of a percentage point when members of the Federal Open Market Committee meet on Oct. 31 and will enact a similar rate cut by year-end, bringing the federal funds rate down from the current 4.75% to 4.25%.

Source--NAHB
Week Of October 29,2007

To read more, go to: http://www.nbnnews.com/NBN/issues/2007-10-29/Front+Page/index.html

‘It’s the End of Subprime as We Know It'

2007-10-30T10:58:00.000-07:00

Dressed provocatively as a farmer and carrying a big stick to liven up his after-lunch presentation at NAHB’s Fall Construction Forecast Conference on Oct. 24, Tom Lawler of Lawler Economic Housing & Consulting, said that the housing industry will have to “get back to basics” and return to a “normal lending world” before a sustainable housing recovery can begin.

That means no more subprime purchase loans in their current configuration — a system that he said was “built to fail” ― and a return to a more “prudently tight” mortgage lending environment and more balanced homeownership rate by age cohort. Too many younger households were able to buy into the housing market during the booms years, Lawler said, which helped fuel the boom and feed the bust.

Lawler said that he had been raising the housing market alarm during appearances at earlier construction forecast conferences and elsewhere since at least 2005 and showed a slide documenting his warnings.

“The investor share of the purchase market has increased dramatically,” he told conference attendees in 2005.

“You had to be on something not to see bubbles in some areas,” he said a year later.

The warning signs were always there, he told last week’s attendees. But not too many people pointed them out until the housing downturn took hold. “I’m now in the mainstream,” he said, waving his stick emphatically.

Among the unheeded warnings he focused on were dramatic increases in home prices in the super-heated markets across the country, in investors/speculators in those same markets and in the rise of vacant homes for sale.

Source--NAHB
Week of October 29, 2007

To read more, go to: http://www.nbnnews.com/NBN/issues/2007-10-29/Economics+%26+Finance/index.html

House Bill to Tighten Mortgage Regulations Introduced

2007-10-30T10:47:00.001-07:00

House Financial Services Committee Chairman Barney Frank (D-Mass.), along with Reps. Brad Miller (D-N.C.) and Mel Watt (D-N.C.), on Oct. 22 introduced legislation to tighten mortgage regulations in the wake of the turmoil in the subprime mortgage market.

Frank said the new legislation would "diminish predatory lending while continuing to support a vigorous mortgage market."
H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, would:

Require any mortgage lender to verify that the borrower has a "reasonable ability to repay" a loan

Bar paying incentives to brokers who steer borrower's to more expensive mortgages

Require mortgage originators to be licensed and registered under state or federal law

Sharply restrict prepayment penalties Expand and enhance consumer protections for "high-cost loans" under the Home Ownership and Equity Protection Act

Allow home owners to sue brokers if they were placed into mortgages that they could not afford

Source--NAHB
Week of October 29, 2007

To read more, go to: http://www.nbnnews.com/NBN/issues/2007-10-29/Politics+&+Government/index.html

Mortgage defaults hit record

2007-10-30T10:18:00.000-07:00

MANY FIRST-TIME BUYERS SEE FORECLOSURE THREAT

With home sales plummeting, values sliding and mortgage companies newly picky about who can refinance, more California homeowners than ever before faced foreclosure last quarter.

Statewide, mortgage companies sent 72,571 "notices of default" to borrowers in the third quarter, eclipsing a record of 61,541 set in 1996, according to DataQuick Information Systems. In the nine-county Bay Area, a record number of homeowners received such notices, which are the first step in the foreclosure process. Several counties, including Santa Clara, Alameda and Contra Costa, also broke records for home-loan defaults.

But the default and foreclosure problems in the valley are mild compared with inland counties where recent sales were dominated by first-time buyers who purchased with little or no money down. Many now find their payments rising and home values falling, making refinancing almost impossible.

Source--Sue McAllister
Mercury News Article Launched: 10/27/2007 01:35:25 AM PDT

Want to sell faster? Try paying real estate agent more

2007-10-30T10:13:00.000-07:00

"I want to pay a higher real estate commission."

Judging by the look of disbelief on my real estate agent's face, they were words she hadn't heard often during the housing downturn.

I could almost read her mind: You're asking $20,000 less than you want for the house, and you're sacrificing more money?

We agreed to a 6.5 percent commission, a percentage point above the national average. How did I fare with my home sale? More on that later.

Source--James Thorner, St. Petersburg Times
Sunday, October 28, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/28/RESKSTTFD.DTL&hw=faster+way+to+sell+the+house&sn=004&sc=426

Congress rushes to aid beleaguered homeowners, buyers

2007-10-30T10:07:00.000-07:00

Distress in the mortgage market is stirring up a wave of new relief bills on Capitol Hill, including one that would allow homeowners to tap into their retirement accounts - penalty-free - to bring their loans current or to refinance.

One major reform bill appears stuck in neutral, however: The Federal Housing Administration Modernization Act, which would raise loan limits in high-cost areas of California and the East Coast and reduce payments. It is considered a crucial relief measure for consumers who need to refinance out of adjustable-rate loans into lower-cost fixed-rate mortgages. It was approved by the Senate Banking Committee on Sept. 19 and was the subject of bold promises for quick passage, but hasn't been heard of since.

Source--Kenneth Harney-Nation's Housing
San Francisco ChronicleSunday, October 28, 2007

To read more, go to: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/28/REDNSU822.DTL&hw=congress+rushes+to+assist&sn=001&sc=1000

Another year of misery in the housing market?

2007-10-30T10:01:00.000-07:00

SLUMP EXPECTED TO GET WORSE BEFORE MARKET GETS BETTER

The current housing slump, which began in late 2005, probably has another year to go before things turn around. Before it is over, home prices - which had soared during the boom years - probably will have fallen by the largest amount of any downturn in the post World War II period.

The problems in housing have been a serious drag on the overall economy - slashing more than a full percentage point off growth in some quarters. And those adverse effects will get worse in coming months, many private economists believe, reflecting the fallout from the severe credit crunch that hit in August.

The betting is that the overall economy will be able to avoid a recession, but it will be a close call with the point of maximum danger still ahead.

Source--By Martin CrutsingerAssociated Press
Article Launched: 10/27/2007 01:44:18 AM PDT

To read more, go to: http://www.mercurynews.com/search/ci_7297645?IADID=Search-www.mercurynews.com-www.mercurynews.com

Patience the only cure if housing bust hits

2007-10-30T09:49:00.000-07:00

There's a lot of real estate amnesia out there. It's probably fair to say that a lot of home sellers can't remember much about the housing market before this decade's Big Boom.
But, there have been arid spots (actually, deserts) in the real estate topography. They're sobering - as if anybody who has been trying to sell his house for months needs more sobering.

PMI Group, a mortgage-insurance firm in Walnut Creek, recently revisited the data on three cities that represented the worst of such boom-to-bust cycles in the last 25 years. It was ugly.

Its new report took a microeconomic look at Los Angeles and Boston in the 1990s and Houston in the 1980s. In each, many homeowners trying to make a buck - not a killing, mind you, just a profit - had to settle in for a long wait.

Source-By Mary UmbergerChicago Tribune
Article Launched: 10/27/2007 01:45:48 AM PDT

To read more, go to: http://www.mercurynews.com/search/ci_7297671?IADID=Search-www.mercurynews.com-www.mercurynews.com

Overpricing house may boomerang on the seller

2007-10-30T09:44:00.000-07:00

Realtors often warn sellers about the danger of overpricing a house. Now they have evidence to show skeptical clients: research by Jeffrey Otteau, a New Jersey appraiser.

He found that in a market where prices are declining, sellers who "test the market" with a high price usually end up with a lower price than those who price realistically.

"Houses that are priced right are selling," said Otteau. "Overpricing extends days on the market and guarantees that you will sell your home for less in a declining market."

Otteau, of Otteau Valuation Group, studied about 4,500 home sales that took place in the first half of 2007, largely in northern and central New Jersey. Most of the houses were priced between $500,000 and $750,000.

He looked at houses that sold in less than a month, and found that they had a median asking price of $599,900 and sold for almost full price - a median of $599,000. When he looked at houses that lingered on the market for more than a month, however, he found that they were priced higher - at a median of $634,900 - but actually sold for less, a median of $585,000. The median is the point at which half the sale prices are above and half below.

Source-By Kathleen LynnThe Record
Article Launched: 10/27/2007 01:45:42 AM PDT

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House auctions crop up on East Coast

2007-10-30T09:38:00.000-07:00

CALIFORNIA NOT ONLY PLACE WITH WEAK MARKET

Won-Ki Choi and his wife, Janice, had their eye on the Fairfax, Va., townhouse for some time. But the $536,449 price tag was much too high for them.

Then they saw a newspaper ad from Ryland Homes: For two hours on a recent Saturday afternoon, the Calabasas, Calif.-based builder would sell 140 homes in the Washington area at a discount, through a silent auction.

The minimum bid for the 2,068-square-foot Fairfax home was $429,999. Won-Ki Choi wrote his name down minutes before the auction was scheduled to end at 3 p.m. He was the only bidder.

"This is your lucky day," Jerie Wolicki, a company receptionist, told him amid applause.

When the housing market began to weaken, builders responded with incentives such as money toward closing costs and low-interest loans through their mortgage arms, but they did so without cutting their base prices. Faced with a glut of unsold homes and canceled contracts, builders are now turning to tactics typical of car dealerships and department stores. What's even more unusual is that the deals are often accompanied by deep price cuts, which builders had been reluctant to do up until now.

Source-By Nancy TrejosWashington Post
Article Launched: 10/25/2007 05:53:24 PM PDT

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Harney: Several bills promise help for distressed homeowners

2007-10-30T09:19:00.000-07:00

Distress in the mortgage market is stirring a wave of new relief bills on Capitol Hill, including one that would let homeowners tap into their retirement accounts - penalty-free - to bring their loans current or to refinance.

One major reform bill appears stuck in neutral, however: The Federal Housing Administration Modernization Act, which would raise loan limits in high-cost areas of California and the East Coast, and cut down payments. It is considered a crucial relief measure for consumers who need to refinance out of adjustable-rate loans into lower-cost, fixed-rate mortgages. It was approved by the Senate Banking Committee on Sept. 19, and was the subject of bold promises for quick passage, but hasn't been heard of since.

The pension-tapping plan for delinquent homeowners was introduced Oct. 19 by Sen. Norm Coleman, R-Minn. Titled the Home Ownership Mortgage Emergency Act, the bill would allow certain borrowers who are 60 days or more behind on their payments to withdraw up to $100,000 penalty-free from their retirement accounts. The funds could be used to bring their loans current to avoid foreclosure, or refinance into a more affordable loan.

Borrowers would avoid the usual 10 percent federal tax penalties on early pension distributions as long as they paid back the withdrawn amounts within three years. The bill restricts this benefit to taxpayers with adjusted gross incomes of $166,000 for joint filers or $114,000 for
single filers. The assistance plan would be temporary - it would terminate at the end of 2009.

Source-By Kenneth Harney
Article Launched: 10/26/2007 10:27:18 AM PDT

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How to Reduce Your Property Taxes

2007-10-30T09:16:00.000-07:00

The housing market may have softened, but many homeowners are discovering one place where their property values remain at peak levels: on local property-tax rolls. "They were valuing our home for way more than it's worth," says Cara Reeves, who recently saw the assessment on her three- bedroom home in Cincinnati jump from $251,000 to $334,400, pushing her latest property-tax bill up 82%.

Because many local governments assign values to properties in their jurisdictions only once every three or more years, many homes still carry assessments from the market's peak, in 2005 and 2006. Some of these valuations are only now being reflected in taxpayers' bills. As a result, the National Taxpayers Union, a nonprofit advocacy group in Alexandria, Va., expects local property-tax bills to increase at least 5% this year, on top of 7% to 8% average annual gains since 2001.

Source-BusinessWeek issue date 11/5/2007

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These Tough Lending Laws Could Travel

2007-10-30T09:14:00.000-07:00

North Carolina's progressive protection laws for borrowers may become a nationwide model

North Carolina has not had the same subprime grief as Nevada or Colorado. Nor is it known for the high-octane activism of California or New York. Yet as Washington lawmakers hash out how to deal with millions of potential foreclosures, North Carolina's predatory-lending laws are shaping the debate.

The Tarheel State's progressive stance dates back long before subprime became a dirty word. North Carolina passed its first comprehensive predatory lending law in 1999 and has revisited the issue several times since. In August, Governor Mike Easley signed the toughest law yet. The North Carolina Home Loan Protection Act bans penalties for borrowers who pay off their mortgages early, mandates that lenders verify income, and is expected to limit the fees brokers collect for arranging certain high-rate mortgages. Only a handful of states, including Ohio and Maine, have enacted similar restrictions this year. And North Carolina's latest regulation is a model for proposals now making their way through Congress, including a bill sponsored by Presidential hopeful Senator Christopher Dodd (D-Conn.). "North Carolina was at the vanguard," says housing expert Kathleen C. Engel, a professor at Cleveland-Marshall College of Law in Ohio, who notes that more than half of states now have some version of North Carolina's original law on their books.

Source-BusinessWeek issue date 11/5/2007

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The Even-Keel Economy

2007-10-30T09:11:00.000-07:00

Today sharp shocks in one sector, like housing, don't necessarily lead to broader downturns

It's the economic heavyweight fight to watch. In one corner: the slumping but still powerful housing market, where new starts have dropped by almost 50% with no bottom in sight.

Its opponent: the global phenomenon known to economists as the Great Moderation. In the U.S., and across much of the world, the ups and downs of output, inflation, and employment have become far less pronounced since the mid-1980s. Recessions have been fewer and milder.

For now, the Great Moderation is winning, since the housing contraction has not turned into a full-blown downturn. This good news, if sustained, implies that different sectors have become less tightly linked. Moreover, it implies that the traditional way of thinking about recessions may be outmoded. Rather than broad-based declines in economic activity, these days we are more likely to get "micro-recessions"--sharp downturns concentrated in one or two economic sectors.

Source-BusinessWeek issue date 11/5/2007

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The Housing Bust's Latest Blow

2007-10-30T09:07:00.000-07:00

New research shows the recent jump in the rate of homeownership was tied largely to loose lending

After three decades of stability, the national rate of homeownership suddenly began rising in the mid-1990s, going from 64% in 1994 to 69% in 2004. But new research published by the Federal Reserve Bank of Atlanta concludes that the bulk of the increase was caused by looser mortgage-lending practices rather than demographic factors such as more households of home-buying age.

That raises an important question: How much of the growth in homeownership is sustainable now that lending standards have tightened? There's no reason to expect all the gains to disappear, but some economists say the Atlanta Fed study points to more trouble ahead for the reeling housing market.

In an Oct. 23 e-mail to BusinessWeek, Goldman Sachs (GS ) chief U.S. economist Jan Hatzius wrote: "The key issue is the potential for a vicious cycle" in which falling homeownership hurts housing prices and forces more defaults, causing ownership to decline even more. That's because falling prices make it more difficult for holders of certain types of mortgages to refinance and hang on to their homes. Added Hatzius: "What the Atlanta Fed paper does is illustrate how important changes in access to credit can be in this cycle."

Source-BusinessWeek issue date 11/5/2007

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Why Merrill Lynch Got Burned

2007-10-30T09:03:00.000-07:00

The bank's leadership role in underwriting risky CDOs brought in millions in fees but put it in the subprime bull's-eye

The blast of criticism directed at Citigroup (C) Chief Executive Officer Charles O. Prince III, whose stewardship of the nation's biggest bank has drawn barbs, has been withering in recent weeks. Yet Prince may have caught a huge break, courtesy of Merrill Lynch CEO E. Stanley O'Neal. On Oct. 24, O'Neal's firm officially became Wall Street's biggest loser in the subprime game.

Merrill's stunning $7.9 billion third-quarter writedown—the result of a sharp drop in the value of securities backed by risky home loans—is the most painful hit taken by a Wall Street bank during the subprime housing blowout. Even worse, the size of the writedown is nearly $3 billion more than Merrill had forecast on Oct. 5. The charge is an embarrassment for O'Neal and Merrill (MER), which reported its first quarterly loss in six years on Oct. 24, and stems from Merrill's big push into collateralized debt obligations—securities backed by subprime mortgages that are sold to investors based on their risk appetite.

Source-by Matthew Goldstein
BusinessWeek issue date 11/5/2007

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U.S. home sales plummet in September

2007-10-26T09:32:00.000-07:00

MEDIAN PRICE ALSO DROPS AS CREDIT CRISIS LIMITS BUYERS' ABILITY TO GET MORTGAGES

Sales of existing homes had a record decline in September nationwide while median home prices fell by the largest amount in nearly a year, reflecting deepening problems in the troubled housing market.

Analysts said the current downturn is already more severe than the housing slump of the 1990s. They predicted that before it is resolved, it will rival the 1980-82 housing slump. Back then, the industry was battered by double-digit mortgage rates and the economy was in a steep recession.

The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September. It was the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was the slowest pace on record.

The median price - the point at which half the homes sold for more and half for less - fell to $211,700 in September, 4.2 percent lower than the sales price a year ago. It was the biggest price drop since last October and marked the 13th time in the past 14 months that the year-over-year sales price has decreased.

Many of the nation's banks and financial houses are struggling under the burden of subprime mortgages made to weak borrowers in recent years. Those mortgages are the most likely to default.

Wednesday, for example, Merrill Lynch said it wrote down $7.9 billion in debt it holds, including subprime mortgages.

Source-By Martin CrutsingerAssociated Press
Article Launched: 10/25/2007 01:35:09 AM PDT

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