Sunday, August 17, 2008

Monday August 16 Housing and Economic stories

Top Stories:

Vegas ground zero for housing gamblers - (www.lasvegassun.com) Buddy Yates sits at a dining room table awash in paperwork. The bills, late notices and letters represent his nearly yearlong quest to keep his family in the three-bedroom North Las Vegas tract home he bought two years ago. In December, when he could no longer afford the $2,365-a-month payments, much less the higher payments set to kick in within months, he dialed up his Texas-based lender, EMC. Yates, a 60-year-old pastor who officiates at valley wedding chapels, wanted the company to restructure his loan by lowering his payments and spreading them over a longer term. By Yates’ account, he ran into a thicket of red tape. After seemingly endless waits on hold, he told his story over and over because the same staffer wasn’t available. Company representatives would then give contradictory advice, he said.

Slow housing market complicates divorce - (www.bankrate.com) Truthfully, it's a mess," says Carol Chumney, an attorney who practices family law in Memphis, Tenn. "There are a lot of folks who want to get a divorce, and the house is an impediment because nobody wants it." House no longer counts as an asset: The tough housing market is hitting divorcing couples in several ways. If the home's value has fallen below the amount owed on the mortgage, neither spouse wants to be saddled with that liability. If one wants to keep the home, it's difficult to refinance the mortgage so the departing spouse can be cut loose from the debt. And evaporating home equity can take with it the means to pay lawyers for the divorce itself.

More on the bribes REIC poodle Senator Dodd took from Angelo Mozilo - (housingpanic.blogspot.com) - No wonder Sen. Christopher Dodd won't release documents related to the $800,000 in cut-rate mortgages he got in 2003 from Countrywide Financial, once the nation's largest mortgage lender. Dodd feints and delays, but he can only stymie, not halt, the discovery of the details of his $800,000 in mortgages. Records show Dodd was more notable as part of the problem, a privileged public official who benefited even more than previously acknowledged.

S.F. houseowners want property values reduced - (www.sfgate.com) Homeowners are flooding City Hall with so many requests to reduce their property values that the tax assessor said Wednesday his office may not be able to meet the demands. So far, Assessor-Recorder Phil Ting's office has received about 1,000 requests for informal re-evaluations - three times the number filed last year. Friday is the deadline to request an informal property re-evaluation from the assessor. "I'm worried that because we have such a huge influx we'll not be able to get back to everyone," Ting said. So far, San Francisco assessors have responded to informal requests from 285 property owners.

Lowenstein Lecture - (optionarmageddon.ml-implode.com) - "In researching my last post, I found this video. It’s long, but worth it. One of the best summaries of the state of the American economy that I’ve seen or read."..

The Remains of the $1 Detroit House - (www.zillowblog.com) After doing a post about the home in Detroit that is listed for $1, there were some challenges that I had the wrong home. While I was 99% confident it IS the home at 8111 Traverse St, Detroit, MI, I thought I’d verify it by going to Ron French of the Detroit News, the person who originally reported the story. Ron, who has visited the house, took the time to describe it to me, but the real verification was in the photos he sent (below). The reason why there was a question as to whether this was the house was because it doesn’t look anything like it used to, due to the vultures that have swooped in and stripped it of nearly everything of value.

Interest-only and Alt-A borrowers next wave of foreclosures - (www.mercedsunstar.com) A new threat is emerging that could keep the tidal wave of foreclosures continuing into 2011, experts say. More interest-only and so-called option adjustable-rate mortgages handed out during the real-estate boom -- loans considered a step up from subprime that were intended for borrowers with higher credit scores -- are starting to go bad as home values continue to fall. These loans also are called alternative-documentation loans, or Alt-A. Subprime loans, often with adjustable rates, blew the bottom out of home prices beginning last year and sent a flood of bank-owned homes on to the real estate market after many borrowers found they couldn't keep up with escalating payments. The same thing could happen with Alt-A loans, many of which will "recast" -- or adjust upward -- beginning next year. Defaults are expected on interest-only mortgages because the borrower pays only interest for a period of time, usually five or seven years. Then the remaining balance must be paid over a shorter term, which increases the monthly payment -- especially if the loan features an adjustable rate.

Mortgage Insurers' Losses Mount - (www.washingtonpost.com) Large mortgage insurers have reported $2.6 billion in losses so far this year, sparking concerns that rising foreclosure rates could force the industry into a money crunch and ultimately make the home-buying process even more difficult. These insurers make up a critical part of the mortgage industry, taking on the risk when borrowers make small down payments. They are facing record delinquency rates that have sent them scrambling to stem losses and to improve their capital reserves. Those losses have also dinged their relationships with mortgage-financing giants Fannie Mae and Freddie Mac, which the insurers depend on for business.

U.S. Foreclosures Rise 55%, Bank Seizures Reach High - (www.bloomberg.com) Banks repossessed almost three times as many U.S. homes in July as a year earlier and the number of properties at risk of foreclosure jumped 55 percent as falling prices made it harder to sell or refinance. Bank seizures rose 184 percent to 77,295, the steepest increase since reporting began in January 2005, RealtyTrac Inc., an Irvine, California-based seller of foreclosure data, said today in a statement. More than 272,000 properties, or one in 464 U.S. households, got a default notice, were warned of a pending auction or foreclosed on. ``It's getting worse,'' Rick Sharga, RealtyTrac's executive vice president for marketing, said in an interview. ``The number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen.''

Foreign Investors Selling Freddie, Fannie Debt - (www.nakedcapitalism.com) - If that was the motivation, it isn't working. As we and others noted, spreads on GSE debt have risen to 215 basis points over Treasuries, only a tad shy of the pre-Bear crisis level of 238 basis points. And remember, they have reached this stratospheric levels despite the Paulson rescue package, despite an alphabet soup of new Fed facilities that accept GSE paper as collateral (as the discount window did) now in place (although there were raspberries all around for the bailout bill, due to its failure to make any changes in the operation, management, or policies of the GSEs and its lack of specificity as to triggers and what mechanism would be used). And the reason? A big factor is that foreign central banks are exiting GSE debt and have pulled back significantly from purchases of new paper. This vote of no confidence appears likely to force the Administration's hand and lead it to take more concrete measures to prop up Freddie's and Fannie's balance sheets. They are not about to risk a spike in mortgage rates and further trouble in the housing markets with elections approaching.

Lehman Portfolio Firesale? - (yourmortgageoryourlife.wordpress.com) TimesOnLine reported today that troubled giant Lehman is looking to unload it’s languishing $40 billion portfolio. Will it be at ‘Firesale’ prices? “Lehman Brothers, the Wall Street investment bank, is understood to be in talks to sell its entire $40 billion (£21.5 billion) real estate portfolio in a move to stem losses incurred during one of the worst property slumps since the Great Depression. “ “The bank - whose stock has fallen 69 per cent since the credit crisis erupted just over a year ago - is believed to be prepared to take a $5 billion hit on the sale of the assets and securities.” “Lehman is believed to have begun sale negotiations with firms such as Blackstone, the private equity group, and BlackRock, the fund manager. “

U.S. likely to recapitalize Fannie, Freddie: report - (www.reuters.com) The U.S. Treasury is growing increasingly likely to recapitalize Fannie Mae and Freddie Mac in the months ahead on the taxpayer's dime, Barron's reported in its August 18 edition. The weekly financial newspaper said that such a move could wipe out existing holders of the agencies' common stock, with preferred shareholders and even holders of the two entities' $19 billion of subordinated debt also suffering losses.


Other Stories:

California budget gimmicks - (www.latimes.com) Seven weeks into the new fiscal year, the scrum in Sacramento over the California budget continues unabated. How the Legislature and Gov. Arnold Schwarzenegger will close the $15-billion-plus gap between anticipated tax revenues and the cost of ongoing programs remains in doubt, as numerous ideas -- some harebrained, some not -- continue to be tossed into and out of the mix. One proposal backed by Democratic lawmakers would raise billion an estimated $1.1 from businesses by delaying the deduction of net operating losses (costs that exceed revenue) for three years. At the urging of some corporate lobbyists, Schwarzenegger recently offered a counterproposal: After the three-year moratorium lifts, businesses would be able to deduct their 2008 losses from the taxes they paid in 2006 and 2007, entitling them to hundreds of millions of dollars in rebates. The biggest beneficiaries of the proposal would be companies that ran up large profits in 2006 and 2007, then saw their fortunes plunge in 2008. Let's see, who might that be? How about the lenders that grew rich off subprime and other risky mortgages before their what-me-worry approach to underwriting caused an explosion in foreclosures. Say, for example, Countrywide Financial Corp. (now owned by Bank of America).

The System Of Appraisal Oversight Is 'Broken' - (www.courierpostonline.com) - And despite ample evidence appraisers are pressured into inflating home values -- sometimes to prices in support of loans that are more than buyers can afford -- the federal regulators charged with protecting consumers have thus far made a conscious choice not to act. "The system is completely broken," Marc Weinberg, the former acting director at the federal agency charged with monitoring the appraisal industry, told the AP before he retired earlier this year. "It's amazing that the system ever worked at all." The AP conducted dozens of interviews and reviewed thousands of state and federal documents, and found:
Hawaii foreclosures in July up 169% over last year - (honoluluadvertiser.com)
Foreclosures In Florida - (patrick.net)
House repossessions surge on Long Island - (newsday.com)

Subprime pain sweeps the world - (www.ml-implode.com) - "MORE than 100 local councils, charities, churches, hospitals and nursing homes across Australia are sitting on a $2 billion bla...
Troubled European mortgage lenders set to face online Implode-O-Meter - (www.ml-implode.com)
Dollar intervention: Facts versus ideology - (www.ml-implode.com)
Why Downey Financial is Not IndyMac - (www.ml-implode.com)
The FHA WhistleBlower: Return of the Living Debt: How Lenders Enable Predatory “Zombie Debt” Collectors - (whistleblower.ml-implode.com/) So, you think you are safe from that predatory collection agency that is trying to collect (extort) thousands of dollars from you for an old, disputed debt that isn’t even enforceable? Well, think again. The collection agencies that specialize in purchasing time-barred debts, have a powerful ally: banks and mortgage companies. And guess what? Banks and mortgage companies do not care about your rights
Housing Woes Drive Desperate Measures, Heartbreak - (yourmortgageoryourlife.wordpress.com) More evidence it is increasingly becoming ‘Your Mortgage Or Your Life’ for many underwater homeowners. From The Street today:
"The foreclosure filings piling up across the country are taking a toll not just on banks and Americans’ personal finances, but on their mental state as well…The related stress can lead to an increase in unhealthy behavior, like not eating or sleeping properly, self-medicating with alcohol or drugs, and damaging personal relationships or employment. Some have even taken their own lives."

Dysfunctional Pricing Backdrop - (www.ml-implode.com)
Shadow Housing Inventory: Getting an Actual Housing Picture of California Foreclosures and REO Numbers - (www.ml-implode.com)
The Hedge Fund Hustle - (www.ml-implode.com)
100 agencies facing $2b black hole - (www.ml-implode.com)

Nationally, house prices have fallen 7.6% over the past 12 months - (biz.yahoo.com)
U.S. House Sales Fall to 10-Year Low as Prices Tumble - (bloomberg.com)
Enjoy These 'Dollar Days' - But Will They Last? - (seekingalpha.com)
NAR Affordability Index Is Worthless - (seekingalpha.com)
Credit Crisis Still Far From Over - (bloomberg.com)
English Central Bank powerless to rescue housing - (independent.co.uk)
Next Blow To Housing Market - (safehaven.com)
Buyer Mentality - (retro.ms11.net)

Dallas Fed chief Richard W. Fisher speaks his mind in Q&A - (www.dallasnews.com)
A long year of lessons for the Federal Reserve - (www.reuters.com)
Foreclosures up, defaults down - (www.latimes.com)
California's unemployment rate rises to 7.3% - (www.latimes.com)
Bracing for Inflation - (www.businessweek.com)
Florida jobless rate the worst in nation - (www.miamiherald.com)
Lehman Faces Loss and New Need for Action - (online.wsj.com)

Deals that created Citi, others questioned as universal bank model shows cracks - (www.latimes.com)
The Endgame Nears For Fannie and Freddie - (www.barrons.com)
Pimco's El-Erian Says Raising Bank Capital Is Harder - (www.bloomberg.com)
Morgan Stanley updates lending systems - (www.ft.com)
Inflation Gets Right Down to the Real Nitty-Gritty - (www.washingtonpost.com)
No Docs - (www.nytimes.com)
The next wave of mortgage defaults - (www.fortune.com)
A Bond Market, Starved for Sunshine - (www.nytimes.com)
Blood in the Street, Danger in the Market - (www.barrons.com)
F.D.I.C. Retirees Ride to Rescue in New Era of Bank Failures - (www.nytimes.com)
Surge of bond deals lifts credit risk premiums - (www.ft.com)
Real estate chaos hits appraisal industry - (www.sfgate.com)

1 comment:

Anonymous said...

more

http://m9m9.blogspot.com

or

http://www.flixya.com/user/Why