KeNo's Housing and Economic Portal: Wednesday November 3 Housing and Economic stories

Tuesday, November 2, 2010

Wednesday November 3 Housing and Economic stories

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TOP STORIES:

Mortgage Lenders Say ‘Enough Is Enough’ as Buybacks Curb Loans - (www.bloomberg.com) Home lenders are making it tougher to get loans as investors step up demands for refunds on defective mortgages, damaging the housing market, executives said today at an industry conference. Already beset by billions of dollars in forced buybacks, originators have imposed standards on new loans that are stricter than those set by mortgage buyers and insurers, according to Todd Chamberlain, an executive vice president who oversees mortgage lending at Birmingham, Alabama-based Regions Financial Corp. “This industry has to stand up and say, ‘Enough is enough,’ "Ron J. McCord, chairman of Oklahoma City-based First Mortgage Co., said during a panel discussion with lender executives at the Mortgage Bankers Association’s annual conference in Atlanta, drawing applause from the audience. “We’re trying to be out here lending to help this recovery.” Fannie Mae, Freddie Mac and bond insurers such as MBIA Inc. are pressing lenders including Bank of America Corp. to honor promises to buy back mortgages if they’re later found to be based on inaccurate data. Known as representations and warranties, the promises cover defects such as inflated appraisals or inaccurate data about a borrower’s job or income. Bank of America said last week it will resist paying claims.

Foreclosures Had Errors, Bank Finds - (www.nytimes.com) Even as Bank of America begins to restart foreclosure proceedings in 23 states on Monday, the bank confirmed that it had discovered errors, including incorrect data and misspelled names, in the paperwork it has reviewed. For weeks, Bank of America has insisted its review had not turned up any serious errors, and emphasized that it had not found a single case where a homeowner was facing foreclosure in error. But on Sunday, the bank revised its fairly combative public stance. Bank of America had found errors, but only in a tiny number of cases, Dan Frahm, a spokesman for the bank, said late Sunday. “These are examples of exceptions that were caught early in the process through control steps,” Mr. Frahm said. “They do not reflect exceptions in final documents that are being resubmitted to the courts.”

Blizzard of California Notes, Bonds Set to Begin - (online.wsj.com) California this week will kick off a series of multibillion-dollar short- and long-term financings, including its second-largest note sale ever, to enable the cash-starved state to pay off creditors and borrow money for other purposes. The state, which enacted a budget 100 days late on Oct. 8, next week will negotiate a $6 billion to $7 billion bridge loan with banks including J.P. Morgan Chase & Co., a spokesman for Treasurer Bill Lockyer told Dow Jones Newswires. That loan, larger by $1 billion to $2 billion than previous estimates, will be followed in the week of Nov. 8 with a $10 billion sale of revenue anticipation notes, the spokesman said. States and other governments commonly issue such short-term notes to smooth out the receipt of revenue other than taxes. Among various types of California note borrowings, only a $10.96 billion issue in 2003 has been larger.

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Dubai: Real Estate Crash Sends Prices, Rents Falling - (news.yahoo.com) There's a half-off sale in the world's tallest building. Even with an address at the iconic Burj Khalifa, rents for residences in the tower are not immune from Dubai's real estate crash. Indeed, nearly a year after it was inaugurated with a massive water-and-fireworks display, about 825 of the tower's 900 ultra-luxury apartments remain unoccupied, according to Better Homes, a real estate brokerage in Dubai. The cost of renting a studio with floor-to-ceiling windows, marble fixtures and wooden floors has dropped to $1,815 a month from $3,025, while a one-bedroom apartment is available for $2,722 (it used to be $4,536), the brokerage says. Two-bedroom residences are expected to get $4,310, down from $7,183. Interested parties "call every few days and go for a viewing," says Imad Ben Khadra, a Moroccan expatriate who owns two 1,000-sq.-ft. one-bedroom apartments he purchased in late 2008 for about $950,000, both of which he is trying to rent out. "We got some offers [from prospective tenants], but nobody confirms."