TOP
STORIES:
Fannie
and Freddie - pay us back! - (www.nytimes.com)
WHO says
Democrats and Republicans can’t agree on anything? When it comes to fixing the
government’s troubled and costly relationship with the private mortgage market,
bipartisanship is very much alive. Politicians in both parties have reached
consensus over the past four years to simply do nothing. Consider the elephant
in the room: Fannie Mae and Freddie Mac owe American taxpayers nearly $140 billion —
and there seems to be no plan on any front to pay it back. Though many
Americans aren’t aware of it, the Federal National Mortgage Association (Fannie
Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) are publicly
traded companies — like I.B.M. or General Electric. Except these two giant
housing lenders were created by Congress and, as a result, have a relationship,
albeit an awkward one, with Uncle Sam.
Sony, Panasonic Credit Rating Cut to Speculative Grade - (www.bloomberg.com) Sony Corp. (6758) and Panasonic Corp. (6752), the
Japanese electronics makers reeling from record losses, had their credit
ratings cut to junk for the first time by Fitch Ratings amid slumping demand for
their televisions. Sony’s rating was cut by three levels to BB-, three steps
below investment grade, and Panasonic by two levels to BB, with the outlook on
both companies being negative, Fitch said in separate statements today. Both
companies had their short-term ratings reduced to B from F3.
To Stem Losses, FHA
Mortgages Get More Expensive - (www.cnbc.com)
The federal agency that some credit with saving the housing market
during the worst of the recent crash, may now be in need of taxpayer help
itself. The Federal Housing Administration (FHA), which insures more than $1
trillion worth of home mortgages, is looking at $16.3 billion in losses,
according to an annual audit released today. “This does not mean FHA has
insufficient cash to pay insurance claims, a current operating deficit, or will
need to immediately draw funds from the Treasury,” according to a release from
the Department of Housing and Urban Development (HUD). “The need to draw on
Treasury funds is determined not by the economic assumptions of this actuarial
review but those used in the President’s FY 2014 budget proposal to be released
in February, with a final determination on a potential draw made in September.”
Rising
down payments and loan costs will hinder a housing recovery - (www.ochousingnews.com) Besides credit qualification barriers due to low FICO scores, there are
two barriers to originating more loans and selling more houses to owner
occupants: (1) insufficient down payment, and (2) increasing loan costs. The
FHA still originates loans at 3.5% down, and the credit barriers are limited,
despite realtor pleas and rhetoric to the contrary. However, since the FHA is
losing a great deal of money and facing a bailout, they are continually raising
their insurance fees as they become the replacement for subprime lending. These
increasing costs are making houses less affordable and thereby reducing access
to credit. As a result, many borrowers are opting for conventional mortgages
with their higher down payment requirements. And since fewer potential buyers
have the available cash saved for a down payment, the increasing costs of FHA
loans which drives people to conventional mortgages is further reducing the
buyer pool. This will inevitably lead to less demand.
Tiny
houses in San Francisco at MacMansion prices - (www.sfgate.com) This week, San
Francisco’s Planning
Commission will vote on whether to cap the new micro-apartments allowed in
the city at 375 units. Proponents of the tiny apartments — which cram living
room, bathroom and kitchen into as little as 220 square feet of living space —
say the city desperately needs more apartments with lower monthly rents.
They also point out that 40 percent of San Franciscans live alone, making this
type of unit ideal. But opponents worry that the units would not benefit
neighborhoods where they would be built, and point out that, at a higher price
per square foot than larger apartments, they are not truly affordable housing.
No comments:
Post a Comment