Monday December 5 2016 Housing and Economic stories

TOP STORIES:

U.S. to Forgive at Least $108 Billion in Student Debt in Coming Years - (www.fortune.com) Students will see more of their debts forgiven than previously thought. An estimated $108 billion or more in student loans will be forgiven over the next 10 to 20 years, thanks to federal programs that help ease the financial burden for those attending higher education institutions. That figure is roughly one-third of the $352 billion in estimated loan volume U.S. students are expected to take out between 1995 to 2017, according to a Wednesday report from the Government Accountability Office. The report, which criticized the Education Department for understating the cost of government debt relief programs, noted that another $29 billion in loans would be discharged.

Chinese Developers Reassess U.S. Projects - (www.wsjloomberg.com) Some Chinese real-estate developers are lowering their profit expectations on U.S. projects or shelving them entirely as frothy prices and rocky partnerships force them to rethink their strategies in the American market. Swelling supply of high-end New York condominiums could result in losses for some Chinese developers, analysts said. A push to partner with U.S. developers on other projects, meanwhile, has brought unexpected legal spats and other delays. “I see a danger in the real-estate market in the U.S.,” said John Liang, Xinyuan Real Estate’s managing director of U.S. operations. “With its seven- to eight-year cycle, you get a sense now that it’s peaking.”

Household Debt Hits $12.4 Trillion As Subprime Loan Delinquencies Hit Highest In 6 Years: NY Fed - (www.zerohedge.com) The latest just released Quarterly Report on Household Debt and Credit  from the New York Fed showed a small increase in overall debt in the third quarter of 2016, prompted by gains in non-housing debt, and new all-time highs in student loans which hit $1.279 trillion, rising $20 billion in the quarter.11.0% of aggregate student loan debt was 90+ days delinquent or in default at the end of 2016 Q3. Total household debt rose $63 billion in the quarter to $12.35 trillion, driven by a $32 billion increase in auto loans, which also hit a record high of $1.14 trillion. 3.6% of auto loans were 90 or more days delinquent.

Why Italian Stability Is in the Hands of One Bank’s Bondholders - (www.wsj.com) Italian insurer Generali has gone in to bat for Banca Monte dei Paschi di Siena, but the troubled lender and the rest of the Italian banking sector face a tense wait-to-see if other bondholders will support its capital raising. The insurer has pledged to swap the MPS junior debt it owns into new shares. That gives the bank a healthy €420 million ($445.5 million) step toward its unofficial target of getting €1 billion to €1.5 billion from this crucial first leg of a three-part recapitalization. Most of Italy’s banking sector is praying that MPS succeeds in a week beset with political risk. The country is struggling to sort out Europe’s biggest bad-loan pile and if MPS fails to raise the €5 billion it needs, it may be impossible for others to complete their own repairs.

Higher interest rates crush mortgage application volume, down 9.4% - (www.cnbc.com) The highest interest rates in well over a year are putting a dent in the mortgage business. Total mortgage application volume fell 9.4 percent last week versus the previous week, on a seasonally adjusted basis. The Mortgage Bankers Association adjusted the weekly reading to account for the Thanksgiving holiday. Volume was 0.5 percent lower than the same week one year ago, the first annual drop in total volume since January. "Mortgage lenders have been very thankful for a strong 2016 in terms of origination activity. However, mortgage application volume in the Thanksgiving week dropped sharply to the lowest level since early January, as mortgage rates increased to their highest point since July, 2015," said Michael Fratantoni, chief economist for the MBA.

OTHER STORIES:

Mnuchin Said to Be Trump’s Treasury Pick as Economic Team Forms - (www.bloomberg.com)
Trump expected to name billionaire Wilbur Ross commerce secretary - (www.reuters.com)
Plaza memories may unnerve Trump-fueled dollar bulls - (www.reuters.com)
India’s Economy Grows Less Than Estimated Before RBI Rate Review - (www.bloomberg.com)

Steven Mnuchin, Expected Treasury Pick, Is an Outsider to Public Policy - (www.nytimes.com)
Auto Loans Get Even Dicier - (www.wsj.com)
China capital curbs reflect buyer’s remorse over market reforms - (www.ft.com)