KeNo's Housing and Economic Portal: Friday April 16 Housing and Economic stories

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TOP STORIES:

Realtor suspected in foreclosure theft - (www.columbiatribune.com) A local Realtor was arrested on suspicion of burglary after police found him Sunday loading shelving into a van from a foreclosed home. At 10:30 a.m. Sunday, Columbia police responded to a burglary call at 2205 Corona Road, where they found Mostafa Jawadi, 55, of 1805 Blue Ridge Road with a van backed into the driveway, police spokeswoman Officer Jessie Haden said. Police had been alerted by Realtors who had been keeping a close eye on foreclosed properties after recent break-ins. Jawadi, owner of First American Realty, had somehow acquired a key to the home. Columbia House of Brokers manages access to the keys, Haden said, and Jawadi did not have authorization to have the key. He was arrested on suspicion of second-degree burglary and stealing and was released from the Boone County Jail on $5,000 bond. As a member of the Columbia Board of Realtors, Jawadi could face punishment from the organization if found guilty, said Carol Van Gorp, chief executive officer. His electronic access to properties was turned off, she said.

Four Lenders Shuttered as U.S. Bank Failures Reach 41 This Year - (www.bloomberg.com) U.S. regulators shut down four banks in Arizona, Georgia and Florida, bringing the total for the year to 41 as small lenders struggle with bad loans tied to commercial real estate. The banks seized March 26, including Desert Hills Bank of Phoenix, Arizona, had total assets of $1.24 billion and deposits of $1.1 billion, according statements from the Federal Deposit Insurance Corp. Regulators have seized 181 U.S. lenders since the start of 2009. “You’re going to continue to see smaller institutions fail because they have no access to capital and they have too much concentration in residential construction and commercial real estate,” said Paul J. Miller, an analyst at FBR Capital Markets in Arlington, Virginia. U.S. lenders are collapsing at the fastest pace in 17 years amid losses on loans made at the height of the market. The number of banks on the FDIC’s “problem” list climbed to the highest level since 1992 in the fourth quarter. FDIC Chairman Sheila Bair said on Feb. 23 that the pace of failures will exceed last year’s total of 140. The latest closings will drain $320.3 million from the FDIC’s deposit insurance fund, the agency said. The FDIC and the four banks acquiring the shut-down lenders agreed to share losses on $870.9 million of assets.

Underwater "Owners" Will Never Surface Again - (www.centralvalleybusinesstimes.com) For underwater homeowners, the Titanic could be above water before their home values, suggests a new study by First American CoreLogic released Thursday. It estimates that the typical U.S. homeowner who is in a negative equity position – where home values are less than the mortgage on the home -- will not experience positive equity until late 2015 to early 2016. In some depressed markets, the typical borrower in negative equity may not experience positive equity until 2020 or later. For the foreseeable future, decline in negative equity is driven slightly more by amortization than by home price appreciation trends, the report says. First American CoreLogic looked at ten major markets, none in the Central Valley, the epicenter of the mortgage meltdown, but the results might be indicative of the Valley’s prospects. More than 11.3 million, or 24 percent, of all residential properties with mortgages in the nation had negative equity at the end of the fourth quarter of 2009.

Man convicted on 160 counts of realty fraud - (www.signonsandiego.com) A San Diego man accused of tricking hundreds of desperate homeowners facing foreclosure into signing over their deeds was convicted of real estate fraud this week after jurors heard from dozens of witnesses who lost their homes. William Hutchings, 63, told property owners they could escape foreclosure through a couple of unheard-of maneuvers, prosecutor Stephen Robinson said. “Unfortunately, a lot of people believed him,” Robinson said. More than 400 homeowners fell victim to the scam, he said. Jurors convicted Hutchings of 160 felony counts of conspiracy, rent-skimming, grand theft and failing to follow state mortgage laws. A forensic accountant estimated that $2 million flowed through his bank account between January 2007 and May 2008, when the scam — and the mortgage meltdown — was in its heyday. Hutchings faces about 49 years in prison at a sentencing scheduled for April 22. San Diego Superior Court Judge Charles Gill ordered him held without bail in the county jail until then.

Treasury defends houseowner assistance plan - (www.reuters.com) A top Obama administration official on Thursday defended a $75 billion Treasury effort to help struggling homeowners avert foreclosure even as some lawmakers called it a failure. Herbert Allison, assistant Treasury secretary for financial stability, said the government's mortgage modification program had already put more than 1 million borrowers temporarily into lower payments. Critics point to the number of active permanent modifications, which is only 168,708 as of February, a fraction of the 3 million to 4 million homeowners the Treasury said it would help when the program was launched last year. "If you talk to those million homeowners, they would tell you this program has been a success for them," Allison said under questioning from lawmakers. Democratic Representative Jackie Speier said the program should be shelved in favor of a new plan that would allow homeowners to stay in their home as renters under a rent-to-own scheme. "I think of this program as death by a thousand cuts. It has failed. It has failed miserably," Speier told Allison, adding that the program does not consider non-mortgage debts as a factor in the modified payment.

Housing's big "shadow" up to 10M more houses could be for sale - (finance.yahoo.com) But those people who can afford to wait to buy a house are probably better off, Humphries says. Based on the most recent data, there are 3.6 million existing homes and 236,000 new homes for sale in America; that equates to 8.6 months and 9.2 months of supply, respectively, based on current sales rates. But that's only half the story. Humphries notes the official inventory numbers "don't capture all the foreclosures that are out there," or the so-called shadow inventory of homes waiting to come on the market. So how big is the "shadow" hanging over housing? A recent Zillow.com survey shows 8% of homeowners, or about 10 million Americans, are "very likely" to sell if and as local conditions improve. Humphries doesn't expect anywhere near 10 million more homes to come on the market in the near term. But this "pent-up supply" combined with foreclosures already in the pipeline and those yet to come because of negative equity and job losses means it will take three-to-five years "before we see more normal appreciation rates return to the market," the economist predicts. In other words, time is still on the buyers' side -- yes it is.

OTHER STORIES:

Supply fears start to hit Treasuries - (www.ft.com)

The Wisdom of the Short-Sellers - (www.nytimes.com)

Mortgage Plan Remodeled Again - (online.wsj.com)

Day Traders 2.0: Wired, Angry and Loving It - (www.nytimes.com)

A Lobbying Blitz Shifts to Wall Street Reform - (www.nytimes.com)

Mortgage interest rates continue to rise - (www.washingtonpost.com)

Los Angeles Area Rent/Buy Ratios - (www.patrick.net)

Housing market's upswing at risk of collapsing - (www.chron.com)

Mortgage delinquencies rise to nearly 14 percent - (finance.yahoo.com)

Households Facing Foreclosure Rose in 4th Quarter - (www.nytimes.com)

Half of U.S. House Loan Modifications Default Again - (www.bloomberg.com)