Editor’s Note: New financial reform legislation provides support for customary and reasonable fees for appraisers. Many see the standardized fees set by the Veteran’s Administration (VA) as a logical benchmark. Find a listing of VA fees by state/area along with important VA links posted free at WorkingRE.com. Customary and Reasonable fees: Making Your Case [...]

More Government Workers Face Pay Cuts, Not Furloughs

A few quotes from homebuilder D.R. Horton conference call today ... (ht Mike in Long Island, Zach, Pat) "Frankly, I don't want the tax credits to be re-enacted or be re-created or extended ," CEO Donald Tomnitz said. "We want to get back to a normalized market. It's a lot easier ... designing your business with the current demand as opposed to having any kind of stimuluses or incentives to create abnormal demand." CR Note: As I've noted before, the housing tax credit was a clear and unequivocal failure. Not only did most of the benefit go to people who were going to buy anyway, but the credit didn't reduce the overall supply. The credit just incentivized some people to move - and pulled some sales forward - and to the extent the credit went to new home sales, it was actually counterproductive by increasing the excess supply. On the cancellation rate increase to 28%: "I was surprised it only increased to 28%. But nevertheless we wanted to give every buyer the opportunity to buy and close on a home. And so if they had a pulse and they were warm, we wrote 'em ," Tomnitz said. "And so as a result we did have some cancellations because people couldn't qualify." CR Note: A normal cancellation rate for Horton is in the 16% to 20% range. On the outlook: " The next 12 to 24 months will be challenging in the homebuilding industry ." CR Note: Yes. Probably more home builders will go bankrupt during the "recovery" than during the bust.

Tuesday’s pending home sales report is the latest indicator that the U.S. housing market is bogged down by an inventory problem: Too many houses, not enough buyers.

This article was originally published in the August 2010 issue of Asset Securitization Report (www.structuredfinancenews.com) The Dodd-Frank financial reform act signed this month by President Obama was, in my reading, very unfriendly to the non-agency MBS market. Taken in its entirety, key provisions of the bill create significant and protracted uncertainty for issuers and investors, further delaying the much-anticipated revival of private-label MBS issuance.

ROCKVILLE, Maryland (Reuters) – This suburb of Washington, D.C. inspired R.E.M.’s 1984 song about the soul-sucking blandness of a suburban adolescence that has been a staple of rock and roll. “(Don’t Go Back to) Rockville” described a town of empty houses, “where nobody says hello.” But some experts in the real estate business believe that in the future, more and more of us will be going back to places like the revamped Rockville — quite happily, in fact. “They had a point at the time,” Sally Sternbach, the head of Rockville’s economic development arm, says of R.E.M.’s quiet anthem. “We got it wrong. We built a mall that never found its anchors. It languished for 40 years. It was like the biblical 40 years in the desert.” Then, 15 years ago, Rockville convened hearings and forums to discuss its lackluster downtown, deciding in the end to replace it with a town square lined with shops, restaurants and apartments, all steps away from a subway station — in other words, more of an urban experience. The citizenry wanted vibrant street life both for the fun of it, and to attract business. So far, it’s worked. Teenagers use Facebook to signal spur-of-the-moment breakdance sessions on the town square’s bandstand because, as Dominique Estrera, 17, explained, it’s really the only place they can “hang out and break.” Adults like to socialize there, too. “I love the Town Square because I can’t walk more than a couple feet without seeing someone I know from doing business,” said Robin Wiener, president of Get Real Consulting, a firm that helps healthcare providers put their records online. Rockville’s renaissance over the past four years shows how the shift toward urban-style living has reached the suburbs. And urban planners insist the trend has legs. Dubbed “smart growth,” the movement favors the development of a mix of housing and businesses in and near existing cities. At the same time, it discourages the Topsy-like growth of peripheral suburbs, known disparagingly as “sprawl...

The latest version of U.S. covered bond legislation (H.R. 5823) — which recently won a favorable vote from the House Financial Services Committee (HFSC) — offers both pluses and minuses, according to a comment published by Moody's Investor's Service (August 2). On the plus side, the bill "will help investors in covered bond transactions because it will set up investor-friendly procedures following an issuer default." In such a situation, there would be an established mechanism for transferring the cover pool to a separate legal estate, which would be administered for the benefit of investors so as to continue making scheduled payments over time. Yehudah Forster In addition, the bill provides certain protections to the administrator so as to minimize the potential for disruption, while preserving deficiency claims that a bondholder may have against the issuer's estate. But Moody's comment, written by VP and Senior Analyst Yehudah Forster, also points to at least two negative aspects of H.R. 5823. One negative is that the bill "provides for overcollateralization levels that will not address market value risk." This is largely because covered bond regulators are specifically directed not to take liquidity risk into account when setting minimum overcollateralization levels. The other big negative, according to Moody's, comes from an amendment that was incorporated into H.R. 5823 at the HFSC's markup session (July 28). Instead of providing for oversight of all covered bond issuance by a single regulator, the amended bill now "appoints the issuer's primary regulator as the covered bond regulator." "Since the regulators are in charge of setting standards, this feature could lead to inconsistency between programs and reduce transparency for investors," Moody's comment states. "It could also lead to a conflict of interest since the goals of the issuer's primary regulator may not always be aligned...

Here is a look at real-estate news in today's WSJ:

US State Funding Plan Stalls in Senate

From Jon Hilsenrath at the WSJ: Federal Reserve officials will consider a modest but symbolically important change in the management of their massive securities portfolio ... The issue: Whether to use cash the Fed receives when its mortgage-bond holdings mature to buy new mortgage or Treasury bonds, instead of allowing its portfolio to shrink gradually, as it is expected to do in the months ahead. ... Buying new bonds with this stream of cash from maturing bonds—projected at about $200 billion by 2011—would show the public and markets that the Fed is seeking ways to support economic growth. This seems unlikely to happen at the Aug 10th meeting based on Chairman Bernanke's this morning, and his to Congress less than two weeks ago.

By focusing largely on interest rates, we have not yet found a sound explanation for what caused the housing bubble and its bursting, an economist writes.

Fannie Mae launched a new website Tuesday aimed at reaching distressed homeowners and urging them to get help.

WASHINGTON (Reuters) - Businesses eligible for tax credits under an Obama administration stimulus package hired an estimated 5.6 million workers, the Treasury Department said on Monday.

The millions of troubled U.S. mortgage loans are overshadowing a reduction in delinquency rates, according to Amherst Securities Group analyst Laurie Goodman.

Did you know that at the height of this recession for every job opening there were 6.2 unemployed workers?

Some experts believe the national homeownership rate will fall to near record lows, while others believe purchase of foreclosures by consumers and investors will slow the decline.

Recipients of the government subsidy are renting boom-era showpieces, brimming with McMansion-like features, that once sold for hundreds of thousands of dollars.

Most noteworthy paragraph in , in Friday’s Washington Post , on what to do about the GSEs: The GSEs are providing an enormous stimulus to the economy. Placing Fannie and Freddie in conservatorship was, in my view, the most effective of the stimulus efforts undertaken in the past two years. This stimulus was aimed squarely at the driver of our financial and economic crisis: the decline of home prices. Without public support, ensuring that mortgage financing was available during the worst moments of the financial crisis and the ensuing 22 months, the housing market would have ground to a halt, home prices would have spiraled downward, foreclosures would have skyrocketed, and financial institution balance sheets would have suffered greater losses, leading to a prolonged downturn and the loss of millions of additional jobs.

Twenty-five percent of Americans now have a credit score of less than 600. In an economy where credit plays a central role, that presents a significant obstacle to recovery.

Struggling borrowers facing “unique hardships” may find more flexibility from lenders starting this month.