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  • Thu, Apr 22 2010
  • 11:56 AM » Weekly Initial Unemployment Claims at 456,000
    Published Thu, Apr 22 2010 11:56 AM by Calculated Risk Blog
    The DOL reports on weekly : In the week ending April 17, the advance figure for seasonally adjusted initial claims was 456,000, a decrease of 24,000 from the previous week's revised figure of 480,000. The 4-week moving average was 460,250, an increase of 2,750 from the previous week's revised average of 457,500. ... The advance number for seasonally adjusted insured unemployment during the week ending April 10 was 4,646,000, a decrease of 40,000 from the preceding week's revised level of 4,686,000. Click on graph for larger image in new window. This graph shows the 4-week moving average of weekly claims since 1971. The four-week average of weekly unemployment claims increased this week by 2,750 to 460,250. The dashed line on the graph is the current 4-week average. The current level of 456,000 (and 4-week average of 460,250) is still high, and suggests continuing weakness in the jobs market. The 4-week average fell to this level in December 2009 following the worst of the recession, and has essentially moved sideways for four months.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 11:55 AM » Producer Prices Rise on Food Costs
    Published Thu, Apr 22 2010 11:55 AM by NY Times
    In a second report, first-time claims for jobless benefits fell more than expected last week.
  • 11:55 AM » U.S. Monthly House Price Index Declines 0.2 Percent from January to February
    Published Thu, Apr 22 2010 11:55 AM by FHFA
    April 22, 2010: U.S. Monthly House Price Index Declines 0.2 Percent from January to February
  • 11:55 AM » 4/22/10--2nd Lien Mod, Redwood Deal
    Published Thu, Apr 22 2010 11:55 AM by
    Today is one of those days where no matter how much I scour I just don’t see that much to highlight. Goldman/Paulson continues to dominate the popular press and POTUS is taking the opportunity to push support for the financial regulation bills. *As reported by American Banker this morning, Wells Fargo is now on the 2nd Lien Mod bandwagon. “Wells Fargo & Co. on Wednesday promised that it would begin modifying second mortgages under a new wrinkle in the government's Home Affordable Modification Program.
    Click Here to Read the Full Article

  • 8:35 AM » On Existing Home Sales
    Published Thu, Apr 22 2010 8:35 AM by Calculated Risk Blog
    Existing home sales for March will be released tomorrow and the consensus is for the NAR to report 5.25 million sales on a seasonally adjusted annual rate (SAAR) basis. That is probably close (I'll take the under). The NAR reported a 5.02 million sales rate in February. 1) The Federal tax credit expires at the end of April for buyers to sign a contract. Since existing home sales are reported when the transaction is closed (by the end of June to qualify for the tax credit), the tax credit probably had little impact on March sales. The boost to reported existing home sales from the tax credit will probably come mostly in May and June. 2) New home sales are counted when the contract is signed, so the boost should come earlier (March and April). The Census Bureau will report March new home sales on Friday. 3) The MBA is showing only a small pickup in purchase applications - so it appears the boost to sales from the tax credit will be much smaller than last year. 4) The level of existing home inventory is probably the most interesting detail in the NAR report tomorrow. Unfortunately there appears to be some discrepancy between local inventory levels and the number the NAR reports. However, on a year-over-year basis, inventories have been declining for the last 19 months. It is possible that the inventory level in March will be above March 2009 (3.65 million in March 2009). So that is something to watch for ...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:34 AM » Busted Homes Behind CDO Bet
    Published Thu, Apr 22 2010 8:34 AM by The Big Picture
    Another good infographic , via the : > > Source : CARRICK MOLLENKAMP , MARK WHITEHOUSE And ANTON TROIANOVSKI WSJ, April 22, 2010
    Click Here to Read the Full Article

    Source: The Big Picture
  • 8:33 AM » Foreclosures Made John Paulson a Billion Dollars
    Published Thu, Apr 22 2010 8:33 AM by The Big Picture
    The deal in which Goldman Sachs, according to the SEC, defrauded some of its investors made hedge-fund king John Paulson a billion dollars. It all pivoted on hundreds of thousands of ordinary homeowners defaulting on their mortgages. 4/21/2010 7:21:19 PM
    Click Here to Read the Full Article

    Source: The Big Picture
  • 8:32 AM » Obama Issues Sharp Call for Reforms on Wall Street
    Published Thu, Apr 22 2010 8:32 AM by NY Times
    In a speech Thursday in the shadow of Wall Street, the president will counter what he calls “the furious efforts of industry lobbyists” trying to weaken or kill new and tighter regulation.
  • 8:31 AM » Federal Reserve Made $47.4 Billion in 2009
    Published Thu, Apr 22 2010 8:31 AM by NY Times
    The transfer, a record sum, was the result of the central bank’s actions to support the fragile housing market.
  • 8:30 AM » A Small Shot of Hope for Jumbo Mortgages
    Published Thu, Apr 22 2010 8:30 AM by Google News
    Here’s a cheerful sign for people who hope to take advantage of falling prices on high-end homes: A bit more money is about to flow in to , and that may help bring down borrowing costs. Jumbo mortgages are ones too big to be bought or guaranteed by government-backed investors Fannie Mae or Freddie Mac. The maximum size for those “conforming” loans ranges from $417,000 in most of the country to a maximum of $729,750 in the priciest housing markets. During the housing boom, rates on jumbos tended to be only slightly higher than those on conforming loans. Then, when investors fled from anything that wasn’t guaranteed by Uncle Sam, jumbo rates shot up. In December 2008, jumbo rates for 30-year fixed-rate loans were around 7%, compared with 5.2% for conforming, according to HSH Associates. Last week, the jumbo average had come down to about 5.8%, HSH says, still about 0.60 percentage point more than conforming. (Many people who get jumbos choose “hybrid” adjustable rate versions, which carry a fixed rate for the first five years or so before starting to adjust. Those generally come with lower rates than 30-year fixed.) On Wednesday, Inc. disclosed that it plans to issue about $222 million of bonds backed by jumbo mortgage loans made by a unit of Inc. over the past 11 months. The market for new issues of such “private label” mortgage securities–ones that aren’t guaranteed by Fannie, Freddie or any other government-related entity–has been virtually dead for the past two years since a surge in defaults caused investors to flee. Jesse Litvak, a managing director at Jefferies & Co., a securities trading firm, says he figures Citigroup, the lead manager of the offering, will easily line up enough investors to buy the securities. That may embolden more lenders to put jumbos into securities rather than holding them on their books or selling them to insurers or other investors. If so, rates on jumbo loans may come down at least a bit as more money is available to finance them...
  • 8:29 AM » The Single Biggest Liability Threat to Appraisers: the FDIC
    Published Thu, Apr 22 2010 8:29 AM by Google News
    The Single Biggest Liability Threat to Appraisers: the FDIC By Peter Christensen of the Appraiser Law Blog The single biggest liability threat to both residential and commercial appraisers is the Federal Deposit Insurance Corporation. The FDIC held a conference last...
  • 8:28 AM » Did You Know: Retail Sales of Furniture and Home Furnishing
    Published Thu, Apr 22 2010 8:28 AM by Google News
    Did you know that furniture and home furnishing sales increased 1.5 percent from February to March 2010?
  • 8:28 AM » How foreclosure impacts your credit score
    Published Thu, Apr 22 2010 8:28 AM by CNN
    If you're delinquent on your mortgage, your credit score will suffer. Everyone knows that. The question is, by how much?
  • 8:28 AM » HUD Increases FHA Lender Net Worth Requirements in New Final Rule
    Published Thu, Apr 22 2010 8:28 AM by National Council of State Housing Agencies
    On April 20, HUD published a increasing net worth requirements for FHA lenders and establishing other risk managem
    Click Here to Read the Full Article

    Source: National Council of State Housing Agencies
  • Wed, Apr 21 2010
  • 6:16 PM » Troubled-Asset Plan Sees Progress on Smaller Scale
    Published Wed, Apr 21 2010 6:16 PM by WSJ
    The U.S. Treasury Department ’s main plan to deal with the troubled mortgage securities at the heart of the financial crisis is happening on a much smaller scale than originally envisioned. That may not be a bad thing, however, since it reflects improvements in the market for mortgage-backed securities, according to market participants and administration officials. “It’s definitely had the impact of helping things correct in terms of pricing. I’m not telling you the fundamentals of the securities have improved but stabilizing pricing was a huge hurdle,” said Jesse Litvak , managing director and trader in the mortgage and asset-backed group at Jefferies & Co., a broker-dealer that deals in the securities. The Obama administration’s Public-Private Investment Program was unveiled last March as part of a broader effort to deal with between $500 billion to $1 trillion worth of troubled loans and securities clogging bank balance sheets. The Treasury selected nine private fund managers to operate funds that would purchase mortgage-backed securities through a mix of private and government financing. Treasury’s initial commitment to the program was $100 billion, but since then the program has been significantly scaled back to $30 billion of taxpayer funds, with Treasury committing $3 of capital for every private $1–$1 of equity capital, $2 of debt capital. That is expected to translate into $40 billion of purchasing power if the program reaches full capacity. So far, the program is even smaller. Treasury released data Tuesday showing the purchasing power of the private funds in the program was $25.1 billion, with just $10 billion in bonds purchased through the first three months of 2010. Details on the securities already purchased remain limited, an ongoing concern for Neil Barofsky , the special inspector general for the $700 billion Troubled Asset Relief Program . He’s been pushing the Treasury to disclose more information on the securities taxpayers have paid for, as well...
  • 6:15 PM » John Paulson Now Bullish on Housing
    Published Wed, Apr 21 2010 6:15 PM by Google News
    Bloomberg News Mr. Paulson Where’s housing headed? We’ve debated the topic here before many times. Now you can add another forecaster to the list: John Paulson, the hedge-fund billionaire, sees home prices edging up. Mr. Paulson, who made a killing betting the mortgage market would fall off a cliff a few years ago, is now optimistic about recovery. In a with about 100 investors Wednesday, Mr. Paulson said that house prices have stabilized and could climb 8%-10% nationwide in 2011. (). Of course the primary aim of the call was to reassure investors who were worried about the over the CDO that Mr. Paulson helped create and then bet against.
  • 6:14 PM » Shifting U.S. housing view aids mortgages, new bonds
    Published Wed, Apr 21 2010 6:14 PM by Reuters
    NEW YORK (Reuters) – Investors are backing off worst-case housing scenarios for the first time in this cycle — a milestone shift that is keeping a mortgage bond rally alive and setting the stage for a recovery in securitization. Prices in the market for private label MBS — those not backed by Fannie Mae, Freddie Mac — have gained 60 percent to 90 percent in the past 12 months as investors bought bonds at distressed levels, with a thick cushion for loss. Today, the rally is on track as investors and dealers tweak housing and bond performance models they use to decide on yields they require to ensure profit. This trend is important for the private residential mortgage-backed securities market, where Redwood Trust Inc. <RWT.N> on Wednesday finally broke the silence, selling the first bond backed by new loans since 2008. “People are starting to think otherwise about the double dip (recession) happening,” said Jesse Litvak, a managing director at Jefferies & Co. in Stamford, Connecticut. There is stability in mortgage defaults, home sales are rising and JPMorgan Chase & Co., the No. 2 U.S. bank, last week delivered an assessment of improved credit trends. Home prices as measured by the S&P Case-Shiller indexes rose in January for the eighth straight month. Laurie Goodman, head of Amherst Securities Group’s strategy team, said that bonds are “stressed” less severely by investors as they pare expectations for further home price drops. “It’s definitely not as bad as you would have guessed six months ago,” said Steve Kuhn, partner and portfolio manager at Pine River Capital Management in New York. “There is real data to back up the view that people are changing assumptions.” Expectations on loss severity, or total losses as a percentage of the principal, had remained stubbornly high even after house price and other data began to suggest stability. Rising foreclosures and unemployment have underscored that U.S. housing was still shaky, and some investors are...
  • 6:14 PM » 4/21/10--SIGTARP Quarterly Report, PPIP, Monolines
    Published Wed, Apr 21 2010 6:14 PM by
    *Thank you to 12th Street’s own Luke Fry for highlighting the latest SIGTARP Quarterly report which can be found here, As you read through the report it starts out with a decidedly positive tone especially for the SIGTARP which has been consistently critical of the government programs and their results. Ultimately the reports goes on to focus on HAMP and I would say this sums it up best, “In sum, until Treasury fulfills its commitment to provide a thoughtfully designed consistently administered, and fully transparent program, HAMP risks being remembered not for catalyzing a recovery from our current housing crisis, but rather for bold announcements, modest goals, and meager results.” I’m guessing Neil Barofsky doesn’t get the invite to too many D.C. cocktail parties.
    Click Here to Read the Full Article

  • 6:14 PM » NCSHAPGA: House Financial Services Committee markup tomorrow on FHA reform, rural home loan guarantee program, flood insurance, and other issues.
    Published Wed, Apr 21 2010 6:14 PM by
    NCSHAPGA: House Financial Services Committee markup tomorrow on FHA reform, rural home loan guarantee program, flood insurance, and other issues.
  • 4:10 PM » Distressed Sales: Sacramento as an Example, March Update
    Published Wed, Apr 21 2010 4:10 PM by Calculated Risk Blog
    The Sacramento Association of REALTORS® is breaking out monthly resales by equity sales (conventional resales), and distressed sales (Short sales and REO sales), and I'm following this series as an example to see mix changes in a distressed area. Starting last month First American Corelogic has started releasing a - and that shows the trend in short sales and REOs nationally. Click on graph for larger image in new window. Here is the . The Sacramento Association started breaking out REO sales in 2008, but they have only broken out short sales since June 2009. Almost 65% of all resales (single family homes and condos) were distressed sales in March. Note: This data is not seasonally adjusted, although the increase in sales in March is slightly above normal because of the tax credit. The second graph shows the percent of REO, short sales and conventional sales. The percent of short sales is near the high set in December. This will probably continue to increase this year (2010 is the year of the short sale!). Also total sales in March were off 3.4% compared to March 2009; the tenth month in a row with declining YoY sales - even with a surge from tax credit buying this year! On financing, nearly 60 percent were either all cash (27.1%) or FHA loans (31.5%), suggesting most of the activity in distressed former bubble areas like Sacramento is first time home buyers using government-insured FHA loans, and investors paying cash.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 4:10 PM » Builders Fighting Over Land in Surprising Places
    Published Wed, Apr 21 2010 4:10 PM by Google News
    Brandon Sullivan for The Wall Street Journal Land that was recently sold in Goodyear, Ariz. It’s well known that home builders have struggled through the last few years, as the crash forced them to sell houses for a song and land for pennies on the dollar. But, land is back. And it’s apparently worth fighting for: Bidding wars have also returned. “There’s been an absolute land rush,” said Gregor Watson, a partner with McKinley Partners, a California-based real-estate fund that works with builders. As we write in , builders are battling to acquire land lots in preparation for ramping up home construction. While volume is tough to track, analysts report that land deals have been rising rapidly in recent months, causing some prices in some of the nation’s weakest housing markets to rise for the first time since 2006. You read that right. Weakest. Nationally, finished-lot prices, which saw low-single digit increases in the first quarter, are up nearly 20% from the trough, largely considered early 2009, according to a land survey released this week by housing-research firm Zelman & Associates. Lot prices in Phoenix and Southern California’s Inland Empire have soared more than 60%. Sacramento, Orlando and Los Angeles are up between 30% and 40%. If that doesn’t leave you scratching your head, consider this: Nationally, the best-located lots are commanding double what they would have a year earlier, said Greg Vogel, chief executive of Land Advisors Organization, a national land brokerage firm based in Scottsdale, Ariz. Builders used to joke they couldn’t give land away! The reason is simple. Even at current prices, land is far cheaper than it was during the boom. Lower-priced land, especially when the lot already includes streets and other infrastructure, gives them more profit on homes. Plus, builders are convinced that buyers will flock to the closing table once employment picks up and the foreclosure crisis ends. They want to be prepared. Just outside of Phoenix, PulteGroup...
  • 1:34 PM » Western States Follow Nation Out of Recession
    Published Wed, Apr 21 2010 1:34 PM by WSJ
    Arizona came out of recession sometime around the beginning of the year, or about six months after the national economy, according to an analysis by local economists that was summarized in . Recession dating is a subjective exercise, even more so at the state level, but a recovery in the west would be a welcome sign for the national economy. With a high concentration of construction jobs and real estate-related industries, western states — in particular California, Nevada and Arizona — have been among the hardest in the recession. and the western region’s unemployment rate, , led the country in March Of course, in the west as in the rest of the country, jobs remain the central issue in recovery. The Arizona analysis, which was done by University of Arizona economist Marshall Vest, looks at retail, employment, housing and income figures, all of which have stabilized or returned to growth. Yet Arizona still has 300,000 fewer jobs than it did at its August 2007 peak, the story notes. For more news and data about jobs:
  • 1:34 PM » Treasury Introduces New $100 Bill
    Published Wed, Apr 21 2010 1:34 PM by WSJ
    U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke on Wednesday unveiled a new $100 bill that is equipped with two new security features. The bill will go into circulation on Feb. 11, 2011. Click for full image The Fed, along with the Treasury Department , the Bureau of Engraving and Printing and the U.S. Secret Service , “continuously monitor the counterfeiting threats” for each denomination and redesign decisions are made based on those threats, Bernanke said. “This job has become more complex in recent years as technology advances and U.S. dollar flows expand and increase,” he added. The bill — the highest value of all U.S. notes — circulates widely around the world, with circulation in the past 25 years growing to $890 billion from $180 billion. Because about two-thirds of all $100 notes circulate outside the U.S., Bernanke said the agencies must ensure people around the world are aware of the design change. Over the next several months, officials at the agencies will work to educate businesses and consumers about the design and explain how to use its security features. The 6.5 billion or so $100 notes in circulation now will remain legal tender, Bernanke said. The security features include a blue 3-D Security Ribbon on the front of the note that contains images of bells and 100s, which move and change from one to the other as you tilt the note, according to joint release from the agencies. Another security feature is the “Bell in the Inkwell” image that changes color from copper to green when the note is tilted, an effect that makes it appear and disappear within the inkwell. “As with previous U.S. currency redesigns, this note incorporates the best technology available to ensure we’re staying ahead of counterfeiters,” Geithner said.
  • 1:34 PM » Secondary Sources: Rent vs. Buy, Small Business, Global Imbalances
    Published Wed, Apr 21 2010 1:34 PM by WSJ
    A roundup of economic news from around the Web. David Leonhardt looks at whether it’s better to rent or own your home. ” In some once bubbly markets, prices have fallen so far that buying a home appears to be a bargain, based on a New York Times analysis of prices and rents in 54 metropolitan areas. In South Florida, Phoenix and Las Vegas, house prices — relative to rents — are as low as in places that never experienced a bubble, like Indianapolis and St. Louis. But in a handful of other areas, including San Francisco, Seattle and Portland, Ore., house prices remain significantly higher than they were before the bubble began. People who buy a home in these areas will face higher monthly costs than if they rented, even after taking tax deductions into account. As a result, buyers are effectively betting that prices will rise enough in future years to cover the difference. The country’s two biggest metropolitan areas, New York and Los Angeles, are a microcosm of today’s more nuanced real estate market. Average house prices across both areas have fallen enough that buying may now be a good deal for many families. Yet there are still significant pockets where renting looks promising — including parts of Manhattan, the New York suburbs and Orange County, Calif.” Ellyn Terry looks at small firms contributions to jobs growth. “Interestingly, the latest observation (for March–June 2009) shows that job destruction actually declined for smaller firms relative to larger firms whereas job creation rates improved for both small and large firms. This performance matters because the key factor for a sustained recovery will be a continued improvement in job creation rates at existing firms and stabilization in the rate of new business formation.” Arvind Subramanian says China is key to unwinding global imbalances. “Essentially, the tidal force of capital flows to emerging economies faces only partially flexible currencies. The wave is being caused by a number of factors that have sharply...
  • 1:34 PM » Commercial Mortgage Mods at the Mercy of Special Servicers
    Published Wed, Apr 21 2010 1:34 PM by Google News
    Preferred Hotels & Resorts Despite signs of an economic recovery, defaults on commercial mortgages bundled into securities keep reaching new highs, as we reported in today’s . The ever-rising default rates are putting in the spotlight so-called special servicers, companies that represent holders of commercial-mortgage-backed securities (CMBS), when the loans underlying these securities are in default or imminent default. Unlike home mortgages, soured CMBS loans are at the mercy of only a handful of special servicers, including LNR Property Corp., owned by private-equity firm Cerberus Capital Management LP, and CW Capital, majority owned by Canadian pension manager Caisse de depot et placement du Quebec. How these servicers behave significantly impacts a CMBS deal’s cash flow and expected losses to bondholders. Some servicers’ modifications have the effect of pitting different classes of bondholders against each other. The WSJ story today highlights one such restructuring: of a $190 million mortgage on a resort in Phoenix that has suffered from reduced business and leisure travel. After months of negotiations with CWCapital, the servicer representing investors in CMBS tied to the loan, the borrower, Grossman Company Properties struck a deal that allowed it to keep the property in exchange for putting in an additional $5.8 million capital. Under the deal, the original loan was split into two parts–a $100 million “A” note and a $90 million “B” note. The current cash flow of the 640-room resort equipped with two golf courses and a water park can only cover the debt service on the A note, whose interest rate was reduced to 5.50% for 30 months from 6.68% on the original loan, according to Deutsche Bank analysts. In addition, the A note will only require interest payments – not principal – until 2014, and the borrower funded a $5.8 million interest reserve to service the debt. The B note becomes the “hope” note and doesn’t receive interest payments during the term. The...
  • 1:34 PM » Treasury May Sell Record Amount of Notes, Primary Dealers Say
    Published Wed, Apr 21 2010 1:34 PM by Business Week
    The U.S. Treasury may sell an unprecedented $128 billion in notes next week as expectations increase that the amount of securities auctioned by the government is peaking with the economy strengthening.
    Click Here to Read the Full Article

    Source: Business Week
  • 1:34 PM » Citigroup Seeks to End 2-Year Mortgage-Bond Drought (Update2)
    Published Wed, Apr 21 2010 1:34 PM by Business Week
    Citigroup Inc. is attempting to sell securities backed by 255 new mortgages, the first transaction of its type in more than two years, people familiar with the offering said.
    Click Here to Read the Full Article

    Source: Business Week
  • 8:14 AM » Shiller: "Mini-bubble" in Stock and Housing Markets
    Published Wed, Apr 21 2010 8:14 AM by Calculated Risk Blog
    Jennifer Schonberger at Motley Fool interviews Professor Robert Shiller: . A couple of comments from Shiller, first on house prices: Robert Shiller: Home prices have been going up for nearly a year now, according to our data, the S&P/Case-Shiller indices ... Normally we could extrapolate that kind of upward trend because historically home prices have shown a lot of momentum. But I think we're in a very unusual circumstance because of the massive bailouts, the homebuyer tax credits, the Fed's purchase of mortgage-backed securities -- and these things are coming to an end. So it's an unusual period. So I don't trust the trend that we have. I'm worried that it might get reversed. And on asset prices: Shiller: We have had kind of a mini-bubble in the stock market and the housing market. It wasn't just because of rate cuts. It was also because of government stimulus and bailouts. So the question is: Are we at risk for even more price increases, and another bubble? I think we are at risk, but I'm not predicting it. I think it's more likely we don't do so well from here .
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:13 AM » NY Times: Up to 300,000 public school jobs could be cut
    Published Wed, Apr 21 2010 8:13 AM by Calculated Risk Blog
    From Tamar Lewin and Sam Dillon at the NY Times: (ht Ann) School districts around the country ... are warning hundreds of thousands of teachers that their jobs may be eliminated in June. ... their usual sources of revenue — state money and local property taxes — have been hit hard by the recession. In addition, federal stimulus money earmarked for education has been mostly used up this year. ... Districts in California have pink-slipped 22,000 teachers. Illinois authorities are predicting 17,000 public school job cuts. And New York has warned nearly 15,000 teachers that their jobs could disappear in June. Secretary of Education Arne Duncan estimated that state budget cuts imperiled 100,000 to 300,000 public school jobs. In an interview on Monday, he said the nation was flirting with “education catastrophe.” These cuts will make the employment situation worse. This is also a reminder that the Federal stimulus spending peaks in Q2, and then starts to decline in Q3.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:12 AM » DataQuick: Foreclosures moving to mid-to-high end
    Published Wed, Apr 21 2010 8:12 AM by Calculated Risk Blog
    As a followup to the previous post, here is some more data : "We are seeing signs that the worst may be over in the hard-hit entry-level markets, while problems are slowly spreading to more expensive neighborhoods . We're also seeing some lenders become more accommodating to work-outs or short sales, while others appear to be getting stricter about delinquencies. It's very noisy out there," [John Walsh, DataQuick president] said. The state's most affordable sub-markets, which represent 25 percent of the state's housing stock, accounted for 47.5 percent of all default activity a year ago. In first-quarter 2010 that fell to 40.9 percent. California's mid- to high-end housing markets were more likely to have seen a rise in mortgage defaults last quarter , though the concentration of default activity - measured by defaults per 1,000 homes - remained relatively low in those areas. For example, zip codes statewide with median home sale prices of $500,000-plus saw mortgage defaults buck the overall trend and rise 1.5 percent last quarter compared with the prior quarter, while year-over-year the decline was 19 percent (versus a 40.2 percent marketwide annual decrease). Collectively, these zips saw 4.5 default notices filed for every 1,000 homes in the community, compared with the overall market's rate of 9.3 NODs for every 1,000 homes statewide. In zip codes with medians below $500,000, mortgage default filings fell 5.8 percent from the prior quarter and declined nearly 43 percent from a year earlier. However, collectively these zips saw 10.5 NODs filed for every 1,000 homes - more than double the default rate for the zips with $500,000-plus medians. On average, homes foreclosed on last quarter spent 7.5 months winding their way through the formal foreclosure process , beginning with an NOD. A year ago it was 6.8 months . The increase could reflect, among other things, lender backlogs and extra time needed to pursue possible loan modifications...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:11 AM » Fed’s Plosser Supports Ending Emergency-Lending Power
    Published Wed, Apr 21 2010 8:11 AM by WSJ
    The president of the Philadelphia Fed wants to end the emergency lending powers most central bankers think were key to fixing financial markets during the darkest days of the market meltdown. Bloomberg News Philadelphia Fed President Charles Plosser In , Federal Reserve Bank of Philadelphia President Charles Plosser outlined his preferred path for the central bank as Congress mulls reforming the financial regulatory system. Other Fed officials have also written to Congress about the issue, seeking to influence a process that could see big changes in how the Fed interacts with the banking system, should some sort of reform pass. Plosser’s letter gave the official a chance to reiterate and expand on points he has made in past remarks. He said it was important for steps to be taken to deal with banks that are too big to fail, and he advocated changing the bankruptcy codes to deal with failing non-bank financial institutions. As other Fed officials have done, Plosser also said proposals that would take away the Fed’s supervision over smaller banks are misguided, and would leave the Fed essentially as a regulator of too-big-to-fail banks. Plosser’s most dramatic proposal would basically strip the Fed of the powers most officials believe were key to righting the financial system over the tumult of recent years. The official said he supports taking away or limiting Fed powers that allow “lending to corporations, individuals and partnerships under ‘unusual and exigent circumstances.’” “I believe the fiscal authorities should do emergency lending and that the Fed should be involved only upon the written request of the Treasury,” Plosser said. “With an appropriate bankruptcy process that protects the financial system from the failure of one firm, the need for [emergency] type lending is vastly reduced,” the central banker said. Plosser has long shown some discomfort with the activities of the Fed through the crisis. He has advocated in the past that efforts should be made to move...
  • 8:10 AM » SEC Weighs Rules on Bank Debt
    Published Wed, Apr 21 2010 8:10 AM by WSJ
    The SEC is considering new rules that would prevent large banks from masking risks by temporarily lowering their debt levels before quarterly reports.
  • 8:09 AM » IMF Warns of 'New Phase' in Crisis
    Published Wed, Apr 21 2010 8:09 AM by WSJ
    In its semiannual Global Financial Stability Report, the International Monetary Fund said banks' losses world-wide wouldn't be as high as it previously estimated, but said Greece's upheaval may mark the start of escalating concerns about sovereign debt.
  • 8:08 AM » Economic Scene: As Markets Fizzle, Buying May Cost Less Than Renting
    Published Wed, Apr 21 2010 8:08 AM by NY Times
    For much of the last decade, renting has been a better financial move than buying. But in South Florida, Phoenix and Las Vegas, the tide has turned.
  • 8:08 AM » Greece Aid Talks Begin as IMF Signals Debt Threat (Update1)
    Published Wed, Apr 21 2010 8:08 AM by Business Week
    Greece began talks today on activating a 45 billion-euro ($61 billion) emergency aid package as the International Monetary Fund called the country’s fiscal crisis a “wake-up call” on sovereign-debt risks.
    Click Here to Read the Full Article

    Source: Business Week
  • 8:08 AM » Inspector general says changes to Making Home Affordable may impede help
    Published Wed, Apr 21 2010 8:08 AM by Washington Post
    Proposed changes to the government's marquee foreclosure-prevention initiative may impede efforts to help troubled homeowners and could lead to more fraud in the program, a federal watchdog concluded in a report released Tuesday.
    Click Here to Read the Full Article

    Source: Washington Post
  • Tue, Apr 20 2010
  • 3:35 PM » DataQuick: California Notice of Default Filings Decline in Q1
    Published Tue, Apr 20 2010 3:35 PM by Calculated Risk Blog
    Click on graph for larger image in new window. This graph shows the Notices of Default (NOD) by year through 2009, and for Q1 2010, in California from DataQuick. Although the pace of filings has slowed, it is still very high by historical standards. From Alejandro Lazo at the LA Times: Across California, a total of 81,054 homes received a notice of default in the first quarter compared with 84,568 in the fourth quarter of 2009 and a record 135,431 in the first quarter of 2009. In terms of new NOD filings, the peak was probably in 2009. A few key points: There are a record number of homes in the foreclosure process and the timeline from the filing of the initial NOD to REO has been extended significantly. There are so many homes in the pipeline the number of distressed sales (foreclosures and short sales) will probably increase sharply throughout 2010 - even if NODs decline. Many of these NODs are probably in mid-to-high end areas (as opposed to the flood of low end foreclosures in 2008). As I've been noting for over a year, prices have probably bottomed in some low end areas, but we will probably see further price declines in many mid-to-high end areas. Although NODs will probably decline in 2010, the number will still be very high. The number of filings in Q1 alone would be a normal year.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 3:34 PM » Housing Market May Not Be That Weak, Shiller Says: Tom Keene
    Published Tue, Apr 20 2010 3:34 PM by Business Week
    The U.S. housing market may not be as weak as Robert Shiller, co-creator of the S&P/Case-Shiller home price index, described it earlier this month.
    Click Here to Read the Full Article

    Source: Business Week
  • 3:34 PM » IMF: Mounting debt threatens global recovery
    Published Tue, Apr 20 2010 3:34 PM by Washington Post
    Historic levels of government debt in the developed world could throw the global financial system back into crisis and clear plans are needed to bring it under control, the International Monetary Fund said Tuesday.
    Click Here to Read the Full Article

    Source: Washington Post
  • 3:34 PM » Housing Expert: Foreclosures are 'Pigs with Lipstick'
    Published Tue, Apr 20 2010 3:34 PM by CNBC
    Housing Expert: Foreclosures are 'Pigs with Lipstick'
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