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  • Thu, Apr 1 2010
  • 1:17 PM » Manufacturing Grows the Most in 6 Years
    Published Thu, Apr 01 2010 1:17 PM by Business Week
    Manufacturing expanded in March at the fastest pace since July 2004, indicating factories will be a source of strength for the U.S. recovery in coming months.
    Click Here to Read the Full Article

    Source: Business Week
  • 1:17 PM » Mortgage-Bond Yields That Guide Loan Rates Rise to 3-Month High
    Published Thu, Apr 01 2010 1:17 PM by Business Week
    Yields on Fannie Mae and Freddie Mac mortgage securities that guide home-loan rates rose to the highest in more than three months, after the Federal Reserve ended its unprecedented purchases of the debt yesterday.
    Click Here to Read the Full Article

    Source: Business Week
  • 1:17 PM » Reporting Matchmaker: Setting Up Home Loan Modification Applicants With Local Journalists
    Published Thu, Apr 01 2010 1:17 PM by feeds.propublica.org
    by and , ProPublica - March 31, 2010 1:31 pm EDT Allow us to make an introduction: Homeowners, local journalists. Local journalists, homeowners. We’d like to set you up. Since last May, nearly 800 struggling homeowners from all over the country have shared their stories with ProPublica about their efforts to get a loan modification through the federal program. With their help, we showed the and frustrations applicants typically face: mortgage servicers have repeatedly , , and for reasons that to the program’s guidelines. Among the 1.1 million homeowners who’ve begun the program’s trial stage, which is supposed to last three months, . We have no doubt that there are many more important stories to be told. By any account, millions of homeowners are facing possible foreclosure. Although we read every homeowner’s story, we can only use a fraction in our coverage. That’s why we’re offering to set up our readers with local journalists (with the homeowner’s permission, of course). . We’re calling our service ProPublica’s Reporting Matchmaker. Here’s how it’ll work.
    Click Here to Read the Full Article

    Source: feeds.propublica.org
  • 7:50 AM » Jim the Realtor on Short Sales: "Rampant Fraud and Deceit"
    Published Thu, Apr 01 2010 7:50 AM by Calculated Risk Blog
    First: the buyer should find out if it is a HAFA short sale (starts April 5th). If so, the "negotiator fee" must be disclosed and be part of the agent's fee (total agent fee not to exceed 6%). From HAFA: The amount of the real estate commission that may be paid, not to exceed 6% of the contract sales price, and notification if any portion of the commission must be paid to a contractor of the servicer that has been retained to assist the listing broker with the transaction. As an aside, if the homeowner or buyer is an agent, they are not eligible for any commission. Any commission that would otherwise be paid to you or the buyer must be reduced from the commission due on sale. Second: as part of a HAFA short sale, the lender(s) must agree not to pursue a deficiency. If the lender balks on a short sale - I'd ask them about HAFA. Third: Where are the regulators? Jim the Realtor is talking about rampant fraud in San Diego. Hello? Is anybody listening? "There is rampant fraud and deceit being imposed by Realtors throughout the county. It's embarrassing."
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 7:50 AM » 3/31/10--SIGTARP Report: Factors Affecting HAMP
    Published Thu, Apr 01 2010 7:50 AM by www.fixedincomecolor.com
    *With all of the hoopla surrounding the government and Bank of America announcement's to push principal forgiveness to the top of the waterfall for mortgage modification triage it would have been easy to miss the latest report from the SIGTARP (Special Inspector General of TARP). and would encourage you to print it out and read it.
    Click Here to Read the Full Article

    Source: www.fixedincomecolor.com
  • 7:50 AM » Center for Housing Policy Study Finds Continuing Gap Between Housing Costs, Salaries
    Published Thu, Apr 01 2010 7:50 AM by National Council of State Housing Agencies
    On March 23, the National Housing Conference's Center for Housing Policy released a study that found that a "substantial gap" still exists between housing costs and many workers' salaries
    Click Here to Read the Full Article

    Source: National Council of State Housing Agencies
  • Wed, Mar 31 2010
  • 4:47 PM » Some Regions Never Felt Housing Boom, or Bust
    Published Wed, Mar 31 2010 4:47 PM by Google News
    From the WSJ’s blog: By Phil Izzo The U.S. still is feeling the effects of widespread housing bust, but a new report serves as a reminder that large swaths of the nation didn’t experience a boom in home prices and hasn’t suffered from the bust. New York Federal Reserve staffers Jaison R. Abel and Richard Deitz released highlighting the stability of upstate New York’s housing markets. The research notes that while the rest of the U.S. saw a real-estate boom and bust, upstate New York was largely insulated from the cycle. “Despite upstate’s long-term weak economic growth and population loss, Buffalo, Rochester, and Syracuse all ranked in the top 10 percent of metro areas in terms of home price appreciation in 2009, with Buffalo ranking sixth overall,” the authors wrote. But upstate New York isn’t alone in bucking the national trend. “Most U.S. metro areas actually experienced more moderate increases in house prices than the nation between 2000 and 2006. In fact, 249 of the 383 metropolitan areas tracked by the Federal Housing Finance Agency saw price increases below the national rate of 8.1% during the boom,” Abel and Deitz said. Many of these areas, in turn, didn’t experience the resulting bust…
  • 4:46 PM » Greenspan to Testify on Subprime Mess
    Published Wed, Mar 31 2010 4:46 PM by WSJ
    Originally posted on . The congressional panel investigating the financial crisis announced the witness list for next week’s much-anticipated three-day hearing focusing on who’s to blame for the subprime lending fiasco. Former Federal Reserve Chairman Alan Greenspan highlights the list of witnesses, as expected. He’ll be the first witness to face the Financial Crisis Inquiry Commission on Wednesday — and the only witness from the Fed. He’s likely to be grilled over the central bank’s decision not to tighten up on the loose lending standards that many banks and mortgage companies were employing in the years leading up to the collapse. Defaults on poorly-documented subprime mortgages undermined the value of many mortgage-related securities, and helped trigger the broader financial crisis in 2008. Greenspan already has cited the Fed’s decisions on lending standards as his biggest regret from the meltdown. He has said he thought the markets would be sufficiently vigilant to minimize the risk themselves. But the growing practice of securitizing mortgages into increasingly complex instruments apparently diluted accountability among lenders and investors, and encouraged poor risk management.
  • 1:56 PM » Appraisers- Working the System
    Published Wed, Mar 31 2010 1:56 PM by www.orep.org
    Editor’s Note: Kenneth W. Brown, SRA wants you to work the system- in a good way. Appraisers- Working the System By David Brauner, Editor Kenneth W. Brown, SRA wants you to work the system- in a good way. Here’s what he means. Brown, appraising since 1991, is sending and posting the following message (below) to fellow appraisers to [...]
  • 1:56 PM » Government Deficits May Soon Be Monetary Policy Variable
    Published Wed, Mar 31 2010 1:56 PM by WSJ
    Recent U.S. bond market volatility indicates a day may be coming where government deficits may become as important a variable for monetary policy as economic data. Right now, most believe low inflation, modest growth and a slow improvement in hiring means the Fed can take its time raising interest rates. But the government’s profligacy could change that view, bending the rate outlook in new directions. The harbinger of future trouble emerged last week, when investors pushed Treasury yields higher. Investors want more compensation for buying such epic amounts of debt. They may also want higher returns, given the added risk that Treasury will have trouble paying back all that it’s borrowed at a time when the subject of government finance is raising questions. While 10 year Treasury yields remain historically low at 3.88%, there’s fear it could go up, potentially by a lot. The problem for the Fed? Higher borrowing costs across the economy that could potentially imperil the recovery. “It’s definitely a concern, and it’s probably only going to get more acute as time goes by,” warns Stephen Stanley , chief economist with Pierpont Securities , a newly started bond trading firm. Why yields rise is central to understand how the Fed will react. If they are driven higher by supply forces alone, central bankers may want to counter the drag by keeping short term rates low for even longer than they now envision. What’s more, a real supply-driven jump in yields could conceivably put the Fed back in the mortgage buying business, in a bid to keep the housing market from being strangled. Higher bond yields could also force the Fed to hike rates, too, if the gains signaled rising worries about inflation. Markets could send that signal if inflation-indexed Treasurys were priced for more price risk as long term Treasury yields rose. Economists warn that scenario could force the Fed to raise rates, even if it meant blunting a recovery, so important to central bankers is keeping inflation...
  • 1:56 PM » Delinquent Borrowers Catch Up on Insured Mortgages (Update2)
    Published Wed, Mar 31 2010 1:56 PM by Business Week
    Borrowers who caught up on overdue mortgages outnumbered people who became newly delinquent on insured home loans for the first time in almost four years. PMI Group Inc. led mortgage insurers higher in New York trading.
    Click Here to Read the Full Article

    Source: Business Week
  • 11:52 AM » MORTGAGE MARKET NOTE 10-3 (UPDATE OF MORTGAGE MARKET NOTE 09-3): Federal Home Loan Bank Capital
    Published Wed, Mar 31 2010 11:52 AM by FHFA
    March 30, 2010: MORTGAGE MARKET NOTE 10-3 (UPDATE OF MORTGAGE MARKET NOTE 09-3): Federal Home Loan Bank Capital
  • 11:51 AM » More Integration and Cooperation Is Way Forward for Europe, IMF Chief Says
    Published Wed, Mar 31 2010 11:51 AM by IMF
    The benefits of European integration are beyond doubt in terms of the democracy, prosperity, and increases in living standards that it has delivered for ordinary people, IMF Managing Director told Romania's parliament on March 30 on the final leg of his European trip.
  • 11:51 AM » Bypassing the Bust: The Stability of Upstate New York's Housing Markets during the Recession.
    Published Wed, Mar 31 2010 11:51 AM by NY Fed
    Jaison R. Abel and Richard Deitz. Bypassing the Bust: The Stability of Upstate New York's Housing Markets during the Recession. Federal Reserve Bank of New York Current Issues in Economics and Finance , Volume 16, Number 3, March 2010.
  • 11:50 AM » The long-term impact of the mortgage crisis--and why it keeps me awake
    Published Wed, Mar 31 2010 11:50 AM by real-estate-and-urban.blogspot.com
    My parent's generation behaved differently than mine in all sorts of ways. shows that they spent less, controlling for education, etc., throughout their life cycle than any other generation. One of the reasons for this is that they paid off their mortgages. According to the American Housing Survey, 70 percent of households headed by someone over the age of 65 have no mortgage at all. Loan amortization became a mechanism for forced saving, and as a a result, those born during the depression are in pretty decent shape financially. A Pew Survey shows that those over the age of 65 feel much more in control of their finances than younger people. My generation is different. Even under the most benign circumstances, we refinance in a manner that slows amortization. I refinanced in Madison twice to take advantage of lower interest rates--this was, of course, the right thing to do financially. But each time, the amortization schedule reset, and so it extended the period at which the mortgage would pay off. Now yes, one can take the money one doesn't put into home equity and put it in other savings vehicles, but it is not clear that everyone does that. Forced saving is slowed. But this is not the worst of how people have handled their mortgages. A substantial fraction of borrowers pulled equity out of their houses, putting themselves on a lower savings path even in the absence of falling house prices. I am going to run some American Housing Survey data on this, but it is hard for me to imagine that 70 percent of my generation will have no mortgage debt when we are elders. My parents' generation has used housing wealth to, among other things, finance long-term care. I hope I am missing something here, but the lack of housing wealth in the future could become yet another challenge as we seek to fund the needs of the elderly.
    Click Here to Read the Full Article

    Source: real-estate-and-urban.blogspot.com
  • 11:35 AM » A little more on Mortgage Debt and Aging
    Published Wed, Mar 31 2010 11:35 AM by real-estate-and-urban.blogspot.com
    I did a quick comparison of average household income for 1989 and 2007 (using the census) and average mortgage debt for those that has mortgage debt (using Survey of Consumer Finances data). In both cases I looked at 45-54 year olds. In 1989, average household income among 45-54 year olds was $39,934; average mortgage debt outstanding among those who had debt was $39,300, so the ratio was about one-to-one. In 2007, average household income among 45-54 year olds was $83,100; average mortgage debt outstanding among those who had debt was $154,000, so the ratio was just under two-to-one. In 1989, the share of households in the age group with a mortgage was 58.3 percent; in 2007 it was 65.5 percent. The only good news: interest rates have dropped from about 10.5 percent to 5 percent. So in 1989, an average income household that wanted to amortize an average mortgage in 15 years would need to pay 14 percent of gross income to do so; in 1989 it would need to spend 19 percent. So putting this all together, the ratio of debt service to income for amortization by retirement has increased by (.19*.655/.14*.583)-1 = 52 percent. Not good, but not quite as bad as I thought, either.
    Click Here to Read the Full Article

    Source: real-estate-and-urban.blogspot.com
  • 11:35 AM » Analysis: Loan Mod Program Re-Boot
    Published Wed, Mar 31 2010 11:35 AM by www.fixedincomecolor.com
    Summary On Friday the administration announced several changes to its basket of homeowner assistance programs. Although this development generated loud headlines, we think the actual impact will be subtle and, if the history of borrower initiatives of the past three years is a guide, disappointing. In our view, the most important change is the imposition of mandatory new “outreach” steps in foreclosure proceedings. This will almost surely have the effect of further slowing foreclosure timelines that are starting to be measured in years, rather than months. Over time, the new pre-foreclosure requirements may push servicers into performing more short sales. While the other changes will improve or expand homeowner assistance at the margins, we believe the effects will not be significant. Bear in mind that with all these assistance programs, you’ve been paid to “bet the unders” in actual volume to date. Also in this report, we review the latest OCC-OTS figures on loan mod composition and redefault performance. Though redefault performance overall remains extremely poor, there are signs of hope in the subset of more recent mods that involve significant cuts in monthly payments.
    Click Here to Read the Full Article

    Source: www.fixedincomecolor.com
  • 11:03 AM » Housing, Finance and Bank Failures
    Published Wed, Mar 31 2010 11:03 AM by Seeking Alpha
    submits: Bank Failure Friday closed four more private banks. The FDIC Deposit Insurance Fund haunts banking. The NAHB worries about tougher regulatory guidelines on CRE lending. Restating the ignored regulatory guidelines yet again! I look at the daily charts for Housing, and Community and Regional Banks. Bank Failure Friday – Four more private community banks failed last Friday, bringing the total for the first quarter of 2010 to 41. At this pace the FDIC will close 164 banks this year, well within my predicted 150 to 200 failures in 2010. This brings the total since the end of 2007 to 206, on the way to 500 to 800 by the end of 2012 and into 2013. All four failures were extremely overexposed to C&D and CRE loans with loan pipelines between 88.7% and 100%. Key West Bank in Florida had exposures higher than I have ever seen; 4015% for C&D when the guideline is 100% and 20,216% for CRE when 300% is the guideline. The Deposit Insurance Fund ((DIF)) has now been tapped for $6.5 billion in 2010, bringing the DIF deficit to $27.4 billion excluding the prepaid $46 billion that sits on the sideline for 2010 through 2012. Another prediction still stands is that the FDIC will tap its $500 billion temporary line of credit with the US Treasury this year. At this pace of DIF Drain, the FDIC will need $26 billion to cover closures in 2010. This would make the DIF $18.6 billion short if you used up all prepaid fees. The FDIC wants to allocate just 1/3 of the $46 billion in 2010, that’s just $15.3 billion, which puts FDIC already in the hole by $12 billion, which justifies tapping the Treasury now. Total Cost to DIF Q1,2010 $6,510.2 DIF 2009 Q4 ($20,850) Cumulative Loss ($27,360) 2010 Fees $15,333 Estimated DIF ($12,027) 2011 Fees $15,333 2012 Fees $15,333 2010 - 2012 Fees $46,000 Estimated DIF $18,639.8 The NAHB is worried about tighter CRE standards. With the Comptroller of the Currency John Dugan recently stating that new tougher lending standards for CRE lending are on...
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 7:41 AM » Loans Without Backing Are Focus of Offer Plan
    Published Wed, Mar 31 2010 7:41 AM by WSJ
    Redwood Trust is trying to reopen the market for securities backed by home-mortgage loans without any government backing with an offering totaling at least $200 million, according to people familiar with the situation.
  • Tue, Mar 30 2010
  • 8:16 PM » Case-Shiller House Price Graphs for January
    Published Tue, Mar 30 2010 8:16 PM by Calculated Risk Blog
    Finally. Every month the S&P website crashes when the Case-Shiller data is released. IMPORTANT : These graphs are Not Seasonally Adjusted (NSA). Unfortunately this month only the NSA data is currently available. Usually I report the SA data, but that isn't available. S&P/Case-Shiller the monthly Home Price Indices for January (actually a 3 month average). The monthly data includes prices for 20 individual cities, and two composite indices (10 cities and 20 cities). Click on graph for larger image in new window. The first graph shows the nominal not seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000). The Composite 10 index is off 30.2% from the peak, and down about 0.2% in January (media reports are an increase seasonally adjusted - but that data isn't available). The Composite 20 index is off 29.6% from the peak, and down about 0.4% in January (NSA). The second graph shows the Year over year change in both indices. The Composite 10 is essentially flat compared to January 2009. The Composite 20 is off 0.7% from January 2009. The third graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices. Prices decreased (NSA) in 18 of the 20 Case-Shiller cities in January NSA. On a SA basis from the NY Times: Twelve of the cities in the index went up in January from December. Los Angeles was the biggest gainer, up 1.7 percent. Chicago was the biggest loser, dropping 0.8 percent. NOTE: Usually I report the Seasonally Adjusted data (see NY Times article), but that data wasn't available. So remember these graphs are NSA.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:15 PM » Much of U.S. Was Insulated From Housing Bust
    Published Tue, Mar 30 2010 8:15 PM by WSJ
    The U.S. still is feeling the effects of widespread housing bust, but a new report serves as a reminder that large swaths of the nation didn’t experience a boom in home prices and hasn’t suffered from the bust. Click for larger map. New York Federal Reserve staffers Jaison R. Abel and Richard Deitz released highlighting the stability of upstate New York’s housing markets. The research notes that while the rest of the U.S. saw a real-estate boom and bust, upstate New York was largely insulated from the cycle. “Despite upstate’s long-term weak economic growth and population loss, Buffalo, Rochester, and Syracuse all ranked in the top 10 percent of metro areas in terms of home price appreciation in 2009, with Buffalo ranking sixth overall,” the authors wrote. But upstate New York isn’t alone in bucking the national trend. “Most U.S. metro areas actually experienced more moderate increases in house prices than the nation between 2000 and 2006. In fact, 249 of the 383 metropolitan areas tracked by the Federal Housing Finance Agency saw price increases below the national rate of 8.1% during the boom,” Abel and Deitz said. Many of these areas, in turn, didn’t experience the resulting bust. The authors say a lack of nonprime lending in these areas played a prominent role in insulating them from the boom and bust. “It is likely that causation runs in both directions — an increase in nonprime lending led to more significant home price appreciation [in boom areas], and more rapid home price appreciation led to a rise in nonprime lending,” the authors stated. A correction from the boom years was clearly the driving force behind a national decline in home prices, and some regions with little to correct have been largely insulated. However, the trouble in the housing market may not end as the market returns to normal levels. Many metro regions may have been spared a precipitous decline in home prices, but the recession sparked by the drop has left almost no one unscathed. As every...
  • 8:15 PM » US mortgage investor rights must be heard, group says
    Published Tue, Mar 30 2010 8:15 PM by Reuters
    NEW YORK, March 30 (Reuters) – Investors who buy residential mortgage and other consumer debt securities on Tuesday urged the U.S. government to pay more attention to their interests as the securitization market is fixed. In a white paper, the Association of Mortgage Investors said better disclosures and enhanced buyer rights are required to restore confidence to the market that has been a top funder of U.S. mortgages in years past. Securitizations as constructed by banks, rating companies and debt servicers in the past have had little regard for the investor, they said. The investor group, which includes Fortress Investment Group, are turning more vocal in their quest for representation as other sources of consumer credit face challenges. Regulators are seeking ways to reduce the economy’s reliance on government funding via Fannie Mae and Freddie Mac, while bank portfolios are stretched already. “Investors provide the capital that make the securitization markets work yet have been ignored in market structure discussions,” the association said in the paper. “It is important for the government to consider the policy recommendations of investors, whose participation and capital are needed for there to be a viable mortgage-backed securities market,” Micah Green, a partner at Patton Boggs LLP, said in a statement. Patton Boggs represents the association. Other big investors, including BlackRock Inc., have complained that unfair treatment of senior debtholders when banks conduct mortgage modifications could hinder the return of private capital at a time when the Federal Reserve is pulling its purchase support of mortgage markets. Fixes to securitizations should include giving investors access to information on loans in securities, which is often denied to them by the loan’s servicer. That investors must pay services such as Loan Performance for data in loans, in light of the no-cost public disclosures on corporate bonds, is “outrageous,” they said. Arguments that loan data...
  • 8:15 PM » 3/30/10--Case-Shiller, Economic Outlook
    Published Tue, Mar 30 2010 8:15 PM by www.fixedincomecolor.com
    *Lots of positive sentiment out there recently . Not necessarily in the RMBS sector, but in the overall economy. With the 10yr sitting at 3.86% this morning I have read from RBS about the risk of 4.30% in our near term future and yesterday D-Bank talked about speeding to 4.10% on the 10yr on the back of strong employment numbers this week. With that being said we have Case-Shiller coming out this morning (in about 20 minutes as of this writing) and I have yet to find ANYONE that believes they are at risk of the housing market getting away from them to the upside. Thank you to our friend Paul Jacob for pointing out the “cumulative weakness in the RPX over recent months” and raising the specter of declination of the MOM C-Shiller index. Unfortunately I am a believer that even if the housing market goes side-ways for the next 3 to 5 years we will have an ever increasing severity on loans that ultimately end up in default, especially if you include principal reduction combined with ultimate loss on loans that ‘re-default’.
    Click Here to Read the Full Article

    Source: www.fixedincomecolor.com
  • 4:52 PM » California Desert Town: From Bucolic Bliss to ‘Gated Ghetto’
    Published Tue, Mar 30 2010 4:52 PM by Google News
    Gina Ferazzi / Los Angeles Times “We loved how everything was family-oriented,” said Willowalk resident Eddie Lopez, left, with wife Maria and six of their children. They bought their 5,000-square-foot house for $440,000 in 2006. It’s probably worth about $170,000 now. Tuesday’s Los Angeles Times takes an at what the housing boom-and bust-has done to , a gated community in the desert town of Hemet, Calif., located about 90 minutes outside of Los Angeles. Back in 2006, at the height of the housing mania, the Lopez family agreed to pay $440,000 for a 5,000-square-foot home in the DR Horton-built development. At the time, the community personified the American Dream: Families filled the addresses, and the community buzzed with social activities like block parties; residents flocked to the community pool. Street names like Pink Savory Way and Bee Balm Road completed the postcard-perfect image, the paper says. But these days, the pool is shuttered. On “handsome single-family homes are padlocked doors, orange ‘no trespassing signs’ and broken front windows,” the Times reports. “Vacant homes are sprinkled throughout Willowalk, betrayed by foot-high grass.” Angelica Stewart and her family plan to vacate the $318,000 home they bought in 2006. Living in a gated community, she tells the paper, “is absurd when drug busts are a regular occurrence.” Willowalk is hardly an isolated case. Similar scenarios are replayed again and again in communities far from urban cores, land that saw rapid development to fill the boom’s insatiable demand. But now that prices have plunged - the Lopezes might be lucky to fetch $170,000 - the owners are gone, replaced by renters. Few owners, it seems, find a long commute worth it anymore. Home prices might be showing -January’s prices were mostly flat from a year earlier - but that doesn’t mean there’s an end in sight. “Thanks to overbuilding, demographic changes and shifts in preferences, by 2030 there could be 25 million more suburban homes on large...
  • 4:51 PM » How $50 Billion in TARP Money Is Being Spent on Housing
    Published Tue, Mar 30 2010 4:51 PM by Google News
    The Obama administration is stressing that the revamp of its foreclosure prevention efforts won’t cost any more taxpayer money. That’s because the administration hasn’t come close to using the $50 billion from the Troubled Asset Relief Program (TARP) that it set aside for its loan modification program last year. That money helps cover the cost of lowering borrowers’ monthly payments, usually by reducing interest rates and extending loan terms to 40 years. Loan servicers that handle mortgage payments also receive incentive payments for successfully modifying mortgages under the Home Affordable Modification Program, or HAMP. Borrowers are eligible for payments after one year in the program. Separately, the administration said last week it would begin requiring banks to consider writing down loan balances for borrowers who owe 115% of their home value. Lenders will receive 10 to 21 cents of federal subsidies for every dollar of loan principal reduced, depending on the degree to which the borrower is underwater. HAMP has resulted in just 170,000 permanent modifications so far and is being revamped to reach more borrowers. That means the $50 billion outlay from TARP has essentially become a housing slush fund that doesn’t require congressional approval for every new outlay or program change. Here’s a look at where some of the money is going: $600 million in housing aid for five more states to spend through their housing-finance agencies. This was announced Monday. Ohio, North Carolina, Oregon, Rhode Island and South Carolina qualified for the aid because they have high concentrations of people living in areas with unemployment that exceeds 12%. $1.5 billion awarded last month to the original five “hardest-hit” housing states: California, Nevada, Arizona, Florida, and Michigan, which had the steepest home price declines. $14 billion earmarked to cover the costs of an initiative where the Federal Housing Administration will allow underwater borrowers to refinance into government...
  • 4:51 PM » What Happened to That Double Dip in Home Prices?
    Published Tue, Mar 30 2010 4:51 PM by Google News
    Have government policies staved off a future home price decline, or have they simply kicked a future price decline further down the road? It’s a timely question with Tuesday’s report on from the Case-Shiller home price index, which showed slightly better than expected home price appreciation. After adjusting for seasonal factors, home prices gained by 0.3% in the three month period ending in January 2010 versus the three month period ending in December 2009. Price gains were led by Western markets such as Los Angeles and San Diego that have seen lots of activity at the low-end as first-time buyers compete with investors for deals on distressed sales. To recap, the government took a series of aggressive steps to help prop up the housing market last year: Congress extended and expanded the home buyer tax for contracts signed by April 30 and closed by June 30. The Federal Reserve extended its purchases of mortgage-backed securities to help keep mortgage rates low. Those purchases are set to end on Wednesday. The Federal Housing Administration has helped provide a steady source of mortgages with minimum down payments of 3.5%. Insurance premiums will rise on FHA-backed loans beginning next week. The government has pushed banks to do more to modify loans, which has held back the number of new foreclosures hitting the market. Foreclosure activity should pick up as more borrowers fail to qualify for modifications and as new programs go into place next week to accelerate short sales, where homes sell for less than the amount owed. Standard & Poor’s, which publishes the Case-Shiller index, warns that the rebound in home prices from last fall is “fading.” There was always a big concern that home prices would slide after the tax credit expired, and while it was extended, the threat of expiration produced a big flurry in buying activity last fall. While home price indexes that include distressed sales, such as the Case-Shiller index, hit their bottom last year, says Thomas Lawler...
  • 4:51 PM » A Look at Case-Shiller, by Metro Area (March Update)
    Published Tue, Mar 30 2010 4:51 PM by WSJ
    The S&P/Case-Shiller 20-city home-price index, a closely watched gauge of U.S. home prices, was mostly flat in January from a month earlier. The index declined 0.7% from a year earlier. On a month-to-month basis prices fell 0.4% in January from December, but adjusted for seasonal factors the 20-city index was 0.3% higher. The winter months are particularly slow for housing, and seasonal factors play a strong role in price declines. On a seasonally adjusted basis, eight cities posted month-to-month declines. Unadjusted, all but two regions experienced home-price drops. Los Angeles posted the largest jump in prices, while Chicago posted the biggest drop. Four cities — Charlotte, Las Vegas, Seattle and Tampa — posted new lows following the financial crisis. On a relative basis, Washington, Los Angeles and New York have held up the most, with each of those markets still 70% above their January 2000 levels. “There is little doubt that housing ’stabilization’ continues although the influx of four million new foreclosures, both on-the-market and shadow inventories that remain elevated, 30 year mortgage rates that are solidly through the 5.1% level and an unemployment rate that remains elevated will all likely continue to put downward pressure on demand and thus prices,” said Dan Greenhaus of Miller Tabak & Co. Below, see data from the 20 metro areas Case-Shiller tracks, sortable by name, level, monthly change and year-over-year change — just click the column headers to re-sort. (About the numbers: The Case Shiller indices have a base value of 100 in January 2000. So a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the metro market.) Home Prices, by Metro Area Metro Area January 2010 Unadjusted Change from December Seasonally Adjusted Change from December Year-over-year change Atlanta 107.04 -1.5% -0.5% -2.2% Boston 153.03 -0.5% 0.3% 1.5% Charlotte 117.13 -0.6% -0.1% -3.1% Chicago 125.11 -1.7% -0...
  • 4:36 PM » Can the SAFE Act Which Regulates the Mortgage and Reverse Mortgage Industry Originators Be Totally Unsafe?
    Published Tue, Mar 30 2010 4:36 PM by www.dennishaber.com
    I have submitted to the onerous requirements of the act because I love the reverse mortgage industry and wish to remain. Others have run away from it. Some have moved from the industry into other jobs. However, the time is ripe to start a dialogue on a topic that has already garnered much debate within and without the reverse mortgage industry. The Safe Act was passed by Congress and signed into law by President Bush as part of the Housing & Economic Recovery act of 2008. Once and for all it sought to correct the deception, fraud, bilking and misrepresentation that some believed was indigenous to the mortgage origination industry. If this law applied equally to mortgage broker, mortgage banker and to depository institution originators, I would have little to say about the law. However, as it now stands, the law is inequitable. It makes little sense. And ultimately does nothing to protect future borrowers from the new scam artists that penetrate the mortgage industry. The licensing requirements do not apply to depository institutions. The aforementioned law illustrates the pristine example of the power of lobbying dollars at work. Before we proceed any further, we have to agree upon one truth: that no matter how or where one obtains a loan the process remains the same. To wit: Whether one originates a loan from a mortgage broker, a mortgage banker or from a depository institution, each “entity” performs the identical task. Let me be clear about this. The origination function of a mortgage broker, mortgage banker and depository institution is identical. However, the treatment that the law provides is entirely disparate. It seems to me that today the public is better off working with a mortgage broker or a mortgage banker because they are now required to pass a mandated challenging test on federal and state law; required to be licensed; required to take 20 hours of pre-licensing courses and 11 hours of continuing education classes each year; undergo a criminal background...
    Click Here to Read the Full Article

    Source: www.dennishaber.com
  • 11:57 AM » Credit Unions, Commercial Banks at Odds Over Lending Turf
    Published Tue, Mar 30 2010 11:57 AM by WSJ
    A proposal to double the percentage limit that determines how much credit unions can lend to small businesses is drawing sharp criticism from commercial lenders, building upon an already thorny relationship between the two. The Credit Union National Association is lobbying Congress to increase how much credit unions can lend to small business from 12.25% to 25% of a credit union’s total assets, and increase the individual loan amounts that wouldn’t count toward the cap from $50,000 to $250,000. As policymakers continue to wrangle with how to reduce constrained lending standards to companies, the association — seizing the opportunity put forth by the financial meltdown — said credit unions are viable resources for businesses who need loans. “The stars are aligned and now is the perfect time for this to happen,” the association’s Senior Vice President John Magill said. His group has already received support from about 104 lawmakers, who have signed on to legislation easing the restrictions. But opposition from the banking industry has kept the provision out of pending financial services legislation in both chambers. The bill’s main sponsor, Rep. Paul Kanjorski (D., Pa.), hopes to attach his provision to any future jobs-creation legislation that the House considers, arguing the measure could create more than 100,000 jobs. A companion bill pending in the Senate sponsored roughly a dozen co-sponsors. Nonetheless, the American Bankers Association doesn’t think now is the time for lawmakers to ease credit union’s business lending restrictions. ABA Congressional Relations Executive Vice President Floyd Stoner labeled the proposal a policy decision that could undermine why credit unions were created. Stoner took issue with whether credit unions would be serving consumers of “modest means” as indicated by their mission statement. Credit unions are tax-exempt in part because of this mission. “By a handfull of aggressive credit unions seeking to become ever more bank-like without...
  • 11:57 AM » Treasury Group Expands Role to Agency, Mortgage Debt (Update1)
    Published Tue, Mar 30 2010 11:57 AM by Business Week
    An industry group that advises on trading in Treasuries said it will expand its role to the agency debt and agency mortgage-backed securities markets after unsettled trades in those markets climbed to a seven-year high.
    Click Here to Read the Full Article

    Source: Business Week
  • 11:10 AM » Mortgage Securities Debate Is All About Trust
    Published Tue, Mar 30 2010 11:10 AM by WSJ
    The effort to revive the market to package loans into securities has turned into a battle between regulators and lenders over a fundamental question: Can banks and their overseers be trusted to prevent bad lending?
  • 10:40 AM » Report: Permanent rentals cheaper than homeless shelters
    Published Tue, Mar 30 2010 10:40 AM by Google News
    A study released yesterday by the U.S. Department of Housing & Urban Development (HUD) concludes government pays more to provide the homeless with emergency shelter than it would to provide permanent rental housing. “We are paying for a form of housing that is largely substandard, and we are paying as much, if not more, than standard conventional housing,” according to University of Pennsylvania professor Dennis Culhane , quoted in USA Today. The study is based on 9,000 families and individuals. or in . Share this entry:
  • 10:24 AM » 30 days and counting: Homebuyer tax credit expires
    Published Tue, Mar 30 2010 10:24 AM by CNN
    Attention shoppers: You have barely a month left before the homebuyer tax credit expires. But depending on where you live, you might not want to rush out to buy.
  • 10:24 AM » SIFMA Supports TMPG Expansion Into Agency Debt & Agency MBS Markets
    Published Tue, Mar 30 2010 10:24 AM by SIFMA
    Release Date March 30, 2010Contact Katrina Cavalli, (212) 313 1181, kcavalli@sifma.org SIFMA Supports TMPG Expansion Into Agency Debt & Agency MBS Markets New York, NY, March 30, 2010— The Securities Industry and Financial Markets Association (SIFMA) today released the following
  • 10:08 AM » Do Non-Recourse Loans Become Recourse in the New Mortgage Plan?
    Published Tue, Mar 30 2010 10:08 AM by Seeking Alpha
    submits: I was reading Dean Baker’s commentary on why the in the Guardian when it dawned on me that the ‘new’ plan is an enhancement of the old plan. And this is significant because the old plan turned non-recourse loans into recourse ones. These recourse loans give banks the ability to seize assets of the debtor other than the home against which the mortgage is secured. This is further evidence that the new mortgage plan is designed to help recapitalize banks and not to help underwater debtors. Back in July I wrote specifically because of this feature. Then I said:
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 10:08 AM » Half of Commercial Mortgages to Be Underwater: Warren
    Published Tue, Mar 30 2010 10:08 AM by CNBC
    Half of Commercial Mortgages to Be Underwater: Warren
  • 8:49 AM » Housing: Sales activity picking up
    Published Tue, Mar 30 2010 8:49 AM by Calculated Risk Blog
    As expected, sales are picking up again (contracts must be signed before April 30th to qualify for the Federal tax credit): From David Streitfeld at the NY Times: (ht Ann) After several disastrous months for home sales across the country, when volume dropped by 23 percent, the pace appears to be picking up again. The number of Des Moines homes under contract in February rose by a third from the January level. The number of pending contracts jumped 10 percent in Naples, Fla., 14 percent in Houston and 21 percent in Portland, Ore. These deals will be reflected in the national sales reports when they become final, this month or next. There is no evidence that prices have begun to move in response to the higher volume. Indeed, so many homes are coming on the market that prices might well fall further. And unfortunately some people are calling for an extension: Robert Shiller, a professor of economics at Yale and co-developer of the Standard & Poor’s/Case-Shiller housing price index, is an early advocate. He thinks the credit was a bad idea that nevertheless the market cannot do without. “You don’t make drug addicts go cold turkey,” Mr. Shiller said. “The credit interferes with the market in an arbitrary way, but ending it now would be psychologically powerful. People will be in a bad mood about buying a house.” He advocates phasing it out gradually. Dr. Shiller is right that the credit was a bad idea, but he is forgetting that existing home sales add little to the economy - and encouraging new home sales with an excess supply is counterproductive. I am hearing from agents that sales activity is picking up in California too. But I don't expect the increase in sales to be as significant this May and June (when contracts close), as last October and November when the first tax credit was expiring. We must remember not to mistake activity with accomplishment (to quote John Wooden). This little extra activity does nothing to reduce the overall supply.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • Mon, Mar 29 2010
  • 7:24 PM » Productivity and the Density of Human Capital.
    Published Mon, Mar 29 2010 7:24 PM by NY Fed
    Jaison Abel, Ishita Dey, and Todd Gabe. Productivity and the Density of Human Capital. Federal Reserve Bank of New York Staff Reports Staff Report Number 440, March 2010.
  • 7:24 PM » Social Security, Benefit Claiming, and Labor Force Participation: A Quantitative General Equilibrium Approach.
    Published Mon, Mar 29 2010 7:24 PM by NY Fed
    Selahattin Imrohoroglu and Sagiri Kitao. Social Security, Benefit Claiming, and Labor Force Participation: A Quantitative General Equilibrium Approach. Federal Reserve Bank of New York Staff Reports Staff Report Number 436, March 2010.
  • 7:09 PM » Edmunds.com: Vehicle Sales driven by Incentives in March
    Published Mon, Mar 29 2010 7:09 PM by Calculated Risk Blog
    In the earlier post, I forgot to mention that U.S. vehicle sales will be released on Thursday. From : Edmunds.com analysts predict that March's Seasonally Adjusted Annualized Rate (SAAR) will be 12.4 million, up from 10.3 million in February 2010. “Although this SAAR sounds promising, it’s too early to wave the flag and say that the economy has turned the corner,” Edmunds.com CEO Jeremy Anwyl told AutoObserver.com. “Incentives drove sales this month, but those were defensive moves in response to Toyota stepping up incentives and are unlikely to last because inventories are simply not high enough to justify them in the long term.” Click on graph for larger image in new window. This graph shows the historical light vehicle sales (seasonally adjusted annual rate) from the BEA (blue) and a forecast for March from Edmunds.com. Excluding the cash-for-clunkers month of August 2009, Edmunds is forecasting the highest sales rate since Sept 2008. As Edmunds notes, the expected jump in March sales was driven by Toyota's incentive program to regain market share - and the response of the other manufacturers. As always I'll be posting the sales reports and an estimate of the SAAR around 4 PM ET on Thursday.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
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