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  • Mon, Oct 19 2009
  • 8:25 AM » Inspector General Report: FHA Lacks Resources to Ensure Lenders Meet Requirements
    Published Mon, Oct 19 2009 8:25 AM by Calculated Risk Blog
    From the WaPo: On Friday, the Inspector General of the Department of Housing and Urban Development, which includes FHA, said the agency lacks the ability to ensure that lenders meet its requirements. The report also said that FHA did not obtain or consider negative information on lenders from other HUD offices, follow up on whether the required fees or documentation were collected, or properly dispose of lender application files containing personally identifiable information. The on the report. (I haven't seen the report yet). No wonder so many FHA lenders have off-the-chart default rates (see: ).
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • Fri, Oct 16 2009
  • 5:35 PM » US Foreclosure Activity
    Published Fri, Oct 16 2009 5:35 PM by The Big Picture
    FST: > > Source: Charlie Carter USFST, 10/15/09
    Click Here to Read the Full Article

    Source: The Big Picture
  • 5:35 PM » Record Quarterly Foreclosures: Up 23% from Q3 2008
    Published Fri, Oct 16 2009 5:35 PM by The Big Picture
    via > I meant to touch upon this yesterday: Foreclosure filings — default notices, scheduled auctions and bank repossessions — have surged to record highs — in Q3, there were 937,840 properties. That is a quarterly increase of 5%, and a year over year gain of 23%. During Q3, one in every 136 U.S. housing units received a foreclosure filing — a record high. This quarter was the worst 3 month period since the great Depression. In yet another astonishing data point, just 6 states account for 62% of US total foreclosures: California, Florida, Arizona, Nevada, Illinois and Michigan are the leading states in terms of receiving foreclosure filings. As the chart above shows, California, Florida, Arizona, and Nevada have the greatest foreclosure activity. States with the greatest foreclosure activity have also seen the most significant price decreases, leading to increased purchases. > See also: Sources : RealtyTrac Otober 15, 2009 Les Christie CNNMoney October 15, 2009
    Click Here to Read the Full Article

    Source: The Big Picture
  • 5:35 PM » Losses on 2007 U.S. CMBS Conduits Could Approach 10% - Fitch
    Published Fri, Oct 16 2009 5:35 PM by Seeking Alpha
    submits: Fitch Ratings has completed a review of 78 U.S. CMBS conduit transactions issued between 2006 and 2008. The review, encompassing approximately $230.4 billion in unpaid balance, resulted in affirmations for 80% of the tranches ($186.1 billion) and downgrades to 20% ($44.3 billion) by dollar balance. The 2007 vintage incurred the majority of negative rating actions. In total, Fitch downgraded 89 junior ‘AAA’ classes (totaling $16.7 billion) across the vintages and five mezzanine ‘AAA’ classes ($726 million). Fitch affirmed all 492 super senior ‘AAA’ classes in its rated portfolio ($164 billion), along with seven junior ‘AAA’ classes ($1.1 billion) and 88 mezzanine ‘AAA’ classes ($17.6 billion).
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 5:35 PM » FHA Case and Appraisal Transfers- What HUD Doesn’t Tell You That You Need to Know!
    Published Fri, Oct 16 2009 5:35 PM by
    Written By: Stacey Sprain, Certified Ambassador Loan Processor (CALP) This week’s topic was an easy one because of an ongoing situation I’ve been involved with that I learned a lot about over this past week. And to be honest, I am really frustrated about this one because it has taken up many people’s time, nearly cost a borrower close to $1000 in appraisal fees and put an appraiser in an awkward position to serve as “trainer” on appraisal regulations when in fact the “trainer” should have been HUD in their own instruction and communication. I think we’ll all agree that it’s always been understood that when a lender transfers a case assignment where an appraisal has been completed, the appraisal is transferred with the case to the new lender. In fact, if you search by topic of “case transfer” within the FHA Outreach FAQ at you will read a number of times that HUD states the following: Lenders are expected to cooperate in the transfer of case numbers. At the request of a borrower, the case number is to be assigned to the new lender using the Case Transfer function in FHA Connection. The transferring lender is entitled to retain any lock-in fee collected from the borrower at the time of application. The transferring lender is required to provide the new lender with the appraisal, if any, but is not required to provide any processing documents, if any. If processing documents are transferred, the fee for providing these documents is to be negotiated between the lenders. No separate charge to the borrower is allowed for the transfer of a case number. Well here is what HUD doesn’t mention or answer that is more than likely to occur many many times if they do not. This is what happened on a recent incoming case transfer to our company: Lender A held a case assignment and received a completed appraisal for borrower A. For whatever reason, Lender A never closed the case with Borrower A, never entered a mortgage credit reject in FHA Connection and never cancelled the case with...
    Click Here to Read the Full Article

  • 5:35 PM » HUD Won't Delay New RESPA Rules
    Published Fri, Oct 16 2009 5:35 PM by Realtor.Org
    The Department of Housing and Urban Development says it's imperative that the new rules take effect on schedule, but Congress may intervene.
  • 5:35 PM » Joint Statement on Budget Results for Fiscal Year 2009
    Published Fri, Oct 16 2009 5:35 PM by US Treasury
    To view or print the PDF content on this page, download the free . October 16, 2009 TG-322 Joint Statement of Tim Geithner, Secretary of the Treasury, and Peter Orszag, Director of the Office of Management and Budget, on Budget Results for Fiscal Year 2009 WASHINGTON, D.C. – U.S. Treasury Secretary Tim Geithner and White House Office of Management and Budget (OMB) Director Peter R. Orszag today released details of the final Fiscal Year 2009 budget results. In making the announcement, Geithner and Orszag pointed to the severe economic and financial crisis the country faced this year and the Administration's commitment to lay a new foundation for economic growth and fiscal sustainability. "This year's deficit is lower than we had projected earlier this year, in part because we are managing to repair the financial system at a lower cost to taxpayers. But future deficits are too high, and the President is committed to working with Congress to bring them down to a sustainable level as the economy recovers," Secretary Geithner explained. "It was critical that we acted to bring the economy back from the brink earlier this year. As we move from rescue to recovery, the President recognizes that we need to put the nation back on a fiscally sustainable path. As part of the FY 2011 budget policy process, we are considering proposals to put our country back on firm fiscal footing," Director Orszag stated. A summary of the FY2009 data, released as part of the September 2009 Monthly Treasury Statement of Receipts and Outlays of the United States Government, shows that the federal deficit dropped by $162 billion from a projected $1,580 billion in the August Mid-Session Review (MSR) to the final figure of $1,417 billion. Receipts for the fiscal year totaled $2,105 billion, while outlays totaled $3,522 billion. The decline in the deficit from the August MSR estimate reflected outlays that were $132 billion lower than expected in August, in large measure because...
  • 12:52 PM » Service Lets Homeowners Get Jump on Lien Jumpers
    Published Fri, Oct 16 2009 12:52 PM by Washington Post
    Adapted from Elizabeth Razzi's blog at
    Click Here to Read the Full Article

    Source: Washington Post
  • 12:52 PM » A Look Inside Fed’s Balance Sheet — 10/14/09 Update
    Published Fri, Oct 16 2009 12:52 PM by WSJ
    You need to upgrade your Flash Player The Fed’s balance sheet expanded for the first time in three weeks, rising slightly to $2.174 trillion from $2.120 trillion. The bulk of the increase came from more than $70 billion in new purchases of mortgage-backed securities. The Fed also expanded its purchases of Treasurys and agency debt. The central bank started a program in March to ramp up such acquisitions in order to keep long-term interest rates low. The Fed announced in August that it will be buying more Treasurys through the end of October, and said last month that it will be buying MBS into 2010. The makeup of the balance sheet continues to shift as most emergency facilities to prop up the financial system posted declines. Direct-bank lending dropped to its lowest level since the week following last year’s collapse of Lehman Brothers. In an effort to track the Fed’s actions, Real Time Economics has created an interactive graphic that will mark the expansion of the central bank’s balance sheet. Every Thursday afternoon or thereabouts, the chart will be updated with released by the Fed. In an effort to simplify the composition of the balance sheet, some elements have been consolidated. Portfolios holding assets from the Bear Stearns and AIG rescues have been put into one category, as have facilities aimed at supporting commercial paper and money markets. The direct bank lending group includes term auction credit, as well as loans extended through the discount window and similar programs. Central bank liquidity swaps refer to Fed programs with foreign central banks that allow the institutions to lend out foreign currency to their local banks. Repurchase agreements are short-term temporary purchases of securities from banks, which are looking for liquidity and agree to repurchase them on a specified date at a specified price. Click and drag your mouse to zoom in on the chart. Clicking the check mark on categories can add or remove elements from the balance sheet.
  • 12:36 PM » Home Buyer Tax Credit Gains Steam
    Published Fri, Oct 16 2009 12:36 PM by CNBC
    Posted By: I was on the fence for a while as to whether Congress would extend the $8000 first time home buyer tax credit and whether the Administration would stand behind that, but I'm getting some clues that have pushed me over the side. I think it may happen. Topics: | | | Sectors: | MEDIA:
  • 10:15 AM » JP Morgan Chase wants interest only loan modifications in Obama Plan
    Published Fri, Oct 16 2009 10:15 AM by
    Banks will push the Obama administration to expand its mortgage-modification program to allow interest-only periods on reworked loans, seeking to bring more homeowners into the initiative while recognizing concern that it may only postpone defaults, according to JPMorgan Chase & Co. “We’re working with our peers to develop a proposal to present,” Douglas Potolsky, a senior [...]
    Click Here to Read the Full Article

  • 8:25 AM » Treasury: Dollar Will Prevail As Long As U.S. Policies Are Sound
    Published Fri, Oct 16 2009 8:25 AM by WSJ
    With all the noise about the weakness of the dollar and foreign investors’ uneasiness about future fiscal policy and inflation — and periodic talk from China or the Middle East about abandoning the dollar in favor of some other currency or a basket of currencies — the dollar continues to be the world’s dominant currency. And, , “As long as the United States maintains sound macroeconomic policies and deep, liquid, and open financial markets, the dollar will continue to be the major reserve currency.” A chart accompanying the Treasury’s semi-annual report to Congress on the currency shows the dollar has lost some — but not a lot — of market share to the euro in the past decade. “The key factor that may explain the smaller share of the euro as a reserve currency is the size and depth of government bond markets. Although total sovereign debt outstanding in the euro area rivals that of the United States, there is no common euro area sovereign debt market. This reduces the ease with which holders of euro-denominated securities can buy and sell them, compared with U.S. Treasury securities,” the Treasury said. Meanwhile, Fred Bergsten, who served in the Carter Treasury and is now head of the Peterson Institute for International Economics, is arguing that the dollar’s days are numbered. , he says, the dollar’s position as the default international currency has made it “much easier for the United States to finance, and thus run up, large trade and current account deficits with the rest of the world.” But the U.S. trade deficit, along with the huge U.S. budget deficit, laid the groundwork for the current financial crisis. So he says it is now time for Washington to realize that “large external deficits, the dominance of the dollar, and the large capital inflows that necessarily accompany deficits and currency dominance are no longer in the United States’ national interest.” It’s time to start creating an international currency system that does not rely on the dollar, he concludes...
  • 8:09 AM » U.S. Charges 41 with Mortgage Fraud
    Published Fri, Oct 16 2009 8:09 AM by Calculated Risk Blog
    This includes lawyers, mortgage brokers, and loan officers ... From the NY Times: Federal prosecutors announced charges on Thursday against 41 lenders, lawyers and others in the real estate industry who they said used fraud to obtain more than $64 million in loans connected to more than 100 residential properties in New York State. .... [One case involved] a Bronx real estate company called MTC, 10 people were accused of participating in a $5.6 million “foreclosure rescue” scheme in which they sought out troubled mortgage holders facing foreclosure, running radio ads in which they presented themselves as saviors. An indictment said that the defendants in that case ... duped troubled homeowners into selling their properties at low prices or persuaded them to transfer the deeds to their homes, promising to help solve their financial problems and then return the properties. Instead, prosecutors said, Ms. Bills and other defendants flipped those properties to straw buyers at inflated prices subsidized by unaffordable loans that the defendants persuaded lenders to issue based on false documentation. It is hard to believe how callous and greedy some people are (assuming the charges are true).
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:09 AM » The Uncertain Housing Outlook
    Published Fri, Oct 16 2009 8:09 AM by Calculated Risk Blog
    The housing outlook has probably never been more uncertain ... and the details are masked by many distortions. "[T]he HAMP program right now ... really makes it difficult for anyone from the outside [of Citi] to actually have a good view as to the inherent credit profile in our [mortgage] delinquency buckets." Citi CFO John Gerspach, So, as confusing as it is, here is a rough overview ... Supply: the supply of distressed homes has been severely restricted by a combination of foreclosure delays and trial modifications. Demand: demand has been distorted by the first-time homebuyer tax credit, by extraordinary levels of lending using government-insured FHA loans, and the Fed buying GSE MBS pushing down mortgage rates. This has led to a buying frenzy in many low end areas, and has pushed up prices. Look at the today from DataQuick: Home sales in the Bay Area edged up in September as buyers scrambled to take advantage of low mortgage interest rates as well as a tax credit due to expire at the end of November. ... The month-to-month gain was atypical : sales normally decline around 11 percent from August to September. ... The use of government-insured FHA loans – a common choice among first- time buyers – represented 29.3 percent of all Bay Area purchase loans in September. This is a very large percentage of government-insured FHA loans - and many of these buyers are probably using the tax-credit as their downpayment (which will probably lead to higher defaults). “I don’t think it’s a bad thing that the bad loans occurred. It was an effort to keep prices from falling too fast. That’s a policy.” , chairman of the House Financial Services Committee on recent FHA lending. So what does this mean for the housing market? In the short term: Existing home sales will probably be strong in September based on regional reports. With restricted supply and increased demand, prices (Case-Shiller) will probably be strong through at least September (reported with a delay). Reported...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:09 AM » Understanding Goldman Sach’s Earnings
    Published Fri, Oct 16 2009 8:09 AM by The Big Picture
    Rolfe Winkler has an interesting pair of charts (below) showing GS’s earnings. However, Rolfe seems to reach a very different conclusion than I do: He chalks up their gains up to their “Casino” — but Goldman’s trading revenue has been remarkably consistent. They excellent information flow, and tremendous discipline. If it were really a roll of the dice, it would be far more erratic . . . Remember, the casino takes money from the suckers — the House usually wins: > Updated chart!
    Click Here to Read the Full Article

    Source: The Big Picture
  • 8:09 AM » Commercial Real Estate Musical Chairs, With Chairs Added Each Round
    Published Fri, Oct 16 2009 8:09 AM by Google News
    Commercial real estate vacancies hit nearly 25% in Phoenix Valley area. Scottsdale and Southeast Valley vacancies are even higher. Please consider . Nearly 1 out of every 4 square feet of Valley office space was vacant in the third quarter ending Sept. 30, commercial-real-estate experts said. That's about 28 million square feet of empty space, according to Phoenix commercial-realty brokerage Colliers International, one of several Valley firms tracking the progress of sales and the leasing of office, industrial and retail buildings. Within the next few months, about 2 million more square feet of office space will open, and less than 20 percent of it has been reported as spoken for by a future tenant. One of the soon-to-open buildings, the 400,000-square-foot One Central Park East office tower in downtown Phoenix [at left], has yet to announce a lease agreement despite plans to open by the end of the year. "Actually, leasing agents are optimistic," said Broker Mindy Korth of Phoenix-based CB Richard Ellis. Korth said One Central Park is a desirable location that ultimately will find its audience. But she agreed with other experts that the high prices paid by companies such as One Central Park developer Mesirow Financial Real Estate Inc. could make it difficult to pay the bills, based on today's lower lease rates. More than 2,200 commercial properties in Maricopa County have received 90-day foreclosure notices since Jan. 1, representing more than $7 billion in real-estate loans on which the borrowers have failed to make payments. Valley Vacancies Overall vacancies - 24.2 percent Scottsdale vacancies - 29.1 percent Downtown Phoenix vacancies - 15.7 percent Southeast Valley vacancies - 30.5 percent Musical Chairs, With "Desirable Chairs" Added Each Round Arizona leasing agents are optimistic because the " real-estate crash positions Phoenix as an attractive relocation area for companies in more expensive states, such as California "....
  • Thu, Oct 15 2009
  • 6:53 PM » Congress Debating the Tax Credit
    Published Thu, Oct 15 2009 6:53 PM by Realtor.Org
    Some lawmakers are wondering whether extension and expansion of the housing incentive make sense.
  • 5:19 PM » Fed funds futures believe the doves but the consequences are
    Published Thu, Oct 15 2009 5:19 PM by The Big Picture
    Following dovish comments on Tuesday from the Fed’s Vice Chairman Kohn and further confirmed in yesterday’s FOMC minutes from the Sept meeting, the Fed’s easy for longer policy is reflected in today’s fed funds futures where the odds for a 25 bps hike by the April meeting are now at the lowest level in this cycle at 78%. Odds remain for a 100% chance of a hike of 25 bps by the June meeting but the chances of a total of a 50 bps by then are moving lower. Combine this with a fresh 14 month low in the US$ and solid earnings giving hopes for overall economic improvement and the CRB index is breaking out to the highest level since Nov ‘08 and the implied inflation rate in the 10 yr TIPS is rising to just shy of the highest level since June while the 5 yr TIPS is pricing in the highest inflation rate since June. Gasoline futures in particular for those of us who drive are just below one year highs.
    Click Here to Read the Full Article

    Source: The Big Picture
  • 3:29 PM » Media Advisory: NAHB To Host Its Semi-Annual Construction Forecast Conference Next Week
    Published Thu, Oct 15 2009 3:29 PM by NAHB
    Press Release
  • 3:13 PM » Citi Conference Call Comments on Impact of HAMP
    Published Thu, Oct 15 2009 3:13 PM by Calculated Risk Blog
    These comments show how important HAMP is to the housing market. The key points are 1) Loans in trial modifications are included in the delinquency rates (as we've discussed), and 2) we are completely in the dark on how the trial mods are performing! Meredith Whitney: Since so much of your numbers today are influenced by the trial mod [HAMP] results, I wanted to ask a couple of questions. Number one, is the early experience consistent with the report that came out in October with the Congressional oversight result, which talked to the difficulty of finding documentation on the modifications? Can you provide more color there? And also a question that I have been asking management is when do you think an appropriate report card will be accessible in terms of the success of these? Is it fourth quarter, first quarter and then I have a follow-up after that please? Citi CFO John Gerspach: The earliest modifications that we entered into were in May. And so we are just finishing up the five-month period right now. And I would say that the documentation process, both in the way that the request is given to the consumer, as well as the assistance that we are giving consumers, has improved over time. So the early stages, we are seeing some difficulty in the customers fulfilling the documentation request as either you noted or we noted. That is one of the reasons behind the extension of the trial period from three months to five months. So let's kind of wait until we at least get the October and perhaps November results in to see whether or not the documentation collection or submission process has improved. As far as an overall scorecard on HAMP , my sense, especially given the fact that you have got five months -- five-month trial for all modifications entered into prior to September 1 and then a three-month period is at best it will be towards the end of the fourth quarter, but it is probably more of a first quarter next year type of answer. emphasis added Click on graph...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 3:13 PM » U.S. charges 41 in mortgage fraud scheme
    Published Thu, Oct 15 2009 3:13 PM by Reuters
    NEW YORK (Reuters) - U.S. authorities charged 41 people in a suspected mortgage fraud scheme that cheated lenders out of more than $64 million on New York state properties, prosecutors said on Thursday.
  • 3:13 PM » Roubini: Real Estate Prices to Fall Another 7-10%
    Published Thu, Oct 15 2009 3:13 PM by
    FOX Business Network’s Brian Sullivan spoke with economist Nouriel Roubini about his outlook for real estate. He is of the opinion prices would fall another 7-10% killing an imperfectly formed recovery, as demand from first-time home buyers fades. While the number of unsold houses may have...
    Click Here to Read the Full Article

  • 1:55 PM » At foreclosure auctions, broken dreams on sale
    Published Thu, Oct 15 2009 1:55 PM by Reuters
    CHICAGO (Reuters) - The seven-bedroom, three-bath house in this city's West Garfield Park neighborhood had once been someone's American Dream.
  • 1:55 PM » New Federal Policies on Commercial Loan Workouts Coming
    Published Thu, Oct 15 2009 1:55 PM by WSJ
    There was a nugget of news buried in Federal Deposit Insurance Corp. Chairman Sheila Bair ’s testimony Wednesday before a Senate subcommittee about the state of the banking industry. According to prepared remarks, she will say at the afternoon hearing that federal regulators “will soon issue guidance on [commercial real estate] loan workouts.” Commercial real estate is seen widely as one of the biggest dangers facing the banking industry, as heavy losses in this area are crushing many community banks and eating into bank capital. These loans often prove more difficult for banks to work out than residential mortgages. “The agencies recognize that lenders are borrowers face challenging credit conditions due to the economic downturn, and are frequently dealing with diminished cash flows and depreciating collateral values,” Ms. Bair will say. “Prudent loan workouts are often in the best interest of financial institutions and borrowers, particularly during difficult economic circumstances and constrained credit availability. This guidance reflects that reality, and supports prudent and pragmatic credit and business decision-making within the framework of financial accuracy, transparency, and timely loss recognition.”
  • 12:21 PM » Economist's Podcast: The Tax Credit and the Economy
    Published Thu, Oct 15 2009 12:21 PM by Google News
    NAR Chief Economist Lawrence Yun discusses reasons for renewing the tax credit and its impact on the economy.
  • 12:21 PM » HUD takes action to expand jobs and training opportunities for low-income residents
    Published Thu, Oct 15 2009 12:21 PM by HUD
    WASHINGTON - The U.S. Department of Housing and Urban Development today launched a new campaign to increase hiring of low-income individuals and public housing residents by state and local governments that receive HUD funds. HUD is contacting more than 3,000 state and local agencies, including public housing authorities, to document their efforts to hire low-income individuals and to contract with companies who hire them. Agencies that fail to comply may be debarred, suspended, or denied participation in HUD programs.
  • 12:21 PM » RealtyTrac: Foreclosure Activity Increases in Q3
    Published Thu, Oct 15 2009 12:21 PM by Calculated Risk Blog
    From RealtyTrac: RealtyTrac® ... today released its U.S. Foreclosure Market Report™ for Q3 2009, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and an increase of nearly 23 percent from Q3 2008. One in every 136 U.S. housing units received a foreclosure filing during the quarter — the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 343,638 properties in September, a 4 percent decrease from the previous month but a 29 percent increase from September 2008. Despite the monthly decrease, September’s total was still the third highest monthly total since the RealtyTrac report began in January 2005, behind only July and August of this year. “Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters,” said James J. Saccacio, chief executive officer of RealtyTrac. “REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties.”
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 11:18 AM » Buyers Must Hurry to Meet Credit Deadline
    Published Thu, Oct 15 2009 11:18 AM by Realtor.Org
    Mortgage application paperwork has to be ready to go, though short-sale purchases should be avoided to make the Nov. 30th deadline.
  • 8:41 AM » U.S. foreclosure filings up in 3rd quarter
    Published Thu, Oct 15 2009 8:41 AM by Market Watch
    U.S. properties subject to foreclosure filings hit nearly 938,000 in the third quarter, up 23% from the year-earlier quarter and 5% from the second quarter.
  • 8:28 AM » Foreclosures On Pace To Hit 3.5 Million
    Published Thu, Oct 15 2009 8:28 AM by Google News
    There were over 900,000 foreclosures in the third quarter as . The number of households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs. The foreclosure crisis affected nearly 938,000 properties in the July-September quarter, compared with about 890,000 in the prior three months, according to a report released Thursday by RealtyTrac Inc. That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year. "The sheer scale of the problem is preventing the loan modification programs from having the kind of impact we'd all like" said Rick Sharga, RealtyTrac's senior vice president for marketing. Some homeowners are in such a massive financial hole that it's hard to design a modification that will actually provide lower payments. And some have avoided paying their monthly bills for a long time. According to the RealtyTrac report, there were nearly 344,000 foreclosure-related filings last month, down 4 percent from a month earlier but still the third-highest month since the report started in early 2005. It was the seventh-straight month in which more than 300,000 households receiving a foreclosure filing, which includes default notices and several other legal notices that homeowners receive before they finally lose their homes. Banks repossessed nearly 88,000 homes in September, up from about 76,000 a month earlier. On a state-by-state basis, Nevada had the nation's highest foreclosure rate in the July-September quarter. Arizona was No. 2, followed by California, Florida and Idaho. Rounding out the top 10 were Utah, Georgia, Michigan, Colorado and Illinois. As I have stated before, bailing out the banks did nothing for cash-strapped, unemployed consumers stuck in homes they cannot sell because they are too far underwater. Supposedly the administration's...
  • 8:27 AM » Goldman Profit, Revenue Beat Expectations
    Published Thu, Oct 15 2009 8:27 AM by CNBC
    Goldman Sachs handily beat earnings expectations Thursday and posted better-than-expected revenue, saying it was seeing growth across a number of sectors.
  • 8:26 AM » Amherst: Few HAMP Modifications to be Successful
    Published Thu, Oct 15 2009 8:26 AM by Calculated Risk Blog
    From Austin Kilgore at Housing Wire: The Making Home Affordable Modification Program (HAMP) adds another layer of uncertainty for private label securitization investors, making it more difficult to predict cash flows, according to a report by analysts at Amherst Securities Group, who added they expect relatively few HAMP workouts to be successful. Additionally, it’s taking longer for bad mortgages to move from last payment to liquidation, and the pace varies by servicer: “ The trial modification period essentially holds the loan in a suspended state for 90 days, making it difficult to assess what is happening with modifications ,” the report said ... While HAMP workouts are keeping the pools of real estate owned (REO) property relatively small , Amherst predicts a low percentage of eventual success of HAMP modifications is inevitable. emphasis added A few comments: The trial period has been extended for an additional 60 days - so make it suspended animation for 150 days! See Treasury and COP note that many of those temporary modifications may be in process of getting paperwork submitted in order for them to achieve permanent status. Treasury granted a two-month extension -- on top of the three-month trial -- for borrowers and servicers to get their documentation ready. Much depends on the success of HAMP. If many of these modifications don't become permanent there will be another flood of foreclosures on the market. BofA has already promised a "spike" in foreclosure at the end of this year, see: We are going to see a spike from now to the end of the year in foreclosures as we take people out of the running" for a loan modification or other alternatives, says a Bank of America Corp. spokeswoman. In many areas the "the pools of real estate owned (REO) property" has all but dried up. The HAMP program is restricting supply. Note: On the demand side, the first-time homebuyer tax credit combined with loose FHA underwriting, is boosting demand....
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:25 AM » House Buying Frenzy
    Published Thu, Oct 15 2009 8:25 AM by Calculated Risk Blog
    The real estate market has gone crazy. At the low end we've been seeing for some time, and recently agents have been telling me there is almost no inventory. Jim the Realtor has been reporting on this in San Diego, see: and And from Diana Olick at CNBC today: (ht Larry) Olick include an email from a real estate agent to a client "Katie": - This market is crazy and many things are just not going to make any sense. ... - Properties are selling in the blink of an eye. - Properties are getting multiple offers within a few days of being on the market, the most offers I’ve heard a house had recently was 44 offers (I know, crazy). ... - 40% of all transactions are cash purchases, which makes it harder for the buyers who are financing to get their offers accepted. - We have 1/2 the inventory we had a year ago and 4 times as many buyers as we did a year ago. And more ... It definitely seems crazy.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:25 AM » FHA Rules Render Condos Utterly Worthless
    Published Thu, Oct 15 2009 8:25 AM by Google News
    When it come to home ownership, condo prices are the last to rise and the first to go down. Given the glut of condos and unfinished condos in the bubble areas, the following article should not be surprising. Please consider by the Arizona Republic. New federal loan-guarantee rules imposed to fend off future government losses from plummeting condominium prices have rendered condos utterly worthless, Valley real-estate experts said. The Federal Housing Administration rules, which took effect Oct. 1, prohibit any new FHA-backed loans on condo units in projects that include more than 25 percent commercial space. In addition, no single investor - including the developer - may own more than 10 percent of the units in a particular project. That particular restriction alone creates a catch-22 from which condo builders most likely cannot escape, said mortgage originator Jill Hoogendyk of Wallick & Volk in Glendale. Another rule that has sellers and brokers scratching their heads prohibits FHA loans in condo developments that aren't "primarily residential," which could be taken to mean the FHA won't guarantee loans in future mixed-use projects. "I'm predicting that what we'll see is whole condominium complexes sitting empty," Hoogendyk said. The new rules are a reaction to substantial losses on federally insured condominium mortgages in the past year, government officials have said. In Maricopa County, condominium foreclosures have outpaced condo-unit sales by nearly two to one since Jan. 1, according to real-estate analyst Zach Bowers of Ion Data in Mesa. According to Bowers, lenders foreclosed on about 8,200 condo units between Jan. 1 and Sept. 30, compared with about 4,900 units sold during the same period. Bowers said there are Phoenix-area condominium projects in which only a handful of buyers purchased individual units. The only viable use for such projects would be renting the unsold units as apartments, which many condo building...
  • 8:25 AM » Why the Dow Broke 10,000, and Why You Should Still Watch Your Wallet
    Published Thu, Oct 15 2009 8:25 AM by
    How did the Dow break 10,000 when the rest of the economy is in the toilet? 1. Corporate earnings are up -- mainly because companies have been cutting costs. Payrolls comprise 70 percent of most companies' costs, which means companies have been slashing jobs. In the end, this is a self-defeating strategy. If workers don't have jobs or are afraid of losing them, they won't buy, and company profits will disappear. 2. Federal borrowing has filled the gap that consumers and businesses created when the latter began to reduce their debt. Federal debt, in other words, has kept the economy from tanking. Can't keep up forever, though. 3. With such horrid employment numbers, Wall Street figures the Fed will keep interest rates low for some time, and continue to flood the economy with money. That's good news for the Street because it means money stays cheap -- and with cheap money the Street can make lots of bets on almost everything under the sun and moon. As a result, the Street's earnings are way up. But this, too, is temporary. At some point the Fed is going to worry about inflation and a falling dollar. 4. Investors of all stripes want to get in early and ride the wave. Pension funds, mutual funds, and other institutional investors figure the bull market has more oomph in it because, well, other investors will jump in. Think Ponzi scheme. Nice for now, but watch out if you're one of the last in. In other words, this is all temporary fluff, folks. Anyone who hasn't learned by now that there's almost no relationship between the Dow and the real economy deserves to lose his or her shirt in the Wall Street casino.
    Click Here to Read the Full Article

  • Wed, Oct 14 2009
  • 6:51 PM » Soured Mortgages Weigh on GE Profit
    Published Wed, Oct 14 2009 6:51 PM by WSJ
    One of the biggest hits to General Electric's third-quarter earnings on Friday will likely be its ongoing losses on subprime U.K. mortgages.
  • 3:56 PM » Banks must lend despite the risks: regulators
    Published Wed, Oct 14 2009 3:56 PM by Market Watch
    Banks should continue to lend to all qualified borrowers, even though they should expect significant further losses on bad commercial real-estate loans, federal regulators say.
  • 2:07 PM » Fitch: 60% of 2006-07 RMBS Mortgages Underwater
    Published Wed, Oct 14 2009 2:07 PM by Seeking Alpha
    submits: Fitch Ratings estimates approximately 60% of the remaining performing borrowers from the 2006-2007 vintages are in a negative home equity position, or ‘underwater’. According to Senior Director Grant Bailey, ‘negative equity reduces a borrower’s incentive to pay their mortgage and limits their options when faced with financial difficulties.’ After notable improvement through the first half of this year, the percentage of previously performing borrowers rolling into a delinquency status stabilized at an elevated level through the summer months and increased modestly in the month of September.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:58 AM » Help From Fannie and Freddie for Foreclosed Homes
    Published Wed, Oct 14 2009 8:58 AM by
    Fannie Mae and Freddie Mac are offering financing incentives for buyers of foreclosed homes that Fannie and Freddie own.
    Click Here to Read the Full Article

  • 8:57 AM » Push on to expand $8,000 tax credit
    Published Wed, Oct 14 2009 8:57 AM by CNN
    Congress is considering proposals to greatly expand a soon-to-expire $8,000 tax credit for first-time homebuyers -- potentially applying it to all but the wealthiest homebuyers.
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