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  • Mon, Sep 12 2011
  • 1:48 PM » Bloomberg's Cohan Discusses Banks, FHFA: Audio
    Published Mon, Sep 12 2011 1:48 PM by Bloomberg
    Bloomberg's Cohan Discusses Banks, FHFA: Audio
  • 9:07 AM » JP Morgan Explains The Euro Crisis With Lego
    Published Mon, Sep 12 2011 9:07 AM by The Big Picture
    I said earlier I wanted to find something “ ,” and this came to mind: > > This chart comes from a Michael Cembalest of JPM, posted by Felix Salmon of Reuters (). The toreador in a floppy hat, and the F1 driver with his helmet, represent Spain, Italy and the rest of the Euro Periphery . The three men with helmets, shields, and medieval weaponry represent the CDU, CSU and FDP parties in Germany. The blue-and-white sailor boy is Finland . Obvs. The woman with an oversized carrot and her friend in overalls with a shovel represent the Social Democrats and Greens . Wotan represents the Bundesbank . The piggy bank is the IMF . The grey-haired Banque chap is the ECB . The chap in the red bib is Poland . The artists are France . The angry chef, the sweeper with a broom, the airline pilot, and the rest of the motley crew at bottom left, represent EU taxpayers in Core countries . The storm troopers are the EU Commission and Euro Group Finance Ministers , chaired by Jose Manuel Barroso and Jean- Claude Juncker. The monocled banker and his assistant are EU bondholders and shareholders . Gee, nothing about the Irish or the Swiss . . . ? > Source: Michael Cembalest, JPM via
    Click Here to Read the Full Article

    Source: The Big Picture
  • 9:07 AM » Unofficial Problem Bank list declines to 986 Institutions
    Published Mon, Sep 12 2011 9:07 AM by Calculated Risk Blog
    Note: this is an unofficial list of Problem Banks compiled only from public sources. Here is the for Sept 9, 2011. Changes and comments from surferdude808: As anticipated, it was a quiet week for changes to the Unofficial Problem Bank List. This week, there were two removals and one addition, which leaves the list with 986 institutions and assets of $402.7 billion. A year ago, there were 849 institutions with assets of $415.3 billion. The removals were the failed The First National Bank of Florida, Milton, FL ($297 million) and Clarkston State Bank, Clarkston, MI ($111 million Ticker: HRTB), which had its actions terminated by the FDIC. The addition is Community Pride Bank, Isanti, MN ($92 million), which has been subject to a Consent Order by the State of Minnesota and not the FDIC since May 2010. This action just came to light when the Federal Reserve issued a Written Agreement against the bank's parent holding company. Next week, we anticipate the OCC will release its actions through mid-August, which should contribute to more changes to the list. Earlier: • •
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • Sat, Sep 10 2011
  • 6:19 PM » How Much Will Refinancing Help the Economy
    Published Sat, Sep 10 2011 6:19 PM by The Atlantic
    I see that I rather glossed over the housing portion of the American Jobs Act last night, so it's worth considering the matter now. Obama wants to help homeowners refinance their mortgages at today's low mortgage rates. It's worth thinking through the effects of this, because it's yet another variation on a proposal that has been bandied about for a very long time. The details are rather thin but as best I can tell, the government is supposed to "help" refinance a bunch of mortgages at current rates--somewhere between 4-4.5% on a 30-year. There will be no principal reductions, and it's not clear what percentage of the mortgage market this applies to, who pays the transaction costs, and so forth. What are the economic effects of this? You get an immediate burst of economic activity as people process mortgage claims. Does this create jobs, or more work for existing processors? I tend to assume that they must be swamped with existing refis, so will probably have to hire more people. It also puts more money into consumer pockets. A working paper from the estimates that about 2.9 million people would take advantage of a program like this. This is expected to reduce defaults by about 110,000, while saving consumers about $7.4 billion in the first year of the program. Some of that is recurring annual revenue--however, the CBO expects that number to decline in real value as the loans are paid down or the houses sold. Call it $8 billion in stimulus. However, against that, you have to set the costs. What are those? The net cost to the GSEs is expected to be about $600 million: they lose $4.5 billion in the Fair Market Value of their mortgage bonds, but that is offset with a savings of about $3.9 billion on the loan guarantees they don't have to make good, because lower the payments staved off 110,000 defaults. However, there's also the private banking sector. According to the CBO, they lose $13-$15 billion in the fair market value of their...
  • 6:19 PM » Misc: Market, Existing Home Sales forecast, ECB's Stark resigns, MERS
    Published Sat, Sep 10 2011 6:19 PM by Calculated Risk Blog
    • S&P off 31+, Dow off 300+. Graph below ... • From economist Tom Lawler: "[Based on incoming data] I’m upping my for August existing home sales (as estimated by the NAR) to a SAAR of 4.91 million." • From the WSJ: The unexpected departure of European Central Bank chief economist Jürgen Stark intensified investors' worries about the euro-zone financial crisis Friday and unleashed a broad pullback from risk in European financial markets, sinking the euro to its lowest level in more than six months. Stark was an inflation hawk and opposed all EU bailouts and ECB bond buying. • Another , this time at the 9th Circuit Court of Appeals (ht Mish). From the opinion: The district court properly dismissed the plaintiffs’ First Amended Complaint without leave to amend. The plaintiffs’ claims that focus on the operation of the MERS system ultimately fail because the plaintiffs have not shown that the alleged illegalities associated with the MERS system injured them or violated state law. As part of their fraud claim, the plaintiffs have not shown that they detrimentally relied upon any misrepresentations about MERS’s role in their loans. Further, even if we were to accept the plaintiffs’ contention that MERS is a sham beneficiary and the note is split from the deed in the MERS system, it does not follow that any attempt to foreclose after the plaintiffs defaulted on their loans is necessarily “wrongful.” The plaintiffs’ claims against their original lenders fail because they have not stated a basis for equitable tolling or estoppel of the statutes of limitations on their TILA and Arizona Consumer Fraud Act claims, and have not identified extreme and outrageous conduct in support of their claim for intentional infliction of emotional distress. Thus, we AFFIRM the decision of the district court. MERS is the Mortgage Electronic Registration System, and some people argued that MERS would lead to the total collapse of Western Civilization or something ... I've argued...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • Fri, Sep 9 2011
  • 11:29 AM » Gap Widens between New and Existing Home Prices
    Published Fri, Sep 09 2011 11:29 AM by Google News
    Due to stubbornly high new-home prices and lower existing-home prices, the gap between the two has opened up.
  • 11:29 AM » More First-Time Buyers Paying Cash
    Published Fri, Sep 09 2011 11:29 AM by Google News
    The percentage of first-time buyers purchasing with cash has risen from 5.2% in July 2009 to 10.3% in July 2011, according to the Realtors® Confidence Index.
  • 11:29 AM » Fannie, Freddie Vs. Big Banks: Housing Gets Hurt
    Published Fri, Sep 09 2011 11:29 AM by CNBC
    At face value, the lawsuit makes sense; the role of the FHFA is to limit losses to Fannie and Freddie.
  • 11:14 AM » Housing sector seen limping along: Reuters poll
    Published Fri, Sep 09 2011 11:14 AM by Reuters
    NEW YORK (Reuters) - The struggling U.S. housing market is expected to fall a little further as it searches for a bottom, but home prices are seen ticking up modestly in 2012, according to a Reuters poll released on Friday.
  • 11:14 AM » No Day of Rest for Online House Hunting
    Published Fri, Sep 09 2011 11:14 AM by Google News
    . Online listings invite aspiring buyers to admire their favorite homes anytime, but new research from the real-estate website Trulia shows that virtual window shopping generally happens on two key days. Trulia did an of its app and web traffic for a three-month period this year from June through August, traditionally the tail end of the busy selling season. (Like its rival,, Trulia turns for-sale listings into public pages filled with slideshows and data covering schools, nearby sales and more.) It turns out Sunday and Monday were the busiest traffic days for Trulia’s website, although visits remained steady during the work week (the data are not seasonally adjusted). Trulia found that the sources of traffic on those two peak days differed. The Sunday web traffic (which kicks into high gear in the early afternoon) was driven by mobile devices such as cellphones and tablets, while Monday traffic came largely from desktop and laptop computers, probably at offices around the country. Some of this is hardly unexpected. It makes sense that people would use their iPads on Sunday for a web search that they would otherwise conduct on their work computer Monday. And similar traffic patterns could easily hold for non-real-estate sites. But Trulia says that the Sunday traffic should remind sellers that buyers could be looking at listing photos on an Android phone before deciding whether to bother with an open house. As for Monday, well, it’s Monday. “After a weekend of endless open houses, most people who are in the market for a home are still on what you can call a ‘house hunting high’ once Monday hits,” Trulia wrote in a blog post. “So once they’re back to the daily grind in cubeland, many are itching to keep on looking at homes.” This buzz continues into Monday evening, when Trulia says visits reach a high point. For more analysis on this topic, read Trulia’s blog, .
  • 9:01 AM » Bove, Bush Discuss Management Shakeup at BofA: Audio
    Published Fri, Sep 09 2011 9:01 AM by Bloomberg
    Bove, Bush Discuss Management Shakeup at BofA: Audio
  • 9:01 AM » Will Push To Maintain Mortgage Caps Bear Fruit?
    Published Fri, Sep 09 2011 9:01 AM by WSJ
    : Counties that could see a possible decrease in limits for FHA-backed loans. Time is running out for Congress to decide whether to block a scheduled drop in the maximum size of government-backed mortgages, and some House lawmakers are calling for quick action. The group, mainly Democrats from pricey coastal housing markets, is pushing to add to a federal spending bill a measure preventing the maximum size of loans that can be backed by Fannie Mae, Freddie Mac and the Federal Housing Administration from declining next month. Rep. Gary Ackerman (D., N.Y.) on Thursday urged the House Appropriations Committee to maintain the current loan limits in a short-term spending bill to fund the federal government before the fiscal year ends on Sept. 30. “Middle-class homeowners are enduring the most painful housing crisis since the Great Depression,†Mr. Ackerman said in a statement. “In just a few short weeks the pain of the crisis is set to become more acute since mortgage credit for many eligible buyers will evaporate.†Three years ago, Congress raised to $729,750 (and higher in parts of Hawaii) the maximum loan amount that government-controlled mortgage companies Fannie Mae, and Freddie Mac and federal agencies can guarantee. New limits to be effective Oct. 1 vary by location, but will drop to $625,500 in expensive markets such as New York, Los Angeles and Washington, D.C. In calling to maintain the current loan limits, Mr. Ackerman was joined by more than 30 other Democrats, mainly from the East and West coasts and one Republican, Rep. John Campbell of California. In July, Messrs. Campbell and Ackerman introduced legislation to maintain the current mortgage limits for two years. The housing industry is pushing hard for such an extension, but the push has yet to gain traction among most Republicans. And the Obama administration has not backed away from its stance that the loan limits should not fall. Many Republicans argue that allowing the loan limits to drop is a small...
  • 8:46 AM » Economists React: Gauging Impact of Obama Jobs Proposal
    Published Fri, Sep 09 2011 8:46 AM by WSJ
    Economists and others weigh in with some early reactions to . – President Obama’s newly proposed $450 billion job creation bill is equivalent to nearly 3% of GDP, so if it was passed by Congress as it stands it would certainly have a significant impact on GDP growth in 2012, which we currently expect to be only 2%. The big question, however, is whether an otherwise hopelessly split Congress can agree to pass any of the multitude of different measures the bill includes? –Paul Ashworth, Capital Economics – The total cost of the plan has risen from the previously reported $300 billion (2% of GDP) to $447 billion (3% of GDP). At first glance it appears that, if enacted, around 75% (or roughly $335 billion) of the fiscal effects of the proposal would show up in calendar 2012. We estimate that fiscal restraint under current law would total $270 billion, or $160 billion net of the extension of the payroll tax cut (to 4.2%) we already assume in our forecast. Thus, if enacted in its entirety, this proposal could shift the fiscal impulse in 2012 from -1.1% of GDP to +0.4% of GDP. However, it is not yet clear how congressional Republicans will respond to the proposal, and we are not changing any of our estimates at this time. –Goldman Sachs – [The Obama plan] calls for about $200 billion in new spending — much of it on things we need in any case, like school repair, transportation networks, and avoiding teacher layoffs — and $240 billion in tax cuts. That may sound like a lot, but it actually isn’t. The lingering effects of the housing bust and the overhang of household debt from the bubble years are creating a roughly $1 trillion per year hole in the U.S. economy, and this plan — which wouldn’t deliver all its benefits in the first year — would fill only part of that hole. And it’s unclear, in particular, how effective the tax cuts would be at boosting spending. Still, the plan would be a lot better than nothing, and some of its measures, which are specifically...
  • 8:46 AM » Obama's Job Plan: Mostly More of the Same
    Published Fri, Sep 09 2011 8:46 AM by The Atlantic
    So we've been standing by all week for Obama's big jobs speech, promised in response to the awful jobs numbers last month. Here are the details, as outlined by the ; I've added in the amounts on the major categories as best I can figure them: Tax cuts: $250 billion Payroll tax rebate on first $5 million in payroll, which the president says will reach 98% of American companies, plus complete rebate for new hires or raises Extending payroll tax cut Extending 100% expensing of business investment (A bunch of regulatory streamlining that is likely to have little effect and is bizarrely classed as a tax cut) Tax credits for hiring unemployed veterans, particularly those with service-connected disabilities $4,000 per worker for hiring workers who have been unemployed for more than six months Infrastructure: about $100 billion $50 billion for new infrastructure projects $10 billion for an infrastructure bank $15 billion to rehab vacant and foreclosed homes/businesses Some undisclosed sum for getting high speed wireless to "98% of American" $25 million to rehab schools Direct assistance: About $100 billion (?) Continuing the extension of unemployment benefits Various retraining/wage support ideas that are supposed to help the structurally displaced to transition into new careers. $35 billion for preserving/hiring teachers, cops and firefighters Federal assistance in refinancing to current mortgage rates All this will be paid for by asking the Supercommittee to find another $400 billion or so in new taxes and spending. So, what do I think? That the president apparently has some sort of numerical compulsive disorder which has caused him to become fixated on "98%"; his stump speeches have always been larded with promises that 98% of American families would get all manner of goodies, while paying absolutely nothing in new taxes, but the mystical figure is now being extended into the realm of companies and high-speed wireless internet subscribers....
  • 8:46 AM » Lawler: Early Read on Existing Home Sales in August
    Published Fri, Sep 09 2011 8:46 AM by Calculated Risk Blog
    From economist Tom Lawler: While normally I don’t put out an “early read” on existing home sales this early – mainly because not enough realtor associations/boards/MLS have released their stats to get a “good” national read – the reports that have come in so far suggest to me that existing home sales in August rebounded from July on a seasonally adjusted basis. Last August the NAR estimated that existing home sales ran at a SAAR of 4.24 million. This August, of course, there was one more business day than last August, and this month’s seasonal factor will probably be 1.5%-2.0% higher than last August’s. The NAR estimated that July existing home sales – which came in south of “consensus,” and below what past pending home sales indices would have suggested (though it was right on top of my regional tracking) – ran at a SAAR of 4.67 million. A “flat” reading for seasonally adjusted existing home sales for August, then, would imply a YOY gain in NSA sales in the 11.8% to 12.3% range. Incoming data, in my view, suggest a national YOY gain well above that – probably in the 16.8% range or so, which would imply that the NAR’s existing home sales estimate for August will probably come in at a seasonally adjusted annual rate of around 4.87 million, a gain from July of about 4.3%, and I think there may be more upside than downside risk to that forecast. Click on graph for larger image in graph gallery. Such an increase, by the way, is not broadly inconsistent with the latest pending home sales index, which showed a mild decline in July. After all, the gains in previous months didn’t show up in similar gains in closed sales, suggesting either (a) increased cancellations; (b) increased delays from contract to closing; or (c) a combination of both. Right now, the correct answer appears to be “c.” (August reflects Lawler forecast).
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:46 AM » President Obama's Jobs Speech: Read the Full Prepared Text Here
    Published Fri, Sep 09 2011 8:46 AM by The Atlantic
    Remarks of President Barack Obama in an Address to a Joint Session of Congress Mr. Speaker, Mr. Vice President, Members of Congress, and fellow Americans: Tonight we meet at an urgent time for our country. We continue to face an economic crisis that has left millions of our neighbors jobless, and a political crisis that has made things worse. This past week, reporters have been asking "What will this speech mean for the President? What will it mean for Congress? How will it affect their polls, and the next election?" But the millions of Americans who are watching right now: they don't care about politics. They have real life concerns. Many have spent months looking for work. Others are doing their best just to scrape by - giving up nights out with the family to save on gas or make the mortgage; postponing retirement to send a kid to college. These men and women grew up with faith in an America where hard work and responsibility paid off. They believed in a country where everyone gets a fair shake and does their fair share - where if you stepped up, did your job, and were loyal to your company, that loyalty would be rewarded with a decent salary and good benefits; maybe a raise once in awhile. If you did the right thing, you could make it in America. But for decades now, Americans have watched that compact erode. They have seen the deck too often stacked against them. And they know that Washington hasn't always put their interests first. The people of this country work hard to meet their responsibilities. The question tonight is whether we'll meet ours. The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy; whether we can restore some of the fairness and security that has defined this nation since our beginning. Those of us here tonight can't solve all of our nation's woes. Ultimately, our recovery will be driven not by Washington, but by our businesses...
  • Thu, Sep 8 2011
  • 5:01 PM » ABA Survey: Popularity of Online Banking Explodes
    Published Thu, Sep 08 2011 5:01 PM by American Bankers Assoc.
    Washington, September 8, 2011 -- A new survey by the American Bankers Association shows that for the first time, older Americans prefer to do their banking online compared to any other method. The survey of more than 2,000 U.S. adults, conducted August 12-14, 2011 by Ipsos Public Affairs, an independent market research firm, revealed that the popularity of online banking among customers 55 and up has surged since last year. Fifty-seven percent of bank customers 55 and up say they prefer banking online compared to 20 percent in 2010.
    Click Here to Read the Full Article

    Source: American Bankers Assoc.
  • 1:39 PM » Obama's Reported Mortgage Refinancing 'Stimulus' Won't Help
    Published Thu, Sep 08 2011 1:39 PM by The Atlantic
    The proposal will have little effect on the economy but could cause more harm than good Tonight, President Obama will speak to the nation about ways in which he believes Washington can inject some adrenaline into the languishing economic recovery. It isn't hard to figure out why: job growth has been trending down and may have in August. With unemployment still near double digits, that's a big problem. Some reports indicate that he'll announce one stimulus measure that purports to cost taxpayers nothing. The administration may push Fannie and Freddie to allow more homeowners to refinance at current very low mortgage interest rates. The measure might sound good in theory but will ultimately amount to attempt at healing the housing market and broader economy. The Idea Inside Mortgage Finance that the president could announce what it calls a re-worked "Home Affordable Refinance Program" ("HARP 2.0"). The idea is simple enough: push the agencies to allow more borrowers to refinance at very low interest rates, around 4%. For borrowers with mortgage rates at or above 6%, this savings becomes real money that can be spent to stimulate the economy. How much money are we talking about homeowners saving? It depends on their previous interest rate and mortgage size. For a family that originally had a $250,000 mortgage at 6%, moving to a 4% interest rate would cut their monthly payment by at least $300. If their mortgage payment was initially 35% of their income, then this is like giving their income a 7% boost. The administration might like this plan for two reasons. First, it wouldn't take any legislation if the Federal Housing Finance Authority coerces Fannie Mae and Freddie Mac to go along. Second, it wouldn't directly cost taxpayers anything or increase the size of the deficit. There Is a Cost But generally, whenever someone is gaining money, someone else is losing that money. This proposal is no exception to that rule. The losers here...
  • 1:39 PM » Six Steps That Could Boost Refinancing
    Published Thu, Sep 08 2011 1:39 PM by WSJ
    Associated Press The Obama administration and the Federal Reserve are looking for ways to help more homeowners refinance. Mortgage rates have dropped—again—to their lowest levels in the last 50 years. A Freddie Mac survey showed that 30-year fixed-rate mortgages averaged 4.12% this week, down from 4.22% last week. But demand for new loans or refinancing remains muted, underscoring reasons why policy makers at the White House and Federal Reserve are thinking about new ways to help more homeowners refinance. , we looked at one of the great puzzles of the government’s initial response to the housing crisis: why few underwater borrowers have refinanced their loans through a White House program that was launched more than two years ago. The Home Affordable Refinance Program allows underwater borrowers whose loans are backed by Fannie and Freddie to refinance. Under HARP, borrowers with loans worth 80% to 125% of the value of their house can refinance without putting down more cash or taking out mortgage insurance—those steps are often so costly that it no longer makes sense to refinance. While 838,000 loans had refinanced under the program through June, fewer than 63,000 mortgages with loan-to-value ratios between 105% and 125% had refinanced. Fannie and Freddie guarantee millions of loans that are underwater. The White House could take a number of steps to revamp the program, though many of these steps would require the blessing of Fannie and Freddie’s regulator, the Federal Housing Finance Agency. Here are six that policy makers would be likely to consider: Remove the eligibility date. Currently, loans that were originated after June 2009 aren’t eligible for HARP, and loans that have already refinanced once through HARP can’t be refinanced again. Eliminate the 125% loan-to-value cap. Nearly one in 13 loans backed by Fannie Mae can’t participate in the HARP program because they’re too far underwater. These loans weren’t eligible initially for HARP because they can’t...
  • 9:07 AM » Calculating the Oomph From Big Government Refi Effort
    Published Thu, Sep 08 2011 9:07 AM by WSJ
    How much economic oomph would be produced by a big federal government push to refinance mortgages for borrowers who can’t refinance because their incomes are too low or because their mortgages are bigger than the shrunken value of their homes or because the fees are prohibitive? Some oomph, but not enough to solve all the woes of the housing market, according to a Congressional Budget Office by staff economists, Mitchell Remy and Damien Moore , working with Deborah Lucas of MIT . (CBO emphasizes this isn’t an official estimate.) The bottom line: The “estimated gains and losses are small relative to the size of the housing market, the mortgage market and the economy” and, thus, the effects would be small as well, the trio says. A large-scale refi program would benefit millions of borrowers, to be sure, but “would not address many of the problems facing the U.S. housing market,” including borrowers who are already in default or whose mortgages are so big relative to the value of the homes that refinancing isn’t the answer. A number of schemes to make refinancing easier have been proposed by economists outside the government, and several have been dissected — and rejected — by the Obama administration. But the administration is looking for ways to encourage Fannie Mae and Freddie Mac , which have been effectively nationalized, to lower some of the barriers it has put up to refinancing lastly. In the CBO working paper, the economists invented a refinancing plan. For one year, borrowers of any income, even those who are underwater, who are current on their loans and who have mortgages already guaranteed by Fannie, Freddie or FHA would be offered a shot at refinancing with a 30-year, fixed-rate mortgage at today’s low interest rates. Principal would NOT be reduced. A fee would be charged equal to the one charged initially on the existing mortgage. (One obstacle to refinancing today are the fees that Fannie and Freddie are levying, particularly on borrowers whose income...
  • 9:07 AM » Hurricane Irene Underscores Importance of Flood Insurance Program
    Published Thu, Sep 08 2011 9:07 AM by Google News
    If Congress doesn't act soon, the National Flood Insurance Program (NFIP) will expire on September 30, 2011.
  • 8:59 AM » In Disputed Fannie and Freddie Mortgage Deals Evidence of 'Robo-Signing'
    Published Thu, Sep 08 2011 8:59 AM by Google News
    Long before the banks started evicting delinquent homeowners, Wall Street, it appears, used robo-signers to ink mortgage deals that would eventually cost investors tens of billions of dollars and in part led to the financial crisis. According to lawsuits filed last week by the U.S.'s Financial Housing Financial Authority, one individual was used by three different banks [...]
  • 8:51 AM » Fed’s Beige Book: District-by-District Summaries
    Published Thu, Sep 08 2011 8:51 AM by WSJ
  • 8:51 AM » House of the Day: August’s Most Popular (Video)
    Published Thu, Sep 08 2011 8:51 AM by Google News
    From a family vacation compound on an island off the coast of South Carolina to a contemporary house in the Hollywood Hills that has sweeping views of Los Angeles, included a variety of styles and personalized details. Five homes were the winners in August in our weekly online poll. The family compound on includes a 5,100-square-foot main house with black walnut floors and solid wood paneling that the owners gutted and rebuilt before building a smaller home on an adjacent property. The complex, which includes a saltwater pool, sold last week at auction for about $2.16 million. In , a Cape Cod-style house includes a variety of personalized details that the owner collected from magazines. Among them: a baking island in the kitchen with its own pop-up mixer and a vertical drawer in the master bathroom that holds up to 100 nail polish bottles. The owners of a brick-and-limestone home in neighborhood included a rotunda terrace overlooking a walled European garden with a stone fountain and a pool. Completed about 18 years ago, the three-story house has four bedrooms and limestone floors. In , a contemporary home in the Hollywood Hills of Los Angeles has large walls of glass that offer views of downtown and the Pacific Ocean. Built in the 1970s, the gated property includes a guest house and an art studio where the owner dabbles in making clay sculptures. The final home, in , was built in the 1930s and includes original detailed carved moldings, as well as copper gutters and a slate roof. It’s currently furnished with some of the owner’s family antiques. Take a video tour of the four most popular houses of August below. Which is your favorite?
  • 8:51 AM » Real Estate News: What Did Fannie, Freddie Know?
    Published Thu, Sep 08 2011 8:51 AM by Google News
    EWM Realtors : Built 100 years ago for one of the founders of Coconut Grove, this Miami property has been renovated over the years to include a 100-yard marble driveway with a fountain, an L-shaped pool, a temperature-controlled wine cellar and an outdoor entertainment area with a wet bar. Here is a look at real-estate news in the weekend’s and Tuesday’s WSJ: : A U.S. housing regulator filed lawsuits against 17 financial institutions, saying they sold $196 billion of risky home loans to Fannie Mae and Freddie Mac without adequately disclosing risks. Lawsuits filed by federal regulators allege that the banks made untrue statements and omitted key facts when they sold mortgage investments to loan giants Fannie Mae and Freddie Mac. : One idea for boosting the economy without asking Congress for more money: help more homeowners refinance. : The Hong Kong government sold a residential site in the New Territories to blue-chip developer Sun Hung Kai Properties for $400 million in a land auction Tuesday. : News Corp.’s embattled U.K. newspaper division put its East London headquarters up for sale, after a turbulent 25-year history at the site. : China Vanke, the country’s largest property developer by market share, said sales in August fell from a year ago due to a slower pace of project launches and lower average sales prices. : Each will contribute $71 million to the platform, which will focus on middle-income residential housing in China’s rapidly expanding cities. : Architect David Rockwell makes a pilgrimage to the antiquities-stuffed Sir John Soane’s Museum in London—and gorges on design tips in the breakfast parlor. : From handsome storage bins to the coolest pencil sharpener, everything you need to create stylish order in the home office. : The architect and landscape designer expands his multidisciplinary business by adding couture rug-maker to his bio. : This six-bedroom family home overlooking Battersea Park in southwest London has been entirely rebuilt...
  • 8:51 AM » Refinancing While Underwater — Mortgages
    Published Thu, Sep 08 2011 8:51 AM by
    Homeowners may qualify to refinance their mortgages through a variety of government programs aimed at avoiding late or partial payments or foreclosure.
    Click Here to Read the Full Article

  • 8:51 AM » Loans for Freelancers - Mortgages
    Published Thu, Sep 08 2011 8:51 AM by
    If you earn most of your income on 1099s, brace yourself for extra preparation, paperwork and discussion of your financial picture when applying for a mortgage.
    Click Here to Read the Full Article

  • 8:51 AM » National coalition advocates for job growth through the National Housing Trust Fund
    Published Thu, Sep 08 2011 8:51 AM by National Housing Conference
    On August 23rd, 45 national organizations, including the National Housing Conference, sent a letter to the Administration requesting that $10 billion for the National Housing Trust Fund be included in the President’s jobs-creation plan. Affordable rental housing for extremely low income households continues to be a serious problem nationwide. There are 10 million extremely low income renter households in our country and only 6.5 million housing units they can afford. The Trust Fund, which was authorized in 2008 but has yet to be funded, will produce, rehabilitate, preserve and operate rental housing that is affordable to extremely low income households across the country while also advancing the Administration’s priority of ending homelessness for veterans and families with children. The letter affirms that the Trust Fund would also be a strong job creator, observing that every $10 billion spent through the Trust Fund would create 122,000 new jobs in the construction industry and 30,000 new, ongoing jobs in the operation of the rental housing. The full letter can be viewed on the .
    Click Here to Read the Full Article

    Source: National Housing Conference
  • 8:44 AM » WSJ: Fed Prepares to Act
    Published Thu, Sep 08 2011 8:44 AM by Calculated Risk Blog
    From Jon Hilsenrath at the WSJ: Federal Reserve officials are considering three unconventional steps to revive the economic recovery and seem increasingly inclined to take at least one as they prepare to meet this month. ... One step getting considerable attention inside and outside the Fed would shift the central bank's portfolio of government bonds so that it holds more long-term securities and fewer short-term securities. ... A second step under consideration at the Fed, one getting mixed reviews internally, would reduce or eliminate a 0.25% interest rate the Fed currently is paying banks that keep cash on reserve with the central bank. ... A third step Fed officials are debating would involve using their words to make their economic objectives and plans for interest rates more clear. "QE3" remains an option, but it appears the first step would be to extend the maturity of the Fed's portfolio. We might get more hints tomorrow when Fed Chairman Ben Bernanke speaks on the economic outlook at 1:30 PM ET.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:44 AM » CBO: An Evaluation of Large-Scale Mortgage Refinancing Programs
    Published Thu, Sep 08 2011 8:44 AM by Calculated Risk Blog
    Some economists have proposed a large scale mortgage refinancing program for homeowners with loans owned or guaranteed by Fannie, Freddie or the FHA, and who are current on their mortgages but who can't refinance - usually because of Loan-to-values (LTV) much greater than 100%. Some economists have this program could be used by 30 million borrowers and deliver $70 billion in annual savings - at essentially no cost. Tom Lawler and I have pointed out that these economists (who missed the housing bubble) seem to be overlooking current programs - and also the offsetting losses for investors. The CBO has analyzed a proposal for a large scale refinancing program: (ht mort-fin). Some key findings: We analyze a stylized large-scale mortgage refinancing program that would relax current income and loan-to-value restrictions for borrowers who wish to refinance and whose mortgages are currently insured by Fannie Mae, Freddie Mac, or the Federal Housing Administration. The analysis relies on an estimate of the volume of incremental refinancing that would occur and an estimate of how future default and prepayment behavior would be affected by such refinancing. Relative to the status quo, the specific program analyzed here is estimated to cause an additional 2.9 million mortgages to be refinanced, resulting in 111,000 fewer defaults on those loans and estimated savings for the GSEs and FHA of $3.9 billion on their credit guarantee exposure , measured on a fair-value basis. Offsetting those savings, federal investors in MBSs, including the Federal Reserve, the GSEs, and the Treasury, would experience an estimated fair-value loss of $4.5 billion. Therefore, on a fair-value basis, the specific program analyzed here would have an estimated cost to the federal government of $0.6 billion. ... We also discuss the impact of this program on various stakeholders, including homeowners, non-federal mortgage investors, mortgage lenders, mortgage service providers, private mortgage insurers...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:44 AM » Calculating the Ooomph From Big Government Refi Effort
    Published Thu, Sep 08 2011 8:44 AM by WSJ
    How much economic oomph would be produced by a big federal government push to refinance mortgages for borrowers who can’t refinance because their incomes are too low or because their mortgages are bigger than the shrunken value of their homes or because the fees are prohibitive? Some oomph, but not enough to solve all the woes of the housing market, according to a Congressional Budget Office by staff economists, Mitchell Remy and Damien Moore , working with Deborah Lucas of MIT . (CBO emphasizes this isn’t an official estimate.) The bottom line: The “estimated gains and losses are small relative to the size of the housing market, the mortgage market and the economy” and, thus, the effects would be small as well, the trio says. A large-scale refi program would benefit millions of borrowers, to be sure, but “would not address many of the problems facing the U.S. housing market,” including borrowers who are already in default or whose mortgages are so big relative to the value of the homes that refinancing isn’t the answer. A number of schemes to make refinancing easier have been proposed by economists outside the government, and several have been dissected — and rejected — by the Obama administration. But the administration is looking for ways to encourage Fannie Mae and Freddie Mac , which have been effectively nationalized, to lower some of the barriers it has put up to refinancing lastly. In the CBO working paper, the economists invented a refinancing plan. For one year, borrowers of any income, even those who are underwater, who are current on their loans and who have mortgages already guaranteed by Fannie, Freddie or FHA would be offered a shot at refinancing with a 30-year, fixed-rate mortgage at today’s low interest rates. Principal would NOT be reduced. A fee would be charged equal to the one charged initially on the existing mortgage. (One obstacle to refinancing today are the fees that Fannie and Freddie are levying, particularly on borrowers whose income...
  • Wed, Sep 7 2011
  • 6:00 PM » Were Fannie and Freddie Really Innocent Bystanders?
    Published Wed, Sep 07 2011 6:00 PM by The Atlantic
    When we learned of the Federal Housing Finance Agency's lawsuits against big banks last week, how we should be expected to believe that Fannie Mae and Freddie Mac -- the biggest players in the mortgage industry -- could have really been tricked so easily by the big banks. Jim Boswell, mortgage-backed security analyst and former Ginnie Mae consultant, also doubts that the two government-sponsored enterprises are really the innocent bystanders that these lawsuits imply that they were. He says that the FHFA should verify that the firms weren't just as bad as the banks when crafting their own MBS -- and he explains how it could easily do so. You can for the details of the methodology he suggests that the FHFA use. It's a pretty fair request, really -- and the banks should be listening. If the GSEs were guilty of the same alleged misdeeds as banks, then a court will probably be more likely to frown at the lawsuits. Here's one of the most interesting parts of Boswell's column: I have been told personally from an inside source that each month Fannie Mae ran analytical jobs prior to deciding what securities they wanted to purchase and sell. Now the FHFA may think that I am being overly skeptical of the GSEs, but in running those analytical jobs, I believe the GSEs were using loan level information only available to the GSEs (and not available to the rest of the investing public) to stack the bets in their favor--purchasing the securities backed with loans that the GSEs felt were likely to pay down slower before offering up the remainder of their new monthly security issues to the rest of unsuspecting world investors. And while the FHFA runs the above analysis they should try to find out who was the driving force behind the "first real mortgage-backed security derivative product" that dealt with differing pay down rates, the REMIC? And who first began buying and selling that product to an unsuspecting public? Now I hate to give anything away, but...
  • 5:29 PM » Most Financial Planners Lack Reverse Mortgage Education, Trend Could be Changing?
    Published Wed, Sep 07 2011 5:29 PM by Google News
    While financial planners are still largely hesitant to recognize a reverse mortgage as a viable option for cash-strapped seniors, some are coming around to recommending them as their clients are less and less prepared for retirement. The American population is, generally speaking, living longer than ever before, and many haven’t properly planned for this, says Karen DeRose, of Chicago-based DeRose Financial Planning Group. “What we’re seeing is, they have a lot of equity locked up into their homes,” she says. “People didn’t realize that they’re going to live this long, and because of that, they’re running out of money, or need to supplement their pensions or Social Security.” The rocky economic landscape has affected many older Americans, and AARP estimates that a quarter of seniors exhausted their savings during the recession, with another 67% forced to draw upon their retirement savings. This results in more than half of seniors, at 53%, not feeling confident for retirement. Older people do not want to move out of their homes, DeRose says, but many times they feel they have to, if they can no longer afford their cost of living. However, being forced to leave home can have very negative emotional implications on seniors, and that’s where a reverse mortgage would come in. “I can see using it where you really want to keep the person in their home, or if it’s going to cause problems for the children to try to figure out how to help supplement Mom and Dad’s income,” says DeRose. “I think that can be a good thing. Moving an elderly parent out can be very, very difficult.” For some financial planners, an asset is an asset, and home equity just that: an asset, to be used accordingly when planning for the future. Aric Walker, a senior advisor from Enumclaw, Wash.-based Senior Planning Solutions, says he approaches client meetings with this mindset and the question, “What is your house doing for you?” If it’s costing them monthly payments that cause a strain on their budgets...
  • 4:11 PM » Fed's Beige Book: "Economic activity continued to expand at a modest pace"
    Published Wed, Sep 07 2011 4:11 PM by Calculated Risk Blog
    : Reports from the twelve Federal Reserve Districts indicated that economic activity continued to expand at a modest pace , though some Districts noted mixed or weakening activity. The St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco Districts all reported either modest or slight expansion. Atlanta said activity continued to expand at a very subdued pace, while Cleveland reported slow growth and New York indicated growth remained sluggish. Economic activity expanded more slowly in the Chicago District and slowed in the Richmond District. Business activity in the Boston and Philadelphia Districts was characterized as mixed, with Philadelphia adding that activity was somewhat weaker overall. Several Districts also indicated that recent stock market volatility and increased economic uncertainty had led many contacts to downgrade or become more cautious about their near-term outlooks. ... Consumer spending increased slightly in most Districts since the last survey, but non-auto retail sales were flat or down in several Districts. ... Manufacturing conditions were mixed across the country, but the pace of activity slowed in many Districts . The New York, Philadelphia, and Richmond Districts reported declining activity overall, and contacts in the Boston and Dallas Districts noted slowing demand from European customers. Cleveland said factory production was stable, and manufacturing activity in the Atlanta and Chicago Districts grew at a slower pace. Minneapolis, Kansas City, and San Francisco reported slight expansions, and St. Louis said activity continued to increase and that several manufacturers planned to open plants and expand operations in the near future. Most manufacturing contacts were less optimistic than in the previous survey ; however, future capital spending plans were solid in a few Districts. ... Labor markets were generally steady, although some Districts reported modest employment growth. And on real estate: Residential real estate activity...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 2:20 PM » Fed’s Evans Calls for Stimulus to Cut Unemployment to 7.5%
    Published Wed, Sep 07 2011 2:20 PM by Business Week
    Federal Reserve Bank of Chicago President Charles Evans said the central bank should move “aggressively” to reduce unemployment, even at the cost of temporarily pushing inflation higher.
    Click Here to Read the Full Article

    Source: Business Week
  • 12:47 PM » Fed's Evans on the Fed's Dual Mandate
    Published Wed, Sep 07 2011 12:47 PM by Calculated Risk Blog
    From Chicago Fed President Charles Evans: Suppose we faced a very different economic environment: Imagine that inflation was running at 5% against our inflation objective of 2%. Is there a doubt that any central banker worth their salt would be reacting strongly to fight this high inflation rate? No, there isn’t any doubt. They would be acting as if their hair was on fire. We should be similarly energized about improving conditions in the labor market. In the United States, the Federal Reserve Act charges us with maintaining monetary and financial conditions that support maximum employment and price stability. This is referred to as the Fed’s dual mandate and it has the force of law behind it. The most reasonable interpretation of our maximum employment objective is an unemployment rate near its natural rate, and a fairly conservative estimate of that natural rate is 6%. So, when unemployment stands at 9%, we’re missing on our employment mandate by 3 full percentage points. That’s just as bad as 5% inflation versus a 2% target. So, if 5% inflation would have our hair on fire, so should 9% unemployment. The current unemployment rate of 9.1% (16.2% U-6) is a tragedy. Even though the high unemployment rate was a direct result of the bursting of the housing bubble and the financial crisis - Evans argues that we shouldn't just accept a sluggish recovery: In their book This Time is Different, Carmen Reinhart and Ken Rogoff documented the substantially more detrimental effects that financial crises typically impose on economic recoveries. Recoveries following severe financial crises take many years longer than usual, and the risk of a second recession before the ultimate economic recovery returns to the previous business cycle peak is substantially higher. In a related study of the current U.S. experience, Reinhart and Rogoff show that the current anemic recovery is following the typical post-financial crisis path quite closely, given the size of the financial contraction...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 12:00 PM » Helping Unemployed Borrowers Meet Their Mortgage Payments
    Published Wed, Sep 07 2011 12:00 PM by Google News
    and With unemployment very high, income loss is now the primary reason for mortgage default. Unemployed homeowners face tough choices. Those with equity in their house may attempt to sell it quickly. Alternatively, to keep their house while seeking a new job, they might deplete their savings, apply for a loan modification, or use other credit. Those with negative equity—who owe more on the mortgage than the property’s current value—have fewer choices, because selling the house won’t pay off the mortgage. All too often the home enters foreclosure and becomes costly for the family and the community. In this post, we examine how states may be able to offer special bridge loans to help jobless homeowners pay their mortgages and help protect neighborhoods and housing markets. Such initiatives could complement existing programs by helping many distressed homeowners before they miss any payments. When Loan Modification Programs May Not Be Suitable Many efforts to address the housing crisis thus far have focused on modifying mortgages to make them more affordable permanently or for a set period of time. When a jobless homeowner’s income loss is likely to be in large part permanent and/or the loan was unaffordable even prior to the income loss, the efficient economic outcome may require a loan modification. Even so, obtaining a modification can be an uncertain, complex, and lengthy process. And many jobless homeowners don’t qualify. When the income loss is likely to be temporary and the loan is otherwise sustainable, a better strategy may be to leave the mortgage as is and have the government provide a bridge loan to the borrower to cover part of the mortgage payment until the borrower is reemployed. This form of assistance is embodied in the Department of Housing and Urban Development’s recent Emergency Homeowners’ Loan Program (EHLP). However, EHLP offers only one-time funding for currently unemployed borrowers, and all applications were due by July 22, 2011. An alternative...
  • 11:29 AM » Will Mortgage Lawsuits Crimp Lending?
    Published Wed, Sep 07 2011 11:29 AM by WSJ
    Bloomberg News ‘Not pursuing a legitimate claim would be a subsidy,’ says Rep. Brad Miller (D., N.C.). By Alan Zibel and Nick Timiraos A federal housing regulator’s seeking billions of damages in mortgage investments that led to losses for Fannie Mae and Freddie Mac has sparked a debate over whether regulators are now too zealously attacking banks. The 17 lawsuits, which are seeking unspecified damages on $196 billion in mortgage-backed securities that Fannie and Freddie bought during the housing bubble, illustrate the tension facing regulators over their response to the financial crisis. On the one hand, regulators have tried to restore lending in order to get the economy moving. But they are also charged with protecting taxpayers and recouping recoverable losses that have stemmed from the massive bailouts of 2008. The central tension, it seems, is this: Should potential misdeeds by banks and other firms be excused because the banking sector is too important to the broader economy, or because Fannie and Freddie knew what they were doing? A number of analysts made that point on Tuesday. Fannie, Freddie and their regulator “are acting in their own self interest as opposed to that of the broader U.S. economy,” wrote FBR Capital Markets analyst Paul Miller in a note to clients Tuesday. A hefty settlement for any damages will pull away capital from the banking system and cause banks “to overly tighten credit standards, which pushes potential homebuyers onto the sidelines,” Miller said. The , which filed the lawsuits on Friday, fired back in a statement on Tuesday afternoon. “The nation’s financial system cannot function if sellers of securities fail to fulfill” a legal responsibility “to accurately represent the characteristics” of certain investments, it said. It continued: Some have claimed that these suits will disrupt economic recovery, or endanger the targeted banks, or increase their cost of capital. While everyone is concerned with these important issues, the...
  • 10:26 AM » Downpayment Sources For Recent Home Buyers, 2005-2010
    Published Wed, Sep 07 2011 10:26 AM by National Association of Realtors
    Home buyers are asked the source of the downpayment for their recent home purchase in the Profile of Home Buyers and Sellers . The most common source for downpayments has consistently been savings for the last five years, however this has risen in prominence recently. In 2010, 66 percent of recent home buyers used savings for the downpayment on their home purchase, up from 50 percent of buyers in 2005. Proceeds from the sale of a primary residence has decreased as a downpayment source, not only among all buyers (43 percent in 2005 to 22 percent in 2010), but also among repeat buyers (66 percent in 2005 to 43 percent in 2010). Receiving a gift from a friend or relative has increased among all buyers as a source of downpayments, from a low of 9 percent in 2006 to a high of 18 percent in 2010. This source is most common among first-time buyers—27 percent of first-time home buyers used this in 2010. Loans from financial institutions other than for a mortgage were more common in 2005 with 6 percent of buyers using them, compared to just 1 percent in 2010. Click here .
    Click Here to Read the Full Article

    Source: National Association of Realtors
  • 9:39 AM » Moynihan Streamlines Management and Operations
    Published Wed, Sep 07 2011 9:39 AM by Bank of America
    Darnell, Montag Elevated to Co-Chief Operating Officers Project New BAC Leads to De-Layered, Simplified Organization Businesses Aligned With Customer Groups Krawcheck, Price to Depart the Company CHARLOTTE, N.C., Sep 06, 2011 (BUSINESS WIRE) --Bank of America Chief Executive Officer Brian Moynihan today announced a reorganization of the company's management that aligns the company's operating units with its three core customer groups: individuals, companies, and institutional investors. Moynihan appointed David Darnell and Tom Montag to the newly-created positions of co-chief operating officers, accountable for all of the company's operating units. T...
    Click Here to Read the Full Article

    Source: Bank of America
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