Today’s News Synopsis:
President of John Burns Real Estate Consulting expects the commercial real estate market to do further damage to residential real estate. New legislation requires swap dealers and major swap participants to register with regulators and requires clearing organizations to provide transaction information to appropriate regulators. GE, MGIC, and Bank of America lost over 500 million in Q3 of 2009.
In The News:
Housing Wire – “BofA Loses $1bn as Net Loss on Home Loans Widens” (10-16-09)
“Bank of America (BAC: 17.26 -4.64%) lost $1bn or $0.26 per share during Q309, compared to a profit of $1.2bn during Q308. But company year-to-date income through Q309 was $6.5bn, compared with $5.8bn during the same period of 2008. BofA paid $1.2bn in preferred dividends for the quarter, including $893m in dividends to the US government”
Housing Wire – “BarCap Expects $2bn of CMBS TALF Requests” (10-16-09)
“Researchers at Barclays Capital (BarCap) expect the October facility date for a government loan program to receive an uptick of requests over the last subscription date. The October 21 Term Asset-Backed Securities Loan Facility (TALF) for commercial mortgage-backed securities (CMBS) will likely see an increase in subscription volume over last month, BarCap said in a research report Friday”
Housing Wire – “MGIC Loses $971m on Increasing Delinquencies” (10-16-09)
“MGIC Investment Corp. (MTG: 6.42 -12.30%) posted a $517.8m net loss in Q309, compared to losses of $115.4m in Q308 and $184.6m in Q209. The net loss for the first nine months of 2009 was more than $1bn, compared to a net loss of $250m during the same period of 2008.”
Housing Wire – “John Burns Sees Distressed CRE’s Dual Effect on Housing” (10-16-09)
“The pain felt in the distressed commercial real estate (CRE) sector will affect the residential mortgage industry on two fronts. The affects range from banks’ disposition of residential assets to a reluctance to lend to the residential sector at all, according to commentary Friday by John Burns Real Estate Consulting. The consulting firm indicated banks may need to dispose of residential assets to concentrate on commercial real estate distress as it continues to pressure the banks. This should have the affect of creating land-buying opportunities at low prices and sparking a bit of recovery, the firm said”
Housing Wire – “Investor Coalition Says No to Interest-Only Mods” (10-16-09)
“The Mortgage Investors Coalition called on the Treasury Department to reject a proposal to offer distressed borrowers interest-only payments for a certain length of time as part of the terms of a Making Home Affordable Modification Program (HAMP) workout. The coalition said a proposal being formed by large banks to allow borrowers the option to make interest-only payments as part of a new HAMP workout plan fails to address the issue of negative equity. Such a proposal is not in the best interest of the housing industry and consumers, said the coalition, a recently formed trade group of asset managers holding more than $100bn in residential mortgage-backed securitizations (RMBS) on behalf of pension funds, college endowments and other investors.”
Housing Wire – “House Moves on Financial Regulatory Reform” (10-16-09)
“The legislation passed Thursday requires swap dealers and major swap participants to register with regulators and requires clearing organizations to provide transaction information to appropriate regulators. The bill also provides for public disclosure of aggregate data on swap trading volumes and positions in a way that protects the business transactions and market positions of individuals”
Housing Wire – “GE Real Estate Revenue Falls 46% from 2008″ (10-16-09)
“Revenue from General Electric’s (GE: 16.08 -4.23%) real estate division for the first nine months of 2009 declined 46% compared to 2008, the company said in its Q309 report. GE Capital Real Estate, which creates real estate debt and equity investment funds for institutional investors as well as finances commercial real estate transactions through commercial mortgages in North America, lost $538m in Q309, compared to profit of $244m in Q308. Year-to-date losses through Q309 were $948m.”
Housing Wire – “Calif. Bank Mod Program Beats Redefault Average” (10-16-09)
“Due to the modifications, overall loan delinquencies dropped as of Sept. 30, 2009, compared to peak levels. Loans 30 to 59 days delinquent fell to $70.6m, 55% lower than the $157.5m on January 31, 2009. Loans 60 or more days delinquent decreased to $16.8m, or 95% lower than the $431.3m on Feb. 28, 2009. Loans in foreclosure fell 38% to $281.8m from $456.2m on June 30, 2009.”
Bloomberg - “MGIC Declines After Posting Ninth Consecutive Loss” (10-16-09)
“MGIC Investment Corp., the largest U.S. mortgage insurer, fell 12 percent as the company’s quarterly loss quadrupled after a record number of homeowners failed to meet mortgage payments.”
Inman - “Pig-in-a-python economics” (10-16-09)
“Long-term rates rose again this week, the 10-year Treasury note and mortgages continuing the spurt that began last Friday, to 3.46 percent and just shy of 5.25 percent, respectively.”
Tags: Bank of America, Barclays, CMBS, commercial, delinquency, GE, General Electric, hamp, John Burns, legislation, loan, MGIC, mortgage, Mortgage Investors Coalition, real estate, residential, RMBS, TALF, treasury
You don’t need statistics to tell you that Americans are anxious about their finances. Keep the worry out of mortgages by following these three suggestions. Americans are worried. According to a recent report by the Rockefeller Foundation, 93 percent of households suffered a minimum of one “substantial economic shock” between March 2008 and September 2009. And, in the summer of 2010, more than 70 percent of Americans were worried about losing their jobs.