Today’s News Synopsis:
According to Experian, approximately 588,000 borrowers walked away from their homes last year. In Q3 of 2009, California accounted for over 25 percent of the nation’s foreclosure activity. MIT reports that commercial real estate transaction prices rose by 4.4 percent in Q3 of 2009.
In The News:
USA Today – “More walk away from homes, mortgages”
(11-3-09)
“Walking away from a mortgage is serious business — it can knock 100 points off your credit score and make you ineligible for a new mortgage for seven years. Yet, about 588,000 borrowers walked away from homes last year, double the number in 2007, according to a recent study by credit-scoring firm Experian and management consultants Oliver Wyman.”
DSNews - “California AG Calls on Lenders to Outline Option ARM Modification Plans” (11-3-09)
“In the third quarter, California accounted for more than 25 percent of the nation’s foreclosure activity, with 250,000 homes receiving foreclosure filings statewide. California homeowners hold 58 percent of the country’s option ARMs originated between 2004 and 2008, Brown said. Approximately one million of these mortgages will reset nationwide in the next four years, resulting in higher payments and a dramatic increase in foreclosures, he said. ”
Wall Street Journal – “Five Reasons the U.S. Doesn’t Need More Home-Buyer Perks” (11-3-09)
“Subsidies raise prices, and house prices are already too high. The house subsidy has little value as economic stimulus. The benefits of stimulus spending are unproven.”
Housing Wire – “Commercial RE Prices Rise 4.4% in Q309: MIT” (11-3-09)
“Transaction prices rose 4.4% on commercial real estate properties sold in Q309 by major institutional investors, according to the MIT Center for Real Estate (MIT/CRE).”
Housing Wire – “Fannie Raises Lenders’ Net Worth Requirement Ten-Fold” (11-3-09)
“Fannie Mae (FNM: 1.15 +11.65%) updated its eligibility requirements for lenders wanting to sell and service residential first mortgages, according to the new selling guide released Friday. To do business with Fannie Mae, lenders must now have a net worth of at least $2.5m — 10 times the previous required net worth — plus a dollar amount equal to 0.25% of the outstanding principal balance of any Fannie Mae portfolio it services.”
Bloomberg - “Bernanke Housing Plan May Prompt Calls to Extend Aid” (11-3-09)
“Federal Reserve Chairman Ben S. Bernanke is gambling that come March, he can stop the purchases of mortgage-backed securities that have propped up the U.S. housing market. Congress may have other ideas. The central bank says it must eventually withdraw its unprecedented economic stimulus to avoid a surge of inflation as a recovery takes hold. Plans to buy $1.25 trillion of housing debt are the centerpiece of its program to pull the nation out of the worst recession since the 1930s.”
Tags: Bernanke, bruce norris, commercial, economic, Experian, fannie mae, Federal Reserve, investor, lender, loan, MIT, mortgage, Oliver Wyman, option ARM, real estate, stimulus