Today’s News Synopsis:
Research from Barclay’s Capital shows that Fannie Mae’s losses may exceed $200 billion. Under new FHA rules, at least 50 percent of the units in a project must be owner-occupied.
In The News:
Housing Wire – “Multifamily Developer Fairfield Files for Bankruptcy” (12-14-09)
“Privately held multifamily real estate developer Fairfield Residential filed for Chapter 11 bankruptcy, the San Diego-based company said in an announcement on its Web site.”
Housing Wire – “Citi to Repay TARP as Treasury Sheds JPM Investment” (12-14-09)
“Citigroup (C: 3.75 -5.06%) on Monday revealed plans to repay $20bn of government funds through the Troubled Asset Relief Program (TARP)”
Housing Wire – “Amherst Sees ‘Inconsistent’ Triple-A Re-REMIC Ratings” (12-14-09)
“Residential mortgage-backed securities (RMBS) originally rated triple-A have been downgraded to below investment-grade levels, leaving investors with insufficient cash flows. Re-REMICs allow for maximized cash flows on downgraded bonds by re-tranching the original security into a new, properly enhanced triple-A security and a junior bond, according to Amherst.”
Housing Wire – “Fannie Mae Losses May Exceed $200Bn: BarCap” (12-14-09)
“Eventual losses at mortgage giant Fannie Mae (FNM: 1.10 +5.77%) could exceed $200bn, posing a risk of receivership after year-end when limitations on the Treasury Department’s authority to support the agencies return, according to research Friday by Barclays Capital (BarCap).”
Bloomberg – “‘Substantial’ Bank Losses Needed to Fix Housing, Goodman Says” (12-14-09)
“Banks will need to take ‘substantial’ writedowns on home-equity loans to enable loan modifications that will allow the U.S. housing market to recover, according to Amherst Securities Group LP. The government’s existing mortgage-modification program will fail to avert many of the 9 million to 10 million looming foreclosures because it doesn’t reduce principal for borrowers, about a quarter of whom owe more than the current value of their houses, Laurie Goodman, a mortgage-bond analyst at Amherst”
Inman - “4 hot real estate tech tools” (12-14-09)
“With Boopsie, you don’t have to type in a URL, wait for your browser to load the URL, and then enter the address or click on a map and wait for those to load as well. Instead, Boopsie uses your phone’s GPS to pull the 10 nearest properties. For agents, it also provides MLS details, key box locations, as well as the listing broker’s contact information. Boopsie also provides one-click access to nearby closed and pending sales, backup offers and leases. At the NAR trade show, Boopsie loaded all this information in about two seconds.”
Orange County Register – “South coast sees gain in distressed homes” (12-14-09)
“Two weeks ago, Dana Point’s percentage of foreclosures and short sales was 22.4%, which has risen slightly to 22.6%. Laguna Beach also saw an increase in distressed inventory. The city’s percentage of distressed inventory rose to 8.6% from 7.7% two weeks ago.”
Realty Times – “Washington Report: FHA Condo Rules” (12-14-09)
“FHA won’t insure mortgages in buildings or complexes where less than 30 percent of the units haven’t already been sold. At least 50 percent of the units in a project must be owner-occupied or sold to purchasers who intend to occupy them. ”
Realty Times – “Stop Before You Reduce the Price” (12-14-09)
“Take a really close look at what IS selling in the neighborhood or market area. Can you identify any common denominators among the selling listings versus the non-selling ones? Maybe all the sales are of four-bedroom homes and your listing has three. Maybe it’s the two-story models that are selling and yours is a ranch. You can’t fix that, of course, but it might help you understand (and explain to your seller). ”
Looking Back:
The Federal Reserve cut interest rates to 1 percent. The median single-family hoe price in San Francisco fell 16.6 percent in October. Nancy Pelosi announced Senate plans for a $500 billion economic stimulus plan.
Tags: Amherst, bank, bankruptcy, Barclays, bruce norris, Citigroup, Fairfield, FHA, insurance, mortgage, real estate, residential, TARP, treasury, writedown