Today’s News Synopsis:
California Governor Schwarzenegger announced a new home buyer tax credit. The Mortgage Bankers Association reports that mortgage applications have increased by .4 percent since Christmas. The FOMC confirmed plans to buy $1.25 trillion in mortgage-backed-securities from Freddie Mac, Fannie Mae and Ginnie Mae. Eugene Ludwig believes that commercial real estate losses will break historical records in 2010.
In The News:
CBIA - “Homebuilders Applaud Governor Schwarzenegger for Prioritizing Jobs, Economic Recovery and Housing in State of the State Address” (1-6-10)
“Enacting a new homebuyer tax credit and streamlining the building process would definitely help continue that positive momentum and help our economy recover more quickly.”
Mortgage Bankers Association - “Mortgage Applications Drop the Week of Christmas and Remain Flat the Week After in Latest MBA Weekly Surveys” (1-6-10)
“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the weeks ending December 25, 2009 and January 1, 2010. For the week ending December 25, 2009, the Market Composite Index, a measure of mortgage loan application volume, decreased 22.8 percent on a seasonally adjusted basis from the prior week. For the week ending January 1, 2010, this index increased 0.5 percent on a seasonally adjusted basis. Both weeks’ results include an adjustment to account for the Christmas and New Year’s Day holidays. On an unadjusted basis, the Index decreased 46.9 percent the week before Christmas and increased 0.4 percent the week after.”
Housing Wire - “FOMC Eyes Extending Scope of MBS Purchases” (1-6-10)
“The Federal Open Market Committee, in its mid-December meeting, considered extending and expanding its initiatives to buy assets from mortgage agencies Fannie Mae (FNM: 1.10 -4.35%), Freddie Mac (FRE: 1.38 -3.50%) and Ginnie Mae. The FOMC also confirmed plans to buy $1.25trn of agency mortgage-backed securities (MBS) and $175bn of agency debt by the end of Q110, according to minutes released Wednesday.”
Housing Wire – “FHA Proposal Will Stifle Competition, Claims NAMB” (1-6-10)
“The National Association of Mortgage Brokers (NAMB) criticized a Department of Housing and Urban Development (HUD) proposal that would change how brokers and lenders operate in the Federal Housing Administration (FHA) loan program. The association contends HUD’s actions will adversely affect competition in the FHA loan market and have far-reaching economic impacts on lenders and correspondents both.”
Housing Wire – “Dodd to Leave Senate, Banking Committee Chair” (1-6-10)
“Senate Banking Committee chairman Christopher Dodd (D-Conn) on Wednesday said he will leave his post in Congress when his term expires and not seek reelection.”
Bloomberg - “Commercial Property Is Biggest Risk, U.S. Bank Examiners Find” (1-6-10)
“‘Losses from commercial real estate will be quite high by historic standards,’ said Eugene Ludwig, former Comptroller of the Currency who is now chairman of Promontory Financial Group, a Washington-based consulting firm to financial institutions.”
Bloomberg - “Regional Mall Vacancies in U.S. Rise to Record on Unemployment” (1-6-10)
“Vacancies at the largest U.S. shopping centers reached a record 8.8 percent in the fourth quarter as unemployment rose and consumers spent less, Reis Inc. said. Vacancies at smaller neighborhood and community centers increased to 10.6 percent, the highest level since 1991, from 8.9 percent a year earlier, New York-based Reis, a real estate research company, said today in a statement.”
Bloomberg - “U.S. Office, Shopping Center Construction Spending May Fall 13%” (1-6-10)
“Construction spending on hotels, office buildings and retail centers may fall 13 percent this year, the second straight annual decline amid a drop in property prices, the American Institute of Architects said. ”
Bloomberg - “Mortgage-Bond Spreads Narrow to Lowest in More Than 17 Years” (1-6-10)
“Yields on Fannie Mae and Freddie Mac mortgage securities fell to the lowest relative to Treasuries in more than 17 years, narrowing further on news Federal Reserve officials last month reiterated they may favor expanding their program to purchase $1.25 trillion of home-loan debt. ”
Looking Back:
One year ago, the NAR reported that the pending home sales index decreased by 4 percent from October to November. President Obama promised a tax break for business that would cover 5 years of expenses. Gary Watts forecasted that home prices below $500,000 would strengthen in 2009. Grubb & Ellis Co. anticipated that apartment rentals would increase during 2009.
About Bruce Norris
Bruce Norris is an active investor, hard money lender, and real estate educator with over 30 years experience. Bruce has been involved in over 2,000 real estate transactions as a buyer, seller, builder and money partner.
Tags: bruce norris, Christopher Dodd, commercial, credit, debt, economy, Eugene Ludwig, fannie mae, FHA, FOMC, freddie mac, Ginnie Mae, HUD, MBS, mortgage, NAMB, real estate, Schwarzenegger, tax