Today’s News Synopsis:
A study from USC shows that immigrants are more attracted to mid-size cities. Goodman claims HAMP is bound to fail because of its failure to address negative equity. According to Realpoint, the delinquency rate among commercial mortgage-backed securities reached 6 percent last month. First American CoreLogic estimates the average home experiencing negative equity will not obtain positive equity until late 2015.
In The News:
NAHB - “New CRE Limits Could Jeopardize Housing and Economic Recovery” (3-29-10)
“Proposals by federal banking regulators to tighten restrictions on commercial real estate (CRE) lending could further exacerbate a severe acquisition, development and construction (AD&C) credit crisis that is choking off new home building activity and threatening the fragile housing recovery now under way, according to the National Association of Home Builders (NAHB).”
Orange County Register – “317,000 properties to get tax-cut review” (3-29-10)
“The Orange County Assessor’s office has announced plans to review the taxable value of 317,000 parcels this year to determine if their owners are eligible for further property tax cuts. That’s 35% of the nearly 900,000 real estate parcels in the county.”
Los Angeles Times – “Consumer spending up, sign of decent recovery” (3-29-10)
“The Commerce Department reported Monday that consumers boosted their spending by 0.3 percent in February. That was a tad slower than the 0.4 percent increase registered in January and marked the smallest increase since September. Still, the increase in spending was considered a respectable showing, especially given the snowstorms that slammed the East Coast and kept some people away from the malls. It marked the fifth straight month that consumer spending rose.”
Inman - “Study: Mid-size cities attract immigrants” (3-29-10)
“A growing number of immigrants are attracted to mid-size cities with lower housing costs, less competition for jobs, and increasing numbers of other immigrants, according to a recent study by the University of Southern California Lusk Center for Real Estate.”
Housing Wire – “Monday Morning Cup of Coffee” (3-29-10)
“Goodman criticized the first incarnation of the Making Home Affordable Modification Program (HAMP) because it did not address negative equity. According to her analysis, as long as borrowers are deeply underwater, they are unlikely to pay in the long term. Thus, the re-default rate will be very high, and the dead weight costs of foreclosure have not been avoided.”
Housing Wire – “New CMBS Projections Push 2010 Delinquencies into Double Digits” (3-29-10)
“In February 2010, the delinquency rate among commercial mortgage-backed securities (CMBS) pools reached 6%, up from 5.7% in January and, according to the analytics firm Realpoint, could be possibly heading toward 11-to-12% by the end of the year. Realpoint tracked delinquency data on $797bn of CMBS pools for the report. The total delinquent unpaid balance for CMBS increased $1.8bn in February, up to $47.8bn. It’s an almost 300% increase from one-year ago when $11.9bn was reported for February 2009 and is now 21 times more than the trough of $2.2bn in March 2007.”
Housing Wire – “Positive Equity Won’t Return For Most Underwater Borrowers Until 2015″ (3-29-10)
“First American CoreLogic estimates that the typical US homeowner who is in negative equity will not experience positive equity until late 2015 to early 2016. In severely depressed markets, the typical borrower in negative equity may not experience positive equity until 2020 or later. CoreLogic projects more than 11.3m — or 24% — of all residential properties with mortgages had negative equity at the end of the Q409. While the largest decreases in home prices appear to have already happened, it remains to be seen when borrowers will return to positive equity.”
Bloomberg - “Goldman Capitulation on Dollar Shows Reversal on U.S.” (3-29-10)
“The strengthening U.S. economy, subdued inflation and rising stock prices are propelling the dollar rally into its fifth month as traders seek refuge from Europe’s fiscal crisis and Japanese deflation. Goldman Sachs Group Inc. and Citigroup Inc. ended bets on a falling dollar last week after the trades lost 2.8 percent. Strategists are raising greenback forecasts at the fastest pace since last March, just before U.S. stimulus efforts that poured as much as $12.8 trillion into the economy ended the currency’s strongest rally in 28 years. Median predictions for the dollar against 47 currencies tracked in Bloomberg surveys rose an average of 1.4 percentage points in the month to March 24.”
