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Today’s News Synopsis:
The Mortgage Bankers Association’s reports that mortgage applications increased by 17 percent from last week, and delinquency rates rose by 2.04 percent. Michael Williams of Fannie Mae believes that the U.S. housing market is still far from recovery. Warren Buffett’s Berkshire Hathaway Inc. is beginning to invest in distressed U.S. properties. The Wall Street Journal reports that China’s $300 billion dollar investment fund is interested in buying distressed properties in the U.S.
Mortgage Bankers Association – “Lower Rates Spur Mortgage Applications in Latest MBA Weekly Survey” (9-9-09)
“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 4, 2009. The Market Composite Index, a measure of mortgage loan application volume, increased 17.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 15.8 percent compared with the previous week and 64.5 percent compared with the same week one year earlier.”
Mortgage Bankers Association - ”MBA Report Shows Commercial/Multifamily Delinquency Rates Continue to Climb in Second Quarter 2009″ (9-9-09)
Between the first and second quarters, the 30+ day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 2.04 percentage points to 3.89 percent. The 60+ day delinquency rate on loans held in life company portfolios rose 0.03 percentage points to 0.15 percent. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.17 percentage points to 0.51 percent. The 90+ day delinquency rate on multifamily loans held or insured by Freddie Mac rose 0.02 percentage points to 0.11 percent. The 90+day delinquency rate on loans held by FDIC-insured banks and thrifts rose 0.64 percentage points to 2.92 percent.”
The Washington Post - Another Wave of Foreclosures Looms” (9-9-09)
“The housing market faces the prospect of a new round of foreclosures as hundreds of thousands of risky home loans known as option adjustable-rate mortgages reset to significantly higher payments that could force borrowers to fall behind, according to a report released Tuesday by Fitch Ratings. About 70 percent of the $189 billion in outstanding option ARMs will reset by 2011, the report said, which would be another setback to a teetering housing market still struggling to recover from the mortgage meltdown that precipitated the financial crisis.”
Bloomberg - “Banks Step Up Loan Modifications Under Obama Program” (9-9-09)
“Bank of America Corp. and Wells Fargo & Co., among the worst performers of banks in the U.S. government’s main foreclosure prevention plan, stepped up their pace of mortgage modifications by at least 60 percent in August. Bank of America more than doubled its number of modifications started through the Making Home Affordable Program to 59,891 in August from July, while Wells Fargo improved by 64 percent to 33,172, the U.S. Treasury said in a report today from Washington. Overall, 47 banks have begun 360,165 modifications through the program, up from about 235,247 in July.”
Bloomberg - “Wealthy Families Face Bankruptcy on Real Estate Crash” (9-9-09)
Wealthy individuals’ Chapter 11 bankruptcy filings jumped 73 percent in the second quarter from a year earlier, according to the National Bankruptcy Research Center, a research firm in Burlingame, California. More individuals or families with at least $1,010,650 in secured debt and $336,900 unsecured are using Chapter 11 of the U.S. bankruptcy code typically associated with business reorganizations. Falling U.S. home prices leave them unable to refinance or sell properties when they drop below the value of the mortgage, said Joseph Baldi, a Chicago bankruptcy attorney.”
Bloomberg - “Fannie Mae’s Williams Still Cautious About Housing Recovery“ (9-9-09)
“The U.S. housing market still has a ‘long road ahead’ to recovery and investors and borrowers should remain cautious as the economy regains its footing, Fannie Mae Chief Executive Officer Michael Williams said.”
Bloomberg - “Buffett’s Berkshire Adds Coverage for Risky Homes” (9-9-09)
Warren Buffett’sBerkshire Hathaway Inc. is adding sales of insurance coverage on foreclosed homes and properties occupied by distressed borrowers to make money from banks burned by the mortgage-market collapse. Berkshire follows Munich Re, the world’s biggest reinsurer, and Australia’s QBE Insurance Group Ltd. in targeting one of the few expanding U.S. insurance markets. The policies are riskier than typical home coverage because the properties are more prone to neglect or vandalism.”
Wall Street Journal – “CIC Looks to Pile Cash Into U.S. Real Estate” (9-9-09)
“China’s $300 billion sovereign-wealth fund is eyeing big investments in distressed U.S. real estate, according to people familiar with the matter. To finance some of the deals, China may rely on an old trading partner: the U.S. government.”
I Survived Real Estate 2009 will air live on The Business Press. Watch by visiting www.TheBizPress.com the night of the event. The feed should start about fifteen minuted before the event begins.
Todays News Synopsis:
A recent report shows that 2 out of 5 working-age Californians are unemployed. The Treasury expects to spend over $45 billion dollars in bail out money for Fannie Mae and Freddie Mac by September 30th. U.S. regulations are making it considerably more difficult to obtain home loans. Aliso Viejo has been named Orange County’s “hottest” home market.
New York Times – “They Left Fannie Mae, but We Got the Legal Bills” (9-5-09)
“PRECISELY one year ago, we lucky taxpayers took over Fannie Mae and Freddie Mac, the mortgage finance giants that contributed mightily to the wild and crazy home-loan-boom-turned-bust. In that rescue operation, the Treasury agreed to pony up as much as $200 billion to keep Fannie in the black, coughing up cash whenever its liabilities exceed its assets. According to the company’s most recent quarterly financial statement, the Treasury will, by Sept. 30, have handed over $45 billion to shore up the company’s net worth.”
Washington Post – “Mortgage Market Bound by Major U.S. Role” (9-7-09)
“Nearly one-third of those who obtained home loans during the boom years of 2005 and 2006 couldn’t get one today, according to mortgage industry analysts. Many of these borrowers were never really able to afford their homes and should not have gotten loans. But many others could, and borrowers like them are now running into tougher government standards.”
Sacramento Bee – “Backlash against banks growing over mortgage modifications” (9-6-09)
“The eight-county Sacramento region has counted more than 42,000 foreclosures since the start of 2007. Many area neighborhoods are scarred by vacant repos and dead lawns that pull down property values of other homeowners. Statewide, the foreclosure tally has passed 410,000, and it’s believed thousands more are inevitable.”
Los Angeles Times – “We all want a deal — that’s what’s scary” (9-5-09)
“When a 20-something friend of mine recently told me she was looking for an apartment to rent in Los Angeles, I had only one bit of advice for her: Don’t accept any advertised rent — haggle with the landlord to get the price down, and demand concessions on anything and everything. The housing crash and the recession have made this a renter’s market. The cost of apartments and homes for rent can only decline. Just look at the number of ‘for lease’ signs in every L.A. neighborhood.”
San Francisco Chronicle – “Study: 2 out of 5 working-age Californians jobless” (9-6-09)
“A report released Sunday says two of five working-age Californians do not have a job, underscoring the challenges in one of the toughest job markets in decades. A new study has found that the last time employment levels among this group were this low was February 1977.”
Bloomberg - “Missing Lehman Lesson of Shakeout Means Too Big Banks May Fail“ (9-6-09)
“Rather than break up institutions such as Bank of America Corp. and Citigroup Inc., or limit their expansion, the U.S. has given them billions of dollars in tax incentives and loan guarantees that enabled them to grow even bigger. To protect against a bank collapse touching off another freefall, President Barack Obama has proposed regulatory changes that rely on the wisdom of bankers and government overseers — the same people who created the conditions that led to Lehman’s bankruptcy and were unable to foresee its consequences.”
Orange County Register – “Where do homes sell in less than a month?” (9-8-09)
“The hardest place in Orange County to find a home to buy — or the ‘hottest’ O.C. market — in terms of ‘market time’ (supply of homes for sale vs. new purchase deals inked in past month) is Aliso Viejo. It takes 0.9 months”
Orange County Register – “Distressed inventory slippery in south coast cities” (9-8-09)
“The number of active short sales and foreclosures has risen in two beach cities that previously saw their distressed inventory shrink, according to a biweekly report by Steven Thomas of Altera Real Estate.”
Inman - “Title industry steps up lobbying” (9-8-09)
“As it steps up its lobbying efforts, the American Land Title Association has decided charge an annual licensing fee of $195 license to non-members who use the trade association’s uniform title insurance policy forms to help generate revenue to cover those and other expenses. ALTA is granting free memberships for the remainder of 2009, but companies must choose to either continue their ALTA membership or pay the annual licensing fee if they want to continue using ALTA’s uniform title insurance policy forms in 2010, the group said.”
Don’t forget I Survived Real Estate 2009 is this coming Friday evening at the Nixon Library. The Business Press, a Platinum Sponsor, is airing the event live online so all can watch on no cost. More at www.ISurvived2009.com.