Today’s News Synopsis:
California air-quality regulators adopted 10- and 25-year targets for reducing greenhouse gases. Fannie Mae is developing a loan forbearance program for military families. Nearly 33% of Americans have credit scores below 620. John Burns predicts that sales of distressed properties will peak in 2011 at 2.3 million transactions.
In The News:
San Francisco Chronicle – “Top 1% of earners get 20% of the money” (9-26-10)
“Former Clinton administration labor secretary Robert Reich, now a public policy professor at UC Berkeley, argues that working class incomes have stagnated for so long that ordinary consumers – who account for about 70 percent of all economic activity – have lost the buying power to pull the country out of recession.”
Los Angeles Times – “Trashing the dollar to save the economy” (9-25-10)
“If something’s got to be sacrificed to put the domestic economy on the road to a sustainable recovery, the dollar’s value against other currencies seems a good candidate. That’s what the Federal Reserve signaled this week — and what Congress, in no uncertain terms, is telling the Chinese.”
Mortgage Bankers Association – “Study Examines the Variety of Alternative Mortgage Loan Products Around the World” (9-27-10)
“The study entitled, ‘International Comparison of Mortgage Product Offerings’, which was conducted by Dr. Michael Lea, Director of the Corky McMillin Center for Real Estate at San Diego State University and sponsored by MBA’s Research Institute for Housing America (RIHA), examines the predominant mortgage designs and characteristics that exist in different international markets and how they have performed prior to and during the crisis. The study examined 12 developed countries with distinctly different mortgage market and product configurations.”
North Bay Business Journal – “Business groups object to greenhouse gas targets” (9-27-10)
“State air-quality regulators late last week adopted 10- and 25-year targets for reductions in greenhouse gases in the major metropolitan areas in the state over the objections of some business groups and certain policy planners that the targets for the Los Angeles and greater San Francisco Bay areas will result in high fuel and transportation costs and more environmental-impact lawsuits for real estate developers.”
Sacramento Bee – “Fannie Mae offers housing aid to military families” (9-27-10)
“Mortgage giant Fannie Mae plans to give military families a break on their home loan payments if they are struggling because of the death or injury of a service member.”
Orange County Register – “1 in 3 unlikely to qualify for mortgage” (9-27-10)
“Borrowers with credit scores under 620 who requested purchase loan quotes for 30-year fixed, conventional loans were unlikely to get even a single loan quote on Zillow Mortgage Marketplace, even if they offered a relatively high down payment of 15 to 25%, Zillow says. According to myFICO.com, nearly one-third of Americans, or 29.3%, has a credit score that low.”
Housing Wire – “DebtX August CRE loan value up to 81%” (9-27-10)
“The value of commercial loans priced in August by The Debt Exchange that collateralize commercial mortgage-backed securities rose to 81% of the original balance, the loan sale advisor said. DebtX priced 57,586 commercial real estate loans last month worth a combined $679.1 billion that collateralize 626 CMBS trusts. The aggregate August value is up from 79.4% in July and higher than the 77% a year earlier.”
Housing Wire – “Fannie Mae EarlyCheck looks to reduce future repurchase risk” (9-27-10)
“Between 2005 and 2007, many of the loans originated did not meet crucial standards set by the GSEs. Banks are now being forced to repurchase those loans. But director of the Federal Housing Finance Agency, Edward DeMarco, said in his congressional speech two weeks ago that the GSEs had more than $11 billion in outstanding repurchase requests at the end of the second quarter. Fitch Ratings predicted in August that the buyback amount for just the big four banks could reach $180 billion.”
Housing Wire – “Rating agencies disregarded mortgage quality risks, former Clayton exec says” (9-27-10)
“Between the first quarter of 2006 and the second quarter of 2007, Clayton reviewed more than 911,000 mortgages for its clients, such as Deutsche Bank and Goldman Sachs, that sold them as security pools. Johnson told the FCIC only half of them, 54%, met the kinds of standards these Wall Street firms were advertising to investors. The other 46% were “bad loans” written on unchecked information such as borrower stated income.”
Housing Wire – “Monday Morning Cup of Coffee” (9-27-10)
“Sales of distressed properties will peak in 2011 at 2.3 million transactions before falling to more normal levels at 850,000 in 2016, according to a report from John Burns Real Estate Consulting.”
Press Enterprise - “2010 real estate survivors celebrate and look at market” (9-27-10)
“Bruce Norris, who hosted the Sept. 17 reception, dinner and panel discussion, took a minute to inform the panelists, including representatives from Fannie Mae and Freddie Mac, that the audience would love the chance to buy and fix up foreclosed houses in bulk. Several times the panelists, who also included outspoken economist Christopher Thornberg and experts in the appraisal, mortgage banking and auctioning sectors, pointed to the discrepancy between high mortgage delinquency rates and a limited number of bank-owned homes available for purchase.”
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