From Richard Weidemeir in MoneyNews:
Single-family home starts were running at an annual rate of 533,000 in
September, whereas single-family home sales were only running at an annual rate
of 389,000. The builders are likely getting a bit ahead of themselves. However,
it is a nice jump from the annual rate of single-family home sales of 306,000
last year. Of course, last year’s sales were the lowest on record. So, the
housing market is still abysmal — well below the 1.4 million-unit rate of July
2005, but it is a green shoot right now.
There is a boom in apartment construction, not condos or townhomes.
Read more: Green
Shoots and Brown Shoots
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Have you considered how the spec housing builders will be able to move forward? They had to get rid of the land lots they had bought in order to avoid as much of the housing bubble pop as possible. Now, they must buy land and build on it in order to sell homes. Where will they get the money to buy the land and then the credit to build the spec homes?
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Home prices are up 2.6% over all in the US. The main markets, year over year, benefiting from the rise are: Minnesota 1.2%, Arizona 14.1%. Rhode Island's prices dropped 0.6%.
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All this stimulus spending is now hurting the banks. The stimulus spending is lowering the interest rates the banks can make on loans. They aren't making enough money on loans, so they are only lending to the highest credit score holders. This is dropping their stock prices. The longer the QE3 is in effect, the less the banks will lend and the fewer buyers there will be because there will be so few mortgages allowed. It will be rough on the housing industry as a whole. The only winners I can see are the big box stores which will be making money from repairs and renovations a people stay in their homes longer.
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Beware reverse mortgages. Warn the people you know to watch out for hidden fees and misleading statements.
"In some cases, widows or widowers have found themselves on the brink of eviction after they were pressured to keep their name off the deed without being told they could be left facing foreclosure if their spouse died." - Monica Russo of the Houston Chronicle.
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According to HousingWire, Warren Buffet is still betting heavly on a housing recovery.
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TBSW:
The Basel III will require the banks to raise captial holdings from 2% to 7%. This means less lending from said banks. However, the "too big to fail" banks will need to have 9.5%. Raising all this capital is why small banks may go out of business. There are other percentages and fees which are required as well. The banks will be required to fill these reserves before handing out dividends. The price we will pay is a slower recovery and more expensive and scarce money being lent. Basel III is slowly being implemented, but is not required to be in full compliance until 2018. Basel III means a much slower recovery for the housing industry. The US interpretation of Basel III is more strict than the European interpretation. This will handicapp the US banks in competition with the European.
The Basel Accords are held by the Basel Committee on Banking Supervision in Basel, Switzerland. It is usually attended by the central banks of the G-20. It is to agree on terms of debt and decided what banks must hold in case of any systemic bank failures. The committee does not hold any authority to enforce any of the agreements. Each country is in charge of enforcing the recommendations.
(I recommend you subscribe to the email at www.tbwsdailys. All this dry, dull information is packaged in a usable, pleasant format by Brian Stevens and Frank Garay.)
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FHFA has reduced the second mortgage pay out to $6000. Also, Borrowers dealing with the loss of a co-borrower, divorce, legal separation, illness, disability or a distant employment transfer will have the option of getting a short sale approved by the servicer before they actually default on a payment. Fannie also is culling down on the amount of documentation required to complete a short sale under hardship circumstances and eliminating certain documentation requirements for borrowers who are 90 days or more delinquent or living with a credit score below 620.
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The Mortgage Bankers Association is forecasting a 25% decline in mortgage originations in 2013, according to HousingWire. Fixed mortgage rates went from 3.57% up to 3.63%. The number of mortgage originations, also, fell last month, but this could be due to the time of year.
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TBSW:
Mississippi and West Virginia have the lowest credit scores, yet have the highest home ownership. These two states didn't engage in the silly, subprime lending mess that the rest of the country did. Instead, they looked at the mortgagor's ability to pay. California and Florida have much higher credit scores, and yet had terrible foreclosure rates.
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There are now 5.64 million properties in distress according to LPS in HousingWire. These are properties which are 30 days or more overdue for payment, but not in foreclosure.
sharexy
Monday, October 29, 2012
Monday, October 22, 2012
Mortgages Harder to Get
TBWS:
FHA is financing fewer loans and conventional mortgages are up the same amount. So, expect your buyers to get more conventional loans than FHA loans.
The average credit score of accepted home buyers is 750, far above the score of most buyers in any age range.
(It will be harder for your buyers to get loans. Prepare them ahead of time so that you both succeed. Work with a mortgage loan officer to help your potential buyers raise their credit score.)
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MoneyNews:
The US will have its credit rating down graded again in 2013 if we experience the fiscal cliff. The whole world economy will increase by only 1.7% in 2013. This means most countries are in the red or heading there instead of growing and decreasing their debt. The US credit rating was dropped from AAA to AA+ on Aug. 5, 2012 by Standard and Poor. On top of that, the percentage of people in the middle class is declining. This will allow fewer people to own homes.
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HousingWire:
FHFA may start helping Fannie Mae and Freddie Mac go after strategic defaulters. Strategic defaulters are those home owners who walk away from homes when they are able to afford the payments. "The Inspector General suggests the FHFA begin to routinely gather info related to deficiencies at the GSEs. After analyzing the data, the FHFA should then manage the deficiency collection process."
Watch out, the Feds are coming for you if you walk away, but can afford the payments.
FHA is financing fewer loans and conventional mortgages are up the same amount. So, expect your buyers to get more conventional loans than FHA loans.
The average credit score of accepted home buyers is 750, far above the score of most buyers in any age range.
(It will be harder for your buyers to get loans. Prepare them ahead of time so that you both succeed. Work with a mortgage loan officer to help your potential buyers raise their credit score.)
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MoneyNews:
The US will have its credit rating down graded again in 2013 if we experience the fiscal cliff. The whole world economy will increase by only 1.7% in 2013. This means most countries are in the red or heading there instead of growing and decreasing their debt. The US credit rating was dropped from AAA to AA+ on Aug. 5, 2012 by Standard and Poor. On top of that, the percentage of people in the middle class is declining. This will allow fewer people to own homes.
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HousingWire:
FHFA may start helping Fannie Mae and Freddie Mac go after strategic defaulters. Strategic defaulters are those home owners who walk away from homes when they are able to afford the payments. "The Inspector General suggests the FHFA begin to routinely gather info related to deficiencies at the GSEs. After analyzing the data, the FHFA should then manage the deficiency collection process."
Watch out, the Feds are coming for you if you walk away, but can afford the payments.
Monday, October 15, 2012
The Fed, Barry Habib, Jaime Dimon and more
KPanchuck reports in HousingWire:
Home Depot CEO Frank Blake thinks the housing market recovery will take at least two years due to "lingering issues in the mortgage credit market and a large inventory of distressed properties".
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It looks like three top Fed officials are ready to raise interest rates. This is suppose to allow more people to go back to work. We will see.
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The IMF is saying that a zone wide depression in Europe is coming unless Germany leaves the union and the other countries are allowed to compete with their own currencies. All that talk about austerity and stimulus hasn't worked. This will affect us here in the US including the real estate market.
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Leon Pannetta is saying we are ripe for a cyber attack that would wipe out all information in the computers it attacks. In other words, have your files on seperate drive and on paper to be able to reconstruct your business if the worst happens.
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JP Morgan Chase CEO Jaime Dimon says mortgage servicing costs will remain elevated until 2014 then will decline significantly. He says it is a rough prediction, but reducing costs will be wonderful seeing that we will have a 3% tax on real estate sales starting in January 2013.
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The housing recovery is not the same as the mortgage recovery. Because of the refi's, there will be fewer repeat buyers. The refi mortgage will keep people in their homes longer.
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For your buyers who want a home, but have bad credit, they can go to a mortgage loan officer to work on a credit restoration plan or to the National Foundation for Credit Counseling website, nfcc.org, to set up an appointment for help. It is free or very low cost according to Clark Howard.
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Barry Habib recommends that we real estate agents list properties in the round figures since buyers want to see properties in round figures such as $250- $300 or $100-$275- no 999 figures. Round figures will show up on more searches than, say $249,900. $250,000 will show up on $200-$250,000 searches as well as $250,000-$300,000. More searches, more sales.
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Elizebeth Duke, a Federal Reserve board member, says there are 4 million vacant homes not even on the market. This doesn't include the vacation homes or homes in between being moved into after sales. Then there is the 1.4 million shadow inventory homes which are at least 3 months behind in mortgage payments. I still haven't heard what the lenders actually plan to do about all this.
Home Depot CEO Frank Blake thinks the housing market recovery will take at least two years due to "lingering issues in the mortgage credit market and a large inventory of distressed properties".
-----------------------------------------------------------------------------------
It looks like three top Fed officials are ready to raise interest rates. This is suppose to allow more people to go back to work. We will see.
------------------------------------------------------------------------------------
The IMF is saying that a zone wide depression in Europe is coming unless Germany leaves the union and the other countries are allowed to compete with their own currencies. All that talk about austerity and stimulus hasn't worked. This will affect us here in the US including the real estate market.
-------------------------------------------------------------------------------------
Leon Pannetta is saying we are ripe for a cyber attack that would wipe out all information in the computers it attacks. In other words, have your files on seperate drive and on paper to be able to reconstruct your business if the worst happens.
--------------------------------------------------------------------------------------
JP Morgan Chase CEO Jaime Dimon says mortgage servicing costs will remain elevated until 2014 then will decline significantly. He says it is a rough prediction, but reducing costs will be wonderful seeing that we will have a 3% tax on real estate sales starting in January 2013.
--------------------------------------------------------------------------------------
The housing recovery is not the same as the mortgage recovery. Because of the refi's, there will be fewer repeat buyers. The refi mortgage will keep people in their homes longer.
---------------------------------------------------------------------------------------
For your buyers who want a home, but have bad credit, they can go to a mortgage loan officer to work on a credit restoration plan or to the National Foundation for Credit Counseling website, nfcc.org, to set up an appointment for help. It is free or very low cost according to Clark Howard.
----------------------------------------------------------------------------------------
Barry Habib recommends that we real estate agents list properties in the round figures since buyers want to see properties in round figures such as $250- $300 or $100-$275- no 999 figures. Round figures will show up on more searches than, say $249,900. $250,000 will show up on $200-$250,000 searches as well as $250,000-$300,000. More searches, more sales.
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Elizebeth Duke, a Federal Reserve board member, says there are 4 million vacant homes not even on the market. This doesn't include the vacation homes or homes in between being moved into after sales. Then there is the 1.4 million shadow inventory homes which are at least 3 months behind in mortgage payments. I still haven't heard what the lenders actually plan to do about all this.
Tuesday, October 9, 2012
Have you heard about H.R. 4646. It will impose a 1% transaction tax on all monetary transactions- bank deposits, bank withdrawals, stock transactions, debit cards,etc. Look it up on snopes.com Debt Free America Act. This money would go to third world countries.
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50% of all refi's go in to foreclosure again. Why are we throwing money down a rat hole?
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In January, a 3% tax will be levied on all house sales. Be prepared.
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Some 68 million Americans feel homeowners should be allowed to strategically default on their mortgages without any consequences, a JZ Analytics survey finds. A strategic default is when a homeowner, who has the ability to make a payment on a house that is not underwater, decides to walk away and let the house go into foreclosure
Read more: Zogby: 68 Million Say It’s OK to Default on Mortgage
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"FHA will not be participating in the REO to Rental program", reports Jacob Gaffney of HousingWire.
I guess the foreclosures will sit and deteriorate as usual.
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50% of all refi's go in to foreclosure again. Why are we throwing money down a rat hole?
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In January, a 3% tax will be levied on all house sales. Be prepared.
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Some 68 million Americans feel homeowners should be allowed to strategically default on their mortgages without any consequences, a JZ Analytics survey finds. A strategic default is when a homeowner, who has the ability to make a payment on a house that is not underwater, decides to walk away and let the house go into foreclosure
Read more: Zogby: 68 Million Say It’s OK to Default on Mortgage
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"FHA will not be participating in the REO to Rental program", reports Jacob Gaffney of HousingWire.
I guess the foreclosures will sit and deteriorate as usual.
Wednesday, October 3, 2012
Fannie and Freddie have sold 1.2 million of their foreclosures. They are now selling pools of properties. The investors are not necessarily American.
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Bank of America is still not releasing its foreclosure back log. They are laying off 16,000 employees. Maybe they will be ready to let loose of their inventory by November. They did get a bunch of stimulus money from this administration. Maybe they are obeying their political masters and holding off releasing the load of foreclosures until after the election.
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Mit Romney is suggesting a 20% across the board income tax reduction, but we might loose the mortgage deduction as well. Personally, I prefer Herman Cain's plan 9-9-9 which would start us on the track to the fair tax plan. That would allow us to spend as much or as little as we want to be taxed and free up our economy in every way including real estate.
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Brian Collins, (Oct 2, 2012) Origination News writes:
Community banks may be driven from the single family mortgage market unless changes are made to the Basel III. Basel III is the third installment of the Basel Accords. It increases the bank liquidity and bank leverage requirements (more regulation). We are already seeing community banks being bought out by larger regional banks because the regulatory costs have increased to the point that the local banks can't make a profit. Basel III will make the situation worse. The OECD is the Organization for Economic Co-operation and Development which is an international economic organization of 34 countries founded in 1961 to stimulate economic progress and trade, according to Wikipedia. They are saying that Basel III will decrease annual GDP by 05-.15%. We can't afford any more decrease in our economy. Our economy is only growing at less than 2% as it is. However, the Basel III doesn't affect the GSE's, only the less than mega banks.
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Jon Prior at HousingWire say:
Freddie Mac is requiring banks to buy back mortgages to allow the Federal Gov't to print money.
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Kerry Anne Panchuck of HousingWire writes:
Borrowers with second liens owned and serviced by Bank of America ($9.08 0.15%) may qualify to get their subordinate debt extinguished entirely. But no letter, no chance of qualifying.
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Bank of America may be deleting these second mortgages, but we, the tax payers, will still be paying for BoA's mistakes in loaning to the defaulting parties because of the stimulus money they got.
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TBWS says:
Stop all loan modifications because between 1/3 and 1/2 of the modified loans default. Modifications perform worse than the worst of any subprime loan. Doing loan modifications just increase loan defaults. Where is the business sense in that? We should just get the foreclosures and short sales out of the way because it doesn't matter to us, the tax payers, who is in the house. 90% of the new mortgages succeed. This will get us out of the default cycle and put our real estate industry back on solid footing. Modifying loans is financing the housing failure. It sounds good, but is just flushing taxpayer's dollars down the toilet.
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Fannie Mae has just pulled the contracts with many of their asset managers. Who will put the foreclosures on the market now?
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Peter Schroeder in The Hill says:
Three states are challenging Dodd-Frank in court. They are Michigan, Oklahoma and South Carolina. They are saying that Dodd-Frank creats death panels for companies. (I hope they win).
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Bank of America is still not releasing its foreclosure back log. They are laying off 16,000 employees. Maybe they will be ready to let loose of their inventory by November. They did get a bunch of stimulus money from this administration. Maybe they are obeying their political masters and holding off releasing the load of foreclosures until after the election.
---------------------------------------------------------------------------------------
Mit Romney is suggesting a 20% across the board income tax reduction, but we might loose the mortgage deduction as well. Personally, I prefer Herman Cain's plan 9-9-9 which would start us on the track to the fair tax plan. That would allow us to spend as much or as little as we want to be taxed and free up our economy in every way including real estate.
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Brian Collins, (Oct 2, 2012) Origination News writes:
Community banks may be driven from the single family mortgage market unless changes are made to the Basel III. Basel III is the third installment of the Basel Accords. It increases the bank liquidity and bank leverage requirements (more regulation). We are already seeing community banks being bought out by larger regional banks because the regulatory costs have increased to the point that the local banks can't make a profit. Basel III will make the situation worse. The OECD is the Organization for Economic Co-operation and Development which is an international economic organization of 34 countries founded in 1961 to stimulate economic progress and trade, according to Wikipedia. They are saying that Basel III will decrease annual GDP by 05-.15%. We can't afford any more decrease in our economy. Our economy is only growing at less than 2% as it is. However, the Basel III doesn't affect the GSE's, only the less than mega banks.
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Jon Prior at HousingWire say:
Freddie Mac is requiring banks to buy back mortgages to allow the Federal Gov't to print money.
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Kerry Anne Panchuck of HousingWire writes:
Borrowers with second liens owned and serviced by Bank of America ($9.08 0.15%) may qualify to get their subordinate debt extinguished entirely. But no letter, no chance of qualifying.
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Bank of America may be deleting these second mortgages, but we, the tax payers, will still be paying for BoA's mistakes in loaning to the defaulting parties because of the stimulus money they got.
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TBWS says:
Stop all loan modifications because between 1/3 and 1/2 of the modified loans default. Modifications perform worse than the worst of any subprime loan. Doing loan modifications just increase loan defaults. Where is the business sense in that? We should just get the foreclosures and short sales out of the way because it doesn't matter to us, the tax payers, who is in the house. 90% of the new mortgages succeed. This will get us out of the default cycle and put our real estate industry back on solid footing. Modifying loans is financing the housing failure. It sounds good, but is just flushing taxpayer's dollars down the toilet.
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Fannie Mae has just pulled the contracts with many of their asset managers. Who will put the foreclosures on the market now?
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Peter Schroeder in The Hill says:
Three states are challenging Dodd-Frank in court. They are Michigan, Oklahoma and South Carolina. They are saying that Dodd-Frank creats death panels for companies. (I hope they win).
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