Banks Lending Less

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.