May 2, 2006

Industry ‘Undergoing Fundamental Changes’ CEO

Lots of housing bubble news on the lending front. “The parent company of Ameriquest Mortgage Co. and Town & Country Credit said Tuesday it will close all of their 229 branch offices and lay off 3,800 employees nationwide as part of a plan to consolidate its retail mortgage lending operations.”

“‘We are moving strategically and decisively to remain a leader in an industry that is undergoing fundamental changes,’ CEO Aseem Mital said in a statement.”

“Ameriquest is the nation’s largest sub-prime mortgage lender. ACC also operates AMC Mortgage Services Inc., formerly Bedford Home Loans. In addition to the branch closings, effective as of Tuesday, the company was also trimming positions at its headquarters.”

“Mortgage banker Accredited Home Lenders Holding Co., a nationwide mortgage company specializing in non-prime residential mortgage loans, said Tuesday Income rose to $35.8 million, slightly below Wall Street predictions.”

“CEO James Konrath said, ‘Our company delivered another solid quarter of earnings and cost discipline, along with an increase in loan originations and portfolio growth. These results were accomplished during a quarter with the anticipated seasonally softer origination volume and a number of competitors lowering interest rates to borrowers while the cost of money was increasing.’”

“Doug Duncan, chief economist at the Mortgage Bankers Association, has a knack for making people feel secure and optimistic about housing’s future. ‘The housing market is normalizing,’ Duncan said. Loan age and the growth in high-risk market lending will add pressure to loan delinquencies. ‘Over half of all loans out there are less than 3 years old,’ Duncan said. ‘Loans tend to peak in probability of delinquency in 3-5 years of their life.’”

“(Economist) Mark Zandi said that ‘builders have done a pretty good job of matching supply and demand’ and that ‘nationally, house prices and supply will go flat in 2006, 2007 and 2008,’ which implies that there will be some price declines in key markets.”

And finally, interest rate news from Wrong-Way Bernanke. “Stocks fell on Monday after CNBC’s Maria Bartiromo revealed on air that Ben Bernanke felt his testimony last week had been ‘misunderstood.’ The anchor said Mr Bernanke had told her at the White House Correspondents’ dinner in Washington on Saturday that he had not intended the markets to infer that the Fed was nearly done raising interest rates.”

“‘It comes off as a great example of over-communication and a possible attempt to over-fine-tune, assuming he was willing to go on the record with these comments; CNBC is not the Fed’s obvious port of call to correct market expectations,’ said Alan Ruskin.”




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101 Comments »

Comment by Sunsetbeachguy
2006-05-02 12:48:20

The famous Doug Duncan.

The last honest man in the RE industrial complex.

He sold his house and is renting. He said simply that it was time to take some $ off the table.

He must have an employment contract cause he’d probably be fired if he didn’t.

Comment by Arwen U.
2006-05-02 13:07:14

A few other reasons he gave for moving was hitting the 500K tax exemption and downsizing as the kids were grown. Another fun fact is that when he moved to Northern VA when his kids were younger he resisted the temptation to buy right away in the late 80’s. He waited until the early 90’s and bought a foreclosure. Good man.

 
Comment by hd74man
2006-05-03 08:48:50

Doug Duncan, chief economist at the Mortgage Bankers Association, has a knack for making people feel secure and optimistic about housing’s future. ‘The housing market is normalizing,’ Duncan said. Loan age and the growth in high-risk market lending will add pressure to loan delinquencies. ‘Over half of all loans out there are less than 3 years old,’ Duncan said. ‘Loans tend to peak in probability of delinquency in 3-5 years of their life.’

Joseph Gobbels at his finest.

This is like broadcasting that Hitler’s wonder weapons would turn the tide, as the Russian hordes stormed down the street to his bunker.

 
 
Comment by crispy&cole
2006-05-02 12:50:03

Notice the “immediately close”. WOW. (someone else pointed this out before me)

Comment by Ben Jones
2006-05-02 12:53:07

I heard they padlocked their offices in Austin, Texas.

Comment by crispy&cole
2006-05-02 12:54:46

I might drive by their local office and take a picture today.

Comment by grim
2006-05-02 13:25:40

Would have done the same.. But they already changed their website.. Can’t find a local office.

grim

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Comment by audet
2006-05-02 15:25:34

I drove by the office in Vancouver, Wa. that I remembered seeing before. No sign of it at all on the building or doors - they must have already closed it down before today.

 
Comment by Inspired
2006-05-02 18:50:55

Had to Post about “Maria Bartiromo- CNBC story.
today the news came out that Maria had talked to BEN - (Fed chair)
WHEN Saturday evening.
Story surfaced on CNBC WHEN 3M NY time Monday….
The market monday rallied out of the gate…then grinded sideways….until 3:08 PM when it “wnet into a free fall - lack of bids ..after the CNBC story went puiblic to the NUBES..
Checking the pricing of Bear Stearns / Goldman Sachs/ & Merrill - they all rallied at first but ALL day long sold OFF!!!
MY bet Wall Street sold into the day long rally knowing of Maria’s news story.3PM…Which by the way was not news but as the Chairman had originally reported to CONgress.
SO why did Maria wait for 2 days and 6 hours to break a ‘NON breaking story????
ANSWER: So the stock market SUCKERS could get BAGGED!!! AGAIN

Comment by GetStucco
2006-05-02 20:21:00

That sounds illegal to me; but what else is new with the Wall Street super-shills?

 
 
 
Comment by Ben Jones
2006-05-02 12:51:59

‘Over half of all loans out there are less than 3 years old,’ Duncan said. ‘Loans tend to peak in probability of delinquency in 3-5 years of their life.’

‘Foreclosure activity across the Bay Area and California ticked up to its highest level in two years in the first quarter as the pace of home price gains slackened In other regions of the state, the increases were much higher. Southern California, for instance, saw a 33 percent jump.’

‘builders have done a pretty good job of matching supply and demand’

‘The city and county of Denver posted a significant increase in housing starts, with a 39 percent increase during the past 12 months. Across metro Denver, there was significant growth in the number of new homes on the market. There were 16,212 units at the end of Q1 2006, a 10.4-month supply.’

Comment by Hoz
2006-05-02 14:51:43

I am posting some items I stumbled upon while doing research today for a client. I apologize in advance if thiese have been posted - I missed them if they were.

From the FDIC 2006 roundtable Scenarios for the Next U.S. Recession:
http://tinyurl.com/mqh8y
http://tinyurl.com/qm5rq

Meredith Whitney, Executive Director, CIBC World Markets, a subsidiary of Canadian Imperial Bank of Commerce.

It challenged me to drill down deeper into the analysis of who was at risk in terms of any type of consumer softening, or a potential recession. My conclusion was that I believe 10 percent of the U.S. economy will actually experience a segmented consumer recession over the next 24 months

Just from an anecdotal perspective, if you know short-term rates are rising, and long-term rates are declining or at least staying static, wouldn’t it be prudent to lock in a long-term mortgage? Why is 30 percent of the mortgage market still booking into adjustable-rate mortgages? Because we believe they couldn’t otherwise afford to squeeze themselves into a home or they’re squeezing themselves into a more expensive home for affordability factors.

want to focus on this statistic, which is pretty alarming. We estimate that 26 percent of the U.S. population lives at, near, or below the poverty level (see Chart 42). The number for the poverty level is living below $23,000 a year, and that covers 13 percent of the population. We go on to estimate, actually, that 26 percent of the population lives at, near, or below the poverty level. Now, these guys have no access to credit.

Sixty-four percent was the traditional homeownership rate as far back as the 1970s to about 1994. This is as far back as the data show, so 64 percent is what we really call the “natural rate of homeownership.”

Of course, you know that 69 percent of the U.S. population today owns homes. Greenspan, in his paper on the mortgage industry in September, targeted 5 percent of the U.S. population at risk in terms of very low equity levels in homes. Sixty-nine minus 64 is 5 percent. So these are the new, first-time homebuyers, which we see at risk.

n terms of equity in homes, it has declined by 9 percent. This is average equity in homes. So, in 1990, the average equity in homes was 60 percent; today it’s 56 percent. So we think, actually, that has created a barbell between those folks who own their homes outright versus the new buyers, who have put very little down on their homes.

In 1994, the standards through which an individual could qualify for a home really relaxed considerably. And from that time, 15 million new homeowners were created in the United States. So it’s not just a matter of money going from the equity market into the housing market. It’s also the fact that 15 million new households became homebuyers, and an increased demand versus supply clearly sent home prices higher. So an expansion of 8 percent in the size of the market cannot be overestimated in terms of its impact on the market (see Chart 45).

Since 1996, subprime lending has grown five-fold (see Chart 46). And these numbers actually may be understated, as a lot of large banks are reticent to admit that they actually have any type of subprime loans. Instead, it has been called non-prime, or non-traditional. What this shows is a five-fold expansion in the subprime lending volume

Again, I want to talk about why someone would do this to themselves, why someone would take on an adjustable-rate product when you know short-term rates are rising. That doesn’t make any sense. The only conclusion that you can draw from this is that, otherwise, these homes would not be affordable to these consumers.

Home equity, which has really been the consumer’s ATM over the last certainly five to ten years, has enabled a lot of this affordability. A lot of the new home mortgages that are originated come with piggyback home equity loan features.

Now, I want to point out that [Chart 49] is only talking about revolving home equity lines. The total home equity number is closer to about $800 billion. So a lot of this home equity is acting like sort of a new version of a credit card for consumers.

Comment by Mike_in_Fl
2006-05-02 15:23:23

I read that whole report a few weeks ago when I was doing some research myself. Some scary stats about just how many marginal customers have been brought into the market by super-easy financing. When they start defaulting … and you know it’s already happening from these NOD stats out of California … it’s going to cause lending standards to tighten up … causing more defaults … causing lending standards to tighten further, etc., etc. Those people who “will just refinance later” are going to find a whole new mortgage market in a year or two.

 
 
 
Comment by sm_landlord
2006-05-02 12:52:16

And who said they don’t ring a bell at the top? :-)

Comment by crispy&cole
2006-05-02 12:53:34

Its only Tuesday and we have had some confessions from HB and now Ameriquest.

 
 
Comment by bottomfisherman
2006-05-02 13:00:05

There’s another sign of trouble in California’s real estate market. Lenders sent 18,668 default notices to homeowners in the first three months of the year, up 28.7 percent from a year ago, according to a report today from DataQuick Information Systems.

“A number of factors are driving defaults higher,” DataQuick President Marshall Prentice said in a statement. “The main one right now is that home values are rising more slowly than they have been the past couple of years, which makes it more difficult for homeowners to sell their homes and pay off the lender. Other factors that influence default activity include the amount of equity people have in their property, the type of mortgage they used and how long they’ve had that mortgage.”

The situation in Silicon Valley, though, wasn’t as bad as the rest of the state. In Santa Clara County, default notices were up 5.4 percent compared with a year ago to 527.

Lenders issue default notices before beginning the foreclosure process, although most homeowners are able to avoid foreclosure by selling their properties for more than their loan balances.

http://www.mercurynews.com/mld/mercurynews/14482958.htm

 
Comment by happy renter
2006-05-02 13:03:41

will close all of their 229 branch offices and lay off 3,800 employees nationwide as part of a plan to consolidate its retail mortgage lending operations.”

“‘We are moving strategically and decisively to remain a leader in an industry that is undergoing fundamental changes,’ CEO Aseem Mital said in a statement.”

This sounds alot like Enrons final hours. I wonder if they’ll liquidate and give out huge bonuses to the execs.

Comment by Sunsetbeachguy
2006-05-02 13:24:53

Enron had about 4500 jobs in downtown Houston and about 13,000 worldwide the day they went BK.

So far the layoff tally for RE industrial complex employees is pretty low. But I will accept the 1500 a couple of months ago and 3800.

Just a drop in the bucket but a good sized one.

Couldn’t happen to nicer people at Ameriquest. I would like to see them twist in the wind a bit.

Comment by crispy&cole
2006-05-02 13:33:05

Add in the Acoustic closing last month. I think 400 people.

 
Comment by Hoz
2006-05-02 14:04:27

This is not the tip of the iceberg, what this number shows is the larger firms now getting squeezed. The mom and pops went under months ago. If we lose 50% of the mortgage brokers, the industry will be in a better place. Greed and lax standards fueled the increase in brokers and gave us all a bad name. IMHO this washout along with the tighter regulations that will be established after this bubble collapse (5 - 10 yr duration) will be great!

Comment by CA renter
2006-05-02 14:36:32

IMHO this washout along with the tighter regulations that will be established after this bubble collapse (5 - 10 yr duration) will be great!
________________
Amen!!

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Comment by hd74man
2006-05-03 08:57:52

IMHO this washout along with the tighter regulations that will be established after this bubble collapse (5 - 10 yr duration) will be great!

Kinda like when the US stopped their heavy bomber raids on Berlin…

When the FEDS tighten the regs, they will over-do it. Always have-always will.

However too late to the party for this bust.

Barn’s burned down and the horses are gone.

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Comment by Inspired
2006-05-02 18:59:49

“closing ALL Branch Offices”….remaining a leader?

Why do journalist let crooks like this get away with “remainig a leader in a fast moving industry?”

Closed sweat shops 229 left open for bsuiness 0…sounds like his leadership is in a dead industry! “In nominae Patre”

 
Comment by asuwest2
2006-05-02 21:57:56

Talk about quick! Apparently they haven’t sacked their webmaster. They’ve already changed their site, so if you are looking for one of the 40 California offices they had on Monday morning…Bongo…aint no more.

The other part which is pretty scary is that Hoover’s says they only had 4000 employees to begin with. Lets see, that’s only a 95% layoff. Betcha there are plenty of good parking spaces now!

As a side note or two, they haven’t yet filed their REQUiRED notification under the WARN act, at least to the state of CA. And as evidence of change, the TOTAL CA layoffs under WARN for 2005 were 1,259.

This year, WAMU alone sacked over 800. YTD tally, 1,986…w/o Ameriquest. Sleep tight!

 
 
Comment by Curt
2006-05-02 13:11:24

Shhhh, quiet! Do you hear it? ……….. Yup, I hear Taps being played very clear and very slowly.

 
Comment by AZ_BubblePopper
2006-05-02 13:11:38

“Stocks fell on Monday after CNBC’s Maria Bartiromo revealed on air that Ben Bernanke felt his testimony last week had been ‘misunderstood.’ The anchor said Mr Bernanke had told her at the White House Correspondents’ dinner in Washington on Saturday that he had not intended the markets to infer that the Fed was nearly done raising interest rates.”

I was watching CNBC at the time. The personalities on the show were really playing up the impact of Bartiromo’s revelations, in amazement, and Bartiromo herself was trying to downplay the news, probably fearing some reprisals, most likely her last chance to talk to a FED chairman in her lifetime…

Comment by Peter Gerard
2006-05-02 13:18:35

Remember her during the internet bubble? Host of “plays of the week”with all those Pump and Dump folks

Comment by AZ_BubblePopper
2006-05-02 13:26:37

Yep, her and Cramer… and boy, she still needs a boob job. The funny thing about Cramer is I’ve made a killing on some of the stocks he’s pumped in the past year. Of course they were stocks or segments that were already on my radar, PCU, BTU, WFT & BHI to name a few… and his call propted me to pull the trigger. Those were all up over 25% in a matter of months after buying. It’s possible that he has enough of a following that his suggestions could actually drive some strength…

Comment by Peter Gerard
2006-05-02 13:42:09

You got it!

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Comment by Patriotic Bear
2006-05-02 15:19:25

Cramer has a big mouth that is it. I suggest you review his pics in 2000. According to Abelson at Barons they were off over 90%. Watch what happends to his pics when we go bearish. A genius is a bull market. He reminds me of the following story.

When Einstein died he woke up in heaven at the end of a long line in fron of the gate. St Peter saw Einstein and said, “You are too important too wait here come directly into heaven”. Einstien commented, “how do I know that I will like it here”. St Peter suggested that he come in and meet some of the boys to get acquainted.

After meeting the first person in heaven Einstein asked the man’s IQ. The answer was “180″. Einstein though “this is great I can discuss plasma and hig levels of mathematics with this fellow”. The next fellow when asked his IQ said, “100″. Einstein thought “this is fine for we can discuss baseball and politics”.

The third fellow told Einstein his IQ was 75. Einstein thought a moment and then asked, “so what do you think about Jim Cramer and the realestate market”?

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Comment by AZ_BubblePopper
2006-05-03 05:43:58

Hey, I didn’t say he was brilliant. I merely said that for stocks that I was already inclined to buy, I bought a few after a mention on his show. FOr a stock to go up all you need is buy interest. My point was that with a recommendation on his show that it’s possible to get that extra buy interest to drive a stock. Now it obviously helps if the stock is already poised to run…

 
 
 
 
Comment by Inspired
2006-05-02 18:54:57

YEH before SPITZER opens a FORMAL INQUIRY on the NEWS LEAKS to Wall Street bankers from CNBC floor people…
Maria so who pays the billions of losses you set up with your insider TIP after waiting all day Monday until 3Pm tospring your trap!

cc: to E.Spitzer NY DA

 
 
2006-05-02 13:22:27

Just out of curiosity. Looked up Ameriquest Mortgage in the Seattle area. Per Yahoo directory, it has an address of 155 NE 100th St. #200 with phone number of 206 729 7025. When I tried to call 206 729 7025, it indicated the call is now 425 430 1031. I tried the second number and it’s ring no answer (20 rings)…hmmm.

Comment by crispy&cole
2006-05-02 13:39:39

Drive by and take a pic.

2006-05-02 13:57:42

I’ll try…I actually live in Bellevue which is about 30 mins drive to this place in North Seattle.

 
 
 
Comment by Melody
2006-05-02 13:30:06

Dow Jones Newswires

Mortgage finance giant Fannie Mae (FNM) plans to delay filing its first-quarter 2006 financial results as it continues to clean up its books and work on an earnings restatement, the company said Tuesday.

Fannie Mae said it would host a conference call for investors on May 9 at 4 p.m. following the filing of a form with the Securities and Exchange Commission that explains the delay.

Company management has said it’s aiming to restate its 2001 to mid-2004 earnings sometime in the second half of this year. The restatement may cost the company about $11 billion.

Shares of Fannie Mae closed at $50.51 on Tuesday, up 61 cents, or 1.2%.

Comment by garcap
2006-05-02 13:35:57

11 billion? that number seems way too high….

Comment by Melody
2006-05-02 13:50:46

If the truth will ever be known, it is probably higher!!!!

Comment by garcap
2006-05-03 04:11:00

the number can’t be right.

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Comment by Peter Gerard
2006-05-02 13:53:30

Just a bunch of pricks could engineer this nonsense.

 
Comment by NH_renter
2006-05-02 14:25:51

Good lord, how long are they going to put off filing their financial statements?
What could be taking so long?
What could they be hiding?

Comment by Peter Gerard
2006-05-02 14:32:21

nh-renter, you got it. Manipulation, which many senior executives profited from, takes takes a long time to correct. Don’t want to screw it up this time.

 
 
Comment by Out at the Peak
2006-05-02 14:54:07

I’ve been short since 52.20. It might have gotten a bump today. Filing Form 12b-25 can’t be positive thing.

Comment by GetStucco
2006-05-02 20:26:33

Too bad Fannie has such great plunge protection. On days (like today) when the major Wall Street homebuilders tank, Fannie, whose stock price should be correlated as it is in the same sector, barely budges, or even magically levitates, even though there are no financials on which to base valuations.

Comment by CA renter
2006-05-03 01:13:49

I got out of my last FNM puts yesterday. Made some good money on those puts, but the PPT thing was getting on my nerves. No reason for them to be at their current price, IMHO.

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Comment by Ted
2006-05-02 13:30:46

Let’s hope the “over half of all loans are 3 years old” doesn’t have a significant overlap with “40% of homes sold were 2nd homes or greater” stat from previous stories. If there is significant overlap, and there must be. That’s gonna a be a lot of hot money underwater real quick, with no homestead exemptions.

 
Comment by Melody
2006-05-02 13:33:36

In a nutshell: in the past 3 years, 10 million people signed ARM mortgages which will reset soon, and 10 million housing units were sold to investors. Foreclosures are already rising, even though job growth is strong and unemployment is low. In addition, 4 million recent homebuyers are subprime risks whose grasp on their homes is tenuous indeed.

If 5 million marginal bubble-buyers fold their hands due to ARM resets or job loss, what will that do to the value of those 10 million investment units? Let’s say the resulting drop in values causes half of those empty, cash-flow negative units to get dumped on the market (or foreclosed upon). Who’s going to buy these 10 million properties?

Comment by Robert Coté
2006-05-02 14:41:30

There’s a million of us ready to buy ten each at cash flow positive prices. We might even consider letting the former renters from the bank rent from us instead.

 
Comment by Out at the Peak
2006-05-02 14:55:58

Demand is very high if the price is right.

 
 
Comment by Melody
2006-05-02 13:35:39

Hovnanian said it plans to take $5 million of write offs in connection with option deposits related to land.

“Although we have not needed to use this tactic as much in recent years, we have employed it successfully in prior slowdowns,” Hovnanian said.

What does this mean?

Comment by AZ_BubblePopper
2006-05-02 13:42:23

It means, the very same land that we’re not making more of and always goes up, is worth less than letting the options expire and the cost of those options along with them, given the housing glut and their own assessment of the prospects for a speedy “recovery”.

 
Comment by crispy&cole
2006-05-02 13:47:34

They gave X land owner $100,000 for land worth $10,000,000. They booked the $100,000 on the Balance sheet with the intention of paying the remaining amount. Then they said F-it; they moved the $100k from the B/S to the income statement and expensed it. and cancelled the purchase of the land

Comment by greg smith
2006-05-02 20:16:14

shouldn’t this be they put the $10,000,000 on the balance sheet as an asset, or am i missing something.

 
 
Comment by Chip
2006-05-02 13:48:25

Melody - I think it means they are congratulating themselves for holding a lot of land via options, instead of having closed on it.

Comment by Chip
2006-05-02 13:49:47

Maybe this is their way of rubbing St. Joe’s nose in it.

Comment by Melody
2006-05-02 13:52:47

Thanks guys…. so in essense, they’re cooking the books… legally?

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Comment by AZ_BubblePopper
2006-05-02 13:56:45

No, it’s smart business. Unfortunately, the signal it sends is not a prtty one for the sector. The companies that didn’t use this strategy and got greedy might be in big big trouble…

 
Comment by Melody
2006-05-02 13:57:44

The latest earnings release from Centex (CTX:NYSE - news - research - Cramer’s Take) represented the big wreck that short-sellers have been waiting for among homebuilders.

The builder missed analyst forecasts for its fiscal fourth-quarter earnings and significantly slashed its 2007 guidance late Wednesday. New orders fell 11% on a unit basis. The company also became the first major build to to report a significant charge related to the forfeiture of certain land option deposits due to slowing local housing market conditions.

Centex too… hmmmm

 
Comment by bluto
2006-05-02 14:15:02

It’s essentially the same as forefitting a deposit (in a contract that had no costs to do so). If someone had a $2,000 deposit on a $500,000 home that had dropped by more than say $10,000 it would be wise to walk from your deposit, too.
Nothing illegal or untward about it. There are even accounting pronouncements (FAS 133 & FAS140) that would require them to write them down regardless of their intent to close.

 
Comment by Operation
2006-05-02 14:26:48

What they are really saying, in laymans terms, is that the grim reaper is on the doorstep, he’s pissed as hell, and they are trying to throw him a bone to get him to go away.

 
 
Comment by borntoski
2006-05-02 14:00:51

St. Joe has a very low basis in their land, and is not in the business of buying land. Mostly, they sell parcels off to other developers or in some cases go at it themselves with their Towns division.

Most large conservative developers rarely land bank. There are speculators and funds that buy land in hopes of flipping, much like in the condo/SF market. Kudos to HOV for being conservative and recognizing a problem. Most homebuilders will be in it thick with the prices they are paying.

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Comment by AZ_BubblePopper
2006-05-02 13:52:34

That’s right. And it’s a risk management approach on both the way up and down so it actually is a pretty sophisticated business approach given how expensive land became. Insurance. Airlines & manufacturers use this strategy to control commodity costs…

Comment by scdave
2006-05-02 14:07:19

AZ;…The companies that didn’t use this strategy and got greedy might be in big big trouble…

Yeah Pal….All the WANABE developers/builders who have been riding the coat tails of this expansion…There are a lot of people that are leveraged “Big Time” (smaller land deals don’t get the benifit of options) in dirt expecting to spin intitled property for huge profits…

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Comment by Melody
2006-05-02 14:19:54

You guys are good, thanks :)

 
Comment by AZ_BubblePopper
2006-05-02 14:30:24

I think you’ll even see some of the big builders get creamed as they got caught up in the euphoria and bought the land always goes up RE crap. I saw 2 min of some A&E house hunters show last night where S Won was churning out the tired line, “Renting is throwing money away”. Made me laugh.

 
 
 
 
 
Comment by dawnal
2006-05-02 14:15:47

Interesting statement by LEND:

“Delinquent loans (30 or more days past due, including foreclosures and real estate owned) were 2.85% of the serviced portfolio at March 31, 2006, compared to 2.47% at December 31, 2005 and 1.72% at March 31, 2005. Delinquency levels remain within management’s expectations and continue to be substantially below published industry averages.”

Let’s see….1.72% last year and it increased to 2.85% this year. Hmm…is that a lot?

Comment by scdave
2006-05-02 14:25:56

66% increase….

 
 
Comment by Betamax
2006-05-02 14:17:25

3,800 laid off - used Hummers and BMW’s for everyone!

 
Comment by Chip
2006-05-02 14:19:28

Just took a screen shot of AmeriQuest’s home page. Kinda’ sentimental.

Comment by crispy&cole
2006-05-02 14:27:29

I clicked on the job oppor. link and nothing??? HUH??

 
 
Comment by dawnal
2006-05-02 14:22:03

“(Economist) Mark Zandi said that ‘builders have done a pretty good job of matching supply and demand’ and that ‘nationally, house prices and supply will go flat in 2006, 2007 and 2008,’ which implies that there will be some price declines in key markets.”
**********************************************************
Supply will go flat, eh? I doubt it but if it does, one wonders at what level? What level for Phoenix would that be? It is at 44,000 and climbing now. Will it be higher next year but flat? Or will it still be climbing?

Stay tuned….

 
Comment by brianb
2006-05-02 14:25:33

Ameriquest will still be around. They’re going all internet instead of branch. That’s what they said. they’re still profitable. They’re not bankrupt.

Comment by scdave
2006-05-02 14:29:58

They’re going all internet……..

Interesting….Does that mean that others will need to follow to compete ?? ALA, Countrywide, WAMU, Wells etc. ?? More layoffs ???

Comment by SidneyPrice
2006-05-02 14:37:33

Yes, more layoffs. The snowball has been rolling downhill for a few months now, but will now grow to considerable size. Expect the foreclosure echo to start in 4-6 months.

 
 
Comment by Shannon
2006-05-02 18:33:21

Tell that to the 3800 people who got their pink slips today.

 
 
Comment by Melody
2006-05-02 14:38:05

Read about Big Builder Releases Annual Report Card of the Nation’s 21 Largest Public Builders.

“For the 4th year in a row, the annual survey found that Texas-based D.R. Horton (DHI) was the No. 1 builder for home closings, net profit and order backlogs. The 21 largest public builders sold 28 percent of all single-family homes, one of every three dollars paid for a new home in the United States last year.

The survey found that by the end of 2005 sales were slowing in the fourth quarter and cancellations were up. These numbers did not surprise the big builders who were expecting a downtick.

“During the run up over the past few years, the tendency has been to look at these companies as a synchronized sector, but that’s all changing now,” says John McManus, editor in chief of Big Builder. “In the next 18 months, underneath all the rhetoric that good markets will offset deteriorating ones, nearly everyone expects there’s going to be casualties among home builders of various sizes. The every-man-for-himself era among big residential construction companies has arrived.”

 
Comment by CA renter
2006-05-02 14:49:19

FWIW, I got a phone call from Washington Mutual. I’m paraphrasing, but went something like this:

WAMU: Hi, this is XXX from WAMU is [CA renter] there?

ME: Yes, this is she.

WAMU: Did you get our flier about being pre-qualified for one of our HELOCs?

ME: Yes, I think so.

WAMU: So, would you be interested?

ME: Um…we’re renting.

WAMU: (flustered laughing) Oh…OK. Well, if you do decide to buy, please let us know if you’d be interested in one of our products…
_________
Anyway, it’s the first time someone actually followed up by phone on one of those HELOC offers. BTW, we get a lot of “pre-qualified” HELOC/refi offers by mail and e-mail, even though we’ve been renting for almost two years!

Comment by Out at the Peak
2006-05-02 15:00:48

Since ownership rate is at 69%, they figure they can blanket their marketing to everyone. Ownership rate is normally 64% so they could have used that tactic before too, but now they are desperate for business.

 
Comment by rallymonkey
2006-05-03 07:26:08

I wouldn’t be surprised if these morons actually gave out helocs to some renters. I doubt they check that carefully.

Comment by Gene
2006-05-03 13:38:31

Actually to enter into a escrow and do a title search before offering up HELOCS so what you are suggesting isn’t likely.

 
 
 
Comment by Melody
2006-05-02 14:49:43

Read about Oahu Home Sales, Prices Slide In April.

The median price for single-family homes dropped $35,000 since March’s record to $615,000. The number of homes sold is also down 20 percent since April 2005 from 418 to 332. April’s sales were also lower than in March when 392 single-family homes were sold.

Condominium median prices dropped $15,500 in April to $296,500. The number of condos sold also dropped significantly. A total of 584 condos sold in April compared to 754 last year. That’s a fall of 22.5 percent.

Real estate experts say the record rains that fell in April affected sales.”

Oh yeah, it rained…lol

Comment by Desert Dweller
2006-05-02 21:19:01

Real estate experts? You mean Mary Flood? What a friggin joke. With a last name like Flood I guess shes an expert on rain at least. President of the Honolulu Board of Realtors. What are the qualifications to be president of the board of realtors? I’m sure you need some serious schooling for that position. My money says Mary will be back to her old job of hula dancing by next spring.

 
Comment by asuwest2
2006-05-02 22:10:43

ok, I’ll spot em this time. They had WAY more rain than normal–6 solid weeks of heavy (and record) rain. Apparently the ocean wasn’t just rising (global warming) but was also falling from the sky this time.

Now let’s see what May/June bring.

 
 
Comment by Melody
2006-05-02 14:52:41

Read about Working on the housing boom
The sector is cooling, finally. Now, a debate is raging over whether the employment market will prevent a implosion.
.

“Recent government figures show that about 1.5 million homes were vacant in the first quarter, most of those presumably up for sale, a 17 percent increase from a year earlier. The 2.1 percent vacancy rate was the highest on record since the government began tracking it in 1994. It was also the fourth straight quarterly increase.

“When you see it increasing quarter after quarter, there seems to be something going on here,” Baker said. “We’re building more homes than are being filled.”

Among those most worried about the real estate market are home builders themselves. The National Association of Home Builders saw its index of builder confidence sink last month to the lowest level since 1995, save for two months right after Sept. 11.”

Comment by scdave
2006-05-02 15:09:19

One of those worried about just that is James McShirley, owner of Sulphur Lumber near Indianapolis. He’s already laying off staff and not filling open positions due to a slowdown in orders from his builder clients.

“We’re holding off as much as we can because qualified people are hard to find,” he said. “But there will come a point where we have to face that (more layoffs) and it could be soon.”

“Those people losing their jobs are the classic home owners. This could be a vicious circle,” he said.

This is where it stats to pick up speed my friends……

 
 
Comment by salinasron
2006-05-02 15:00:37

I think one of the things ramping up foreclosure activity here in CA was the April installment of the property taxes. Watch the delinquency rate. People bought property on ‘how much a month is it gonna cost me’ without factoring in taxes, assessments, HOA fees, etc. BTW, I just figured out where some of those RE types will morph….REPOMAN

Comment by Operation
2006-05-02 15:25:41

I am actually thinking REPOMAN might be a great profession to be when the SHTF.

Comment by Mole Man
2006-05-02 20:05:03

And Arson Investigators, which is a good option for CSI fans who want to start living the dream.

 
Comment by rallymonkey
2006-05-03 07:28:18

Not a bad job. Just make sure you invest in some kevlar before taking it.

 
 
Comment by brianb
2006-05-02 17:28:13

The taxes and insurance are usually taken out in escrow, aren’t they? So they must be paying at least that much.

What is property tax in CA as % of home value? 2%? 1%? So these people in 700K houses can’t be that poor. They’re paying 10-15K in taxes and insurance alone.

Comment by JWM in SD
2006-05-02 17:37:45

Troll

 
 
 
Comment by Getstucco
2006-05-02 15:37:26

‘“Doug Duncan, chief economist at the Mortgage Bankers Association, has a knack for making people feel secure and optimistic about housing’s future. ‘The housing market is normalizing,’ Duncan said.’

Funny — he made me secure about my decision to rent, when I found out that he, too, is a “priced-out renter.” I guess he will buy a home, now that the housing market is normalizing?

 
Comment by _FLmtgbroker
2006-05-02 17:29:20

The writing was on the wall with Ameriquest once their legal troubles were brought to light.
I think the “big” boys will be soon to follow suit (minimal actions to date) in order to stop the bleeding as a result of exorbitant overhead and reduced loan volume. The easy money is sure to run out by EOY and for those of us waiting in the wings now is the time to be sure you have the credit (800 middle score courtesy of myFico.com ;-) ) and assets to buy in 2008.

And as far as MBA economist’s I have read that they anticipate that 6.8 will be the going rate for a 30 year fixed by EOY… I watch bond markets like a hawk and I think they are being ridiculously conservative…

 
Comment by need 2 leave ca
2006-05-02 21:40:51

McDonald’s jobs for all of those ex-mortgage officers. Or, Wal-mart greeters.

Comment by ken best
2006-05-02 23:03:43

How about Freedom Fry Officers, Hospitality Officers.
They probably have a couple of RE investments too, foreclosures
are coming.

 
 
Comment by dutchie
2006-05-03 00:19:06

Re that dinner where Maria talked to Bernanke.

May be Maria was still in shock about the Colbert routine. .. funny
http://www.crooksandliars.com/2006/04/29.html#a8104

BTW I understand that this performance was kept out of the mainstream.

Comment by CA renter
2006-05-03 01:44:52

Understand it’s a roast and all, but all is can say is…wow. That guy’s got some cojones!!!!

 
 
Comment by Miami_med
2006-05-03 04:12:43

Had to post this letter to the editor in The Sun-Sentinel from South Florida today:

” Earlier this week, and many times in the past several months, you have chosen to run front-page articles on the sales slowdown in the local real estate industry and promoting the concept of a coming “bust.”

The fact that virtually all real-estate knowledgeable people said that wasn’t the case, nor was it likely to be, seemed not to enter your thought process.

Yet on your front page it went — and down went real estate sales.

A self-fulfilling prophecy, no doubt.

In Friday’s issue, you covered the comments of the National Association of Realtors’ chief economist, David Lereah, where this highly credible and noted national real estate expert said (quoting your article): “Lereah blamed Wall Street analysts and the media for perpetuating negative hype regarding the housing slowdown. They’re telling us we’re in a bubble and that we’re going to come crashing down. There is nothing that could be further from the truth.”

My question to you, dear editor, is this: Why wasn’t that put on your front page instead of in your Business section?

This smacks of an old practice of putting — perhaps knowingly? — disingenuous information on page 1 and burying the correction on page 28!

You have a responsibility to understand how you can influence the public’s behavior and we need — and I demand — accuracy and fairness from you.

However, as you continually choose to put innocuous local “human interest” stories on the cover and bury truly consequential stories about Iran’s nuclear threats, “W’s” adminstration’s latest gaffe, et al., deep in the A section, I wonder if you will take this letter seriously enough to change what you do.”

Inventory up to almost 800 in 33021, a jump of almost 200 in a week.

Comment by weinerdog43
2006-05-03 05:08:34

What! You are expecting the SCLM to actually REPORT news!?!

You can get 10 times more factual information on the internet in one tenth of the time it takes to dissect a dead tree edition. Reading papers like the Washington Post or Washington Times is akin to reading Pravda. There might be a nugget of truth in there somewhere, but you spend a ton of time trying to figure out where it is.

 
 
Comment by LFC
2006-05-03 06:39:34

Here is a little rumor. HSBC(parent company of HFC) is buying Ameriquest.

 
Comment by Baldy
2006-05-03 21:29:30

I don’t understand the Maria thing (that the markets thought Bernanke’s “pause” meant “stop”). I took his comments to mean: “We don’t know what we’re doing. When we do, we’ll continue raising. Until then, we’ll maybe wait” To me, the very definition of the word “pause” assumes “it” (rate hikes) will be resumed. The thing that gets me though, is that Bernanke basically said they may stop (at least for a short while), if even inflation is a problem. Kind of disturbing. I know they don’t wish to completely destroy the economy, but it’s either the economy (& housing) or the dollar (course they could just damage both more than they care to).

 
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