The Last Moments Of Trendsetting Hurrahs
A housing bubble report from Bloomberg. “A slew of investment firms are targeting riskier mortgages in a bid to earn higher returns in a world in which home lenders are more cautious and central banks are suppressing yields on more traditional debt. Citadel Servicing Corp. tripled its originations last year to about $150 million, is targeting $400 million to $500 million this year, Chief Executive Officer Daniel Perl said. While the mortgages it makes may be riskier in some ways, Perl said that the company saw just four of its loans default last year, representing less than 0.4 percent of the debt it oversees. Three of those paid off without a loss and it anticipates that will also happen with the other one, he said. ‘The reason for that is quite simple: the people had equity in their properties,’ he said.”
The Associated Press on California. “December’s rains enabled Californians to finally meet Gov. Jerry Brown’s call for a 20 percent reduction in monthly water consumption, but more restrictions loom as the state adapts to long-term drought conditions. A state drought-busting campaign declaring ‘Brown is the New Green’ encourages people to let their lawns die. ‘Homeowners should do their part, but the focus has been way too much on residents,’ said Maria Gutzeit, a member of a water district board in the Santa Clarita area. ‘You ask anyone here how they are going to sell a house with dead grass and dead bushes, and you’ll bankrupt people for something that doesn’t even significantly help the statewide water portfolio.’”
The Austin American Statesman in Texas. “After several years of swiftly rising rents, Austin-area apartment dwellers are about to get some relief this year, as thousands of new units enter the market and ease the metro area’s demand crunch. More than 10,000 apartment units opened in the metro area last year, and another 8,000 or more units are expected to enter the market this year, according Charles Heimsath, president of Capitol Market Research. Apartment rents are stabilizing after rising rapidly from 2010 through 2013. ‘You can clearly see that the rapid pace of increase has slowed to almost nothing,’ Heimsath said. ‘I don’t see citywide growth in rents at all in 2015.’”
“Robin Davis, manager of Austin Investor Interests, which researches the local apartment market, said it has been one of the strongest nationwide ‘for a full five years, reaching historical heights in rent, occupancy and overall growth.’ However, she noted a shift could be in store. ‘These are likely the last moments of trendsetting hurrahs until the market absorbs the upcoming development that, at present, will bring over 12,000 conventional units and almost 1,800 affordable/student housing units over the next 12 months,’ Davis said.”
The Star Tribune in Minnesota. “After a rip-roaring January last year, housing construction in the Twin Cities metro this month is off to a slow start. Throughout the Twin Cities metro builders were issued 308 permits to build 529 units during four comparable weeks in the month of January 2015, according to the Builders Association of the Twin Cities. That was a 13-percent decline in permits, but a 50-percent decrease in number of units, mainly because there were fewer apartment buildings.”
“Most forecasts call for a modest increase in new home sales during 2015. So far that’s not been the case. Permits to build single-family houses were down 16 percent this month. ‘After a tough 2014 for single-family construction, we had hoped to see a much stronger start to this year,’ said Chris Contreras, 2015 president of the Builders Association of the Twin Cities.”
From WUIS.org in Illinois. “In 1974, Jorge Chapa became familiar with the meatpacking industry and its bloody and backbreaking disassembly line. He revisited meatpacking 30 years later, as a sociologist. This time he analyzed it for a study showing how the once high-paying job had slid from providing a middle-class living into one paying minimum wage. When Chapa, a University of Illinois Urbana-Champaign professor, was first exposed to meatpackers, he says, they earned good benefits and $17 an hour. ‘They went home to a nice house, two cars and could afford to send their kids to college.’ In 2004 terms, when Chapa did his study, that translated to about $65-$70 an hour, about 10 times what they actually earned in 2004.”
“In 2014, Pew Research Center crunched data from the Federal Reserve’s Survey of Consumer Finances from 2007 to 2010. Pew found the median net worth of American families decreased by 39.4 percent, from $135,700 to $82,300. And the median wealth of upper-class families outpaced that of middle-class families by seven times and the lower-class by nearly 70 times.”
“‘One of the very biggest wealth generators historically has been homeownership, and that promise of homeownership, helping people to obtain the American dream, was really kind of ripped to shreds a bit during the Great Recession,’ says Amy Terpstra, director of research for the Chicago-based Heartland Alliance’s Social IMPACT Research Center. ‘I think there are things that can be done to restore the promise of homeownership with a particular lens to making sure that’s available equally because we know that minorities do have much lower rates of home ownership, and when they do own homes, they tend to not accrue value as quickly as it does for nonminorities.’”
From Cleveland.com in Ohio. “Home values have plummeted in Parma since the housing bubble began to deflate, dropping by more than 20 percent between 2007 and 2013 — the biggest drop among Ohio’s 10 largest cities. The economy’s downward turn in 2008 hit working-class residents of Parma hard, said real estate agent Chris DePiero. ‘There’s a lot of banked-owned houses,’ said DePiero. ‘A lot of the good people of Parma, blue-collar workers, lost their jobs unfortunately, and I think it’s a type of situation where a lot of people had to give their house to the bank, and there’s tons of bank-owned houses consequently.’”
“Prior to the foreclosure crisis, in 2007, a Parma house sold for about $120,000. ‘Properties were really inflated, so when that bubble burst in 2008, mortgage lenders tightened down and wouldn’t loan to anybody unless they gave their first-born child,’ said Parma Economic Development and Community Services Director Erik Tollerup. ‘That really killed the housing market for a good couple of years.’”
“Now, that price ranges from about $85,000 to $92,000, said DePiero, whose been in the real estate business for 30 years. ‘It’s really sad if you think about it,’ he said. In 2011 and 2012, when the regional market ‘hit rock bottom,’ home values were fell to $80,000.”
“very biggest wealth generators historically has been homeownership, and that promise of homeownership, helping people to obtain the American dream…”
That’s it right there Amy. The American Dream used to be a modest cottage with a front yard and a white picket fence. Somehow the dream turned into getting a “very biggest wealth generator”.
It’s no wonder tuition at your college is so high. It must cost a fortune to keep staff like you on the payroll to sit around and talk about making money off of houses, and how to get minorities deeper in debt.
“very biggest wealth generators historically has been homeownership”
Pensions, I’d add pensions to this list, maybe put it at the top of the list.
A pension (for those who have one) are a sort of forced savings and its value is increased as one’s worked years are increased. And then, after one stops working, he can draw from it an annuity OR (and this is the fun part for me and my investment guru buddies) he can CASH IT OUT!
And if he cashes it out then he has to do something with the cashed-out money and this is when it really begins to get fun for me and my investment guru buddies (so fun and, oh, so profitable).
“are a sort of forced savings” = “is a form of forced savings”
And if you can get the retired schmuck to cash out and fork over to you his 401k then so much the better.
(Now, if only we can find a way to get hold of his social security money.)
My dad cashed his pension back in the 1990’s I think ? about 350K.
I told him to put it in Vanguard mutual funds, low fees etc.
he told me a few days ago its north of 2M
sh$$t not bad for the working class.
Easy come, easy go. I know an elderly person who was up over a mil last summer, largely on CAT. Not a mil anymore.
If he really has that much I’m sure it will easily go somewhere.
“President Obama’s proposal, as outlined in a White House fact sheet, is to treat bequests other than to charitable organizations as potentially taxable, just like other instances in which assets change hands. There would be a few exceptions: For couples, it says, tax wouldn’t be due until the death of the second spouse. Gains of up to $100,000 per individual (or $200,000 per couple) could still be left to heirs free of tax—in addition to an exemption of up to $250,000 per individual (or $500,000 for a couple) for a home.”
And it’s not really an exception, but a loophole to ending the step-up basis loophole is that any capital gains payments, which would now be made at death, would be deductible from the value of your estate when it comes to that tax. But that, remember, only hits individuals leaving more than $5.43 million, or couples leaving more than $11 million.”
oh never mind
only gov & utility workers get pensions
Cashing out is not an option for many pension plans, but it was for me when I retired early in 2012 and I decided to take it. Thanks to the lunacy of QE my cashout was waaay bigger than it would have been if interest rates were normal and my employer was about to phase in a less favorable formula so the time was right. From what I’ve read cashing out usually is a bad idea in a normal economy but we don’t have one….
Public pensions are not wealth generators, they are wealth redistributors. If the amount paid out of the pension to the worker had some relation to what the worker paid in and the actual rate of return earned by the pension fund during the employees tenture, it would be different.
Generating wealth through productive is SO 1950s.
He revisited meatpacking 30 years later, as a sociologist or taxpayer supported lurker
gov workers mostly watch others work
Or do meaningless make work.
Is your project shovel ready?
Whenever someone starts talking to me about real estate, this is what I hear them saying…
“My name is Elmer J. Fudd, millionaire. I own a mansion and a yacht.”
Didn’t he end up going to Alcatraz?
One of the best Fudd’s in the old Warner Bros. Looney Tunes days was when the opera music came on and Elmer started out with: “Kill the wabbit, kill the wabbit, kill the wabbit…..kill the wabbit!!! All to I believe it was sung to Verdi - just classic!!! That is why Fudd ended up in the pen me thinks!!!
‘Johnson County’s (Kansas) housing market slowed considerably in November, as buyers pulled back with the approach of colder weather and the holiday season.’
‘According to the research group, the average price of new and previously owned homes sold slipped to $274,100 in November. That was down 3.3 percent from the same month in 2013. The average new home sold for $416,300 in November while the average price for a previously owned home was $251,600.’
‘Construction activity on single-family homes also fell as the weather turned. Countywide, 91 permits for single-family homes were issued in November, down 43.5 percent from the same month in 2013.’
‘Residential construction slowed in 2014, with metro area cities issuing 14 percent fewer home building permits than the previous year, according to a report published Friday by Home Builders Association of Greater Des Moines.’
‘In all, 4,724 residential building permits were issued during the year, down from 5,487 the previous year.’
“The decrease from 2013 shows that housing is still in a semi-fragile state based on cost, lot availability, and most importantly, available credit to first time home buyers,” Creighton Cox, a lobbyist for the home builders association, said in a news release.’
‘Permits declined in all residential categories from 2013 to 2014. Home builders had said it would tough to top 2013, the industry’s best year in a decade, in which metro area home building permits increased 21 percent from the previous year. A despite the year-over-year decline, the number of permits issued in 2014 was more than double the amount issued five years ago.’
‘Parma’s home values were down more than 20 percent between 2007 and 2013, the biggest property value drop among Ohio’s 10 largest cities. While officials blame the economy, not all readers are buying it. Hundreds of readers voiced their thoughts on the home-value decline.’
‘Some readers believe Parma’s property values dropped even more than 20 percent. moobs_sbooms said, “I live in Parma. I think 20% devaluation is a bit low. I’ve seen houses in my development that went for $150k in 2007 barely sell for $100k now. I live in south Parma in an area of nice ranches with decent sized yards. Not an area of McMansions but not your typical Parma bungelows either.”
‘clevebaron9 said, “my friends kid bought in 06 for 108……cant sell for 70….30 yr note still underwater….. 20% is too low.”
‘BetelJoos said, “The value of my house is less than what I paid in 1996.”
‘Many readers said part of the problem is foreclosed houses in Parma are left to fall into disrepair and bring down the value of the entire street. redz28 said, “Part of the problem is the older houses too. When a home built before 1950 goes into foreclosure, the city should buy it and demolish it. No one wants to live in 850 sq feet this and age, let alone raise a family there. These houses sit empty and bring everyone’s value down, or worse get section 8 and turned into rentals. That brings an entirely new source of problems to town.”
‘Most of Pierce County’s property tax valuation appeals for the 2014 tax year come from a single source: Invitation Homes, the county’s largest owner of single-family rental houses.’
‘It’s just a small example of the change in the landscape since Invitation Homes arrived in Pierce County. At almost 1,000 properties, Invitation Homes is the county’s largest single home-owner.’
‘The company has appealed its property valuations in King County, too, officials there said this week, though not as many as in Pierce County.’
‘Using the county’s average tax rate of $15.17 per $1,000 of the properties’ values, Invitation Homes ended up saving itself $16,475 in taxes for those 191 properties —which works out to a savings of about $86 per property. For the 2014 tax year, the board has received 1,106 appeals. Of those, 560 were from Invitation Homes — about 51 percent of the appeals.’
‘Jim Hall, a division manager in the assessor’s office, said the company made official its withdrawal of 212 of those appeals, leaving just 348 to work through. In King County, where property values have skyrocketed, the company has filed 225 appeals.’
‘The company’s staff “is overwhelmed, too,” Hall said. “They have this same situation in a lot of different communities. They’re looking for ways to do this quickly.”
‘Part of the reason Invitation Homes is overwhelmed, county officials say, might be that this year company officials are directly handling the appeals. Last year, Invitation Homes used Altus Group, a real estate consultancy that acts as a client’s agent in real estate matters.’
‘This past fall, “it took me almost 8 weeks to reach some one (with Invitation Homes) and have someone call back,” said Kim Shannon, the clerk who schedules appeals hearings for the board.’
‘In “Where Are They Now? Former Bravo Reality Stars Edition” news, it appears as though former Real Housewives of Orange County star Peggy Tanous is still dealing with financial issues that caused her to file for bankruptcy in February of 2013. The 45-year-old mother of one is reportedly a little bit behind on her mortgage payments of $6,000 a month (as in 75 MONTHS BEHIND) for her Irvine, California home and currently owes $1.54 million on the property, which is currently valued at only $840,000.’
‘According to Radar Online, U.S. Bank has filed court papers asking a bankruptcy judge to free the property from bankruptcy protection due to the fact that Peggy has no (actually, WAY less than zero) equity in the home. And the numbers are actually worse than they appear because Peggy took out a second mortgage on the property with another bank for $300,000!’
‘As we previously reported, when Peggy filed for bankruptcy in 2013 she listed her marital status as divorced, although she and husband (ex-husband?) Micah Tanous appear to still be together. (On the bankruptcy filing, Peggy listed her annual income as $30,000 with the bulk of that coming from $2,500 in child support payments from Micah.) Although Peggy has never admitted publicly that they are divorced, many have speculated it was a calculated move to help divide and protect the couple’s assets.’
‘China’s central bank increased its economic stimulus measures event further Wednesday amid growing concerns about the rate of expansion in the world’s second-largest economy.’
‘The People’s Bank of China decided to cut banks’ reserve requirement ratio by 50 basis points to 19.5 percent. The move, effective Thursday, is the first such cut since May 2012. This will lower the amount of deposits that each lender is required to hold as reserves.’
‘Larry McDonald, the senior director at Newedge USA, told CNBC Wednesday that the new announcement does mark a change in direction from the bank compared to its strategy at this point last year. He explained that the PBOC had been more worried about the country’s credit markets and had tried to curtail risk, but were now appearing to be more dovish.’
“Now as the they have completely reversed course,” he said. “It’s a sign of global central bank panic,” he added, with other central banks also producing similar moves in the last few months on the face of global deflation and growth downgrades from organizations like the World Bank.’
‘Former General Electric chief Jack Welch told CNBC on Wednesday the Federal Reserve would be “crazy” to increase interest rates in the near future. “It would be insane,” he said in a ” Squawk Box ” interview. “Your exports would fall off the table even more. The dollar would strengthen. It does nothing at all for the U.S. economy,” he continued. “We’ve [also] got oil problems in the U.S.”
“If you look at this global market, this is a bitch of a problem with this dollar currency ratio,” Welch said. “I think the Fed would be crazy to raise rates at this point with the dollar where it is.”
“We’ve [also] got oil problems in the U.S.”
“We” do? Why wasn’t he asked to explain this? I think he might have a problem but the rest of us don’t.
You’ve got a frog in your pocket Jack.
Is it possible Jack, that you are afraid of something else than what’s best for Americans? Doesn’t GE have the majority of their doings overseas these days? Isn’t it those economies you want to see grow? Doesn’t a strengthening dollar crush those economies?
But… Its a recovery, right? I mean, Broke Obomba and his apologists keep telling us the economy is in recovery. So why are Central Banks all cutting and easing? Why does the FED still force our interest rates to remain at sh!t levels? Its a recovery, right?
No, it’s something else.
Deflation Desperation…I said in the Bits 14 central banks have cut rates since Jan 1…I stand corrected….Its 16 if anybody is counting…And, although I don’t like the dude much, I agree with Jack…Can’t see Yellen raising rates in the face of everyone else cutting including the power houses of China, Japan & Germany…She will walk it back due to international influences…
Which simply drives demand and prices lower.
To what end?
After all, there’s no risk, right? Junk bonds could never pose a problem.
After all, there’s no risk ??
Huge risk right now…I not a rose colored glasses guy…I think the FED is stuck…Can’t raise…Won’t lower…Sit on your hands…Hope & Pray the everyone else can turn the deflation around and spark some GDP growth…And, we still got any number of geo-political problems that effect all markets…
Just look at the market reactions on any given day…We sell off 300 and its just a bad day….Whats a really bad day look like…
‘Denmark’s biggest bank is considering how it will need to adjust its retail deposits should negative interest rates persist. Danske Bank A/S is “preparing for low rates, negative rates,” to continue for a while “and we have to take it from there,” Chief Executive Officer Thomas F. Borgen said in an interview in Copenhagen.’
‘Borgen is trying to adjust his business to cope with the central bank’s efforts to defend Denmark’s euro peg. That’s driven its benchmark deposit rate to minus 0.5 percent and sent government yields below zero for maturities as long as five years. Danish mortgage rates are also negative for shorter maturities. Borgen says it’s possible rates will stay negative for as long as two years.’
‘Meanwhile, borrowers are benefiting from the development. Danske’s mortgage unit, Realkredit Danmark A/S, says it will continue to issue loans even at negative interest rates. Nykredit Realkredit A/S, Denmark’s biggest mortgage lender, says it won’t. Nordea Kredit, a unit of Nordea Bank AB, has stopped offering bond-backed loans with rates that adjust every year.’
‘Denmark yesterday revealed it sold a record 106.3 billion kroner ($16.4 billion) in January to weaken the currency. Its main deposit rate is minus 0.5 percent following three cuts last month.’
‘Record-low rates are also fanning property prices in an economy that’s only just emerged from a burst housing bubble. Credit at cheaper rates than ever before also risks fueling borrowing for the world’s most indebted households.’
‘The Financial Supervisory Authority in Copenhagen is keeping a close eye on property prices, and is ready to employ new rules on mortgage lending to ensure cheap money doesn’t create another real estate bubble. The FSA “is following on a constant basis developments in housing prices,” Ulrik Noedgaard, director general of the Copenhagen agency, said.’
how many fed agencies w this “mission”?
Financial Supervisory Authority in Copenhagen
where’s exide?
China has been talking about reining in its bubble for what seems like forever. When push comes to shove, the country’s leaders back down, every time, which tells me that things are enormously fragile over there.
‘How soon before Houston’s robust housing market is impacted by the oil layoffs? Realtor Michael Weaster at Xcel Properties insists now is still a good time to sell. “I’m still telling people if you’re in the market to sell, its still strong,” he says. “As it stands right now, the oil layoffs have not affected, or I haven’t seen it affect any of the housing market yet, but that ripple could come.”
‘Weaster believes a lot of laid off oil workers will downsize into one of the region’s many apartments. “Its inevitable when people buy a house, get laid off and can’t find a job within the same industry, that causes a problem,” he says. “And if turns into a buyer’s market, the values will not continue to grow, they’ll decline,” he says.’
Houses were being built at a faster pace in the Houston MSA than in the entire state of CA. That’s all you need to know.
Unless there is a rebound in oil prices (and quick), all that supply will push prices down.
‘Chipotle began trading in 2006, and it’s been a market winner since, for the most part. From trading at about $60 at the end of 2008, it rose to a record high of $727.97 in January. There have been stumbles along the way, with a few other quarters that didn’t match estimates — and the shares in fact were down in 2012. But mostly it’s gone up. Before the fourth-quarter earnings report, Chipotle shares had gained 6.2% in 2015, following a year in which they added 28.5%. Wall Street has a consensus price of $745.80 on the shares, with no analyst having a sell rating.’
‘Following the quarterly report, shares fell 6.5% to $679.75. The stock closed regular trading at $726.63, up 2% for the day.’
‘Revenue and same-store sales estimates from analysts had been going up in the past few days. But the fact that Chipotle didn’t make the most recent numbers demonstrates that outstanding growth isn’t necessarily enough, not when traders want even more tremendous performance for valuing the stock at 40 times estimated earnings.’
How hard is it to make a Burrito?
LOL…Good one Colorado…
Somehow I can’t see a burrito chain being worth $700 share/40 times earnings. But then again, I have doubts about a black-market taxi service being worth billions too.
I walked into a Chipotle once. The guy was stuffing spoonfuls of rice into the tortilla. I turned around and walked out.
guy was stuffing spoonfuls of rice into the tortilla ??
Yes but it was brown rice with free range chicken…Its the “in-thing” you know…
Actually, the trend is toward less carbs, and this guy was rolling up a carb blow-out. Have you seen the calories in one of those welcome-mat sized flour tortillas?
I remember when I first heard about putting rice in burritos. It was an article in an Austin weekly. The writer mocked the restaurant for being greedy.
one of those welcome-mat sized flour tortillas ??
LOL…
I don’t even know what a burrito is.
the average sm biz in the US sells for a p/e of 2.4
The other day I was driving listening to the radio and this guy was talking about retail space. He said the US has 40+ sq ft per person and Europe has a little over 3 sf/person.
Well if it’s anything like I’ve seen over the past 8 years - I’d say a lot of the 40 sq/ft per person is empty and about to go emptier….
People in the US are 3x larger so we need a lot more space. Think of the children.
Around here, commercial is already officially 45% vacant.
I just got this in an email:
‘Construction employment expanded in 257 metro areas, declined in 43 and was stagnant in 39 between December 2013 and December 2014, according to a new analysis of federal employment data released today by the Associated General Contractors of America.’
‘Dallas-Plano-Irving, Texas added the largest number of construction jobs in the past year (15,200 jobs, 13 percent), followed by Houston-Sugar Land-Baytown, Texas (14,900 jobs, 8 percent)’
‘The largest job losses from December 2013 to December 2014 were in Bethesda-Rockville-Frederick, Md. (-3,900 jobs, -12 percent); followed by Phoenix-Mesa-Glendale, Ariz. (-3,400 jobs, -4 percent); Riverside-San Bernardino-Ontario, Calif. (-2,700 jobs, -4 percent); Gary, Ind. (-1,900 jobs, -11 percent) and Richmond, Va. (-1,800 jobs, -5 percent).’
Nice post Ben…Interesting…Job loses in the construction field…And, thats off a historically low number of new starts…
And the biggest gains are in markets likely to slow down.
Correct me if I’m wrong, but overall, aren’t construction jobs are up year on year? Per the BLS, approximately up 300k jobs throughout the country from December ‘13 to December ‘14 (about 5% increase).
We’re now at the highest level of construction jobs in December since 2008.
I readily acknowledge that the oil patches will suffer construction job losses, but many other markets, who are still way below the housing construction trendline, should continue to improve.
With 25 million excess empty houses and housing demand at 20 year lows, why build more houses?
Single family construction $ up 11% YoY while total private residential declined slightly YoY. December US Census.
New home sales still dragging along at 400,000 since 2009. Like the builders have been saying, they’ve been making more expensive houses to try to keep the sales dollars up.
Yep. Been having THAT very conversation of late with Mr. Builder (pick your poison on the firms that bleat this out) - And what I keep tellin them is this…..way over priced, way too many high end homes on the market and building up like cord wood every week esp in the nicer climes and they wonder why this stuff just sits and sits with no takers.
Housing update from Reuters….wonder what the FSA will be sayin ’bout this…?
UPDATE 1-U.S. housing regulator downbeat on prospects for principal reductions
Reuters 2/4/2015 2:00 PM ET
Print Article
(Adds underwater borrower, captive insurer details, additional quotes)
By Lindsay Dunsmuir
WASHINGTON, Feb 4 (Reuters) - The top U.S. regulator of Fannie Mae and Freddie Mac on Wednesday played down the likelihood of reducing the loan size of homeowners still under water, saying such a move would also have to be a “win” for taxpayers.
Any program to help those whose mortgage loan balance is more than their house is worth would be “substantially narrower” than a lot of people want, Federal Housing Finance Agency director Mel Watt said during a roundtable with reporters.
Watt, a former 20-year Democratic congressman who has been at the helm of the agency for just over a year, came under fire from Democratic lawmakers in November for not taking a more aggressive approach to principal reductions..
At issue is balancing relief for homeowners with the interests of taxpayers, who support the government-controlled mortgage-finance giants.
“Is there someplace where there is a win for the borrower and a win for Fannie and Freddie and therefore the taxpayer?” Watt said.
He declined to offer a concrete timeline for any decision.
In the meantime, the FHFA has been promoting other policies to help struggling homeowners, such as allowing eligible Americans to buy back Fannie- or Freddie-backed foreclosed homes at current market value.
The FHFA has a number of decisions to make over the next few months from new eligibility requirements for private mortgage insurers to whether to raise or lower the amount Fannie and Freddie charge lenders to guarantee loans.
An action on guarantee fees is anticipated by April .
Some in the mortgage industry think Watt may ease the pricing adjustments on those fees for less-creditworthy borrowers to chime with the FHFA’s affordable housing goals and possibly raise the base guarantee fee slightly to compensate.
Watt could also remove the adverse market charge, an additional cost to lenders introduced in 2008 to improve the mortgage duo’s financial health amid mounting losses.
In contrast to his predecessor, Watt has prioritized the FHFA’s affordable housing goals by compelling Fannie and Freddie to allow down payments as low as three percent of a property’s value and to begin paying into an affordable housing fund, actions decried by congressional Republicans.
Fannie Mae and Freddie Mac buy mortgages from lenders, which they package into securities and mostly sell to investors.
Watt rejected criticism from the banking industry on the agency’s proposal for tightened criteria on Federal Home Loan Banks membership that would effectively shut out lightly regulated captive insurers, wholly owned entities created to insure their parent companies against risks.
“We are the regulator and it’s our responsibility to stop the abuse,” he said. (Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci)
‘At issue is balancing relief for homeowners with the interests of taxpayers’
My opinion on all this has been that a mass principle reduction would ultimately lower prices and the government isn’t interested in that. Lower prices mean bank losses and these guys are foaming the runway for the banks. They’ll let you live in the house for years without paying, like the real housewife in this thread, but they don’t want anything that puts downward pressure on prices.
Oil Craters $4.41
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
2014 for housing anyway you look at it more of a bust then a first round draft that doesn’t pan out.
2015 looks like another, “we hope it gets better” (never in the know RE agents) but as of now more worry then joy,if things don’t pickup foreclosures surely are around the corner.
Underwater folks have little hope of breaking even, it becomes evident as houses sit for 9 months or longer with very little action.
The ” cheaper to walk then stay” chant will start and the wild fire of you can have it back will again be the cry, only this time a depression not serious recession will bring the country to its knees.
Many know I have advocated a return to normal market by now and the storm would pass, I will admit the storm is closer then ever and even I can say, if things don’t pick up I will run with you for cover, and if you want to kick me out of the tent, I don’t blame you?
Pick yourself up off the floor and cheer up and remember… Falling prices to dramatically lower and more affordable levels is positively bullish and good for the economy.
California List Prices Go Negative On Year In 2014
http://www.zillow.com/ca/home-values/