June 2010

A Word About Strategic Defaulters and FNMAs New Crack Down...

Posted on Monday, June 28, 2010

Larry Kudlow and I agreed on CNBC yesterday that we’ve had enough government intervention in the economic crisis to last a lifetime. But as Shaien Nasiripour points out in "Fannie ferocious; taxpayer owned mortgage giant attacking struggling homeowners," I was wrong. Fannie’s move to p...

Update on Pending Mortgage Reforms

Posted on Wednesday, June 23, 2010

he House Financial Services Committee released a statement bullet pointing the steps that they’ve approved so far. The report is 2000 pages long. It outlaws many common mortgage industry practices. It requires lender to make sure loans benefit the borrower (net tangible benefit underwriting standa...

Penalty for Strategic Defaulters

Posted on Wednesday, June 23, 2010

25% of homes are underwater. The stigma of defaulting is all but gone. Last week the US House of Representatives passed the FHA Reform Act replenishing FHA resveres. They also tacked on a penalty which will make homeoenwers who stratgically default ineligible for an FHA loan. Rep. Chris Lee of NY ...

Update on Pending Mortgage Reforms

Posted on Wednesday, June 23, 2010

he House Financial Services Committee released a statement bullet pointing the steps that they’ve approved so far. The report is 2000 pages long. It outlaws many common mortgage industry practices. It requires lender to make sure loans benefit the borrower (net tangible benefit underwriting standa...

Update on Pending Mortgage Reforms

Posted on Wednesday, June 23, 2010

he House Financial Services Committee released a statement bullet pointing the steps that they’ve approved so far. The report is 2000 pages long. It outlaws many common mortgage industry practices. It requires lender to make sure loans benefit the borrower (net tangible benefit underwriting standa...

Unemployment and Debt

Posted on Wednesday, June 23, 2010

A recent report from the Joint Center for Housing Studies out of Harvard reflects the expectation that unemployment will remain high. Also important, homeowners level of debt relative to equity stood at 163% as of the begin of the year indicating thast housing costs have become a severe burden...

Some Not So Good Predictions

Posted on Wednesday, June 23, 2010

2/3 of American homes have a mortgage. 56 million. Over half are owned or guaranteed by the GSEs. 35% are on bank balance sheets. 15% are private labels out of Wall Street. 14% of the 56 million mortgages are already delinquent or foreclosure. 56 x 14% is 7.8 million people not paying the...

FNMA and Freddie Delist

Posted on Wednesday, June 23, 2010

FHFA ordered the delisting as neither has not maintained the $1 minimum per share required by the NYSE for most months since put in conservatorship in Sept 2008. Values of both dropped nearly 40% after this news. ...

Some Recent Short Sale Stats..

Posted on Wednesday, June 23, 2010

Short sales are on the rise and will continue. This far 50% have been in CA, 8% in Fla and 7% in AZ....

HAMP re-defaults

Posted on Wednesday, June 23, 2010

Fitch Ratings expects 55 to 66% of prime loans modified under HAMP to redefault within the next 12 months. For subprime and Alt A loans the prediction is 65 to 75%. Mods involving principal reductions, they say, may improve those numbers but those programs are not expected to roll out until later t...

Americans Cant Afford Downpayment

Posted on Wednesday, June 23, 2010

According to the National Foundation for Credit Counseling many Americans are having trouble coming up with a 20% downpayment. Usually only a problem for first time buyers. But now no on has equity when they sell. Average home price is just under %200K, 20% down is $40k. Those with poor credit ne...

Shadow Inventory

Posted on Wednesday, June 23, 2010

According to S&P shadow inventory has been growing in almost every area over the past 5 years. The backlog will take an estimated 3 years to clean out. This includes loans more than 90 days late. The original principal balance for these loans is thought to total $480 billion (30% of the private labe...

New Index Measures Consumer Financial Distress

Posted on Wednesday, June 23, 2010

CredAbility Consumer Distress Index is a new quarterly stat tracking shifts in the average American household financial condition over time. CredAbility was f/k/a Consumer Credit Counseling Service of Greater Atlanta. The new index measrures consumers employment, housing, credit, household budget...

Existing and New Home Sales Down - Double Dip?

Posted on Wednesday, June 23, 2010

New EXISTING HOME SALES number were released Tuesday June 22 at 10 AM by NAR for May. We expected to see a rise of about 6%. But instead saw a slight decrease. Given that this number measures closed sales, we should see at least another month of home buyer tax credit boost so this lower than ex...

What the Smart Guys Are Saying...

Posted on Wednesday, June 23, 2010

GDP: A relapse into recession in not likely. GDP growth this year is about 3.5% and will be about the same next year. Employment: Inventories are lean so businesses will be spending there as well as on equipment then have been putting off. Continued federal stimulus will help, but that tapers...

Cocktail Talk

Posted on Wednesday, June 23, 2010

$13 trillion nation debt 39.68 million on food stamps. Realtytrac foreclosure on 367,056 properties in March. MBA over 10% with mtg missed payment between January and March - record high. Banks own greater share of residential housing net worth in US than all Americans. Stat...

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