-
Why Preston Should Have Stayed at the SBA
Tweet Share on Facebook April 18, 2008 CommentTalk about a buzz kill.
There Steven Preston was, standing at the White House, with the decider at his side, wistfully daydreaming about his new job leading an obscure, corruption-tainted agency that's likely to play a leading role in a perilously complicated effort to pull homeowners out of the most terrifying crisis in a generation. But you just couldn't allow someone to enjoy his view from the top of the world, Rep. Nydia Velázquez, could you?
-
Top 10 Foreclosure States
Tweet Share on Facebook April 17, 2008 Comment (15)The bit plays out a lot funnier on David Letterman, but the good folks over at the Real Estate Bloggers have compiled this fascinating—but terrifying—top 10 list based on a recently released RealtyTrac report.
Overall, 1 out of every 538 U.S. households received a foreclosure filing last month.
-
Another Painful Month for Housing
Tweet Share on Facebook April 16, 2008 Comment (1)March housing starts dropped nearly 12 percent from February and more than 36 percent from a year earlier, the Census Bureau reported today. At the same time, "permits dropped 5.8 percent to 927,000, also far below the consensus, 970,000, and the lowest level since April 1991," Ian Shepherdson, the chief U.S. economist at High Frequency Economics, said in a report. He called it "further evidence, as if it were needed, of the catastrophe in the housing market."
Still, despite the dismal report, a decline in home-building activity should help reduce the bloated inventory that is punishing the market.
"The drop in starts combined with falling prices will help pare the overhang of unsold homes that will eventually set the stage for a rebound in homebuilding later this year or early in 2009," David Resler, chief economist at Nomura Securities, said in a report.
-
Ron Paul Sees Bailout Writing on the Wall
Tweet Share on Facebook April 15, 2008 Comment (68)With momentum building for some form of taxpayer-funded housing rescue, what better time to check in with one of the most ardent bailout opponents, Republican Rep. Ron Paul of Texas? Excerpts from an interview:
What is the likelihood that Congress will pass some form o f large-scale government intervention aimed at stemming the tide of foreclosures?
Oh, I think they will. [Rep.] Barney Frank [a Massachusetts Democrat who is chairman of the House Financial Services Committee] would support that. It's interesting. Barney Frank is a good friend of mine. He and I support things that allow and permit personal risk, like Internet gambling and smoking marijuana. But economic risk is supposed to not be permitted? So I needle him a bit about that. I say, "How come we can't have economic risk?" I want people to take their own risk, and then you wouldn't have these kinds of problems that we are facing today. -
Foreclosure Filings Up Sharply
Tweet Share on Facebook April 15, 2008 CommentRealtyTrac's March 2008 U.S. Foreclosure Market Report shows that foreclosure filings nationwide increased 5 percent from the previous month and 57 percent from a year earlier. All told, 1 out of every 538 households received a foreclosure filing in March, the report says.
"The March numbers show that overall foreclosure activity so far this year continues to run nearly 60 percent above the levels we saw last year," said James J. Saccacio, chief executive officer of RealtyTrac. "On a year-over-year basis, default notices were up nearly 57 percent and bank repossessions were up nearly 129 percent, but auction notices were up only 32 percent, indicating that more defaulting homeowners are simply walking away and deeding their properties back to the foreclosing lender. This deed-in-lieu-of-foreclosure process allows the lender to take possession of a property without putting it up for public foreclosure auction."
Press release here.
-
Fannie and Freddie Go After Jingle Mailers
Tweet Share on Facebook April 14, 2008 Comment (4)One of the many curiosities to accompany the mortgage crisis is the growing number of struggling borrowers who have elected to simply walk away from their homes instead of launching an all-out effort to prevent foreclosure. The sharp drop in home prices—which has put millions of Americans "underwater," meaning they owe more on their mortgages than their homes are worth—is one factor behind the trend. Meanwhile, since most mortgages are packaged and sold to investors, rather than held by a local banker, it may be easier for homeowners to justify walking away and sending their house keys to the lender—so-called jingle mail.
In addition, a number of companies have emerged on the Web that present foreclosure as an attractive alternative for cash-strapped borrowers.
-
Bill Clinton on the Mortgage Crisis
Tweet Share on Facebook April 14, 2008 Comment (4)With the housing crisis becoming an increasingly central campaign issue in the race for the White House, former President Bill Clinton provided his two cents on the issue while stumping for his wife in North Carolina.
From the Wall Street Journal:
-
Brokered Subprime Loans Cost More
Tweet Share on Facebook April 11, 2008 CommentSubprime borrowers who use brokers pay "significantly more" than those who go directly to the lender, according to a study by the Center for Responsible Lending.
The research—the first to empirically examine the effect of broker compensation on a broad spectrum of borrowers—reveals troubling patterns. The most important is that, for borrowers with weak credit, brokered mortgages carry higher interest rates than the same loans obtained directly from a retail lender. On a typical loan of $166,000, a subprime borrower with a brokered mortgage will pay $5,222 more in the first four years of the loan. Over the 30-year span of a loan, the cost difference grows to almost $36,000.
-
Administration’s Mortgage Fix Is Criticized
Tweet Share on Facebook April 10, 2008 Comment (2)Right on cue, Democratic lawmakers are sharply criticizing the Bush administration's plan—announced Wednesday—to expand help to about 100,000 mortgage holders. Democrats say the plan does not go far enough, and they are continuing their efforts toward devising a large-scale, taxpayer-funded housing bailout.
"I have serious questions as to how a substantial number of more homeowners could be helped through [the Federal Housing Administration] without an infusion of government funds," Rep. Carolyn Maloney of New York, a senior Democrat on the Financial Services Committee, told the Wall Street Journal.
Article here.
-
It Takes One to Know One...
Tweet Share on Facebook April 10, 2008 CommentLooks as if some of the folks who helped create the housing mess have had a change of heart.
From NPR:
Some out-of-work mortgage brokers have now found their way to nonprofits like this one. The [Neighborhood Assistance Corp. of America] is working with borrowers facing foreclosure all over the country, refinancing or restructuring their unaffordable subprime loans.
Bruce Marks heads up NACA and now helps retrain former subprime loan brokers. Who better to untangle these unaffordable loans than the brokers who helped set them up, he says. The former brokers understand the "exploding ARM loans" and the "pick-a-pay loans," Marks says. "They are the experts, because they were a part of that industry, and they know that business inside and out."
Full story here.
