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HUD Chief Blames Congress for Hope for Homeowners’ Failings
Tweet Share on Facebook December 17, 2008 Comment (6)More details on Hope for Homeowners' wildly underwhelming start: only 312 applications so far and--you guessed it--congress and the administration are blaming each other for its shortcomings.
From The Washington Post:
The three-year program was supposed to help 400,000 borrowers avoid foreclosure. But it has attracted only 312 applications since its October launch because it is too expensive and onerous for lenders and borrowers alike, Preston said in an interview.
"What most people don't understand is that this program was designed to the detail by Congress," Preston said. "Congress dotted the i's and crossed the t's for us, and unfortunately it has made this program tough to use."
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Sheila Bair: Stop Blaming the Community Reinvestment Act
Tweet Share on Facebook December 17, 2008 Comment (10)Along with Fannie Mae and Freddie Mac, the Community Reinvestment Act has been fingered by a number of critics--mainly from the right--as a key cause of the financial crisis. But in a speech Wednesday, FDIC Chairman Sheila Bair--a Republican--called such logic a “myth.”
From Bair’s prepared remarks:
CRA as a scapegoat
I think we can agree that a complex interplay of risky behaviors by lenders, borrowers, and investors led to the current financial storm. To be sure, there's plenty of blame to go around. However, I want to give you my verdict on CRA: NOT guilty.
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Radioactive Effect: 2009 Housing Head Wind
Tweet Share on Facebook December 17, 2008 Comment (15)With home prices having dropped a painful 21 percent from their 2006 peaks, property owners everywhere could use a splash of good news in their New Year's Eve cocktails. But as a nasty recession is now part of the picture, the chances of an aggressive housing market rebound next year are dim. "A lasting recovery in the housing market?" says Mike Larson, a real estate analyst at Weiss Research. "I don't see it in the cards until the back end of the year—if that."
Here's a look at the factors that will be weighing down the housing market in 2009:
7. Radioactive Effect Despite lower real estate prices and cheaper mortgage rates, the pain inflicted by the housing bust will frighten many would-be buyers away from the market next year, Larson says. "Enough of your 'average Joes' have been burned very badly and will be burned by the time this is all over that investment money is not going to flood back into the market," Larson says. "Any recovery—in my opinion—will be gradual and is going to take time."
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Housing Starts Hit All-Time Lows
Tweet Share on Facebook December 16, 2008 Comment (1)The government reported Tuesday that November housing starts plummeted nearly 19 percent from October and 47 percent from a year earlier. That’s the lowest level since the government began collecting such data back in 1959.
Here’s what Patrick Newport, US Economist with IHS Global Insight, had to say about the figures in a report of his own:
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6 Things to Know About the Fed Rate Cut
Tweet Share on Facebook December 16, 2008 Comment (16)The Federal Reserve on Tuesday cut its federal funds target rate by more than three-quarters of a percentage point to a range of between 0 and .25 percent. The decision signals that Fed Chief Ben Bernanke is more concerned with the rapidly deteriorating economy--which has been mired in a recession since December of last year--than the prospect of stoking inflation. “Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined,” the rate-setting Federal Open Market Committee said in its statement. “Financial markets remain quite strained and credit conditions tight.”
Here’s how the Fed’s actions affect you:
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Household Formation: 2009 Housing Head Wind
Tweet Share on Facebook December 16, 2008 Comment (2)With home prices having dropped a painful 21 percent from their 2006 peaks, property owners everywhere could use a splash of good news in their New Year's Eve cocktails. But as a nasty recession is now part of the picture, the chances of an aggressive housing market rebound next year are dim. "A lasting recovery in the housing market?" says Mike Larson, a real estate analyst at Weiss Research. "I don't see it in the cards until the back end of the year—if that."
Here's a look at the factors that will be weighing down the housing market in 2009:
6. Slowing Household Formation At the same time, the pace of new household formation is slowing, which further chips away at housing demand. Richard Moody, chief economist at Mission Residential, says the development is linked to three factors: More singles are moving in with each other, young adults are returning to live with their parents, and fewer immigrants are entering the country. "For those three reasons, you are seeing a slowdown in the rate of household formation," Moody says. "And to the extent that the economy and the labor market remain weak this year—which I think they will—then that's going to continue."
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Builder Confidence Is Still at All-Time Lows
Tweet Share on Facebook December 15, 2008 CommentThe National Association of Home Builders/Wells Fargo Housing Market Index (HMI) remained at record lows in December:
Builder confidence in the market for newly built single-family homes held at a record low in December as deepening economic turmoil, a deteriorating job market, and an ongoing flow of foreclosed homes onto the market continued to negatively impact sales conditions. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) did not budge this month from November’s all-time low reading of 9, with two out of three component indexes losing further ground.
“The crisis continues,” said NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, W. Va. “While builders are doing everything we can in the way of price and non-price incentives to move new homes off the books, buyers are afraid to move forward, and in any case there is almost no way to compete with the cut-rate product that is continually flooding the market from mounting foreclosures. Congress and the Administration must step in with substantial incentives to bring qualified buyers back to the table as well as effective foreclosure relief programs if we are to end this negative spiral that is weighing so heavily on our national economy.”
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Doug E. Fresh: Rapper Facing Foreclosure
Tweet Share on Facebook December 15, 2008 Comment (1)The recent wave of celebrity housing problems has ensnared another high-profile victim: Rapper Doug E. Fresh.
From the New York Post:
Rap icon Doug E. Fresh - best known for his '80s hit "The Show" - has been socked with three foreclosure actions by banks looking to collect more than $3.5 million in unpaid mortgages on a trio of his Harlem homes…
The golden-voiced rapper, whose real name is Douglas Davis, grew up in Harlem. After his skill at vocally imitating drumbeats and percussion sounds made him famous in the 1980s, he stayed in the neighborhood, investing in local real estate and raising five sons.
He fell behind in payments and, according to a foreclosure suit filed in Manhattan in late August, 2008, he now owes more than $1.73 million.
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Mortgage Mess on 60 Minutes
Tweet Share on Facebook December 15, 2008 Comment (4) -
The 5 Best (and Worst) Housing Markets of 2008
Tweet Share on Facebook December 15, 2008 Comment (20)Zillow's recent report also outlined the housing markets that had performed the best—and the worst—in 2008 so far.
Thirty of the 163 metropolitan statistical areas (MSAs) covered in the Zillow Real Estate Market Reports showed gains in the Zillow Home Value Index, or median value of all homes in the area, over the first three quarters of the year, with the Jacksonville, N.C. region seeing year-over-year appreciation of 4.9 percent. The change in value was calculated by averaging the year-over-year change in each of the first three quarters of the year.
Also performing well were the Winston-Salem, N.C. and Anderson, S.C. MSAs, with year-over-year increases of 4.1 percent and 3.5 percent, respectively, over the first three quarters of the year.
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