Banks on Sick List Top 400
August 28, 2009, Wall Street Journal

The banking industry continues to deteriorate, with federal regulators adding 111 lenders to their list of endangered banks in the latest quarter, even as the economy shows signs of stabilizing. Data released Thursday painted a gloomy picture of the state of banking. The Federal Deposit Insurance Corp. said it had 416 banks on its "problem list" at the end of June, equivalent to about 5% of the nation's banks, up from 305 at the end of March and 117 at the end of June 2008. Problem banks had a combined $299.8 billion of assets at the end of June, compared with $78.3 billion a year ago.

New York Observer Starts a Paper on Real Estate
August 23, 2009, New York Times

Twenty months into a deep recession, the real estate market is battered and the print news media are doing even worse. What kind of time is this for a money-losing publisher to start a print publication about real estate? A perfect one, according to Jared Kushner, owner of The New York Observer, who is about to introduce The Commercial Observer, a weekly newspaper on the commercial real estate market in New York City. The first issue will be published Sept. 15.

LendingTree: Google to Compete on Loan Referrals
August 28, 2009, Associated Press

LendingTree, which allows prospective borrowers to get quick offers from multiple lenders, claims Google is about to get into the same business. A LendingTree lawsuit against a separate technology provider claims that it has learned Google plans to launch such a service later this month or in early September. The lawsuit claims that LendingTree has received screen shots — pictures of a computer screen — showing a trial version of Google's service that indicate Google will give customers loan offers and contact information for lenders. Also, see these two related stories: Is Google a Loan Shark? and Google Eyes Mortgage Lending Service

'Old Time Religion' for the Economy
August 27, 2009, Baltimore Sun (Opinion)

Will the economic recovery be enduring - V shaped? Or will it collapse after a short time - W shaped? For the middle class, it may be none of the above - an X.

New-Home Sales Post Another Strong Gain
August 26, 2009, Wall Street Journal

New-home sales climbed more than anticipated in July, staging their fourth straight month of strong gains to add to evidence that the housing market is emerging from its long slump. Sales of single-family homes increased by 9.6% to a seasonally adjusted annual rate of 433,000 compared to the prior month, the Commerce Department said Wednesday. That was the highest number sold since September 2008 and well above projections for a 1.6% gain to 390,000 by economists surveyed by Dow Jones Newswires. The increase was the fifth in seven months, as buyers are returning to the market in search of bargains.

Subprime Lenders Getting U.S. Subsidies, Report Says
August 26, 2009, Washington Post

Many of the lenders eligible to receive billions of dollars from the government's massive foreclosure prevention program helped fuel the housing crisis by issuing risky subprime loans, according to a report to be issued Wednesday by the Center for Public Integrity.  Under the $75 billion program, called Making Home Affordable, lenders are eligible for taxpayer subsidies to lower the mortgage payments of distressed borrowers. Of the top 25 participants in the program, at least 21 specialized in servicing or originating subprime loans, according to the center, a nonprofit investigative reporting group funded largely by charitable foundations.

Home Prices Are Up. No, Down. No, Flat. Where’s the Truth?
August 25, 2009, Christian Science Monitor

When you hear news about home prices rising or falling these days, it might be good to take the data with a grain or more of salt. Latest Case-Shiller index shows monthly gains, though prices are down 15.4 percent from last June. But such barometers are not a one-stop guide to the housing market.

Those Who Lose Homes May Face State Tax Hit
August 25, 2009, San Francisco Chronicle

Californians who lose their homes in a foreclosure, short-sale or deed in lieu of foreclosure this year could be hit with a state income tax on canceled or forgiven debt. A state law that temporarily exempted many homeowners from this tax at the state level expired at the end of last year. Attempts to revive it have not been successful.

America’s Housing Market: Where It All Began
August 20, 2009, The Economist

Signs of stabilisation should not obscure the big problems still ahead.

He is hardly your typical distressed seller. Hugh Hefner recently sold his personal residence in Holmby Hills, California, next door to the Playboy mansion, to a 25-year-old entrepreneur for $18m—some 36% below the asking price. It will come as little solace to the ageing Lothario that the discount looked about right: house prices have fallen by one-third from their peak nationwide, and by much more than that in the worst-hit states, such as California, Florida and Nevada.

U.S. Suburbs Become Face of Foreclosure
August 24, 2009, Financial Times

Apart from the piece of paper in the window, the house looks like every other Midwest suburban home in the Lakewood Springs development in Plano, a small town about 50 miles west of downtown Chicago. Plano sits at the western end of Kendall County, at the edge of where metropolitan Chicago blends into rural Illinois. Ten years ago, the area’s flat prairie land was covered in corn and soy bean fields. But between 2000 and 2007, Kendall became the fastest-growing county in the US, as people moved out to Chicago’s far-west suburbs in search of more affordable property in its “bedroom communities”. With the economic downturn, the housing boom has turned to bust. Kendall County now has the highest foreclosure rate in Illinois, with one in every 26 households receiving a foreclosure filing in the first six months of the year – three times higher than the state average and well above the national average of one in every 84 homes.

‘Cash is King’ in Market for Foreclosed Homes
August 22, 2009, San Francisco Chronicle

Cash offers close escrow quickly and easily, while offers with a mortgage now often take 45 days or longer to close and can fall through if the financing hits any snags. All-cash sales are most common where prices are low and bank-owned properties account for the lion's share of listings. In foreclosure-ridden Pittsburg, for instance, 42.7 percent of home sales in the first three weeks of July had no record of a purchase loan, according to county data analyzed by MDA DataQuick. The median price for those transactions was $105,000.

Mortgage delinquencies break another record

Prime, fixed-rate loans account for one in three foreclosure starts: MBA
August 20, 2009, MarketWatch

Residential mortgages either in foreclosure or with at least one payment past due hit 13.16% in the second quarter, the highest percentage ever recorded by the Mortgage Bankers Association, the industry group reported on Thursday."As a sign that mortgage performance is once again being driven by unemployment, prime fixed-rate loans now account for one in three foreclosure starts. A year ago they accounted for one in five. While 41 states had increases in the foreclosure start rate for prime fixed-rate loans, 43 states had decreases in that rate for subprime adjustable-rate loans."

BofA's Countrywide loses court ruling on mortgages

August 20, 2009, Reuters

A federal judge has ruled that Bank of America Corp (BAC.N) cannot have a lawsuit by investors seeking to force it to buy back mortgages heard in federal court, saying he lacks jurisdiction to decide the case. The ruling is a win for investors, to the extent that Holwell rejected a claim by the bank's Countrywide Financial Corp unit that new federal laws to encourage loan modifications to help struggling borrowers stay in their homes govern this case.

County To Give $30,000 To Buy Foreclosed Homes

August 19, 2009, WFTV.com

OSCEOLA COUNTY, Fla. -- The foreclosure crisis is so bad in Osceola County that leaders are willing to hand people up to $30,000 a piece just so they'll buy foreclosed homes. The county has plans to use $14 million in federal neighborhood stabilization dollars to give down payment assistance to buyers willing to purchase a foreclosed home. Other cities are using their stimulus dollars to rehab and re-sell foreclosed properties. Osceola County is hoping, by giving money to homeowners, they'll be more likely to buy a foreclosed home.

Credit card defaults seen peaking this year

August 18, 2009, Reuters

Credit card loan defaults, which have risen sharply in recent months and which many analysts feared could rival mortgages as a headache for banks, could peak sooner than widely expected.

Mortgage Delinquency Rate Hits All Time High in 2Q
Associated Press

The delinquency rate on U.S. mortgage loans hit an all-time high in the second quarter, but the pace of growth for the rate slowed, a possible sign the mortgage crisis may be beginning to turn the corner. Data provided by credit reporting agency TransUnion shows the ratio of mortgage holders who are 60 days or more behind on their payments increased for the 10th straight quarter, to 5.81 percent nationwide for the three months ended June 30.

Signs of Stability in Housing Starts
Wall Street Journal

Home construction unexpectedly fell 1% in July along with building permits, but the declines were concentrated in the multifamily category. Housing starts fell 1.0% to a seasonally adjusted 581,000 annual rate compared to the prior month, the Commerce Department said Tuesday. June housing starts, for instance, climbed 6.5% to 587,000, revised from an originally reported 3.6% increase to 582,000

Florida Court Wants Mandatory Mediation on Foreclosures
Wall Street Journal

The Florida Supreme Court's residential foreclosure task force recommended Monday that all cases involving primary homes should be mediated and that judges should expedite cases dealing with vacant and abandoned properties. The recommendations will go to the justices, who are looking for ways to help the court system cope with a flood of foreclosure cases caused by the national recession and Florida's housing bust. Florida has one of the nation's highest foreclosure rates. It was third at 3.4% behind Arizona and California in June

Vermont Mortgage Laws Shut the Door on Bust — and Boom
Wall Street Journal

In plenty of other states, Andrea Todd would have been a homeowner years ago. Here, she bought just this month — a difference that helps explain how Vermont avoided the housing bust, and shows the possible pitfalls in President Barack Obama's plan to tighten mortgage regulation. Vermont's strict mortgage-lending laws largely prevented the state's residents from signing the types of dubious home loans written in other markets across the country. Its 1990s legislation made mortgage lenders warn customers when their rates were relatively high, and put the brokers who arranged loans on the hook if their customers defaulted. Now, by at least one measure, the state has the lowest foreclosure rate in the U.S. And in what officials believe is the first state law of its kind, Vermont declared that mortgage brokers' fiduciary responsibility was to borrowers, not lenders.

Fed Survey: No Return to Normal in Near Term
American Banker

Despite some encouraging economic signs, a clear majority of bankers surveyed by the Federal Reserve Board do not expect underwriting standards for residential real estate, commercial mortgages or credit cards to normalize before 2011. In the central bank's survey of 55 senior loan officers at domestic institutions, some said it could take even longer for standards to return to the levels that prevailed before the crisis hit.

Tax Bills Put Pressure on Struggling Homeowners
New York Times

Hard times are causing more homeowners to fall behind on their property taxes. But in thousands of cases, they are not responsible to their local governments, but to private companies that charge double-digit interest and thousands of dollars in service fees.