Nevada Leads Country with 70% of Mortgages Underwater
Housing Wire, July 8, 2010
Roughly 70 percent of mortgages on the LendingTree network in Nevada are worth less than what is owed on the loan. LendingTree is an online lender exchange and personal finance resource for consumers. According to LendingTree, the average percentage of mortgages in negative equity for each state was 18.1 percent. The state with the lowest percentage was Oklahoma with 6 percent. New York was not far behind. There, 6.3 percent of all mortgages on the LendingTree network were underwater. But Nevada holds the worst at 69.9 percent. The next closest is Arizona with a negative equity ratio of 51.3 percent, followed by Florida at 47.8 percent.
LPS Division to Sell Foreclosed Homes through Online Auction
Housing Wire, July 8, 2010
Lender Processing Services, a provider of technology and services to the mortgage and real estate industries, said its LPS Auction Solutions division will conduct an online auction of bank-foreclosed homes located nationwide. The bid deadline is Aug. 2. The portfolio includes single-family homes, multifamily homes and condominiums. It involves properties in 11 states, including Baltimore, Md.; Shreveport, La.; the Greater Fort Lauderdale, Fla., area; the St. Louis, Mo., area; the Richmond, Va., suburbs; and Greater Pittsburgh, Pa.
Wells Fargo Cuts 3,800 Jobs, Closes Sub-Prime Unit
Business Week, July 8, 2010
Wells Fargo & Co., the fourth-largest U.S. bank by assets, plans to eliminate 3,800 jobs, or about 1.4 percent of its total workforce, and close its consumer-finance branch network. The lender will take a charge of $185 million, with $137 million, or 2 cents a share, in the second quarter, according to a statement yesterday from the San Francisco-based company. Wells Fargo said it will close 638 independent consumer-finance branches and stop making nonprime home loans.
To Fix Sour Property Deals, Lenders 'Extend and Pretend'
Wall Street Journal, July 8, 2010
Some banks have a special technique for dealing with business borrowers who can't repay loans coming due: Give them more time, hoping things improve and they can repay later. Banks call it a wise strategy. Skeptics call it "extend and pretend." Banks are applying it, in particular, to commercial real-estate lending, where, during the boom, optimistic borrowers got in over their heads to the tune of tens of billions of dollars. A big push by banks in recent months to modify such loans — by stretching out maturities or allowing below-market interest rates — has slowed a spike in defaults. It also has helped preserve banks' capital, by keeping some dicey loans classified as "performing" and thus minimizing the amount of cash banks must set aside in reserves for future losses.
Retail Market Suffers
Las Vegas Review-Journal, July 7, 2010
The retail market remains sluggish in Las Vegas as high unemployment and tight consumer spending hamper any chance of economic recovery, forcing businesses to close and driving up vacancy at shopping centers across the valley. Retail performance dipped again in the second quarter. Some 345,000 square feet of space — roughly the size of three or four Wal-Mart Supercenters — was returned to the market, Colliers International brokerage reported. Vacancy rose to 10.1 percent on 43.7 million square feet of retail space, compared with 7.9 percent in the year-ago quarter. Clark County posted a quarterly average of $82,583 in taxable sales per retail employee during the recession, down from $90,329 before the recession. The average dropped to $77,448 in the first quarter.