Archive for September, 2009
A Fort Myers, Fla. real estate broker is launching an auction Web site to sell luxury homes.
Homes listed on the site will have a Web page with an audio virtual tour, interactive floor plan, press release, podcast and online bidding function. The home will receive a pre-listing inspection and staging as well, said Robin Speronis, owner and broker of Zen Real Estate.
“Over 90% of affluent luxury home buyers start their home search online. It's a natural progression to online bidding,” she said. “With the buying process in such a state of constant change, it is imperative the selling process adapt to give buyers exactly what they want.”
To ensure that only serious bidders participate in the auction, the Web sites are password-protected.
Speronis, who also runs a blog about Florida real estate, is offering three packages for listing homes on the auction site ranging in price from $3,995 to $9,995.
Write to Austin Kilgore.
Mortgage Outreach Services, the MOS Group, selected the Mitel Communications Suite (MCS) to lower IT costs, reduce power consumption and allow the flexibility needed to spur company growth.
The MOS Group provides mortgage delinquency resolution for the financial industry. Headquartered in Ottawa, Canada, Mitel provides communications applications for companies of all sizes.
Running on a Sun Fire server from Sun Microsystems, the MCS combines the Mitel Communcications Director with applications such as Mitel NuPoint Unified Messaging and the Mitel Unified IP Client. Its implementation is designed to manage the MOS Group’s applications and call loads across a variety of locations.
MCS is designed to reduce the number of servers required, simplify deployment and handle current and future user growth.
The MOS Group also deployed the Mitel Unified IP Client for Sun Ray, the voice and virtual desktop software that makes desktop and telephone systems mobile by including an automatic cell phone hand off and single sign-on option and replaces traditional PC’s with thin clients.
Write to Jon Prior.
Morgan Stanley (MS: 18.56 +2.26%) chairman and CEO John Mack will step down from his CEO role at the end of the year after steering the firm through one of the most significant financial crises since the Great Depression.
He will be replaced by current Morgan Stanley co-president James Gorman.
Mack, 64, will retain his position as chairman, and Gorman will join the firm’s board of directors. Morgan Stanley’s second co-president Walid Chammah will assume the role of chairman of Morgan Stanley International and will continue to be based in London.
The changes take effect Jan. 1, 2010.
Mack spent more than 20 years of his career at the firm, but left in 2001. He returned to take the reigns as CEO in 2005 and has been responsible for stabilizing Morgan Stanley during the financial crisis, board director Robert Kidder said, including overseeing the firm’s conversion to a bank holding company, strengthening the company’s capital position and repaying the its Troubled Asset Relief Program (TARP) infusion.
Mack notified the board 18 months ago of his intent to step down from the CEO role after his upcoming 65th birthday in November.
“Given our tremendous progress, we believe now is the right time for that transition, and all of us on the board – and across the firm – are grateful that we will continue to benefit from John's insights and experience in his critical role as chairman,” Kidder said.
Gorman, 51, has served as co-president of the firm since 2007, charged with overseeing Morgan Stanley’s global wealth management business, investment management business and operations and technology group. Earlier this year, he was named chairman of the Morgan Stanley Smith Barney joint venture.
“Succession has been a top priority for me since my return to Morgan Stanley, and I am confident that James is the right person to lead the firm forward,” Mack said.
Write to Austin Kilgore.
SoundBite Communications, which offers voice, text and e-mail messaging software, introduced a proactive customer communications package for mortgage servicers participating in the Home Affordable Modification Program (HAMP).
Under the Making Home Affordable (MHA) program, HAMP provides incentives for servicers to modify loans on the verge of the foreclosure and adjusts the incentive caps based on actual performance.
With the amount of HAMP-eligible loan modifications on the rise, SoundBites designed the MHA Accelerator to streamline the modification progress, cut operating costs and increase the number of loan modifications started.
The MHA Accelerator increases communication between the servicer and borrower during qualification, processing, the trial period and underwriting.
It collects missing documents and verifies information, provides automated reminders to reinforce on-time payments and proactively communicates with qualified borrowers to trim the amount of inbound calls.
Write to Jon Prior.
Homeowners in the United Kingdom, much like in the United States, are encountering obstacles to refinance as credit largely remains on lockdown and underwriting standards remain tight among mortgage lenders.
The occurrence of refinancings takes effect within securitizations as loans are "prepayed" or considered paid in full. The loan essentially disappears from the security although it still exists in a different form and may end up in a new security.
A reduction in the prepayment rate of a security reduces the speed at which a trust declines in size. It slows the rate at which credit enhancement can accumulate and may cause certain classes of notes to repay less rapidly than expected and potentially extend beyond their step-up dates in the absence of refinance, according to Fitch Ratings.
But despite a decline in prepayments within UK residential mortgage-backed securities (RMBS) during the past 18 months, ratings on transactions issued from the 12 Fitch-rated UK prime master trust programs are unlikely to be negatively impacted on account of prepay speeds.
"Fitch's ratings address the repayment of principal in full by the legal final maturity and as such are unlikely to be affected by a slow down in the prepayment rate given that the majority of bonds have long-dated legal finals," said Francesca Zwolinsky, director on Fitch's UK RMBS team.
Fitch applied a stress test to the programs, calculating the probable effect of various prepayment speeds on the performance of the programs. Most notes repaid by their maturity dates without incurring principal losses.
"The prepayment rates in the Arkle and Permanent programs have declined to the extent that insufficient principal has been generated to redeem a number of notes in full," Fitch said in a report Thursday. "However … the sponsors of these two programs have supported their structures and injected cash into the trusts to ensure the bonds are redeemed on time."
The decline in loan redemptions since the beginning of '08 are most apparent in non-conforming programs and several deals involving greater-than-average high loan-to-value mortgages, Fitch noted.
"This emphasises the difficulty that these borrowers are having in refinancing following the widespread tightening of underwriting criteria and, in some cases, the complete withdrawal of these mortgages from several lenders' product ranges," Zwolinsky said.
In June, Fitch noted a trend among lenders that offered more favorable rates to borrowers with at least 25% equity in the property. About 50% of all loans in Fitch-rated master trust programs bore too little equity to qualify for these rates.
Write to Diana Golobay.
First American CoreLogic, a member of the First American Corp. (FAF: 14.98 +0.07%) enhanced its TrueStandings Securities, a Web-based platform that provides access to 96% of active non-agency securitized mortgages with history dating to 1993.
TrueStandings Securities now includes data on loan-level loan modifications, which is updated monthly as data becomes available.
The platform also includes the option to display updated loan-to-value (LTV) measurements and provides the property record count of outstanding liens.
Its previous data export feature now includes a data importation service that integrates with the LoanPerformance RiskModel that simultaneously considers credit, interest rate and home-price risk to predict cashflows and defaults.
Once installed, the data import option can download bulk export files and run them through its RiskModel. The projections are then ready for retrieval and analysis for the user.
Write to Jon Prior.
The Washington, DC-based consumer protection non-profit Fair Mortgage Collaborative (FMC) and the Laguna Niguel, Calif.-based software developer Mortgage Grader (MG) announced a partnership to evaluate whether lenders’ mortgage products are “fair and safe.”
The partnership with give use MG’s testing software to evaluate loan specifications and rate loans based on FMC standards.
The non-profit FMC —which aims to provide consumer information and protection in the mortgage process — said the program will give consumers an independent source of rating information when evaluating lenders.
“Mortgage shoppers will now have peace of mind knowing that their potential lender has received a well-earned badge of trustworthiness,” FMC executive director Howard Banker said.
Write to Austin Kilgore.
The gap between asking price and selling price is closing — indicating a potential alignment of sellers' asking prices and the current housing market.
According to a Zillow real estate market report, buyers paid 3.3% or nearly $7,039, less than the last listing price on homes for sale in July. That’s down from 3.5%, or $7,630, in June, and 4.6%, or $10,260, in January.
Zillow reported 22.8% of all homes listed for sale on its Web listing service had at least one price reduction as of September 1 and the median reduction was 6.5% off the original listing price.
Negotiating power varied from region to region. Florida homebuyers had the most negotiating power in July, with 13 of the 25 metropolitan statistical areas (MSAs) having the greatest difference between asking and selling price were located in the state.
There was little to no negotiating room in some California markets, however. In some areas, buyers paid above asking price, and in seven major California markets, asking prices and selling prices were the same.
Write to Austin Kilgore.
Market observers for weeks have pointed toward a perceived bottom in the US housing market and broader economy.
Analysts are identifying what may be a slow, sustainable economic recovery that will keep inflation and interest rates low, according to a Banc of America Securities-Merrill Lynch (BAS-ML) research report Thursday.
"The US is exiting its worst banking crisis and recession since the depression," the report reads, in part. "No sector is more exposed to the broad US economy than Financials."
Gains in the US financial sector likely indicate overall economic recovery, as earnings-per-share (EPS) among US financial institutions are highly levered to credit costs, which BAS-ML researchers expect to peak this year.
"Financial EPS can surge even if household spending and borrowing remains sluggish," researchers said in the report. "Sluggish [gross domestic product] promotes a steep yield curve. BAS-ML economists expect the Fed to remain on hold until early 2011."
Core inflation will likely remain low as labor markets experience a large supply of unemployed workers and a shortage of job openings. The rally seen this summer as the US economy reached a sense of stability — particularly in house prices — is likely to continue, researchers said.
Recovery may slow in coming months, however, as a typical recovery sees 50% of the prior peak recovered in the first six months and the remaining 50% recovered over the following 14 months. BAS-ML researchers noted six months have passed since investors feared a nationalization of the banking industry in March.
"But now with exactly six months having passed since the March lows," researchers added, "investors should have increased confidence that the market bottom is behind and that we are in the early stages of a sustainable, albeit slow, economic recovery."
Write to Diana Golobay.
The Bank of England’s Monetary Policy Committee maintained the official bank rate at 0.5% and said it will continue its asset purchase plan that will issue £175bn (US$291.6bn) in central bank reserves.
The announcement comes as house prices in the UK increased 0.8% in August, the second consecutive month to experience an increase, and the fourth month of the year to see an increase.
The UK market may be seeing a summer increase similar to that in the US market in terms of sales activity and prices, while interest rates have remained artificially low from similar government purchase programs.
The increases have been slight across the UK, as the average house price moved from £160,861 in December 2008 to £160,973 in August 2009. Also, on a year-over-year basis, the average house price is 10.1% lower in 2009 than it was in August 2008, according to the Halifax house price index, a monthly report published by HBOS, a subsidiary of Lloyd’s Banking Group (LYG: 2.01 -0.50%).
“Demand for housing has increased since the start of the year due to better affordability and low interest rates. This, together with low levels of property available for sale, has boosted house prices over the last few months,” Halifax housing economist Martin Ellis said.
But as the low rates are encouraging buyers to get in the market, the Council of Mortgage Lenders (CML) released a statement reiterating that mortgage rates are set with reference to a complex range of factors, not just one or two as some recent commentary has tended to imply.
“It is utterly misleading to look at any individual benchmark rate — whether Bank rate, Libor, or swap rates — and assume that the margin between that rate and the mortgage rate is pure ‘profit’ in the way that some recent commentary has implied,” CML director general Michael Coogan said. “The real picture is not nearly so simple — lenders face a broad range of pressures, both in terms of the cost of funds and the cost of liquidity management and capital. This is causing a change in the relationship between benchmark rates and mortgage rates in comparison with the pre-credit crunch era.”
The bank rate has been at its low level since early March, at the same time the asset purchase plan was announced. Originally set at £75bn, the committee decided to increase the purchases to £125bn in May, and increased it again to its current level in August.
Write to Austin Kilgore.
