Archive for November, 2009
Ann Sperling joins financial and professional services firm Jones Lang LaSalle (JLL: 75.63 +0.42%) as chief operating officer for the Americas region.
In her new role, Sperling will lead Jones Land LaSalle’s Americas management committee, oversee the region’s planning process and compensation program, integrate support functions with the businesses and improve business processes, the firm said. She succeeds Bill Thummel, who held the position since 2005 and is now chief operating officer of the firm’s global corporate solutions organization, a newly created position.
Sperling joins from Catellus Development Group, where she was managing director of the mixed-use development company, a wholly owned subsidiary of ProLogis (PLD: 32.52 -0.09%). She joined Catellus as a result of the CB Richard Ellis/Trammell Crow merger, where she had a 25-year career at Trammel Crow, most recently in the role of managing director and area director for the firm’s Rocky Mountain region.
“Ann is a proven leader whose experience across a broad range of real estate disciplines makes her the ideal choice for this important position,” said Peter Roberts, CEO for the Americas region. “Her success in driving growth, excellence in client service and business performance makes her the ideal choice to help guide the firm now and through the economic recovery.”
Write to Austin Kilgore.
For Missouri borrowers, nearly nine times as many loans serviced by Citigroup (C: 30.87 +1.61%) avoided foreclosure than those that foreclosed in Q309.
The ratio in the third quarter of 2008 was 3.4 to 1. Since the beginning of the mortgage crisis in early 2007, Citi found financial solutions for 715,000 homeowners, representing $79bn in underlying mortgages.
As of September 30, 2009, CitiMortgage, Citi’s servicing division, had started modifications on 33% of its eligible portfolio under the Home Affordable Modification Program (HAMP), through which the US Treasury Department allocates capped incentives to participating servicers.
The data on Citi's workout efforts comes as part of preliminary results of a forthcoming quarterly report. Citi releases data on its foreclosure preventionefforts in 22 states every quarter. The latest edition will be released in the coming weeks.
“We are committed to working with community leaders, elected officials and organizations throughout Missouri and the country to identify how we can together best help provide assistance and relieve the economic pressures homeowners face,” said Vikram Pandit, Citi’s CEO. “Citi recognizes the obligation we have to use our global strength to help fuel the economic recovery through responsible programs and actions that support American families, communities and businesses. We intend to deliver on that obligation.”
Write to Jon Prior.
Statewide home sales in Illinois experienced the first quarterly year-over-year increase in more than three years during Q309, according to the Illinois Association of Realtors (IAR).
Sales of single-family homes and condominiums totaled 32,460, up 0.3% from 32,358 in Q308. The median sales price in Q309 was $165,000, down 12.9% from $189,500 in Q308, the association said.
IAR credited the first-time homebuyer tax credit for the improved results during the quarter, but said an increase in entry-level home and distressed property sales is continuing to exert downward pressure on prices.
The average interest rate for a 30-year fixed-rate mortgage (FRM) was 5.28% in the region, according to the Federal Home Loan Mortgage Corporation. It marks an increase from 5.07% during Q209 and a decrease from 6.44% in Q308.
In the quarter, 21,298 homes sold in the Chicago metropolitan statistical area (MSA), up 2.4% from 20,802 in Q308. The median sales price for the Chicago area was $205,000, down 16.3% from $244,900 in Q308. The MSA includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties.
Year-over-year sales for the third quarter were up in 47 of 100 Illinois counties, including Adams (11.1%), Boone (14.6%), Champaign (6.6%), Cook (4%), DuPage (3.6%), Kankakee (3.6%), Lake (2.9%), Sangamon (10.6%) and Will (0.9%).
Year-over-year median home sales prices for the third quarter were up in 37 of 100 counties, including Knox (2.9%), Logan (2.6%), McDonough (15.7%), Peoria (7.2%), Rock Island (3.8%), Sangamon (3.3%) and Vermilion (2.4%).
Write to Austin Kilgore.
Bank of America (BAC: 7.29 -0.14%) extended nearly $184bn in new credit during Q309, bringing the total of new credit issued for the first nine months of the year to $759bn.
During the quarter, BofA originated $96bn in first mortgages for nearly 450,000 borrowers purchase homes or refinance mortgages. During the first nine months of the year, the bank said its originated $292bn in first mortgages for more than 1.3m borrowers.
BofA's $759bn in new credit extended is equal to nearly $17 for every $1 of the $45bn of Troubled Asset Relief Program (TARP) funds it received from the federal government. By November 16, Bank of America will pay more than $2.5bn in dividend payments to the US Treasury Department.
“As households and communities across America continue to feel financial strain, we are working hard to revitalize the US economy by making every good loan that we can to individuals, businesses of all sizes, and municipalities and nonprofits across the country," said Bank of America’s consumer policy executive Andrew Plepler. “We are hopeful that our ongoing efforts will not only improve economies across America, but also provide consumers the relief they need during these difficult times.”
Bank of America said it’s increased its default servicing staff 55%, and has more than 11,000 employees who handle mortgage loss mitigation. During the past 21 months, Bank of America modified 445,000 mortgages, an average of more than 21,000 per month through its own modification program. In addition, it has nearly 100,000 borrowers in the trial period of Making Home Affordable Modification Program (HAMP) workout plans.
In addition, Bank of America said its spent more than $10.5m to help tenants and owners of foreclosed properties with relocation fees during the quarter, bringing the year-to-date total of more than $31.5m to help 10,100 individuals. Its real estate-owned (REO) program also provides technical assistance to more than 70 communities and weekly REO information to 190 jurisdictions.
The bank also said it originated nearly $3bn in home equity and reverse mortgage loans during the quarter, bringing the year-to-date total to more than $10bn. Lending to low- and moderate-income customers totaled more than $23bn in mortgages during the quarter, for 154,000 borrowers. Year-to-date total is $64bn for more than 410,000 borrowers.
Write to Austin Kilgore.
Most renters in multi-family properties continue to make payments with their checkbooks despite significant investments by apartment firms to offer online and automated payment systems, according to a report from the National Multi Housing Council (NMHC).
NMHC represents the the interests of apartment firms in the US. Researchers surveyed 110 leading apartment firms and found that 76% of renters pay their rent with a check delivered to the office, while 12% pay via credit card and only 10% use an automated bank transfer.
Renters still write checks despite 74% of firms allowing renters to use credit cards to pay rent and 81% allowing online payments. Only 18% of payments are made online, according to the study.
Even though apartment firms can scan the checks for faster processing, over 66% of the check payments received are manually processed. Rather than developing their own system, 70% of the firms use a third-party to provide automated payment systems.
The main obstacle for encouraging online rent payments is the convenience fee banks charge firms that accept credit cards, and 79% of those firms pass the fee on to the residents.
"To overcome these obstacles, the industry will need to aggressively promote the use of automated payments by ensuring that both residents and property-level staff know how and what type of automated payments make sense,” said David Cardwell, vice president of technology at NMHC. “And the industry's technology partners must work with apartment owner/operators to address the integration problems.”
Write to Jon Prior.
The US Treasury Department is denying the request of mortgage giant Fannie Mae (FNM: 0.00 N/A) to transfer half of the equity interests in its low-income housing tax credit (LIHTC) investments to unrelated third-party investors.
After posting a $19.8bn quarterly net loss, Fannie asked its conservator, the Federal Housing Finance Agency (FHFA), to submit the request on its behalf. FHFA also requested on Fannie's behalf another $15bn draw on the Senior Preferred Stock Purchase Agreement with the Treasury, to cover Fannie’s net worth deficit as of September 30.
Fannie said in a Securities and Exchange Commission (SEC) filing Monday that the LIHTC request, if granted, would allow the investors to receive substantially all the tax benefits from the LIHTC investments for a specified amount of time. At that later date, the percentage of tax benefits received by the investors would automatically reduce, while the percentage of tax benefits Fannie could receive would increase by the same amount.
But the Treasury on Friday informed the FHFA and Fannie it would not consent to the proposed transaction.
An Administration official confirmed to HousingWire the request is being denied.
"It is our view that the proposed sale would result in a loss of aggregate tax revenues that would be greater than the savings to the federal government from a reduction in the capital contribution obligation of Treasury to Fannie Mae under the [Senior Preferred Stock Purchase] Agreement," the official said in an e-mailed statement. "In short, withholding approval of the proposed sale affords more protection of the taxpayers than does providing approval."
Fannie said Monday it would consider other options, although it may be difficult to sell or transfer the LIHTC investments under current constraints and market conditions. If attempts to sell or transfer are unsuccessful, Fannie warned it may have to record an "other-than-temporary" impairment in Q409 that could reduce the LIHTC investments' carrying value to zero.
As of September 30, the carrying value of Fannie's LIHTC investments was $5.2bn.
"If we record an impairment, our net worth will be reduced by an amount equal to the impairment," Fannie said in the SEC filing. "Because we expect to have a net worth deficit in future periods, the impairment will increase the amount that would be requested from Treasury by FHFA on our behalf under the senior preferred stock purchase agreement."
Write to Diana Golobay.
More investors are applying for real estate rehab loans, or loans made to investors and collateralized against the quick-sale value of the property for which the loan is made, according to ZINC Financial.
ZINC Financial provides investment rehab loans that help investors leverage their capital to acquire and rehabilitate properties.
Also known as a hard money loan, lenders often structure a rehab loan based on a 60 to 70% loan-to-value (LTV) ratio — an amount the lender could expect to get from the sale of a property within one to four months of default, according to ZINC’s Website.
In anticipation of increased demand of rehab loans throughout 2009 and into 2010, ZINC launched its Investor Rehab Program, which provides investors with a possible seven-day submission process.
Investors should have no shortage of inventory as analysts at RealtyTrac, a real-estate data provider, anticipate a peak of foreclosures in 2010.
Write to Jon Prior.
The National Association of Realtors (NAR) acquired certain licensed data and secured data aggregation services from LPS Real Estate Group, a division of real estate technology provider Lender Processing Services (LPS: 16.78 +1.39%).
With the software, NAR can create and maintain the Realtors Property Resource (RPR), a database of all properties in the US. NAR said when its database launches in Q210, it will include more than 147m individual properties.
The database will include public record information including tax and assessment data, liens, zoning, permits, environmental information, and information on neighborhoods, school district and community demographics, along with search features, market-to-market comparisons and referral opportunities, NAR said.
“RPR will give Realtors nationwide data on all properties at their fingertips so they can respond quickly to consumers interested in residential and commercial real estate,” said NAR president Charles McMillan, a broker with Coldwell Banker Residential Real Estate in North Texas.
The database is not a national multiple listing service (MLS), NAR said, and will carry no offers of cooperation and compensation. It will only be available to NAR members and will eliminate their need to purchase data from third-party aggregators.
A wholly-owned NAR subsidiary, Realtors Property Resource will be led by CEO Dale Ross, co-founder of the Metropolitan Regional Information System, and president Marty Frame, former Cyberhomes general manager.
Write to Austin Kilgore.
The count of non-performing and re-performing loans within non-agency or private-label mortgage-backed securities (MBS) slipped 0.48% to 2.36m in October, from 2.37m in September, according to Amherst Securities Group.
The firm now sees $965.4bn of private-label MBS in performing status the end of October, $476.5bn of MBS non-performing and $115.6bn of MBS re-performing.
Despite the slight monthly decline in the volume of non- and re-performing private-label MBS, the gap between always performing balance and non- or re-performing continued to narrow in the month as the new default rate rose, according to Amherst data.
The firm indicated 1.9% of the month-end balance — or $17.9bn — of always performing loans transitioned to non-performing status in October, while 11.5% — or $13.3bn — of re-performing loans transferred to non-performing status.
Prepayment speeds among 2004 through 2007 vintage MBS continued to narrow across the board in October, particularly among Alt-A and Prime MBS.
Write to Diana Golobay.
A new program aims to connect lenders, servicers and investors with independent property managers to handle tenant-related issues on recently foreclosed properties.
The National Residential Property Receivership Program is a partnership between Carrollton, Texas-based specialty servicer Wingspan Portfolio Advisors and the American Legal and Financial Network (AFN), a network of mortgage banking and legal professionals.
The program was created in response to the Protecting Tenants at Foreclosure Act (PFTA), which was signed into law in May and requires lenders who repossess properties to maintain a tenant’s lease until its expiration and affords tenants of foreclosed homes without leases 90 days to vacate a property.
“When borrowers own property, they are required by the lender to make payments and maintain insurance to safeguard the home,” said William LeRoy, AFN president and CEO. “Under the new legislation, when lenders take the property back, many new responsibilities shift to them. They include duties to tenants, who are often the previous owners, and to local municipalities, which impose penalties if the real estate is not properly maintained.”
The problem, LeRoy said, is that lenders, investors and servicers aren’t equipped to handle the demands of being a landlord. In some cases, courts will appoint receivers to handle the property management for a lender who forecloses on a borrower.
The program provides personnel from Wingspan’s residential receivership department, property managers that specialize in tenant housing, and lawyers from AFN, to work on behalf of the lender, servicer or investor.
“Receivers stand in the shoes of the lender and administer the needs of the property,” said Wingspan CEO Steven Horne. “They are often the best option for lenders when faced with the challenges of servicing tenant-occupied properties, impaired or abandoned houses, or properties with unfinished construction.”
Write to Austin Kilgore.
