Archive for December, 2009
The Florida Supreme Court yesterday adopted a mediation program to reach out to borrowers facing foreclosure, according to a court order. The bill may help aid distressed borrowers who are too far along in the foreclosure process to benefit from next year's Home Affordable Foreclosure Alternatives Program (HAFA)
The Task Force on Residential Mortgage Foreclosure Cases was established in late March to respond to the nation’s third highest mortgage delinquency rate by state; its worst foreclosure inventory; and the most foreclosure starts in the nation. At the end of 2009, the state estimates 456,000 pending foreclosure cases statewide.
The 15-member task force issued a final report in August recommending the program and identifying a lack of communication between plaintiffs and borrowers as the largest impediment to early resolutions in the foreclosure process.
Under the statewide managed mediation program, all foreclosure cases in the state courts that involve residential property will be referred to mediation.
According to the court order, the non-profit mediators should be independent of the judicial branch, capable of operating without funds from the court, be politically and professionally neutral and must be able to handle the high volume of foreclosure actions.
Under the order, the mediation manager must schedule a mediation no earlier than 60 days and no later than 120 days after the suit is filed and is responsible for contacting the borrower to explain the program.
Write to Jon Prior.
The Miami Dade County Clerk of Courts dismissed a $48.5m foreclosure lawsuit filed by Capmark Bank against the owners of a rental community in Florida, according to an announcement from Sky Development.
According to a review of court documents, Capmark filed the suit on July 21, 2009 against Vista View Apartments and Yizhak Toledano, the owner of Sky Development and previous owner of the 308-unit rental community in Sunny Isles Beach, Fla. operating as Beach Place Luxury Rentals.
Capmark Financial Group is a commercial real estate lender based in Utah. In October, it filed for Chapter 11 bankruptcy as part of a reorganization following a $1.6bn Q209 loss. According to a statement, Capmark Bank, its subsidiary, received $600m in equity to resume business.
Earlier in December, Capmark Financial Group completed the sale of its North American servicing and mortgage banking business Berkadia Commercial Mortgage.
Write to Jon Prior.
Pacific Marketing Associates, which provides sales and marketing services for real estate developers in California, anticipates increased demand and limited supply will boost prices in the condominium market.
The prediction goes against expectations that new guidelines from the Federal Housing Agency (FHA) would constrict financing for condos.
Paul Zeger, president and founder of Pacific Marketing Associates, said several factors are pushing average sales prices up in the mid-range market, especially in the Bay Area.
Year-over-year sales jumped for the second straight month in many markets, such as Contra Costa County. Prices also increased from Oct. 2009 to Nov. 2009 by 8.5%.
“If you want new construction, demand will soon outstrip supply, but other factors such as interest rates and availability of home loans will also have an effect,” Zeger added.
Low interest rates, federal benefits and FHA loans are pushing prices when the inventory of condos priced below $729,000 is not being refilled and current sales deplete the inventory, Zeger said.
He pointed to an 87-unit boutique condo development in downtown Walnut Creek that’s one-third sold or in contract. The average price-per-square-foot is running at $467, compared to $310 for other condos in the area. In January 2010, Zeger said, the availability of FHA loans should spark an immediate sales push.
Write to Jon Prior.
PMI Mortgage Insurance (PMI) sold its entire investment in RAM Holdings, a subsidiary of RAM Reinsurance Company.
The terms and conditions of the sale were not disclosed, but RAM Holdings stock is currently trading at $0.41 a share, down from $0.50 last week, sources told HousingWire.
Through its subsidiary, RAM Reinsurance Company provides reinsurance for public finance and structured finance obligations already insured by monoline financial guaranty companies. Primary insurers use reinsurance for protection against deep losses, to limit liability against specific risks and to share liability when those losses overwhelm its capital reserves.
PMI impaired its investment in RAM Holdings in 2008, meaning its credit quality rating fell below investment grade, and reduced the carrying value of the investment to zero.
Standard & Poor’s downgraded PMI’s own credit rating, along with four other mortgage insurers, last week as continued losses on insurance claims exceed previous expectations. PMI’s credit rating fell from double-B minus to B plus.
Other mortgage insurers continue to face difficulties as last week, Bank of America’s (BAC: 7.29 -0.14%) Countrywide Home Loans unit sued Mortgage Guaranty Investment Corp. (MTG: 4.14 +6.98%), citing that the mortgage insurer denied millions in claims.
According to PMI’s announcement, the sale allows the company to focus on its core US mortgage insurance operation, and the proceeds from the sale will add to PMI’s liquidity position.
Write to Jon Prior.
Disclosure: the author holds no relevant investments.
Zenta Mortgage Services will create 1,002 jobs in Charlotte, N.C. over the next five years, according to an announcement from Gov. Bev Perdue. The announcement comes in the face of market research that shows the city is likely to lose 50,000 jobs yearly due to adverse economic conditions.
Based in New York, Zenta is a global financial services outsourcing company, providing mortgage services and real estate analysis. The company currently employs 237 workers in Charlotte and plans to begin hiring in January 2010.
Zenta will make the expansion after the state’s Economic Investment Committee voted to award it a Job Development Investment Grant (JDIGs). The grants are performance-based incentives awarded only to new and expanding businesses and industrial projects whose benefits exceed the costs to the state and would not occur in North Carolina without the grant. Companies do not receive any funds up front and must meet job creation, retention, average wage and investment criteria to receive grant funds.
The funds equal 60% of the state personal income withholding taxes generated by the new jobs for every year the company meets the requirements, up to nine years. Zenta could receive up to $8.6m in maximum benefits.
It could be good news for the less prosperous counties in North Carolina as well. When a JDIG is awarded in one of the state’s healthier counties, 25% of the grant is allocated to the Industrial Development Fund to spur economic growth in harder hit areas. With the JDIG grant going to Zenta, up to $2.87m could be added to the fund.
Even though Charlotte’s Mecklenburg County is healthier than some in North Carolina, the city needed the jobs. According to a recent report from John burns Real Estate Consulting (JBREC), Charlotte’s housing and job market has fallen into distress, compared to Raleigh, N.C. Jobs are leaving Charlotte on a 12-month pace of -5.7%, translating to 49,000 jobs a year.
But Zenta’s CEO Henry Hortenstine said the Charlotte market has a talented supply of financial services professionals.
“The company had alternatives to Charlotte but in the end this was the right decision for Zenta. We are excited about our continued and expanded presence in Charlotte,” Hortenstine said.
Write to Jon Prior.
