Archive for December, 2011
Sales of existing homes rose 4% in November, according to the National Association of Realtors, which is revising its benchmarks for sales and inventory data since 2007.
The trade group said sales of single-family homes, townhomes, condos and co-ops increased to a seasonally adjusted rate of 4.42 million units from 4.25 million in October.
NAR said November existing home sales were 12.2% higher than 3.94 million a year ago.
Lawrence Yun, chief economist at NAR, said existing home sales reached a 10-month high in November, as people are taking advantage of a buyer's market. Yun said the current pace is 34% higher than the middle of 2010, and "a genuine sustained sales recovery appears to be developing."
Earlier Wednesday, CoreLogic (CLGX: 14.56 +0.62%) said home prices across the country are dropping as the glut of distressed properties continues to plague the real estate economy.
Potential homeowners also have access to the lowest mortgage interest rates in 40 years. Freddie Mac recently reported the average 30-year, fixed rate fell to 3.94% from 3.99% a week earlier and 4.83% a year ago.
"With record low mortgage interest rates and bargain home prices, NAR's housing affordability index shows that a median-income family can easily afford a median-priced home," according to Moe Veissi, president of the trade group and broker-owner of Veissi & Associates Inc. in Miami.
NAR said the median price of all homes sold in November was $164,200, down 3.5% from a year earlier. Sales of distressed properties accounted for 29% of all sales last month, which is up slightly from October and down from one-third of all sales a year earlier.
"With record low mortgage interest rates and bargain home prices, NAR's housing affordability index shows that a median-income family can easily afford a median-priced home," according to Moe Veissi, president of the trade group and broker-owner of Veissi & Associates Inc. in Miami.
NAR also revised benchmarks on existing home sales for the past four years. There were 4.19 million existing homes in 2010, which is down 14.6% from prior estimates of more than 4.9 million sales last year. The trade group lowered sales and inventory by 14.3% for 2007 through 2010, and expects the change to impact upcoming GDP revisions by the federal government.
The trade group said the housing inventory at Nov. 30 decreased to 2.58 million existing homes for sale, representing a seven-month supply, which is down from 7.7-months supply at Oct. 31.
"Since setting a record of 4.04 million in July 2007, inventories have trended down and supplies are moving close to price stabilization levels," Yun said.
Single-family homes sales increased 4.5% in November to an annual rate of 3.95 million from 3.78 million a month prior and rose 13% from 3.5 million a year earlier. The median price of an existing single-family home dipped 0.2% to $164,100 in November.
Write to Jason Philyaw.
Follow him on Twitter: @jrphilyaw.
Tags: 30-year fixed, benchmarks, broker-owner, CoreLogic, distressed properties, existing home sales, freddie mac, GDP, housing inventory, interest rates, mortgage, NAR, National Association of Realtors, re-benchmarking, real estate agents, seven-month supply, Veissi & Associates Inc.
Posted in Origination/Lending, Top Stories | 2 Comments »
Homebuilder KB Home (KBH: 9.85 +1.55%) ended the fourth quarter on a muted high note with the firm still profitable, despite a decline in earnings, and a 38% year-over-year jump in net home orders.
The fiscal year for the homebuilder ends Nov. 30.
The Los Angeles-based builder posted a fourth-quarter profit of $13.9 million, or 18 cents per share. That is down from a profit of $17.4 million, or 23 cents per share, a year earlier. Still, the builder beat the street estimate of earnings in the three cent-per-share range, according to Yahoo! Finance.
Meanwhile, home building revenue in the fourth quarter shot up 6% from $451 million in the fourth quarter of last year to $479.9 million in the most recent period. Revenue also grew during the period due to a 4% increase in the number of homes delivered and a 3% uptick in the average home selling price.
Net orders for the period grew from 1,085 last year to 1,494 in 4Q. By Nov. 30, the company had 2,156 homes in backlog, compared to 1,336 in 2010.
The average selling price in the fourth quarter hit $232,400, compared to $232,500 a year earlier.
Positive developments on the revenue side were offset by a $19.9 million, or 36%, increase in fourth quarter selling, general and administrative expenses.
The company spent $55.7 million in the year-earlier quarter on expenses, and that number shot up to $75.6 million in 4Q of 2011.
Write to: Kerri Panchuk.
Tags: earnings, home builder, KB Home, revenue
Posted in Origination/Lending, Top Stories | No Comments »
National home prices continue to be pressured by a stream of distressed properties that threaten to push prices even lower, a CoreLogic (CLGX: 14.56 +0.62%) report said Wednesday.
The nation's shadow housing inventory stood at 1.6 million units, or a 5-month supply, in October, suggesting little movement in the past six months.
That number remains consistent since July, but is down from 1.9 million units last year, as lenders clear properties through short sales and REO dispositions, the data analytics firm said.
Still, for every two homes available for sale, two are classified as in the "shadows," according to CoreLogic. The nation's shadow housing inventory currently represents half of the 3 million properties with seriously delinquent mortgages.
Of the 1.6 million properties now in the shadows, 770,000 units are seriously delinquent, 430,000 are in foreclosure and 370,000 are in REO.
Many of the distressed properties are in Florida, California and Illinois, which cumulatively account for more than one third of the entire shadow inventory. Other states with a large supply of homes include New York, Texas and New Jersey.
The current shadow inventory is four times higher than it was at the peak of the housing bubble in mid-2006. Generally, a healthy housing market has less than one-month's supply of inventory, CoreLogic said.
"The shadow inventory overhang is a large impediment to the improvement in the housing market because it puts downward pressure on home prices, which hurts home sales and building activity while encouraging strategic defaults," said Mark Fleming, chief economist at CoreLogic.
Write to: Kerri Panchuk.
Tags: CoreLogic, shadow housing inventory
Posted in Servicing/Default, Slider | 4 Comments »
Mortgage applications filed in the United States fell 2.6% for the week ending Dec. 16 as a surge of refinancings weakened on uncertain economic data.
The Mortgage Bankers Association's Weekly Mortgage Applications Survey – a measure of loan application volume – declined 2.6% from last week as both refinancing and purchase activity died down.
The change comes after a 4.1% surge in apps last week when low interest rates spurred a new round of refinancing activity.
The seasonally adjusted purchase index fell 4.9% from a week earlier, while the refinance index declined 1.6% from a week prior.
"Continued anxiety surrounding the fragile economic situation in Europe led interest rates lower last week. However, refinance applications fell slightly, and purchase applications dropped further as we head into the end of the year," said Michael Fratantoni, MBA’s vice president of research and economics. "Remarkably low rates are not enough, as many homeowners continue to hold back due to lack of equity in their properties, poor credit and a weak job market."
The refinance share of mortgage activity grew to 80.7% of all applications this past week, up from 79.7% a week earlier.
Mortgage rates last week continued to fall, with the 30-year, fixed-rate mortgage for conforming loan balances of $417,500 or less dropping to 4.08% from 4.12% a week earlier. The 30-year, FRM on jumbo loans valued at $417,500 or greater edged down to 4.44% from 4.47% the previous week.
The average, 15-year FRM fell to 3.39%, its lowest rate all year. That compares to a rate of 3.44% a week earlier. Meanwhile, the 5/1 ARM fell to 2.90% from 2.93%.
Write to: Kerri Panchuk.
Tags: 15-year, 30-year, fixed-rate mortgage, FRM, mortgage applications, Mortgage Bankers Association, purchase applications, refinancing activity
Posted in Origination/Lending, Top Stories | No Comments »
The Urban Institute appointed Sarah Rosen Wartell as its new president, the research group announced Tuesday.
The nonpartisan, Washington-based firm looks at macroeconomic issues, including the housing crisis and its impact on communities.
Wartell, who co-founded the Center for American Progress, will succeed outgoing president Robert Reischauer at the end of February.
She also previously served as deputy assist for economic policy and deputy director of the National Economic Council under President Bill Clinton.
Joel Fleishman, chairman of the Urban Institute's board, said in a release Wartell "is widely respected for her strategic leadership, pace-setting innovations and policy expertise."
While at the Center for American Progress, Wartell directed the Mortgage Finance Working Group as well as a government performance program
A study released Monday by the Urban Institute said borrowers who took help from the National Foreclosure Mitigation Counseling program were twice as likely to receive a modification.
Write to Andrew Scoggin.
Follow him on Twitter @ascoggin.
Tags: Center for American Progress, foreclosure, housing crisis, loan modification, Sarah Rosen Wartell, think tank, Urban Institute
Posted in Origination/Lending, Top Stories | No Comments »
Versus Capital Advisors LLC rolled out a mutual fund Tuesday that offers investors direct access to real estate assets.
The Versus Capital Multi-Manager Real Estate Income Fund set up by the firm gives individual investors the opportunity to invest directly in real estate.
"We believe that owning direct real estate is a crucial part of a well-diversified portfolio and that individual investors deserve access to the best managers in an investor friendly structure," said Mark Quam, CEO of Versus Capital.
"We developed the fund to give investors direct access to core real estate funds sponsored by our approved institutional managers," he said.
The fund is set up as a real estate holding and is focused on income producing real estate funds.
The company's first objective is to obtain consistent income, while its secondary motive is to preserve capital and create long-term capital appreciation.
Write to: Kerri Panchuk.
Tags: direct real estate, individual investors, investor friendly, real estate assets, Versus Capital Advisors LLC, Versus Capital Multi-Manager Real Estate Income Fund
Posted in Secondary Market/Investors, Top Stories | No Comments »
Stocks jumped Tuesday with the Dow Jones Industrial Average back above 12,000, driven in part by news of an increase in housing starts.
The Dow increased 337.32 points, or 2.87%, to close at 12,103.58. Nasdaq and the S&P 500 rose 80.59 and 35.95 points, or 3.19% and 2.98%, respectively.
Homebuilder stocks showed significant gains, including PulteGroup (PHM: 7.79 -0.13%), D.R. Horton (DHI: 14.39 +1.91%), KB Home (KBH: 9.85 +1.55%), Toll Brothers (TOL: 22.47 +1.81%), Lennar (LEN: 22.28 +0.68%) and Ryland Group (RYL: 18.40 -0.97%).
Banks closed up on the day as well, with Bank of America (BAC: 7.29 -0.14%) back above the $5 mark. Citigroup (C: 30.87 +1.61%), Goldman Sachs (GS: 111.77 +2.96%), JPMorgan Chase (JPM: 37.21 -0.75%) and Wells Fargo (WFC: 29.60 +1.89%) made gains Tuesday as well.
Housing starts increased 9.3% in November from a month earlier, according to the Commerce Department. The month's totals also rose 24.3% from November 2010.
November's seasonally adjusted rate of 685,000 starts is the highest since April 2010.
Single-family housing starts, however, declined 1.5% from November 2010 to 447,000, according to the Census Bureau and Department of Housing and Urban Development. The measure rose 2.3% from October.
The Dow is up 4.54% on the year with Nasdaq and the S&P 500 down 1.85% and 1.3%.
Write to Andrew Scoggin.
Follow him on Twitter @ascoggin.
Tags: Bank of America, Citigroup, commerce department, D.R. Horton, Dow Jones Industrial Average, Goldman Sachs, housing starts, JPMorgan Chase, KB Home, Lennar Corp., NASDAQ, PulteGroup, Ryland Group, S&P 500, stock market, stocks, Toll Brothers, Wells Fargo
Posted in Secondary Market/Investors, Top Stories | 1 Comment »
The federal government is putting in place mortgage technology allowing its workers to track distressed loans via the Internet.
The eMason Clarifire application will become available through the General Services Administration for use by federal agencies in an effort to increase transparency in the mortgage mediation space.
The GSA is an arm of the federal government that helps manage the functioning of federal agencies. Among other duties, it supplies products and communications for U.S. government offices and develops government-wide cost-minimizing policies.
The Clarifire software should enhance the ability of government agencies such as the Federal Housing Administration and Freddie Mac to manage delinquency processes and the complex collaboration associated with these processes, the firm said.
It provides loan servicers and others involved in the mortgage mediation process secure workflow and uses a system to track cases in mediation. The Web-based location allows caseworkers to communicate, upload documents, audit the status of a mediation case and manage tasks.
In December 2010, the Clearwater, Fla.-based firm contracted with Fannie Mae to provide mortgage mediation tracking and management for the GSE in most parts of Florida. Clarifire was fully implemented by Fannie Mae and made available to about 400 servicers in its initial roll-out at the time.
eMason CEO Jane Mason said Clarifire can be used as a gateway for servicers, investors, brokers and borrowers to interact, as well as a single point of contact for borrowers in need of information about their loan options.
Write to Justin T. Hilley.
Follow him on Twitter @JustinHilley.
Tags: Clarifire, eMason, Fannie Mae, FHA, freddie mac, General Services Administration, GSA, GSE
Posted in Servicing/Default, Top Stories | No Comments »
Vertical Capital Markets Group is unleashing an investment concept on the market to simultaneously help financial firms saddled with undervalued mortgage assets and investors searching for yield on residential loans.
The firm launched its Vertical Capital Income Fund this year, and is currently building a portfolio of quality, performing residential loans secured by first liens or deeds of trust.
Vertical Capital told HousingWire it is purchasing mortgages in bulk directly from financial firms at affordable price points.
This discount, which typically runs 30% or more, allows the company to work directly with borrowers to restructure the loans and help quality borrowers, while still making money on the investments long-term. Vertical Capital says the firm even has the ability to lower the principal for borrowers, creating a scenario where the investment fund, investors, the borrower and the selling financial institution benefit from the placement of the asset under Vertical Capital's umbrella.
Gus Altuzarra, CEO of Vertical Capital Markets Group, told HousingWire that many financial firms ended up holding assets when the secondary mortgage market collapsed in 2008. "Their model was not one of making loans and keeping them," he said. "It was to securitize them. But when the secondary market fell apart, many financial firms were left holding assets that they never planned to hold in the first place."
This is where Vertical Capital steps in, Altuzarra said. The company reevaluates all of the mortgages it wants to acquire by conducting new underwriting on the borrowers. Valuable assets that come out as strong during the underwriting process are then acquired for investment purposes.
"The value of the asset is really important," Altuzarra said. "We use national firms to go out and look at these assets."
Not every financial firm carrying these assets is in a position to sell, Altuzarra told HousingWire. But when they can, the discounted sale is one way for financial firms to get fresh capital coming in.
As for the homeowner, Altuzarra paints a picture of relief for some quality borrowers who are upside down.
"They stay in the house (after we acquire the mortgage). They have renewed hope of someday paying off their loan, and they are no longer owing 200% of what their property is worth. Typically, we will take them down to the same level of the value of the home. They have a more affordable payment, and the fund generates income which is paid to the investor."
Meanwhile, Vertical Capital is paid a management fee.
In terms of underwriting, the fund is looking for mortgages where the borrower has a stake in the home either through a down payment or longevity formed by raising a family there long-term. Generally, the firm wants at least an 80% loan to value based on current property values and credit scores north of 620. Vertical Capital estimates that 90% of the loans in the fund are performing mortgages.
The company's group president Bayard Closser said in a statement, "One of the real attractions of this investment is it doesn’t correlate closely with equity and most bond markets, and whether equities or real estate go up or down, it essentially doesn’t matter. Through this structure, the fund will own the underlying collateral in the event of a loan default."
Write to: Kerri Panchuk.
Tags: affordable price points, mortgage assets, secondary mortgage market, Vertical Capital Markets Group
Posted in Secondary Market/Investors, Top Stories | No Comments »
A few weeks after losing one of its designated New York foreclosure law firms with the closing of the Steven J. Baum law offices, Freddie Mac added three firms to its New York network.
A spokesperson for the company confirmed Tuesday that it named the following businesses to its designated default law network in New York: Sheldon May & Associates, the Law Offices of Jordan Katz, and Sweeney, Gallo, Reich & Bolz.
"We are pleased to now have the ability to represent Freddie Mac as a member of Designated Counsel program in the State of New York and we are committed to ethically and vigorously representing the interests thereof," said Ted Eric May, managing partner with Sheldon May & Associates. "We believe that our receiving of this designation from Freddie Mac speaks to the professionalism of all of the members of our firm, our philosophy on how to represent our clients while adhering to best practices, and our unwavering commitment to serving our industry."
The additions come after Freddie Mac and Fannie Mae released a notice advising servicers to move all of their business from the Steven J. Baum law offices in New York state. Steven J. Baum P.C., one of New York's largest default services law firms and the subject of a recent federal investigation into its foreclosure processes, announced plans to shut down in late November.
Steven J. Baum announced its closing shortly after Fannie Mae and Freddie Mac sent out a directive to mortgage servicers ordering the transfer of all foreclosure and bankruptcy matters.
Write to: Kerri Panchuk.
Tags: Fannie Mae, freddie mac, Gallo, May & Associates PC, Reich & Bolz LLP, Sheldon, Steven J. Baum, Sweeney, the Law Offices of Jordan Katz
Posted in Servicing/Default, Top Stories | No Comments »
