Monday Morning Cup of Coffee: Greece approves economic reforms
A look at stories across HousingWire's weekend desk, with more coverage to come on bigger issues:
Eurozone finance ministers are set to approve a bailout package for Greece on Monday, Austrian Finance Minister Maria Fekter said on Sunday.
"At the moment it appears it will go exactly this way," Fekter said about the approval and also Greece staying in the euro zone.
Greece's cabinet on Saturday approved a final set of austerity steps sought by the European Union and International Monetary Fund as a condition for a $171 billion rescue package.
On Sunday, the U.S. encouraged the IMF to support the agreement.
"We welcome the program of economic reforms agreed to by the Prime Minister of Greece and the coalition parties, and the public statement of support from the major economies of Europe," U.S. Treasury Secretary Timothy Geithner said. "This is a very strong and very difficult package of reforms, deserving of support of the international community and the IMF."
Discussions regarding the reforms included how much the private sector would contribute, how much will come from the European Financial Stability Facility and European Stability Mechanism safety nets the eurozone has up, and how much leverage the rescue funds can manage to arrange.
This week's stock tradings will shadow the developments in Europe this week, with fourth quarter earnings season nearly finished and few major U.S. economic data reports on the agenda. The Dow closed at 12,949.87, within striking distance of 13,000, a threshold not reached since May 2008.
Stay tuned this week for HousingWire's coverage of the Mortgage Bankers Association's National Mortgage Servicing Conference & Expo 2012 in Orlando, Fla.
Regulators, attorneys and others will explore the details of the $25 billion AG settlement and how it will impact servicing going forward. Speakers at the event include CNN political analyst Paul Begala and Homeownership Preservation Office Chief Darius Kingsley.
The payroll tax cut extenstion that cleared Congress on Friday broadens the base of workers who receive help from the nation's unemployment insurance program.
The $150 billion bill that extends through December a cut in workers' payroll taxes to 4.2% from 6.2%, prevents a steep drop in doctors' Medicare compensation and renews expiring unemployment benefits, The Wall Street Journal reports.
Other provisions will make long-term changes to jobless insurance.
The bill reportedly expands a program known as "work sharing" that uses unemployment insurance funds to supplement the paychecks of employees whose hours have been reduced as part of a company's cost-cutting.
Also, more funds will go to programs like Georgia Works, in which workers collect unemployment while receiving training from companies. And self-employed workers, such as entrepreneurs, will receive jobless benefits similar to those of other workers.
Homebuilders should look at changes in consumer attitudes behind the lower home prices, according to John Burns Real Estate Consulting. Houses that sell between $200,000 and $300,000 are becoming the norm.
Since new-home prices peaked in 2007, new single-family sales of more than $500,000 have fell from 13% to 6% of the market, John Burns notes. Sales of new homes priced under $300,000 account for about 75% of new single-family deals. The West experienced a radical shift, with newly constructed homes under $200,000 doubling their share to 24% of sales in 2011.
"Our surveys and our consulting work show that today's buyer is frequently very focused on affordability, and this broad macro theme will continue to play itself out in the new home space during 2012," the firm said.
There were no banks closures last week, according to the Federal Deposit Insurance Corp.
Seven banks failed in January, up from two in December. The pace of closures in January was slightly below the 2011 average of 7.7 per month. Analysts at Trepp said earlier this month they expect fewer failures in February — so far two have occurred — and March than in January.
"We expect closures to extend through 2012 and possibly beyond," they said. "Much will depend on the strength of the economy in general, and real estate market conditions in particular."
As of the fourth quarter, Trepp deemed 226 banks as facing a high risk of failure. Six of them failed during January. Among the remaining high-risk banks, the greatest institution counts are in Georgia (45 banks), Florida (37), Illinois (27), Minnesota (15), Tennessee (12) and North Carolina (11).
"These states are most likely to continue to experience bank failures in the months ahead," the analysts said.