Monday Morning Cup of Coffee takes a look at news crossing HousingWire's weekend desk, with more coverage to come on bigger issues.
Hear it first at HousingWire:
VRM Mortgage Services announced that it has listed, managed and sold more than 500,000 REO properties since the company was founded eight years ago, the most of any asset manager outsourcer over that period, according to the company. The properties represent more than 50 billion in asset transactions.
"While we’re proud of this major milestone in the company’s history, we’re even prouder of the positive impact we’ve had in neighborhoods across the country,” said Keith Murray, founder, president and CEO of VRM Mortgage Services. "For every property we manage, we are helping our clients manage risk and loss severity, hiring local vendors, preserving property values, and injecting business and life back into local communities.”
VRM, founded in 2006, quickly became the primary asset management vendor for Freddie Mac and later for Fannie Mae. The company has since added rental management, property preservation, inspections, title and closing and other services to its offerings.
It's officially June, but the severe weather last winter is still haunting the economy, at least if you believe the reporting that links the contraction of GDP in the first quarter to the prolonged cold. The commerce department released revised GDP numbers on Thursday that showed the economy contracting by 1% in the first quarter — the first time in three years the GDP has shrunk.
The coverage from the New York Times on the cause of the contraction remains typical:
Most economists on Wall Street and at the Federal Reserve blame a very cold winter for much of the slowdown. Experts are now predicting that the annual pace of growth will rise to between 3% and 4% in the current quarter, and data so far for April and May appears to be much more robust.
Temperatures in the Northeast and parts of the Midwest were indeed frigid, but data released by NOAA in March showed that this winter ranked as the 34th coldest winter on record, with the extreme cold of some parts of the country balanced by warmer-than-average temperatures in the Southwest and Florida, with Arizona, California, and Utah each recording February temperatures that ranked among the ten warmest on record.
Weather or not, the weakness in the economy is troubling. Redfin's chief economist, Nela Richardson, had this to say on NPR's Marketplace roundup on Friday:
"What it would take for us to reach the 3% that the Fed has been forcasting is for us to grow in the second half of this year by 5%... I just don't see any evidence of where this growth is going to come. And the reason I'm so troubled is because business investment plumeted so much... There's no indication that the seeds of growth that would hit 5% in the second half of the year are actually starting to bloom in the spring swoon."
Especially if the weather isn't to blame after all. Breitbart has an interesting piece that looks at three troubling parts of the Commerce Department's report which have nothing to do with freezing temperatures or record snow.
The GDP was down in the first quarter, but don't blame luxury home buyers — they are one sector of the housing market that continues to improve. Sales of the priciest 1% of homes have risen 21.1% so far this year, and it seems every week features a new listing that breaks a record. But not every luxury home fares as well. Here's one Atlanta home originally listed for $50 million that has been reduced to a mere $16.75 million. You won't see that kind of markdown in California, which boasts six of the top 10 luxury home markets in the country.
The FDIC reported that one bank failed in the week ending May 30 — Slavie Federal Savings Bank of Bel Air, Maryland, was acquired by Bay Bank FSB.
Slavie Federal Savings Bank had approximately $140.1 million in total assets and $111.1 million in total deposits. Bay Bank will pay the FDIC a premium of 0.2% to assume all of the deposits. In addition to assuming all of the deposits of the failed bank, Bay Bank, FSB agreed to purchase approximately $129.9 million of the failed bank's assets.
The FDIC will retain the remaining assets for later disposition and estimates that the cost to the Deposit Insurance Fund will be $6.6 million.