Monday Morning Cup of Coffee takes a look at news crossing HousingWire's weekend desk.
As winter rushes in along following Hurricane Sandy, New York-area officials are concerned about the residents left after last week’s storm. 30,000 to 40,000 people in New York alone will be forced to find new homes, reported Mayor Michael R. Bloomberg on Sunday.
“I don’t know that anybody has ever taken this number of people and found housing for them overnight,” the mayor said. “We don’t have a lot of empty housing in this city. We are not going to let anybody go sleeping in the streets or go without blankets, but it’s a challenge, and we’re working on that as fast as we can.”
Unfortunately, New York is not the only area that will be affected by the cold weather. Residents in New Jersey and Connecticut can expect a similar problem. “This is going to be a massive, massive housing problem,” Gov. Andrew M. Cuomo said.
To read the entire New York Times article, click here.
Fitch Ratings is currently retrieving preliminary information in order to assess the impact of Hurricane Sandy. Although gathering a complete list of damaged properties could take some time due to the size of impacted areas, CMBS loan defaults could rise as quickly as the November 2012 distribution date.
Fitch doesn’t predict significant rating actions, as most commercial properties maintain property/casual insurance, windstorm insurance and 12 to 24 months of business interruption insurance. It is expected that some properties even have flood insurance coverage.
As FEMA continues to increase the number of disaster zones, preliminary lists will begin pouring in this week and early next week. It is expected that the damage will be significant and there is a potential for a large amount of business interruption claims as offices struggle with flooding issues.
Ongoing analysis by Fitch will reveal details on insurance coverage and ongoing assessment on the amount of time it will take for areas to fully recover.
HUD will accelerate federal disaster aid and offer assistance to homeowners and low-income renters who were vacated from their homes during Hurricane Sandy, U.S. Housing and Urban Development Secretary Shaun Donovan stated Sunday.
President Obama declared the Rhode Island counties of Bristol, Newport and Washington disaster zones, allowing HUD to provide foreclosure relief and other support to certain families in these counties.
“Families who may have been forced from their homes need to know that help is available to begin the rebuilding process,” said Donovan. “Whether it’s foreclosure relief for families with FHA-insured loans or helping these counties to recover, HUD stands ready to help in any way we can.”
2013 could see a boost in the economy as a result of post-Sandy construction hiring, analysts report. With $50 billion in estimated losses, it is inevitable that damaged homes, building, roads and bridges be rebuilt.
Construction firms, contractors and local governments will begin hiring in the first months of 2013. These jobs will be critical to the economy, offering higher pay than the average U.S. private-sector job.
Although economists warn the boost will be modest, a ripple effect is expected. Construction job growth will inevitably lead to a need for architects, real estate agents, office equipment and building materials.
"We will see not only construction workers in the northeastern part of the country, but workers from around the country will be flocking to the area," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University. "I think it will be a significant boost to the construction industry."
Wells Fargo asked that the lawsuit filed by the government regarding “reckless” lending under a government mortgage program be dismissed. The big bank argued that a previous legal settlement with the U.S. had alleviated those claims.
The mortgage-related abuses were settled by Wells Fargo in a $5 billion accord with 49 state attorney generals as well as a number of federal agencies in a deal approved in April. Therefore, Wells argued the lawsuits filed last month by the U.S. violated the previous settlement.
"Wells Fargo committed billions to the United States in settlement of the D.C. action and should be able to rely on the United States to observe and abide by its commitments and representations," the bank said in its filing on Thursday.
The U.S. Department of Housing and Urban Development, who oversees the FHA, was profoundly involved in the April settlement as well as the latest October lawsuit. Some say the FHA is suffering large losses that may clean out its reserves.
The Federal Deposit Insurance Corporation took over two banks this weekend. Citizens First National Bank, Princeton, IL was closed by the Office of the Comptroller of the Currency, and the FDIC was named Receiver. The FDIC estimates that the cost to the Deposit Insurance Fund will be $45.2 million.
Heritage Bank of Florida, Lutz, FL was closed by the Florida Office of Financial Regulation, and FDIC was named Receiver.
Heritage Bank of Florida had approximately $225.5 million in total assets and $223.3 million in total deposits. In addition to assuming all of the deposits of the failed bank, Centennial Bank of Arkansas agreed to purchase approximately $193.7 million of the failed bank's assets.
The FDIC will retain the remaining assets for later disposition.