Mortgage Market Roundup, Sept. 25
Lennar Sees Worst Loss in Over 50 Years: Lennar Homes yesterday reported a shocking $514 million loss for its third quarter, ended August 31. That's a loss of $3.25 per share, when analysts has expected losses equaling roughly 55 cents per share -- not surprisingly, the home builder said it's got some laying off to do. Lennar CEO Stuart Miller explained the poor results as reflective of the poor housing market, and in part he said the lack of sales were due a mortgage market that "has continued to redefine itself." Countrywide stays on the offensive: After touting its loss mitigation focus earlier this week, Countrywide said today that it's now going to invest in a road show targeting open houses across the United States. The hook? The Calabasas, Calif.-based lender wants "to educate home buyers about the basics of the real estate market and give them the tools they need to shop for a home." Apparently, Countrywide doesn't feel that the realtors involved in either hosting or showing the home to their clients are doing a good enough job on this front ... Interestingly enough, the press release noted that Countrywide saw a 40 percent bump in customer inquiries after the rate cut -- although it isn't clear what these calls were about. (If these calls were primarily existing borrowers looking to refi out of a current adjustable rate product, I'd be curous to know how many actually could qualify under the more stringent lending guidelines now in place; but that's a seperate story.) A little pat on the back: One of the better-read posts this past week here at Housing Wire has been a story looking at how futures investors are reading the direction of key housing markets across the U.S. -- hat tip here to an HW reader from TFS Derivatives for sharing the key stats with me. It's been gratifying to see other media outlets jump on the story subsequent to my post, primarily because I think the emergence of multi-year housing futures is so profound that it deserves to be disseminated among an even broader audience than just the hundreds of thousands of HW readers that visit this site each month. Towards that end, the whip-smart team over at Inman News today has a guest column written by Stephen Bedikian from RealIQ, who tackles the most common issue about the new futures contracts -- just how accurate are the numbers, anyway? His take is that investor's expectations appear to be "reasonable," given the context of prior real estate downturns. Freddie grows, but delinquencies rising: Freddie Mac said today that its housing portfolio grew at the fastest rate since 2005, as the GSE jumped into the secondary markets and bought up cheap paper. Freddie Mac's monthly volume summary said that its mortgage portfolio grew 19.3 percent to $732.2 billion, while total delinquencies reached their highest level in over one year. Sources had suggested to me earlier in the month that both GSEs are seeing early evidence of increased foreclosures in their portfolios, and the upward trend in delinquencies at Freddie would seem to support this notion. (That being said, total delinquences only managed to top out at 0.44 percent of all loans -- not exactly a glut.) American Home: Bankrupt American Home Mortgage Investment Corp. said in a press statement that it had resolved a number of issues that had been dogging the company's servicing ops, at least in the press. First up, American Home said it had resolved problems that caused more than 500 homeowners property tax checks to bounce. Second, American Home said it reached an agreement with both Freddie Mac and Ginnie Mae over the servicing of each company's respective loans (see here for my original post), helping pave the way for an expected sale of the servicing platform. That sale may land in the lap of billionaire investor Wilbur Ross, who was named the lead bidder by American Home and has bid $435 million for the servicing portfolio.