Lowe’s [stock LOW][/stock] announced the closing of 20 underperforming home improvement stores this week. Ironically, the news came as a report showed a 9.5% rise in home remodeling activity in August. Lowe’s closed 10 stores on Oct. 16 and will shutter another 10 in the coming month. As Lowe’s announced a need to close stores to maintain a competitive financial position, the BuildFax Remodeling Index released a study showing that remodeling activity grew significantly in August, reaching a seven-year record high.
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As Bob Dylan first sang nearly 48 years ago: “The times, they are a-changin.” And it certainly holds true in the homebuilding profession, where builders are revamping product offerings to serve families with multiple generations living under one roof. A few years ago, 20-somethings, armed with a decent FICO score and a steady job, could easily qualify for a mortgage. Now we find ourselves in a world where homeownership is marred by tighter underwriting guidelines and a lack of secure employment among potential homebuyers.
Bank of America [stock BAC][/stock] mortgage servicing rights are already dropping as a result of lower interest rates, and exiting the correspondent lending channel will cost the bank even more. Mortgage servicing rights, or MSRs, are contractual agreements between a bank and a lender to service a mortgage for a fee. Buying and selling MSRs is a multibillion dollar market.
The Collingwood Group, a Washington-based business advisory firm, named Ray Romano senior adviser. The former Freddie Mac executive vice president and chief credit officer is expected to identify business opportunities for the firm that arise as a result of the housing crisis, the company said Tuesday. Romano brings risk-management expertise and executive leadership for consumer and multifamily mortgage products to The Collingwood Group. Vice Chairman Brian Montgomery said Romano’s strengths are highly valuable and needed in today’s mortgage market.
Homebuilder optimism climbed to the highest level since the federal homebuyer tax credit started in April 2010, according to the latest National Association of Home Builders index. The NAHB and Wells Fargo [stock WFC][/stock] survey builders to gauge perceptions of the new, single-family home market for the next six months. A score higher than 50 indicates more builders view the market as good than poor. The index rose to 18 for October from 14 for September. The index had ranged between 13 and 17 for the 12 months prior to October’s reading.
Institutional investment manager State Street Corp. [stock STT][/stock] saw its profit rise 5% in the third quarter, while earnings increased slightly over last year. State Street posted a profit of $543 million, or $1.10 a share in the third quarter. That compares to a profit of $540 million, or $1.08 a share, a year ago. Meanwhile, revenue jumped to $2.4 billion, up 5% from $2.3 billion.
While reverse mortgages were not the central topic of conversation, at the Mortgage Bankers Association conference last week in Chicago one reverse-specific information hub received quite a bit of attention. The conference, which had a strong forward focus for its 3,000+ attendees including insight from industry figureheads including government officials, housing economists, and political leaders […]
The evolution of reverse mortgage products, specifically the HECM, seems to have been stalled by the limited applicability and utility of the product in the broader perspective of retirement planning. A major cause of this stall can be attributed to an overreaction to a very limited but very problematic issue of HECM borrowers being coerced into using reverse mortgage proceeds to buy inappropriate financial products. Reverse mortgages have long been portrayed as a solution for house rich but cash poor seniors to have access to additional money to fund their retirement. Detractors and those with limited understanding of the product
Despite the most affordable buying market in decades, households across the country are slowly choosing rentals versus homeownership, signaling a positive economic trajectory for the multifamily sector, according to Freddie Mac’s October 2011 economic outlook report released Monday. In the year ending June 2011, the Census Bureau reported a net increase of 1.4 million households that moved into rental housing, a 4% rise in the number of tenant households. The U.S. homeownership rate fell about 1.5% over the past year, according to Freddie Mac’s report.
The sale of properties repossessed through foreclosure may not peak until 2013, keeping home prices from a meaningful recovery for some time, analysts estimated Monday. Nearly half of the more than 552,000 REO properties liquidated in the first half of 2011 were held by private banks. In the years ahead, the government — including the Department of Housing and Urban Development, Fannie Mae and Freddie Mac — will begin taking a majority of the activity.
Home sales in the Detroit metro area rose in September for the third consecutive month as sale prices also jumped, a new report says. However, for the hardest hit areas of the city, opposite trends persist. In the city’s inner-ring suburbs, sales fell 6.8% compared to September 2010, but that decline was offset by gains in outer-ring suburbs, which pushed year-over-year sales in the greater Detroit metro area up 8.2% overall, according to a report from Realcomp.
The Federal Reserve Board approved a final rule Monday that forces bank holding companies with $50 billion or more in assets and certain nonbank firms to submit resolution plans explaining how they would wind down their businesses in times of stress.