"If you live in a neighborhood that has a homeowners association, brace yourself. Neighbors losing their homes to foreclosure and short sales not only are dragging down your property values but also are setting you up for higher fees. There's even a threat that your entire neighborhood could grow ...
" (2008-11-9)
December 5, 2008
Foreclosures Pick Pockets of Homeowners Associations
Now Is the Time for Those Bottom-Feeders to Do Their Work
"Bring on the vultures. I mean that in the most flattering way possible, you dear deep-pocketed real estate investors with access to credit.
" (2008-11-2)
Surrounded by Ruins, Mortgage Market Remains Intact
"Everybody knows how severe and painful the global financial breakdown has been, with banks unwilling to lend even to other banks. But what about mortgages and real estate? Can you still get a home loan with less than 20 percent or 30 percent down? Or with a credit score below 720?
" (2008-10-18)
Another Losing Proposition for Homeowners
"It's happened again. Some of the same people who lost money last year to the Metro Dream Homes mortgage-payment scheme lost tens of thousands of dollars more to another debt-payment plan before it was shut down by the Maryland securities commissioner this month. The commissioner has ordered Edwar...
" (2008-10-12)
20 Steps to Toughen Up Against Hard Times
"Harder times appear to be on the way, even if lawmakers succeed in unclogging the nation's credit system. It's time to look around our homes and do what we can to cut costs, avoid unnecessary repairs and preserve cash.
" (2008-10-5)
'Hope for Homeowners,' Still Long in Coming
"We interrupt this financial crisis with a word from its sponsor: the families who are losing homes to foreclosure.
" (2008-9-28)
When Your Couch Is on Order and the Company Goes Bankrupt
"Maybe they'll become collector's items, my coffee table from Bombay Co., some old bedside tables from Scan. Both are retailers that have shuttered their stores after filing for bankruptcy protection. It's the trickle-down result of a poor housing market.
" (2008-9-21)
A House Tour With Two-Wheeled Appeal
"PORTLAND, Ore. -- With gas prices high, bicycles flying out of stores and a buyer's market for houses, a handful of real estate agents around the country are touting the two-wheeled appeal of their listings.
" (2008-9-13)
December 2, 2008
Nowadays, the bank says what a house is worth
"It used to be a market mantra: A house is worth only as much as a buyer is willing to pay. But given today's bank failures, foreclosures and tightened credit, real estate experts have had to modify the aphorism to reflect harsher realities. "A house is only...
" (2008-11-30)
Civil rights complaint targets Wall Street rating firms
"Moody's and Fitch's high ratings of subprime mortgage bonds disproportionately harmed black and Latino home buyers, the National Community Reinvestment Coalition alleges.
In what is apparently the first legal action of its kind, an association of community-based organizations has filed a federal civil rights complaint against two of the three largest Wall Street rating firms, charging that their inflated ratings on subprime mortgage bonds disproportionately caused financial harm to African American and Latino home buyers across the country." (2008-11-30)
New crisis, in commercial real estate, looms
"The full scope of the housing meltdown isn’t clear and already there are ominous signs of a new crisis — one that could turn out the lights on malls, hotels and storefronts nationwide." (2008-11-28)
The death penalty: Reasonable doubt
"Troubling questions surround a capital case in GeorgiaIN 1989 Troy Davis and two friends were hanging out in Savannah, Georgia. They saw a homeless man leaving a shop and started to bully him. An off-duty policeman heard the commotion and intervened; he was shot and killed. Though no gun was found, the state produced nine witnesses who said that Mr Davis was the culprit. He was convicted of the murder and sentenced to death in 1991. It seemed a straightforward case. Americans particularly revile cop-killers and here was a parade of people saying that Mr Davis had shot a policeman. But after the trial, no fewer than seven of the nine recanted. Several of them said they had felt subjected to pressure by the police. Others thought someone else was the killer. The homeless man said he could not remember, and anyway he had been drinking. ..." (2008-11-27)
New home sales fall to slowest pace since 1991
"Sales of new homes fell in October to the lowest point in nearly 18 years while the median price of a new home dropped to the lowest level since 2004." (2008-11-26)
November 26, 2008
Home prices tumble by record in 3Q
"Home prices tumbled by the sharpest annual rate on record in the third quarter, according to two widely watched indexes released Tuesday, and the trend is expected to get worse." (2008-11-25)
Home prices tumble to 2004 levels
"Sales of existing U.S. homes fell more than expected last month, as economic fears made buyers leery even though prices plunged to the lowest level in more than four years." (2008-11-24)
Falling prices a bitter pill for homeowners
"The housing market may have bust, but many homeowners are still living in a bubble. Despite dismal housing headlines and reports showing falling prices nationwide, owners in some once-hot areas still believe their home is gaining value or at least holding its...
" (2008-11-23)
Earlier closings may be in home buyers' best interest
"Most people schedule real estate settlements late in the month to save on paying upfront cash, but the last-minute rush often causes mistakes and creates logjams.
To milk all they can out of their final rent checks, first-time buyers often try to schedule their closings as close to the end of the month as possible." (2008-11-23)
Efforts expand to help financially distressed homeowners
"Two mass-market loan modification programs are aimed at preventing foreclosures. But critics say they don't solve the problem and could have a corrosive effect on borrowers.
You may have seen headlines about the latest public and private efforts to help financially distressed homeowners cope with their mortgage payments. But you might not have caught key details that could affect you or people you know -- now or in the recession months ahead." (2008-11-23)
Freddie, Fannie suspend foreclosure actions
"Mortgage finance companies Fannie Mae and Freddie Mac are suspending foreclosures for about 16,000 U.S. households during the holiday season." (2008-11-20)
Spending and the economy: The end of the affair
"America’s return to thrift presages a long and deep recessionDEBBIE JEFFRIES could see it coming. When she manned the cash register at Linens ’n Things, the household-goods chain where she has worked for 14 years, a customer would sometimes open her wallet and display 15 credit cards. “That people can pull out that many credit cards—that’s insane. You say, whoa, maybe that’s why we’re here. We have so much debt.” Ms Jeffries cut up her own credit card several years ago when the balance became unmanageable, but still became an indirect victim of the credit crunch that is now dragging America into recession. Linens ’n Things filed for bankruptcy protection in May; in October, unable to find a buyer for its stores, it began to liquidate itself. A sign in the window of Ms Jeffries’ store in suburban Maryland invites anyone interested in buying the fixtures to see the manager. Ms Jeffries expects to be out of a job by the end of December. ..." (2008-11-20)
Green trends in California: Cooling off
"The economic slowdown is having one good effectCALIFORNIA tried to save the world again this week. Arnold Schwarzenegger, the state’s governor, rounded up politicians and officials from across the globe (expending quite a bit of carbon) and urged them to tackle climate change more aggressively. To set an example, he ordered state power companies to obtain one-third of their electricity from renewable sources by 2020. California is indeed leading the way in cutting greenhouse-gas emissions—but not for the reason it might want. Mr Schwarzenegger became an environmental hero two years ago, when he signed a bill committing the state to cut greenhouse-gas emissions to 1990 levels by 2020. California’s lead was followed by 17 other states, Congress and Britain. Many one-upped California by adopting even more ambitious targets. A slight stain on this otherwise heartwarming picture was that, until recently, California appeared to have little chance of hitting its own target. Then the state’s housing market collapsed, petrol prices soared and the economy slid towards recession. ..." (2008-11-20)
Adult children moving back home with parents
"Extended families sharing a home was once an American tradition. Now with rising foreclosures and layoffs, it's a necessity. But there is a silver lining.
Donald Garcia, 35, and his wife, Augustine, were living in a Burbank apartment when Augustine's mother approached them for help. She had refinanced her three-bedroom Tujunga home a year and a half earlier with an interest-only loan, and what had been a $900 monthly house payment had doubled." (2008-11-15)
FDIC plan could help 1.5 million keep homes
"Publicly breaking with the Bush administration, the FDIC proposed to use $24 billion in government funding to help 1.5 million American households avoid foreclosure." (2008-11-14)
Foreclosures spike 25 percent year-on-year
"The number of homeowners caught in the wave of foreclosures in October grew 25 percent nationally over the same month in 2007, data released Thursday showed." (2008-11-13)
Florida: Snowbirds, meet the repo men
" The property crash is devastating a boom townYOU can gauge the depth of Florida’s economic woes with a quick look at a parking lot on the north side of Cape Coral, on the state’s south-western coast. Since the implosion of the local housing market last year, Gulf Coast Recovery has hauled in the cars of wiped-out building workers who fell behind on their payments. But now the beefy, heavily-tattooed repo men at Gulf Coast hoot about the red Corvette they have just towed away; and their lot contains Cadillacs, $40,000 Harley-Davidsons, even speedboats. “We don’t mind taking those,” says Scott Friga, the company’s owner. “They’re toys.”Cape Coral was a boom town a few years ago, buoyed by a huge upturn in house-building. Workers flooded in, and speculators and builders alike could buy Hummers on credit. In 2004 the Los Angeles-based Milken Institute rated the resulting sea of stucco and strip malls the best-performing city in America. Now it is 120th. One in 71 homes in Cape Coral’s Lee County has a foreclosure filing, and nearly half the mortgages on recently purchased houses in the area are under water. ..." (2008-11-13)
The global economic summit: After the fall
"On November 15th world leaders are due to sit around a table in Washington, DC, to fix finance. They have their work cut outTHE leaders arriving in Washington, DC, for this weekend’s economic summit are being presumptuous. If they want what they are calling Bretton Woods 2 to live up to the original, which took place in New Hampshire overshadowed by war and the Depression, it will have to establish a new economic order for the capitalist world. In 1944 that meant creating the IMF, the World Bank and a body to oversee world trade. Imagine Hank Paulson, America’s treasury secretary, as John Maynard Keynes; or picture Gordon Brown, Britain’s prime minister, as Winston Churchill (as Mr Brown himself secretly may), and you get a sense of the task ahead.The Bretton Woodsmen of 2008 are grabbing the credit before they have earned it—rather as all those subprime householders did. More than two years of gruelling technical work laid the ground for the wartime conference of officials and finance ministers (prime ministers and presidents had other things to deal with). By contrast, the leaders gathering this weekend from the G20, a mix of industrial and emerging countries, plus the European Union, have cobbled together an agenda in a few frenetic weeks. They will doubtless produce no shortage of promises. Just what these are worth will depend on sweat and summits yet to come. ..." (2008-11-13)
November 21, 2008
Working Harder for Every Sale
"Real estate agent Sharon Zunkley has taken some unusual steps this year to sell houses.
" (2008-10-25)
November 11, 2008
New breed of investor looks to housing market
"Falling prices and rampant foreclosures are not the stuff of healthy housing markets. But to some real estate investors, the dismal market can signal that it is time to invest." (2008-11-11)
Homeowner denial: My home is gaining value
"Despite dismal housing headlines and reports showing falling prices nationwide, owners in some once-hot areas still believe their home is gaining value or at least holding its own." (2008-11-10)
Foreclosures Pick Pockets of Homeowners Associations
"If you live in a neighborhood that has a homeowners association, brace yourself. Neighbors losing their homes to foreclosure and short sales not only are dragging down your property values but also are setting you up for higher fees. There's even a threat that your entire neighborhood could grow ...
" (2008-11-9)
Now Is the Time for Those Bottom-Feeders to Do Their Work
"Bring on the vultures. I mean that in the most flattering way possible, you dear deep-pocketed real estate investors with access to credit.
" (2008-11-2)
November 10, 2008
Number of first-time home buyers is increasing
"Low home prices and excess supply helped drive a rise in first-time U.S. home buyers and reduce excess inventory, according to a study released Saturday by The National Association of Realtors." (2008-11-9)
The market for homeowners looking to sell
"Melissa Morris put her Haight-Ashbury flat on the market in mid-September. It was priced right and she accepted an offer of $825,000 within days. The contractor's inspection was set for Sept. 29 and as the buyer toured the home, the stock market was in the...
" (2008-11-9)
Some strapped homeowners keep making payments
"Think of them as the walking wounded: The homeowners who are upside down on their mortgages, owing much more than their home is worth. But they're still on their feet and still sending their payments each month. In this credit crisis, all the attention has...
" (2008-11-9)
Strategy to protect home equity credit lines
"Many homeowners who have taken out home equity lines of credit have learned in recent months that these loans are not as useful as they initially seemed. Lenders are struggling to minimize risk, and because they are especially at risk to lose money on...
" (2008-11-9)
British home prices suffering, too
"House prices in Britain will continue to plunge over the coming year as the economy deteriorates, two leading housing reports said early last week. Average house prices will be 25 percent - or 50,000 pounds ($77,000) - cheaper by the end of 2009 than they...
" (2008-11-9)
After big jump, pending home sales fall, again
"Pending U.S. home sales fell more than expected in September, after posting a big jump in the previous month." (2008-11-7)
The economic challenges facing Barack Obama
"Financial mess and gathering recession dominate Barack Obama's agendaHE HAD always planned for the economy to be his priority. Just not this economy.As candidate, Barack Obama crafted a platform to address the concerns that preoccupied voters earlier this year: high energy and health-care costs, stagnant middle-class incomes and rising foreclosures. But such problems pale beside the eruptions since August. America’s housing crisis has become a global financial panic; the economy, which was muddling along as recently as July, may be in its deepest recession in decades. Consumer confidence, as our chart shows, is at its lowest in more than half a century (except for a brief sharp dip in 1980). ..." (2008-11-6)
Nev., Mich., Fla. lead ‘underwater’ homes list
"Here’s a shocker: almost half of Nevada homeowners with a mortgage owe more to the bank than their homes are worth." (2008-10-31)
Closing arguments: The end is nigh
"The candidates are making their final pitches to the electorate“INFOMERCIALS” usually feature over-the-hill “actors” hawking improbable products in the small hours. Barack Obama’s infomercial on October 29th lasted for 30 minutes, appeared at 8pm on seven channels, including CBS and NBC, and featured state-of-the-art production techniques. Mr Obama focused on bread-and-butter issues—the recent Wall Street crash (which he described as a verdict on eight years of failed economic policies from, guess who, the Republicans), rising health-care costs, home foreclosures, disappearing jobs and stagnating incomes—and he illustrated them by telling the story of various families he had met on the stump. He also tried to counter his airy-fairy image telling us, in as much detail as the format would permit, how he planned to deal with these problems. ..." (2008-10-30)
Policy in a recession: Putting the air back in
"Staring at recession, policymakers in rich economies are considering how to avoid a prolonged slump. Here are some options—and some obstaclesDEBT is out; cash is in. Financial institutions are finding it hard to borrow from anyone but the state—and they are reluctant to lend to anyone else. Firms, aware that credit is drying up, are striving to raise cash. They have already run down their inventories and are trimming investment and jobs. Householders whose homes are worth less than their mortgages must save hard to reduce their debts. Those that cannot service their mortgages will default, causing more trouble for banks and, via lower house prices, other homeowners.Just a few months ago, the main worry of policymakers in many economies was whether, as the prices of oil and other commodities shot up, they could contain inflation. But the flight from debt and the dash for cash, inelegantly called “deleveraging”, means a bludgeoning for demand. Now central banks and governments are facing a new set of questions. First, can they stop deleveraging from gaining momentum and wrecking their economies? And second, will the tools of conventional macroeconomic policy—cutting interest rates, lowering taxes and increasing public spending—be enough? ..." (2008-10-30)
November 6, 2008
Chat Plus
"Real estate editor Maryann Haggerty and columnist Elizabeth Razzi respond to a question adapted from a recent online chat.
" (2008-10-26)
October 28, 2008
American house prices fall yet again
"House prices in America fall yet againTHOSE looking for an end to America's housing bust will have to wait a little longer. Although sales of new homes rose slightly in September, prices are continuing to fall fast. On Tuesday October 28th the S&P/Case-Shiller index of house prices for ten cities showed a record decline of 17.7% in the year to September. The index has now fallen nearly three times as far as it did during the last big dip in 1991. The broader 20-city index has also touched a new low, sinking by 16.6%. Some observers think that house prices could continue to drop until the middle of next year. ..." (2008-10-28)
Rising Housing Costs Outpacing Income
"LOS ANGELES -- The financial squeeze on Americans got tighter over the last decade as the increase in housing expenses far outpaced the growth in incomes, a new study shows.
" (2008-10-11)
October 27, 2008
New home sales soar 2.7 percent
"New home sales post unexpected increase in September as prices fall to lowest level since 2004." (2008-10-27)
October 25, 2008
Rebuilding a home after a fluke flood
"Three days before Christmas 2006, as chef Matt Beville was sliding a tray of pastries into the oven at work, he had no idea events were unfolding at his 1924 Burbank home that would displace him for 18 months and lead to a $209,000 whole-house remodel." (2008-10-25)
Foreclosure king surfs troubled home waters
"Real estate broker Leo Nordine is working his well-timed magic in selling distressed houses.
The South Bay's reigning King of Foreclosures runs around barefoot, doesn't own a cellphone and drives an 8-year-old Toyota Tundra pickup." (2008-10-25)
October 23, 2008
Greenspan: 'Credit Tsunami'
"Testifying before the House of Representatives Committee on Oversight and Government Reform, former Federal Reserve Chairman Alan Greenspan said: 'We are in the midst of a once-in-a century credit tsunami.'
" (2008-10-23)
Economics focus: A helping hand to homeowners
"Some economists think the credit crisis needs to be fixed at its source—in America’s housing marketGOVERNMENTS across the rich world have taken drastic steps to save the banking system. As the fears of outright collapse recede, their focus has turned to improving the supply of credit to households and firms by pushing market interest rates down and encouraging banks to lend more freely. But a growing number of economists, and now the Bush administration, believe that the credit crunch also has to be addressed at its source—in America’s housing market, where prices have fallen almost one-fifth from their peak, and foreclosures have soared (see chart).Two features of housing finance make the crisis hard to resolve. The first is “no-recourse” home loans, which are standard in America (though not elsewhere). If a borrower defaults, a bank can claim back the property used as collateral, but nothing more. When the value of a home drops below the size of the mortgage, a borrower has a reason to default to escape his negative equity. ..." (2008-10-23)
Eastern Europe is battered by the financial and economic crisis
"Stockmarkets plummet in eastern Europe, as the economic troubles spreadHopes that eastern Europe would prove relatively immune to the global financial turmoil have evaporated as the financial crisis is turning into an economic crisis in the developed world. Stockmarkets have been plummeting throughout the region and several currencies have come under pressure. There are clear signs that the global credit crunch has finally started to bite, with access to external finance becoming much more difficult, as well as expensive. Hungary and Ukraine have turned to the IMF and European Central Bank (ECB) for support, and others may follow. As a result, regional growth in 2009 is set to slow sharply.For almost a year following the onset of financial turmoil in July 2007, ignited by the subprime crisis in the US, eastern Europe felt few effects. Growth held up extremely well, with the exceptions of Estonia and Latvia, which fell into recession some time ago after their home-made financial bubbles burst. High commodity prices continued to drive growth in much of the Commonwealth of Independent States (CIS). For most of the rest of eastern Europe, weakness in west European demand was offset by rising intra-regional trade and buoyant domestic demand. That has all changed in recent months, and eastern Europe is now among those emerging market regions that look to be hit the worst by the intensifying global financial instability and ensuing economic slowdown. The resilience of eastern Europe is disappearing. ..." (2008-10-23)
Foreclosure activity rises 70 percent
"The number of homeowners ensnared in the foreclosure crisis grew by more than 70 percent in the third quarter of this year compared with the same period in 2007." (2008-10-23)
October 21, 2008
Tenant's tactics are a bunch of garbage
"Q: I have a small apartment building and we pay for the garbage pickup. A tenant did some spring cleaning and completely overwhelmed our bins with such things as mattresses and box springs and broken stereo shelving. The garbage company informed me that if it'...
" (2008-10-19)
September house prices off 1.3% in Britain
"Britain's biggest mortgage lender says that house prices fell by 1.3 percent in September, another indication of Britain's slumping housing market. Halifax said Thursday that average prices are 12.4 percent lower than a year earlier. The bank's chief...
" (2008-10-19)
Getting mortgage easier than some other credit
"Credit squeeze, credit freeze, credit system seizures: Everybody knows how severe and painful the global financial breakdown has been - with banks unwilling to lend even to other banks. But what about mortgages and real estate? Can you still get a home loan...
" (2008-10-19)
Rates on 30-year mortgages reach 8-week high
"Rates on 30-year mortgages jumped to the highest level in eight weeks, squeezing some potential home buyers out of the market, and reflecting how nervous lenders remain, despite the widespread global intervention in the credit markets. Freddie Mac reported...
" (2008-10-19)
Fannie, Freddie CEOs discuss foreclosures
"The new chief executives of Fannie Mae and Freddie Mac are trying do more to stop the home foreclosures hammering the housing market, but said it still might take years for real estate to recover in some cities." (2008-10-21)
October 19, 2008
September house prices off 1.3% in Britain
"Britain's biggest mortgage lender says that house prices fell by 1.3 percent in September, another indication of Britain's slumping housing market. Halifax said Thursday that average prices are 12.4 percent lower than a year earlier. The bank's chief...
" (2008-10-19)
Getting mortgage easier than some other credit
"Credit squeeze, credit freeze, credit system seizures: Everybody knows how severe and painful the global financial breakdown has been - with banks unwilling to lend even to other banks. But what about mortgages and real estate? Can you still get a home loan...
" (2008-10-19)
Rates on 30-year mortgages reach 8-week high
"Rates on 30-year mortgages jumped to the highest level in eight weeks, squeezing some potential home buyers out of the market, and reflecting how nervous lenders remain, despite the widespread global intervention in the credit markets. Freddie Mac reported...
" (2008-10-19)
October 17, 2008
Surrounded by Ruins, Mortgage Market Remains Intact
"Everybody knows how severe and painful the global financial breakdown has been, with banks unwilling to lend even to other banks. But what about mortgages and real estate? Can you still get a home loan with less than 20 percent or 30 percent down? Or with a credit score below 720?
" (2008-10-18)
Homebuilders scramble to downsize floorplans
"When the U.S. housing market hit the skids, homebuilders like KB Home that thrived by offering large homes and expensive amenities began to rethink their home designs with an eye toward making smaller, less costly homes." (2008-10-17)
Government may file subprime charges soon
"The top federal prosecutor in Los Angeles indicated Thursday that charges are coming soon from a sweeping investigation of banks and subprime lenders." (2008-10-17)
October 16, 2008
Some states help renters in foreclosed homes
"A few states recently passed or proposed laws to protect renters by requiring mortgage holders to provide sufficient notice for tenants living in foreclosed properties. Sheriffs in Illinois and Michigan also have stepped in to help." (2008-10-16)
California Realtors forecast lower home prices, rising sales in 2009
"The volume of home sales is expected to climb 12.5% next year, even as doubts linger about the nation's financial markets.
Home prices across the state will continue to drop next year, even as sales, spurred by the low prices on foreclosed properties, will keep rising in 2009, according to a California Assn. of Realtors forecast slated to be released today." (2008-10-15)
October 15, 2008
Coldwell Tries 10-Day Housing Sale
"A U.S. real estate brokerage firm asks its clients to cut their homes' listing price in the hopes of attracting buyers during a 10-day markdown sale.
" (2008-10-15)
October 14, 2008
Apple's New Laptops Still Too Expensive
"Senior Technology Correspondent Gary Krakow says Apple's new laptops may look cool, but the price cuts aren't deep enough. With even the cheapest unit priced at $999, this line can't compete with mini laptop powerhouses like Dell and Asus.
" (2008-10-14)
The credit crisis hits India but it may profit
"How India could benefit in the long termThe global financial crisis has hit Indian stockmarkets hard. By October 13th the country's benchmark indices had fallen some 50% from the record heights they scaled in early January 2008. India's second-largest lender, ICICI Bank, has suffered a sharp drop in its shares following rumours that it is over-exposed to toxic US and UK assets. Equity outflows from foreign institutional investors (FIIs) during 2008 so far are a net US$9.9bn, compared with net inflows of US$17.4bn in 2007.This painful erosion of investor wealth and confidence is not the only fall-out in India of the global panic. The rupee has been depreciating rapidly against the US dollar, owing to the global dollar liquidity shortage, heavy outflows from FIIs looking to transfer funds home, and purchases of dollars by Indian banks to fund their overseas operations. By early October the rupee had slumped to a six-year low, negating the recent fall in crude oil prices and keeping India's oil-import bill high. The continuing depreciation means that the Reserve Bank of India (RBI, the central bank) must keep up its heavy intervention in the foreign-exchange market to stop the rupee from falling too sharply. ..." (2008-10-14)
October 12, 2008
High-rise living for sale in historic San Jose
"When word got out late last year that Silicon Valley's highest high-end high-rise was being built in San Jose's downtown Historic District, more than 3,000 people signed up. Now, despite an economy in crisis and a prolonged housing slump, buyers are starting...
" (2008-10-12)
Mortgage last loan people pay, study finds
"Behind the mortgage crisis lurks some consumer behavior that, at first glance at least, seems puzzling. When faced with the possibility of falling behind on home loans, credit card payments or car loans, borrowers are more likely to choose to let their...
" (2008-10-12)
Another Losing Proposition for Homeowners
"It's happened again. Some of the same people who lost money last year to the Metro Dream Homes mortgage-payment scheme lost tens of thousands of dollars more to another debt-payment plan before it was shut down by the Maryland securities commissioner this month. The commissioner has ordered Edwar...
" (2008-10-12)
October 9, 2008
McCain Proposes Mortgage Rescue Plan
"The Republican candidate proposes a plan to help homeowners who struggle with mortgage payments to avoid foreclosure.
" (2008-10-9)
Europe's governments struggle to cope with more financial turmoil
"Germany guarantees all retail bank savings, as European governments take more individual stepsAFTER stepping in to save five banks in seven countries in the past week, Europe’s governments had hoped to stop fear spreading through the continent’s financial system. They failed. Authorities are again busily trying to keep afloat several of the banks they had previously bailed out. The biggest of the bank rescues to flounder was that of Hypo Real Estate, a mammoth German property lender and financier of local governments. Hypo was deeply reliant on money markets to fund its long-term loans. Yet these have frozen in recent weeks. Paradoxically, the source of its weakness—its reliance on money markets—also made it too interconnected to fail. German authorities muttered darkly of their economy and financial system suffering a ripple of unpredictable consequences similar to those caused by the collapse of Lehman Brothers in America in mid-September, had they let it go down. ..." (2008-10-6)
October 8, 2008
Nearly 1 in 6 homeowners are ‘under water’
"The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults." (2008-10-8)
China and crisis management
"China must do better at handling disasters“RIDICULOUS” is how China’s banking regulator, Liu Mingkang, recently described American lending practices that led to the current crisis. In private, some Chinese officials have expressed even greater contempt for the Western financial system. But while Communist bureaucrats are allowing themselves a little smugness, they have crises of their own to fret about and are struggling to learn—even from the West—how to manage them. Many a foreign businessman, in after-dinner speeches to colleagues, has observed that in China the word for crisis, weiji, contains the characters for danger (wei) as well as opportunity (ji). Their point is to show that the Chinese, unlike pessimistic Westerners, see crises as opportunities for improvement. But the crisis now besetting China’s dairy industry, involving the poisoning of tens of thousands of infants by tainted milk, show that lessons have not been learned (just as many after-dinner speakers have yet to learn that the etymology of weiji does not support their argument: in this context ji simply means “moment”). ..." (2008-10-8)
20 Steps to Toughen Up Against Hard Times
"Harder times appear to be on the way, even if lawmakers succeed in unclogging the nation's credit system. It's time to look around our homes and do what we can to cut costs, avoid unnecessary repairs and preserve cash.
" (2008-10-5)
'Hope for Homeowners,' Still Long in Coming
"We interrupt this financial crisis with a word from its sponsor: the families who are losing homes to foreclosure.
" (2008-9-28)
October 6, 2008
Big drop in home prices in England, Wales
"House prices in England and Wales fell at their sharpest rate in at least eight years in August, British government figures showed. Average house prices declined 4.6 percent from year-to-year in August, and 1.9 percent from the previous month, the Land...
" (2008-10-5)
As loan volume leaps, so do worries about FHA
"In the current credit squeeze, if you have less than a 20 percent down payment, there's pretty much only one major source of mortgage financing available: the Federal Housing Administration, a Depression-era home loan insurance agency that still offers 3...
" (2008-10-5)
Bail-out politics, continued: While Wall Street burns
"Lawmakers fiddle, then reach for the fire-hoseWHEN Congress does nothing, Americans usually breathe a sigh of relief. But when the House of Representatives failed to pass a rescue package for the financial system on September 29th, panic ensued. The stockmarket crashed: more than a trillion dollars in paper wealth evaporated in a single day. That, plus the shock waves that battered markets around the world, seems to have made lawmakers sit up and take notice. Before the vote, Barney Frank, the Democratic head of the House banking committee, observed that: “It is hard to get political credit for avoiding something that hasn’t yet happened.” Perhaps that is why the rescue plan was rejected, by 228 votes to 205. Some lawmakers simply weren’t convinced that disaster was imminent if they failed to act. ..." (2008-10-2)
Europe and America: Lessons from a crisis
"European Schadenfreude over the ills of American capitalism does not signify a dramatic move away from the free marketONE by one, European leaders have lined up to hail the triumph of welfare over Wall Street. “The idea that markets are always right was a mad idea,” declared the French president, Nicolas Sarkozy. America’s laissez-faire ideology, as practised during the subprime crisis, “was as simplistic as it was dangerous”, chipped in Peer Steinbruck, the German finance minister. He added that America would lose its role as “financial superpower”. The Italian finance minister, Giulio Tremonti, claimed vindication for a best-selling book that he wrote earlier this year about the dangers of globalisation.It would be wrong to exaggerate Europe’s sense of self-righteousness over Wall Street’s fall. This week governments in Belgium, France, Germany, Ireland and the Netherlands all scrambled to bail out their troubled banks (see article), confirming how exposed Europe’s economies are to knock-on effects from America. Even left-wing editorialists in France, quick to sneer at degenerate American capitalism, have tempered their glee. “There would be something comical, even pleasurable, in watching the frenetic agitation of the banking world”, wrote Laurent Joffrin, editor of Liberation newspaper, “if millions of jobs were not at stake, not to mention the economic balance of the planet.” ..." (2008-10-2)
Depression index
"Signs of a pending depression? The Economist's D-word indexMANY comparisons may be made between the devastation being wrought on America's financial system today and the Wall Street crash of 1929. One similarity that the world is desperate to avoid is a repeat of the depression of the 1930s. Hopes are pinned on the American bail-out plan that the House of Representatives is set to reconsider on Friday October 3rd. If the fear of depression is anything to go by, the future looks bleak. A survey of newspaper articles over the past two decades shows a sharp spike in mentions of the dreaded D-word, as commentators have started to think the worst. The prognostications may possibly turn out to be true, or perhaps the only thing we have to fear are the fears of journalists themselves. ..." (2008-10-2)
September 30, 2008
Home prices tumble by sharpest annual rate
"A closely watched index shows home prices tumbling by the sharpest annual rate ever in July, but the rate of decline is slowing." (2008-9-30)
Global market turmoil continues after the House rejects the bail-out plan
"Global market turmoil continues after the rejection of the mortgage-rescue plan in AmericaHOW many votes in Congress will the latest financial upheaval change? That is the calculus underway in Washington, DC, after the House of Representatives defeated the proposed $700 billion mortgage-rescue plan by 228 to 205 on Monday September 29th. Democrats backed it by 140 votes to 95, while Republicans opposed it by 133 to 65.Bankers had been under no illusions that the tweaked Paulson plan would cure all the financial systema€™s ills. But most had seen it as a step in the right direction, and had expected it to pass. Its rejection sent stockmarkets into freefall. The Dow Jones Industrial Average finished down by 7%, and suffered its biggest-ever points loss. Perhaps fittingly in an economy that is in danger of sliding into depression, the only stock among the 500 in the S&P index that finished higher was Campbella€™s Soup. The S&P closed 29% below its peak. Reflecting fears that consumer demand will wilt, shares of Apple Computer, creator of the iPhone, fell by 18%. The rout continued in Asia, but shares rebounded in Europe on Tuesday morning on hopes that the bill would eventually pass. ..." (2008-9-30)
KB Home building smaller houses to lift sagging sales
"The company is trying to attract buyers with 1,230-square-foot homes selling for $200,000 in the Inland Empire and other high-foreclosure areas.
As California's biggest builder of new homes posted its seventh straight quarterly loss Friday, Westwood-based KB Home said it was trying to boost sales by building small, lower-priced houses instead of the larger ones that had sustained the company during the housing boom." (2008-9-27)
California home prices continue to fall
"After a 41% slide in August, prices are at their lowest in five years and will probably fall further, industry group says.
California home prices tumbled a record 41% in August from a year earlier as foreclosure sales pushed down values." (2008-9-26)
Bailout doesn’t address abandoned homes
"So why — as we discuss the most dramatic government intervention in nearly a century — is there only passing mention of all these vacancies?" (2008-9-26)
Help sought for struggling homeowners
"But the main proposals to ease the foreclosure problem face practical and political problems, and there's no consensus that the measures would actually work.
Lawmakers, housing advocates and both presidential candidates are demanding that any bailout for financiers on Wall Street needs to help homeowners on Main Street too." (2008-9-25)
September 25, 2008
New homes sell at slowest pace in 17 years
"Government data show sales of new homes dropped sharply in August, falling to the slowest pace in 17 years. The average sales price fell by the largest amount on record, too." (2008-9-25)
Europe's economies: Struggling to keep moving
"The financial meltdown may be happening mainly in America, but Europe is starting to feel the heatTHOSE who hoped Europe might escape Wall Street’s woes were sorely disappointed this week. Not only did markets slide across the continent, with bank shares especially hard-hit, but also a purchasing managers’ index for the euro area fell to its lowest since 2001, and three business-confidence indicators were unexpectedly weak. The figures suggest that a recession may even have begun already. The questions are how deep it will be, and how long it will last. And the answers will depend heavily on the two biggest economies: Germany and France. Germans feel aggrieved. While others were living on easy credit and blowing bubbles, they practised virtue. The economy clawed back lost competitiveness via low wage rises. The public sector was in surplus last year. Exports and investment have done well, giving Germany its best spell of growth since the early 1990s. Yet one does not have to indulge in a vice to contract a disease. The entire euro area was boosted by house-price increases, notes Jorg Kramer, chief economist of Commerzbank. “Germany can’t decouple.” ..." (2008-9-25)
September 24, 2008
Home sales, prices plunge in August
"A record decline in U.S. home prices in August attracted more buyers in some areas and led to a sizable decline in the number of unsold homes on the market." (2008-9-24)
Green Energy Sector Gets Boost From Senate
"The $18 billion bill (which still needs approval from the House of Representatives) will provide multiyear tax credits for renewable energy companies and rebates for consumers to buy plug-in electric cars.
" (2008-9-24)
September 23, 2008
Home prices tumble 5.3 percent
"U.S. home prices in July fell a record 5.3 percent compared with a year ago, a government agency said Tuesday, and have now receded to October 2005 levels." (2008-9-23)
Realty Television
"Never mind the national housing slump: Real-estate TV is selling just fine." (2008-7-7)
September 22, 2008
Helicopter crashes into house, killing two aboard
"A helicopter crashed through a house and came to rest in flames across the street early Sunday in Kenosha, Wisconsin, killing the two people aboard but missing the home's five occupants, officials said.
" (2008-9-22)
September 21, 2008
When Your Couch Is on Order and the Company Goes Bankrupt
"Maybe they'll become collector's items, my coffee table from Bombay Co., some old bedside tables from Scan. Both are retailers that have shuttered their stores after filing for bankruptcy protection. It's the trickle-down result of a poor housing market.
" (2008-9-21)
America's Fed, Treasury and Congress will spend big money to keep markets in check
"America's Treasury asks Congress for $700 billion to stabilise the marketsUNTIL this week America's authorities clung to the hope that they could tide over the financial system with a few loans until home prices stabilised and all the bad debts were accounted for. But the destruction visited on Wall Street in the past week has dashed those aspirations and forced policymakers to consider a more sweeping response. The bankruptcy of Lehman Brothers and AIG’s federal takeover have triggered a wholesale flight to safety that could turn illiquid institutions insolvent. Healthy corporations can no longer issue bonds. Banks can barely borrow from each other. The federal government, having lent hundreds of billions of dollars to banks and investment banks and AIG, now thinks it must put permanent capital into the financial system to restore confidence and stop the vicious spiral. Hank Paulson, the treasury secretary, and Ben Bernanke, chairman of the Federal Reserve, met Congressional leaders towards the end of the week. And on Saturday September 20th Mr Paulson sent a preliminary plan under which the federal government would be authorised to purchase up to $700 billion of "residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages" originated or issued on or before Wednesday. It could buy them from any financial institution headquartered in the United States. ..." (2008-9-19)
AIG, an insurance giant, is bailed-out by America's government
"America’s government comes to the rescue of a giant insurance company AMERICAN finance has a new, if reluctant, kingpin: the government. In a dramatic move on the evening of Tuesday September 16th the Federal Reserve agreed to provide American International Group with a loan of $85 billion to help it stave off bankruptcy. In return, either the Fed or Treasury will take effective control of the company, which until recently was an icon of private-sector capitalism. In the space of nine days, the government has found itself having to take charge of both the country’s largest insurer and its two giant mortgage agencies, Fannie Mae and Freddie Mac. The move comes two days after Lehman Brothers, a big investment bank, filed for bankruptcy after being denied federal help, and Merrill Lynch, another Wall Street giant, fled into the arms of Bank of America for fear of being swept away by the hurricane battering global financial markets.As well as writing general-insurance policies all over the world, AIG plunged disastrously into the market for derivatives linked to housing and credit. Its exposure to the murky credit-default swaps market alone is a notional $441 billion, enormous by anyone’s standards. As the market value of these derivatives fell, the firm found itself strapped for capital, and was forced last weekend to approach the Fed, cap in hand. The central bank initially demurred, instead nudging JPMorgan Chase and Goldman Sachs to try to help AIG raise the money from private sources, such as other banks, private-equity firms and sovereign-wealth funds. Those efforts failed, however, and AIG’s predicament worsened on Monday when the big rating agencies downgraded its debt, forcing it to post more than $13 billion of extra collateral with trading partners. At that point officials performed a U-turn and began negotiating an emergency rescue. ..." (2008-9-17)
A House Tour With Two-Wheeled Appeal
"PORTLAND, Ore. -- With gas prices high, bicycles flying out of stores and a buyer's market for houses, a handful of real estate agents around the country are touting the two-wheeled appeal of their listings.
" (2008-9-13)
Best- and worst-case economic scenarios
"Will the 13-month-old credit crunch get even worse and drag down the entire global economy? Or are punch-drunk Americans due for some good news for a change?" (2008-9-12)
‘Board-up’ guys see boom in housing bust
"As the number of foreclosed homes grow, a very specific kind of contractor is needed: Board-up guys who prevent the residences from becoming squats." (2008-9-9)
Subscribe to:
Posts (Atom)
