Thursday, December 17, 2009

What's in the news

A 55% increase in "shadow inventory"

Dec. 17 (Bloomberg) -- The number of homes that may be in the pipeline for a sale because of foreclosure and delinquency climbed about 55 percent to 1.7 million at the end of September, according to estimates by First American CoreLogic.

The “shadow inventory” rose from 1.1 million a year earlier. Such properties include those taken over by banks and mortgage companies and those where the loans are at least 90 days delinquent, the Santa Ana, California-based research firm said in a report today. The number of unsold homes listed for sale was 3.8 million in September, down from 4.7 million a year earlier, First American said.

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Walking away, it's not a moral dilemma for banks! They tell homeowners to "do the right thing" but they themselves do what is most financially prudent.

Dec. 17 (Bloomberg) -- Morgan Stanley, the securities firm that spent more than $8 billion on commercial property in 2007, plans to relinquish five San Francisco office buildings to its lender two years after purchasing them from Blackstone Group LP near the top of the market.

The bank has been negotiating an “orderly transfer” of the towers since earlier this year, Alyson Barnes, a Morgan Stanley spokeswoman, said yesterday in a telephone interview. AREA Property Partners will take over the buildings. Barnes declined to say when the transfer will occur.

“This isn’t a default or foreclosure situation,” Barnes said. “We are going to give them the properties to get out of the loan obligation.” Eh so you are walking away, right!

The Morgan Stanley buildings may have lost as much as 50 percent since the purchase, he estimated.

Commercial mortgage defaults more than doubled in the third quarter from a year earlier as occupancies fell, according to Real Estate Econometrics LLC. Office vacancies will reach a near-record 19 percent in the first quarter of 2011, broker CB Richard Ellis Group Inc. estimated.

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Is that all?

Eventual losses at mortgage giant Fannie Mae could exceed $200bn, posing a risk of receivership after year-end when limitations on the Treasury Department’s authority to support the agencies return, according to research Friday by Barclays Capital (BarCap).

Once the added authority expires, the Treasury will no longer be able to increase the size of the $200bn preferred backstops supporting Fannie and brother agency Freddie Mac without consulting Congress.

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Cramdown shotdown!

WASHINGTON (Reuters) – In a win for the banking industry, the U.S. House of Representatives voted on Friday to reject a measure that would have allowed bankruptcy judges to change the terms of mortgages for distressed homeowners.

Known as "mortgage cramdown," the measure was defeated in a 188-241 decision as a proposed amendment to a broader financial reform bill expected to win House passage later on Friday.

The House had approved a mortgage "cramdown" measure in March over the objections of Republicans and bank lobbyists, but it died in the Senate.

Cramdown would help stem the home foreclosure wave continuing across the United States, its advocates said. But opponents said it would raise costs for everyone and divert capital from the mortgage debt market.

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3 comments:

Martin Burtin said...

For what it's worth, the market seems to me very competitive for well priced properties. I thought having all cash offer would give me an edge at acceptance, but that does not seem to mean as much to the bank or broker as I had thought. I think these various government plans that "kick the can down the road" give rise to an attitude of relaxed or even planned foot dragging, on the part of banks and brokers. We may be in the midst of the worst recession of our life times, yet there is money out there looking to invest in hard assets such as property. I can tell you from recent experience, it is quite competitive and frustrating. I particularly hate the part of it where you do not get to meet the person who says yes or no to the deal. Having to deal with the bank through the layers of broker an buyers agent without ever shaking hands with the principal(s), or being able to work a deal face to face and git'r done, seems very inefficient and counter productive.

Martin Burtin said...

More inventory on the way:

http://www.latimes.com/business/la-fi-foreclosures18-2009dec18,0,3770149.story

Alex said...

According to the latest quarterly survey released by the National Association of Realtors (NAR), total existing home sales have fallen dramatically compared to last year, and the national median home price is down as well. Miami beach condos for sale