NAR - pending home sales up
Pending home sales are on an upward trend, which has been uneven
but meaningful since reaching a cyclical low last April, and are
well above a year ago, according to the National Association of
Realtors (NAR). The Pending Home Sales Index (PHSI), a
forward-looking indicator based on contract signings, rose 2.0%
to 97.0 in January from a downwardly revised 95.1 in December and
is 8.0% higher than January 2011 when it was 89.8. The data
reflects contracts but not closings. The January index is the
highest since April 2010 when it reached 111.3 as buyers were
rushing to take advantage of the home buyer tax credit. The PHSI
in the Northeast rose 7.6% to 78.2 in January and is 9.8% above a
year ago. In the Midwest the index declined 3.8% to 88.1 but is
10.8% higher than January 2011. Pending home sales in the South
increased 7.7% to an index of 109.1 in January and are 10.5%
above a year ago. In the West the index fell 4.4% in January to
101.9 but is 0.7% above January 2011.
Why gas prices vary across the country
The national average for regular gasoline rose to $3.70 Friday,
up 14 cents in the past week - and only about 40 cents shy of the
all-time record high of $4.11 a gallon reached in July 2008.
While many are feeling the pain at the pump, Americans are seeing
widely divergent prices depending on where they live. Why are
drivers in Fort Collins, Colorado paying a little over $3, while
those in Santa Barbara, California are seeing gas prices at $4.33
a gallon? Colorado, Montana, Utah and Wyoming have the cheapest
pump prices in the country, at about $3.21 a gallon or less on
average, while retail gasoline prices are near $4.30 a gallon in
California and are over $4 in some parts of New York. The answer
lies in the "chaos" in crude oil prices around the nation, says
OPIS energy analyst Tom Kloza. "There's never been more diversity
in crude oil prices. There's never been more diversity in
gasoline prices." The divergence in pump prices comes from the
wildly differing wholesale prices for gasoline. The wholesale
price of gasoline in the Rocky Mountains and Midwest is about 20
to 40 cents cheaper than on the East Coast, for example.
The price of the refined fuel reflects regional supply issues
that face refiners in various parts of the country, based on the
type of oil they process. Crude oil in some landlocked areas in
the Midwest — such as North Dakota, where there has been a
tremendous supply surge recently — reached about $95-$96 a
barrel Friday. For refineries that use sour crude in the Midwest,
Western Canadian Select grade of crude, a heavy grade, the price
is closer to $91 a barrel. Yet, on the East Coast, refining
capacity, and as a result gasoline supply, has been drastically
reduced in the past few months. Two refiners outside of
Philadelphia, which account for 20% of the gasoline in the
northeast have shut down. Overall US and European refinery
shutdowns have taken about 2.6 million barrels of gasoline supply
off the market since 2009, says Houston-based energy analyst Andy
Lipow.
East Coast refiners import most of crude oil from Europe and West
Africa. North Sea Brent crude prices rose have risen above $125 a
barrel. Light Louisiana sweet crude prices on the Gulf Coast
reached $130 a barrel on Friday, due to tight supplies of
European and West African crude blends. (RBOB gasoline futures
traded at the CME Group's New York Mercantile Exchange - in close
proximity to East Coast refiners and delivery terminals - also
more closely reflects the Brent crude price. March RBOB gasoline
futures rose 1% Friday to settle at a 2012 high of $3.15 a
gallon.) Wholesale oil and gasoline prices have been rising
sharply all over the country in the past few days, Kloza says.
"At this rate, it's a foregone conclusion retail prices will rise
another 5 to 15 cents a gallon this week." Retail gasoline prices
have already spiked 5 cents since Friday. At this rate, if the
surge in gasoline prices next month mirrors the month of
February, record pump prices may be in store even before the
summer driving season gets underway.
Olick - 2500 foreclosures up for bulk sale
"Barely six hours after billionaire investor Warren Buffett said
that if he could he’d like to buy 'a couple of hundred thousand
single family homes', the regulator of Fannie Mae and Freddie Mac
put about 2500 of theirs up for sale. It is the next step in the
government’s REO (bank-owned) to rent program; the plan,
announced earlier this month, is designed to help Fannie and
Freddie unload thousands of foreclosed properties weighing on
their books. Fannie Mae alone owns more than 100,000 repossessed
properties. 'This is another important milestone in our
initiative designed to reduce taxpayer losses, stabilize
neighborhoods and home values, shift to more private management
of properties, and reduce the supply of REO properties in the
marketplace,' said FHFA acting director Edward DeMarco in a press
release.
While the prequalification phase began several weeks ago,
investors can now move to the next phase, where, if accepted by
proving financial capacity and experience, they can get access to
the properties for sale. The bulk of the properties are in the
most distressed markets, such as Florida, parts of California,
Phoenix, AZ, and Las Vegas, NV. Atlanta, GA, however, has the
highest number in the mix, 572 properties making up 23% of the
total up for sale. Atlanta housing was hit hard by the recession
and high job losses. Just 17% of the properties are vacant, so
investors would largely be getting assets with existing cash
flow. As these first properties hit the market, there is no
shortage of investors ready to scoop them up. Rental demand is
still surging, and rents continue to rise, despite record high
affordability and record low mortgage rates. Nearly 47% of all
closings in January were of distressed properties, according to a
new survey from Campbell/Inside Mortgage Finance, and investors
now make up nearly a quarter of all buyers, according to the
National Association of Realtors.
As banks start to ramp up the foreclosure process again, after a
year of delays following the 'robo-signing' scandal, more
properties will be repossessed and put up for sale; investors are
flocking to the deals, largely using all cash, as they get into
increasingly competitive situations. Even owner-occupants
(non-investors) are turning more to cash, as credit is still
tight. 'Despite near record low mortgage rates, homebuyers are
finding it very advantageous in the current housing market to
shop with cash. And low returns on money deposited in banks as
well as mortgage approval hassles also are pushing homebuyers to
consider all cash transactions,' according to Campbell/IMF.
'Between last October and January, the use of cash by current
homeowners purchasing a new principal residence surged from 30.8%
to 34.1%. Critics of the bulk REO to rent program say that
giving large investors with hoards of cash bulk deals squeezes
out smaller investors who might do more improvements to the
properties and then turn around and sell them at higher prices,
thereby increasing overall home values. Investors in the FHFA
program are required to hold the properties and rent them for 'a
specified number of years,' according to the agency’s initial
announcement."
S&P Greece downgrade may be short
Standard & Poor's downgrading of Greece's long-term ratings to
'selective default' could well be short but there is a risk
Athens falls back into default later, S&P analyst Moritz Kraemer
said today. S&P cut Greece's rating on Monday, the second
ratings agency to proceed with a widely expected downgrade after
Athens announced a bond swap plan to lighten its debt burden.
"It's a distinct possibility that this will be a short default
which will be cured," Kraemer told Reuters Insider television.
"The more interesting question is not when it will be cured but
whether it will be the last one." "I think the rating coming out
of default of the Hellenic Republic will give some indication of
what the likelihood of another restructuring down the road would
be." When assessing what rating to give Greece in the future,
S&P would look at the political environment, the growth outlook
and the remaining debt stock. "We think that on all three fronts
there are huge question marks," said Kraemer.
DSNews - debt and delinquency on the decline
Real estate-related debts are on the decline, as are overall
delinquencies, according to a quarterly report from the Federal
Reserve Bank of New York. Debt maintained through mortgages and
home equity lines of credit (HELOC) declined $146 billion during
the fourth quarter of last year. Mortgages made up a majority of
the decline – $134 billion – while HELOCs made up the
remaining $12 billion. Mortgage debt is now 11% below its peak,
while HELOC debt is now 11.7% below its peak. Also in the fourth
quarter, the delinquency rate on consumer debt was reduced from
10% to 9.8%. About $1.12 trillion of the total $11.53 trillion
in consumer debt was delinquent. About $824 billion in debt was
seriously delinquent (90 or more days past due). While overall
delinquency declined, about 2.2% of mortgage loans became
delinquent in the last quarter of the year.
Foreclosures increased 9.5% over the quarter as 289,000 homes
received foreclosure filings. However, the foreclosure rate is
still 35.3% below the level recorded in the fourth quarter of
2010. Also, despite the rise in foreclosure filings, the rate of
loans that became seriously delinquent declined, corresponding
with a rising cure rate, which reached 27.2% at the end of last
year. “Overall it appears that delinquency rates are
stabilizing at levels that remain significantly higher than
pre-crisis levels,” said Andrew Haughwout, VP and economist at
the Federal Reserve Bank of New York.
FHA to raise premiums
The Federal Housing Administration (FHA) will raise mortgage
insurance premiums this April in order to repair the health of
its emergency fund. The FHA upfront mortgage insurance premium
will increase to 1.75% from 1% of the base home loan amount. This
will apply regardless of the term or loan-to-value ratio
beginning in April. The annual mortgage insurance premium will
increase by 10 basis points for loans under the $625,500 limit
beginning April 1 and by 35 bps for home loans above that amount
starting in June, the FHA said Monday. Authority for these raises
come under the payroll tax cut extension agreed to last fall.
The FHA said the changes will boost the Mutual Mortgage Insurance
Fund by $1 billion. The UFMIP can still be financed into the
mortgage. The increase to the upfront premium will cost new
borrowers roughly $5 more per month. Reverse mortgages and
borrowers in special loan programs would be exempt from the
changes, according to the FHA.
Last week at the Mortgage Bankers Association servicing
conference in Orlando, FHA Commissioner Carol Galante said there
would be upcoming insurance premium changes for the streamline
refinance program. An FHA spokesman said these changes would be
included in a letter to lenders due soon. The MMI fund slipped
below the Congressionally mandated 2% threshold in 2008, and in
slipped to 0.2% last year. According to an analysis of President
Obama's budget, the fund could have declined further in 2013 and
possibly needed a bailout from the Treasury Department. Nearly $1
billion in revenue from settlements with mortgage servicers
announced in the last few weeks will also keep the fund from
needing assistance, according to FHA. "After careful analysis of
the market and the health of the MMI fund, we have determined
that it is appropriate to increase mortgage insurance premiums in
order to help protect our capital reserves and to continue
encouraging the return of private capital to the housing market,"
Galante said. "These modest increases are one of several measures
we are taking towards meeting the Congressionally mandated 2%
reserve threshold, while allowing FHA to remain a valuable option
for low- to moderate-income borrowers."
Pending home sales are on an upward trend, which has been uneven
but meaningful since reaching a cyclical low last April, and are
well above a year ago, according to the National Association of
Realtors (NAR). The Pending Home Sales Index (PHSI), a
forward-looking indicator based on contract signings, rose 2.0%
to 97.0 in January from a downwardly revised 95.1 in December and
is 8.0% higher than January 2011 when it was 89.8. The data
reflects contracts but not closings. The January index is the
highest since April 2010 when it reached 111.3 as buyers were
rushing to take advantage of the home buyer tax credit. The PHSI
in the Northeast rose 7.6% to 78.2 in January and is 9.8% above a
year ago. In the Midwest the index declined 3.8% to 88.1 but is
10.8% higher than January 2011. Pending home sales in the South
increased 7.7% to an index of 109.1 in January and are 10.5%
above a year ago. In the West the index fell 4.4% in January to
101.9 but is 0.7% above January 2011.
Why gas prices vary across the country
The national average for regular gasoline rose to $3.70 Friday,
up 14 cents in the past week - and only about 40 cents shy of the
all-time record high of $4.11 a gallon reached in July 2008.
While many are feeling the pain at the pump, Americans are seeing
widely divergent prices depending on where they live. Why are
drivers in Fort Collins, Colorado paying a little over $3, while
those in Santa Barbara, California are seeing gas prices at $4.33
a gallon? Colorado, Montana, Utah and Wyoming have the cheapest
pump prices in the country, at about $3.21 a gallon or less on
average, while retail gasoline prices are near $4.30 a gallon in
California and are over $4 in some parts of New York. The answer
lies in the "chaos" in crude oil prices around the nation, says
OPIS energy analyst Tom Kloza. "There's never been more diversity
in crude oil prices. There's never been more diversity in
gasoline prices." The divergence in pump prices comes from the
wildly differing wholesale prices for gasoline. The wholesale
price of gasoline in the Rocky Mountains and Midwest is about 20
to 40 cents cheaper than on the East Coast, for example.
The price of the refined fuel reflects regional supply issues
that face refiners in various parts of the country, based on the
type of oil they process. Crude oil in some landlocked areas in
the Midwest — such as North Dakota, where there has been a
tremendous supply surge recently — reached about $95-$96 a
barrel Friday. For refineries that use sour crude in the Midwest,
Western Canadian Select grade of crude, a heavy grade, the price
is closer to $91 a barrel. Yet, on the East Coast, refining
capacity, and as a result gasoline supply, has been drastically
reduced in the past few months. Two refiners outside of
Philadelphia, which account for 20% of the gasoline in the
northeast have shut down. Overall US and European refinery
shutdowns have taken about 2.6 million barrels of gasoline supply
off the market since 2009, says Houston-based energy analyst Andy
Lipow.
East Coast refiners import most of crude oil from Europe and West
Africa. North Sea Brent crude prices rose have risen above $125 a
barrel. Light Louisiana sweet crude prices on the Gulf Coast
reached $130 a barrel on Friday, due to tight supplies of
European and West African crude blends. (RBOB gasoline futures
traded at the CME Group's New York Mercantile Exchange - in close
proximity to East Coast refiners and delivery terminals - also
more closely reflects the Brent crude price. March RBOB gasoline
futures rose 1% Friday to settle at a 2012 high of $3.15 a
gallon.) Wholesale oil and gasoline prices have been rising
sharply all over the country in the past few days, Kloza says.
"At this rate, it's a foregone conclusion retail prices will rise
another 5 to 15 cents a gallon this week." Retail gasoline prices
have already spiked 5 cents since Friday. At this rate, if the
surge in gasoline prices next month mirrors the month of
February, record pump prices may be in store even before the
summer driving season gets underway.
Olick - 2500 foreclosures up for bulk sale
"Barely six hours after billionaire investor Warren Buffett said
that if he could he’d like to buy 'a couple of hundred thousand
single family homes', the regulator of Fannie Mae and Freddie Mac
put about 2500 of theirs up for sale. It is the next step in the
government’s REO (bank-owned) to rent program; the plan,
announced earlier this month, is designed to help Fannie and
Freddie unload thousands of foreclosed properties weighing on
their books. Fannie Mae alone owns more than 100,000 repossessed
properties. 'This is another important milestone in our
initiative designed to reduce taxpayer losses, stabilize
neighborhoods and home values, shift to more private management
of properties, and reduce the supply of REO properties in the
marketplace,' said FHFA acting director Edward DeMarco in a press
release.
While the prequalification phase began several weeks ago,
investors can now move to the next phase, where, if accepted by
proving financial capacity and experience, they can get access to
the properties for sale. The bulk of the properties are in the
most distressed markets, such as Florida, parts of California,
Phoenix, AZ, and Las Vegas, NV. Atlanta, GA, however, has the
highest number in the mix, 572 properties making up 23% of the
total up for sale. Atlanta housing was hit hard by the recession
and high job losses. Just 17% of the properties are vacant, so
investors would largely be getting assets with existing cash
flow. As these first properties hit the market, there is no
shortage of investors ready to scoop them up. Rental demand is
still surging, and rents continue to rise, despite record high
affordability and record low mortgage rates. Nearly 47% of all
closings in January were of distressed properties, according to a
new survey from Campbell/Inside Mortgage Finance, and investors
now make up nearly a quarter of all buyers, according to the
National Association of Realtors.
As banks start to ramp up the foreclosure process again, after a
year of delays following the 'robo-signing' scandal, more
properties will be repossessed and put up for sale; investors are
flocking to the deals, largely using all cash, as they get into
increasingly competitive situations. Even owner-occupants
(non-investors) are turning more to cash, as credit is still
tight. 'Despite near record low mortgage rates, homebuyers are
finding it very advantageous in the current housing market to
shop with cash. And low returns on money deposited in banks as
well as mortgage approval hassles also are pushing homebuyers to
consider all cash transactions,' according to Campbell/IMF.
'Between last October and January, the use of cash by current
homeowners purchasing a new principal residence surged from 30.8%
to 34.1%. Critics of the bulk REO to rent program say that
giving large investors with hoards of cash bulk deals squeezes
out smaller investors who might do more improvements to the
properties and then turn around and sell them at higher prices,
thereby increasing overall home values. Investors in the FHFA
program are required to hold the properties and rent them for 'a
specified number of years,' according to the agency’s initial
announcement."
S&P Greece downgrade may be short
Standard & Poor's downgrading of Greece's long-term ratings to
'selective default' could well be short but there is a risk
Athens falls back into default later, S&P analyst Moritz Kraemer
said today. S&P cut Greece's rating on Monday, the second
ratings agency to proceed with a widely expected downgrade after
Athens announced a bond swap plan to lighten its debt burden.
"It's a distinct possibility that this will be a short default
which will be cured," Kraemer told Reuters Insider television.
"The more interesting question is not when it will be cured but
whether it will be the last one." "I think the rating coming out
of default of the Hellenic Republic will give some indication of
what the likelihood of another restructuring down the road would
be." When assessing what rating to give Greece in the future,
S&P would look at the political environment, the growth outlook
and the remaining debt stock. "We think that on all three fronts
there are huge question marks," said Kraemer.
DSNews - debt and delinquency on the decline
Real estate-related debts are on the decline, as are overall
delinquencies, according to a quarterly report from the Federal
Reserve Bank of New York. Debt maintained through mortgages and
home equity lines of credit (HELOC) declined $146 billion during
the fourth quarter of last year. Mortgages made up a majority of
the decline – $134 billion – while HELOCs made up the
remaining $12 billion. Mortgage debt is now 11% below its peak,
while HELOC debt is now 11.7% below its peak. Also in the fourth
quarter, the delinquency rate on consumer debt was reduced from
10% to 9.8%. About $1.12 trillion of the total $11.53 trillion
in consumer debt was delinquent. About $824 billion in debt was
seriously delinquent (90 or more days past due). While overall
delinquency declined, about 2.2% of mortgage loans became
delinquent in the last quarter of the year.
Foreclosures increased 9.5% over the quarter as 289,000 homes
received foreclosure filings. However, the foreclosure rate is
still 35.3% below the level recorded in the fourth quarter of
2010. Also, despite the rise in foreclosure filings, the rate of
loans that became seriously delinquent declined, corresponding
with a rising cure rate, which reached 27.2% at the end of last
year. “Overall it appears that delinquency rates are
stabilizing at levels that remain significantly higher than
pre-crisis levels,” said Andrew Haughwout, VP and economist at
the Federal Reserve Bank of New York.
FHA to raise premiums
The Federal Housing Administration (FHA) will raise mortgage
insurance premiums this April in order to repair the health of
its emergency fund. The FHA upfront mortgage insurance premium
will increase to 1.75% from 1% of the base home loan amount. This
will apply regardless of the term or loan-to-value ratio
beginning in April. The annual mortgage insurance premium will
increase by 10 basis points for loans under the $625,500 limit
beginning April 1 and by 35 bps for home loans above that amount
starting in June, the FHA said Monday. Authority for these raises
come under the payroll tax cut extension agreed to last fall.
The FHA said the changes will boost the Mutual Mortgage Insurance
Fund by $1 billion. The UFMIP can still be financed into the
mortgage. The increase to the upfront premium will cost new
borrowers roughly $5 more per month. Reverse mortgages and
borrowers in special loan programs would be exempt from the
changes, according to the FHA.
Last week at the Mortgage Bankers Association servicing
conference in Orlando, FHA Commissioner Carol Galante said there
would be upcoming insurance premium changes for the streamline
refinance program. An FHA spokesman said these changes would be
included in a letter to lenders due soon. The MMI fund slipped
below the Congressionally mandated 2% threshold in 2008, and in
slipped to 0.2% last year. According to an analysis of President
Obama's budget, the fund could have declined further in 2013 and
possibly needed a bailout from the Treasury Department. Nearly $1
billion in revenue from settlements with mortgage servicers
announced in the last few weeks will also keep the fund from
needing assistance, according to FHA. "After careful analysis of
the market and the health of the MMI fund, we have determined
that it is appropriate to increase mortgage insurance premiums in
order to help protect our capital reserves and to continue
encouraging the return of private capital to the housing market,"
Galante said. "These modest increases are one of several measures
we are taking towards meeting the Congressionally mandated 2%
reserve threshold, while allowing FHA to remain a valuable option
for low- to moderate-income borrowers."
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