June 15 is the short sale day
Fannie Mae and Freddie Mac, the nation's two largest mortgage
backers, will implement their new short sale guidelines on June
15. The changes require mortgage servicers to make a decision
within 30 days of receiving a short sale offer. They also must
consider requests for pre-approved short sales within that same
timeframe. If the lender needs more than 30 days, it must give
borrowers weekly status updates and a decision within 60 days of
the initial application. This extension gives lenders more time
to determine the value of the property or to get the approval of
a mortgage insurer. The moves are aimed at streamlining the
short sale process, which often takes months to complete. Faster
response times could help thousands of homeowners. Short sale
transactions can get so complicated that many prospective buyers
won't even consider making an offer on a short sale property. And
many of those who bid often walk away from the offer because
lenders take so long to make a decision. "Short sales are more
complex than routine home sales since they may involve multiple
parties and long-distance negotiating," said Tracy Mooney, a
Freddie Mac senior vice president. The new rules "are intended to
help make the decision process more transparent and timely."
Banks have also caught on to the benefit of approving short
sales. Foreclosures take more time for the bank to recoup their
money, and it costs upwards of $50,000 to process a foreclosure.
But in the wake of the robosigning scandal, banks are more apt to
help and even encourage a homeowner to pursue via a short sale.
In addition to the benefits of the bank, the homeowner comes out
much better in the long run. Along with a new home, their credit
has been salvaged to a respectable level as opposed to letting a
home go due to foreclosure. With a foreclosure it can take up to
seven years for your credit to show signs of improvement.
Jobless claims stay high, jobs stall
Initial claims for state unemployment benefits dropped by 1,000
to a seasonally adjusted 388,000, the Labor Department said
today. The prior week's figure was revised up to 389,000 from the
previously reported 386,000. The four-week moving average for
new claims, a closely followed measure of labor market trends,
rose 6,250 to 381,750, its highest since the week that ended Jan.
7. Economists polled by Reuters had forecast new claims falling
to 375,000 last week. The reading was the latest example of
fizzling momentum in the labor market recovery. New claims fell
sharply during early winter but the improvement has largely
stalled in recent weeks. The number of people still receiving
benefits under regular state programs after an initial week of
aid rose 3,000 to 3.315 million in the week ended April 14. The
number of Americans on emergency unemployment benefits fell
45,930 to 2.73 million in the week ended April 7, the latest week
for which data is available. A total of 6.68 million people were
claiming unemployment benefits during that period under all
programs, down 87,160 from the prior week. Employers added
120,000 new jobs to their payrolls in March, the least since
October, after averaging 246,000 jobs per month over the prior
three months. Many economists believe a mild winter boosted
payrolls growth earlier in the year and view recent stagnation as
payback for those gains.
Foreclosures up in half of all American cities
More than half of US major cities showed an increase in
foreclosures since the end of last year, according to RealtyTrac.
Mortgage servicers put a freeze on the process in 2010 to
correct affidavit problems and resolve investigations from
federal regulators and the state attorneys general. A $25 billion
settlement approved in March brought new standards and relief
requirements for struggling homeowners. As servicers adjusted,
foreclosures began to increase in different areas of the country
during the first quarter. Filings increased in 26 of 50 largest
cities, led by Pittsburgh, where foreclosures jumped 49% from the
previous three months. Some cities still showed continued
declines from the end of last year. Filings dropped 28% in
Portland, Ore. and fell 26% in Las Vegas. Servicers put Vegas
filings on pause since a new state law took effect bringing new
affidavit requirements and stronger enforcement for violations.
As a result, Stockton,
California held the highest metro foreclosure rate in the first
quarter, where one in every 60 homes received a filing. Vegas
dropped all the way to eighth on a 61% decline from the first
three months of last year, but it wasn't the only city with
filings well below year-ago levels. Of the 50 major cities, 33
reported filings were down from the first quarter of 2011. Vegas
showed the largest drop over that time, followed by a 53%
decrease in Seattle and a 51% drop in Austin, Texas. "First
quarter metro foreclosure trends were a mixed bag," said Brandon
Moore,CEO of RealtyTrac. "While the majority of metro areas
continued to show foreclosure activity down from a year ago, more
than half reported increasing foreclosure activity from the
previous quarter — an early sign that long-dormant foreclosures
are coming out of hibernation in many local markets."
Fed doing more harm than good?
The Federal Reserve is doing more harm to the US economy than
good by keeping interest rates artificially low and continuing
its "monetary medicine", Peter Boockvar, portfolio manager and
equity strategist at Miller Tabak said. "Bernanke has put the US
economy over the past bunch of years into monetary Fantasyland,"
Boockvar said today. "When you have rates at zero, when you have
an expanded balance sheet of about $3 trillion, the economy is
not real." Boockvar’s comments followed the Fed’s policy
statement on Wednesday that it would hold its key interest rate
near zero. The Fed also indicated the economy would have to
improve before it changes its policy. A 9-1 vote accompanied the
statement, which renewed the pledge to keep rates low through
2014. Boockvar said the Fed's policy of keeping rates at zero
misallocates capital and does not create a firm foundation for
growth because "the cost of money is artificial. It's on
monetary medicine, painkillers you can say," he said. "The Fed to
me is an impediment, not a boost, and they should just stop what
they are doing." The Fed’s quantitative easing or bond-buying
over the past several years has coincided with gains in stock
markets, but it has also stoked fears of inflation and worries
the Fed won’t be able to exit without causing turmoil in the
bond markets and a jump in interest rates. "At some point, the
extraordinary policy (of bond buying) has to be reversed and it's
going to be a complete mess when it happens," Boockvar said. "If
they (the Fed) think they're going to do it orderly, I have a big
problem with that belief."
NAR - recovery is here!
Pending home sales increased in March and are well above a year
ago, another signal the housing market is recovering, according
to the National Association of Realtors (NAR). The Pending Home
Sales Index, a forward-looking indicator based on contract
signings, rose 4.1% to 101.4 in March from an upwardly revised
97.4 in February and is 12.8% above March 2011 when it was 89.9.
The data reflects contracts but not closings. The index is now
at the highest level since April 2010 when it reached 111.3. The
PHSI in the Northeast slipped 0.8% to 78.2 in March but is 21.1%
above March 2011. In the Midwest the index declined 0.9% to 93.3
but is 16.9% higher than a year ago. Pending home sales in the
South rose 5.9% to an index of 114.1 in March and are 10.6% above
March 2011. In the West the index increased 8.7% in March to
108.0 and is 9.0% above a year ago.
Lawrence Yun, NAR chief economist and incorrigible optimist, said
2012 is expected to be a year of recovery for housing. Of
course, he said that about 2010 and 2011 as well, but who's
counting? "First quarter sales closings were the highest first
quarter sales in five years. The latest contract signing
activity suggests the second quarter will be equally good, " he
said. "The housing market has clearly turned the corner. Rising
sales are bringing down inventory and creating much more balanced
conditions around the county, which means home prices will be
rising in more areas as the year progresses."
Olick - noisy numbers or recovery?
"The spring housing numbers aren’t coming in along
expectations. That can’t be, right? Unemployment has been
easing, mortgage delinquencies falling, and affordability is off
the charts. That means housing should be bouncing back with verve
and vigor this Spring, except it’s not. It’s not crashing
again, it’s just bouncing along a bottom, which means the
recovery, as we’ve been warning all along, becomes increasingly
local. Let’s look at some data out this week: Sales of new
homes dropped, but only after a large upward revision in
February. That of course leads everyone to blame the weather.
S&P/Case-Shiller’s home price index reached new lows, but the
amount of the annual drop was smaller than the previous month, so
that’s an improvement, sort of. Mortgage applications fell,
even as the rate on the thirty year fixed hit a new low on the
Mortgage Bankers Association’s weekly survey. Refis fell hard
and purchase applications rose a little, although the four week
moving average is down. Zillow.com reports that home values rose
from February to March (0.5%), 'marking the largest monthly
increase since May 2006, before home values peaked.' That led
analysts there to exclaim the headline: 'Majority of Markets
Covered by Zillow Home Value Forecast to Hit Bottom by Late
2012.' Trulia.com released a report which mixes three
indicators, construction starts, existing home sales and
delinquency and foreclosure rates in order to gauge the housing
recovery. Apparently it slipped backward in March 'after a few
strides forward.' Then Federal Reserve Chairman Ben Bernanke
said, 'The ongoing weakness in the housing market still
represents a headwind to economic recovery.'
No wonder economists at Freddie Mac concluded in its April
forecast that the data are, 'noisy.' Then they too blamed it all
on the weather. So what are we to think, and how are we to play
housing, here at the almost, sort of, bottom in some markets but
not in others? 'Investor demand will drive many markets this
spring and summer,' says David Stiff, chief economist at Fiserv.
'This means that, at the moment, the MBA purchase application
index is a less reliable predictor of sales activity.' Stiff
says he thinks the housing market has bottomed out, but that
won’t be obvious until next year. He also makes clear that the
recovery will be driven by investors, and investors largely buy
in the lower cost markets. The one truth I heard in all the
heated talk of housing today came from CNBC’s Jim Cramer, with
whom I often disagree. He said, 'aggregate numbers make you no
money.' He was talking specifically about housing."
Fannie Mae and Freddie Mac, the nation's two largest mortgage
backers, will implement their new short sale guidelines on June
15. The changes require mortgage servicers to make a decision
within 30 days of receiving a short sale offer. They also must
consider requests for pre-approved short sales within that same
timeframe. If the lender needs more than 30 days, it must give
borrowers weekly status updates and a decision within 60 days of
the initial application. This extension gives lenders more time
to determine the value of the property or to get the approval of
a mortgage insurer. The moves are aimed at streamlining the
short sale process, which often takes months to complete. Faster
response times could help thousands of homeowners. Short sale
transactions can get so complicated that many prospective buyers
won't even consider making an offer on a short sale property. And
many of those who bid often walk away from the offer because
lenders take so long to make a decision. "Short sales are more
complex than routine home sales since they may involve multiple
parties and long-distance negotiating," said Tracy Mooney, a
Freddie Mac senior vice president. The new rules "are intended to
help make the decision process more transparent and timely."
Banks have also caught on to the benefit of approving short
sales. Foreclosures take more time for the bank to recoup their
money, and it costs upwards of $50,000 to process a foreclosure.
But in the wake of the robosigning scandal, banks are more apt to
help and even encourage a homeowner to pursue via a short sale.
In addition to the benefits of the bank, the homeowner comes out
much better in the long run. Along with a new home, their credit
has been salvaged to a respectable level as opposed to letting a
home go due to foreclosure. With a foreclosure it can take up to
seven years for your credit to show signs of improvement.
Jobless claims stay high, jobs stall
Initial claims for state unemployment benefits dropped by 1,000
to a seasonally adjusted 388,000, the Labor Department said
today. The prior week's figure was revised up to 389,000 from the
previously reported 386,000. The four-week moving average for
new claims, a closely followed measure of labor market trends,
rose 6,250 to 381,750, its highest since the week that ended Jan.
7. Economists polled by Reuters had forecast new claims falling
to 375,000 last week. The reading was the latest example of
fizzling momentum in the labor market recovery. New claims fell
sharply during early winter but the improvement has largely
stalled in recent weeks. The number of people still receiving
benefits under regular state programs after an initial week of
aid rose 3,000 to 3.315 million in the week ended April 14. The
number of Americans on emergency unemployment benefits fell
45,930 to 2.73 million in the week ended April 7, the latest week
for which data is available. A total of 6.68 million people were
claiming unemployment benefits during that period under all
programs, down 87,160 from the prior week. Employers added
120,000 new jobs to their payrolls in March, the least since
October, after averaging 246,000 jobs per month over the prior
three months. Many economists believe a mild winter boosted
payrolls growth earlier in the year and view recent stagnation as
payback for those gains.
Foreclosures up in half of all American cities
More than half of US major cities showed an increase in
foreclosures since the end of last year, according to RealtyTrac.
Mortgage servicers put a freeze on the process in 2010 to
correct affidavit problems and resolve investigations from
federal regulators and the state attorneys general. A $25 billion
settlement approved in March brought new standards and relief
requirements for struggling homeowners. As servicers adjusted,
foreclosures began to increase in different areas of the country
during the first quarter. Filings increased in 26 of 50 largest
cities, led by Pittsburgh, where foreclosures jumped 49% from the
previous three months. Some cities still showed continued
declines from the end of last year. Filings dropped 28% in
Portland, Ore. and fell 26% in Las Vegas. Servicers put Vegas
filings on pause since a new state law took effect bringing new
affidavit requirements and stronger enforcement for violations.
As a result, Stockton,
California held the highest metro foreclosure rate in the first
quarter, where one in every 60 homes received a filing. Vegas
dropped all the way to eighth on a 61% decline from the first
three months of last year, but it wasn't the only city with
filings well below year-ago levels. Of the 50 major cities, 33
reported filings were down from the first quarter of 2011. Vegas
showed the largest drop over that time, followed by a 53%
decrease in Seattle and a 51% drop in Austin, Texas. "First
quarter metro foreclosure trends were a mixed bag," said Brandon
Moore,CEO of RealtyTrac. "While the majority of metro areas
continued to show foreclosure activity down from a year ago, more
than half reported increasing foreclosure activity from the
previous quarter — an early sign that long-dormant foreclosures
are coming out of hibernation in many local markets."
Fed doing more harm than good?
The Federal Reserve is doing more harm to the US economy than
good by keeping interest rates artificially low and continuing
its "monetary medicine", Peter Boockvar, portfolio manager and
equity strategist at Miller Tabak said. "Bernanke has put the US
economy over the past bunch of years into monetary Fantasyland,"
Boockvar said today. "When you have rates at zero, when you have
an expanded balance sheet of about $3 trillion, the economy is
not real." Boockvar’s comments followed the Fed’s policy
statement on Wednesday that it would hold its key interest rate
near zero. The Fed also indicated the economy would have to
improve before it changes its policy. A 9-1 vote accompanied the
statement, which renewed the pledge to keep rates low through
2014. Boockvar said the Fed's policy of keeping rates at zero
misallocates capital and does not create a firm foundation for
growth because "the cost of money is artificial. It's on
monetary medicine, painkillers you can say," he said. "The Fed to
me is an impediment, not a boost, and they should just stop what
they are doing." The Fed’s quantitative easing or bond-buying
over the past several years has coincided with gains in stock
markets, but it has also stoked fears of inflation and worries
the Fed won’t be able to exit without causing turmoil in the
bond markets and a jump in interest rates. "At some point, the
extraordinary policy (of bond buying) has to be reversed and it's
going to be a complete mess when it happens," Boockvar said. "If
they (the Fed) think they're going to do it orderly, I have a big
problem with that belief."
NAR - recovery is here!
Pending home sales increased in March and are well above a year
ago, another signal the housing market is recovering, according
to the National Association of Realtors (NAR). The Pending Home
Sales Index, a forward-looking indicator based on contract
signings, rose 4.1% to 101.4 in March from an upwardly revised
97.4 in February and is 12.8% above March 2011 when it was 89.9.
The data reflects contracts but not closings. The index is now
at the highest level since April 2010 when it reached 111.3. The
PHSI in the Northeast slipped 0.8% to 78.2 in March but is 21.1%
above March 2011. In the Midwest the index declined 0.9% to 93.3
but is 16.9% higher than a year ago. Pending home sales in the
South rose 5.9% to an index of 114.1 in March and are 10.6% above
March 2011. In the West the index increased 8.7% in March to
108.0 and is 9.0% above a year ago.
Lawrence Yun, NAR chief economist and incorrigible optimist, said
2012 is expected to be a year of recovery for housing. Of
course, he said that about 2010 and 2011 as well, but who's
counting? "First quarter sales closings were the highest first
quarter sales in five years. The latest contract signing
activity suggests the second quarter will be equally good, " he
said. "The housing market has clearly turned the corner. Rising
sales are bringing down inventory and creating much more balanced
conditions around the county, which means home prices will be
rising in more areas as the year progresses."
Olick - noisy numbers or recovery?
"The spring housing numbers aren’t coming in along
expectations. That can’t be, right? Unemployment has been
easing, mortgage delinquencies falling, and affordability is off
the charts. That means housing should be bouncing back with verve
and vigor this Spring, except it’s not. It’s not crashing
again, it’s just bouncing along a bottom, which means the
recovery, as we’ve been warning all along, becomes increasingly
local. Let’s look at some data out this week: Sales of new
homes dropped, but only after a large upward revision in
February. That of course leads everyone to blame the weather.
S&P/Case-Shiller’s home price index reached new lows, but the
amount of the annual drop was smaller than the previous month, so
that’s an improvement, sort of. Mortgage applications fell,
even as the rate on the thirty year fixed hit a new low on the
Mortgage Bankers Association’s weekly survey. Refis fell hard
and purchase applications rose a little, although the four week
moving average is down. Zillow.com reports that home values rose
from February to March (0.5%), 'marking the largest monthly
increase since May 2006, before home values peaked.' That led
analysts there to exclaim the headline: 'Majority of Markets
Covered by Zillow Home Value Forecast to Hit Bottom by Late
2012.' Trulia.com released a report which mixes three
indicators, construction starts, existing home sales and
delinquency and foreclosure rates in order to gauge the housing
recovery. Apparently it slipped backward in March 'after a few
strides forward.' Then Federal Reserve Chairman Ben Bernanke
said, 'The ongoing weakness in the housing market still
represents a headwind to economic recovery.'
No wonder economists at Freddie Mac concluded in its April
forecast that the data are, 'noisy.' Then they too blamed it all
on the weather. So what are we to think, and how are we to play
housing, here at the almost, sort of, bottom in some markets but
not in others? 'Investor demand will drive many markets this
spring and summer,' says David Stiff, chief economist at Fiserv.
'This means that, at the moment, the MBA purchase application
index is a less reliable predictor of sales activity.' Stiff
says he thinks the housing market has bottomed out, but that
won’t be obvious until next year. He also makes clear that the
recovery will be driven by investors, and investors largely buy
in the lower cost markets. The one truth I heard in all the
heated talk of housing today came from CNBC’s Jim Cramer, with
whom I often disagree. He said, 'aggregate numbers make you no
money.' He was talking specifically about housing."
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