Recent Articles
Oct 28, 2009 | No Comments | Sean Mills
This is no “news” to any of my friends in the business but some how it is to a lot of other people. 2009 is a time to survive and get through it not to kill it with record business.-Sean
(Calculated Risk) The MBA reports: Mortgage Applications Decrease
The Market Composite Index, a measure of mortgage loan application [...]
This is no “news” to any of my friends in the business but some how it is to a lot of other people. 2009 is a time to survive and get through it not to kill it with record business.-Sean
(Calculated Risk) The MBA reports: Mortgage Applications Decrease
The Market Composite Index, a measure of mortgage loan application volume, decreased 12.3 percent on a seasonally adjusted basis from one week earlier. …
The Refinance Index decreased online drugs 16.2 percent from the previous week and the seasonally adjusted Purchase Index decreased 5.2 percent from one week earlier.
…
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.04 percent from 5.07 percent, with points increasing to 1.25 from 1.13 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The purchase index is off almost 17% over the last 3 weeks, and the refinance index is off about 30%.
It appears the post home buyer tax credit slump has started, although apparently the tax credit will be extended and the eligibility expanded – so the slump might be delayed …
Click on graph for larger image in new window.
This graph shows the MBA Purchase Index and four week moving average since 2002.
The Purchase index declined to 254.9, and the 4-week moving average declined to 280.
Note: The increase in 2007 was due to the method used to construct the index: a combination of lender failures, and borrowers filing multiple applications pushed up the index in 2007, even though activity was actually declining.
The MBA reports: Mortgage Applications Decrease
The Market Composite Index, a measure of mortgage loan application volume, decreased 12.3 percent on a seasonally adjusted basis from one week earlier. …
The Refinance Index decreased 16.2 percent from the previous week and the seasonally adjusted Purchase Index decreased 5.2 percent from one week earlier.
…
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.04 percent from 5.07 percent, with points increasing to 1.25 from 1.13 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The purchase index is off almost 17% over the last 3 weeks, and the refinance index is off about 30%.
It appears the post home buyer tax credit slump has started, although apparently the tax credit will be extended and the eligibility expanded – so the slump might be delayed …
Click on graph for larger image in new window.
This graph shows the MBA Purchase Index and four week moving average since 2002.
The Purchase index declined to 254.9, and the 4-week moving average declined to 280.
Note: The increase in 2007 was due to the method used to construct the index: a combination of lender failures, and borrowers filing multiple applications pushed up the index in 2007, even though activity was actually declining.
Oct 19, 2009 | No Comments | Sean Mills
Not real estate but very noteworthy for the investors in California, the pain is far from over in our golden state. Don’t forget to source the REAL unemployment number, U6, for the true statistics on this recession as it relates to umeployment.-Sean no prescription drugs (Source Article LA Times)
Job losses for September are higher [...]
Not real estate but very noteworthy for the investors in California, the pain is far from over in our golden state. Don’t forget to source the REAL unemployment number, U6, for the true statistics on this recession as it relates to umeployment.-Sean no prescription drugs (Source Article LA Times)
Job losses for September are higher than expected and almost six times greater than in August, state officials say. L.A. County joblessness soars to 12.7%.
California posted higher-than-expected job losses in September, a sign that the state’s employment woes continue even amid indications of a broader economic recovery.
Employers cut 39,300 workers from their payrolls last month, according to figures released this morning by the state Employment Development Department. That’s nearly six times the number of jobs the state now says were lost in August, led by cuts in construction and government.
A separate survey of joblessness showed that California’s unemployment rate was 12.2% in September, down from a revised 12.3% in August. The unemployment rate in September 2008 was 7.8%.
“It is discouraging,” said Esmael Adibi, an economist at Chapman University. “We want to see job losses go down and the pace slow down, but we didn’t see it.”
California’s unemployment rate is well above the national rate of 9.8%.
The state’s job losses were especially pronounced in construction, which lost 14,100 jobs over the month, and government, which lost 12,700.
Cutbacks in government employment, which includes public schools, are partly to blame for the state’s lackluster performance this month, said Stephen Levy of the Center for the Continuing Study of the California Economy.
“We are disproportionately hit in the government sector because our state and local governments are having worse budget shortfalls than in other states,” he said.
Los Angeles County’s unemployment rate soared to 12.7%, up from 12.2% the previous month. The county has lost 164,200 jobs over the last year.
Unemployment rates in the other four counties in Southern California all declined in August. Orange County’s jobless rate was 9.4% in September, down from a revised 9.8% in August. Hard-hit Riverside and San Bernardino counties posted an unemployment rate of 14.2%, down from 14.6% in August.
Ventura County’s unemployment rate was 11%, down from a revised 11.3% in August. San Diego’s unemployment rate dipped to 10.2% in September from 10.6% in August.
Imperial County continued to have the highest rate in the state, and one of the highest in the country, in September at 30.1%. Others were Merced County at 15.7%, Trinity County at 15.9%, and Yuba County at 17.8%.
The state has lost 732,700 jobs over the last year, with 144,000 of those losses occuring in construction. California’s construction sector has shed more than 300,000 jobs since its pre-recession peak in early 2006.
Oct 6, 2009 | No Comments | Sean Mills
People have asked me why we are not seeing more of the trustee sales properties go back to the bank, REOs, or being sold? This is an example of why the pain is being spread out so much.-Sean
Source Article NY Times
Mortgages
A Plan for Forbearance
WITH the nation’s unemployment rate still high, federal regulators are intensifying efforts [...]
People have asked me why we are not seeing more of the trustee sales properties go back to the bank, REOs, or being sold? This is an example of why the pain is being spread out so much.-Sean
Source Article buy without a prescription target=”_blank”>NY Times
Mortgages
A Plan for Forbearance
WITH the nation’s unemployment rate still high, federal regulators are intensifying efforts to curb the effects of job losses or underemployment before they fuel another wave of home foreclosures.
The Federal Deposit Insurance Corporation, which protects consumer deposits when banks fail, recently recommended that lenders provide certain borrowers with a temporary respite from mortgage payments, or a forbearance. That relief would last up to six months, and sometimes longer, as the lenders work on long-term loan modifications.
“We want to make sure lenders do this as a strategy to mitigate losses to the F.D.I.C., but also because it’s the right thing to do,” said Michael H. Krimminger, the special adviser on policy to the F.D.I.C. chairwoman, Sheila C. Bair.
Under the agency’s plan, lenders would reduce loan payments to “affordable levels” for those borrowers who defaulted on their mortgages as a result of job losses or salary reductions. The new payments, the agency said, would be low enough to allow for “reasonable living expenses” in addition to the mortgage.
The plan, announced in September, applies only to the 53 financial institutions that relied on the F.D.I.C.’s insurance fund while acquiring failed banks. It does not include the four major mortgage lenders: Wells Fargo, Bank of America, Citigroup and JPMorgan Chase. These banks already have unemployment forbearance programs, though they differ from the F.D.I.C. plan.
•
In March, Citigroup introduced its Homeowner Unemployment Assist program, which lowers the monthly payment for many unemployed borrowers to $500 for three months. To qualify, a homeowner must have a loan owned and serviced by CitiMortgage, and be 60 days or more delinquent, among other things. Mark C. Rodgers, a spokesman, said it was too soon to say whether Citi would adopt the F.D.I.C.’s six-month forbearance policy. “It remains to be seen what changes we might make to the program, which has been in a test mode, going forward,” he said.
•
Wells Fargo has for years offered forbearance for unemployed borrowers who cannot pay their mortgages, according to Debora K. Blume, a spokeswoman. The nature of the forbearance terms, she said, is “highly dependent on the customer’s full financial and personal circumstances.”
•
At JPMorgan Chase, “if the borrower’s income is too low or not certain, but there are prospects for future employment, we may offer a loan forbearance program that allows a borrower to pay a reduced amount, or even zero, for a limited length of time, often three months,” said Thomas A. Kelly, a spokesman.
•
Bank of America offers up to six months of forbearance, according to Jack Schakett, the bank’s credit loss mitigation strategies executive.
Lenders maintain that they have been working together, and with the federal government, to create more consistent strategies for unemployed borrowers.
Mr. Schakett says borrowers generally receive better forbearance packages if they have “reasonable prospects for employment,” though his bank also examines their financial management skills. Bank of America looks at mortgage-payment habits and overall debt payment success, among other things.
“People who were already struggling with their mortgage payments would be less likely to end up with a job that would help them be successful in the future,” Mr. Schakett said.
Unemployment rates have not risen as sharply as some economists feared last year, but they remain higher than at any point in more than a decade.
Last month, the Department of Labor reported that the national unemployment rate rose to 9.7 percent in August, slightly more than it was in July and 3.5 percentage points higher than August 2008.
New York City’s unemployment rate, meanwhile, jumped to 10.3 percent in August, up from 9.5 percent in July.
Oct 6, 2009 | No Comments | Sean Mills
It always is easier to look from the outside and see with such clarity, the old “your life my way.” Were down but we are not out. Even our friends in the UK are getting in on the debate.-Sean
Los Angeles, 2009: California may be the eighth largest economy in the world, but its state government [...]
It always is easier to look from the outside and see with such clarity, the old “your life my way.” Were down but we are not out. Even our friends in the UK are getting in on the debate.-Sean
Los Angeles, 2009: California may be the eighth largest economy in the world, but its state government is issuing IOUs, unemployment is at its highest in 70 years, and teachers are on hunger strike. So what has gone so catastrophically wrong?
Will California become America’s first failed state?
Los Angeles, 2009: California may be the eighth largest economy in the world, but its state government is issuing IOUs, unemployment is at its highest in 70 years, and teachers are on hunger strike. So what has gone so catastrophically wrong?
Patients without medical insurance wait for treatment in the Forum, a music arena in Inglewood, Los Angeles. The 1,500 free places were filled by 4am. Photograph: John Moore/Getty Images
California has a special place in the American psyche. It is the Golden State: a playground of the rich and famous with perfect weather. It symbolises a lifestyle of sunshine, swimming pools and the Hollywood dream factory.
Read More » »
Oct 6, 2009 | No Comments | Sean Mills
No secret on this one if you have been to Las Vegas in the past year. -Sean
Budget-minded apartment tenants may be willing to sacrifice features such as walk-in closets and hardwood floors for cheaper rent, but they still want swimming pools, fitness centers and barbecue pits that make staying home more enjoyable.
Paid utilities and washers [...]
No secret on this one if you have been to Las Vegas in the past year. -Sean
Budget-minded apartment tenants may be willing to sacrifice features such as walk-in closets and hardwood floors for cheaper rent, but they still want swimming pools, fitness centers and barbecue pits that make staying home more enjoyable.
Paid utilities and washers and dryers in units topped the amenities list for renters from February to August on ApartmentGuide.com’s site.
Although amenities are important, renters consider multiple factors before choosing an apartment. More than 35 percent of respondents to a survey by Apartments.com said location and neighborhood have the biggest impact on their decision to pick one apartment over another if rent is not an issue, followed by 19 percent who said the size of the apartment matters most.
Read More » »
Oct 2, 2009 | No Comments | Sean Mills
From the BLS:
Nonfarm payroll employment continued to decline in September (-263,000), and the unemployment rate (9.8 percent) continued to trend up, the U.S. Bureau of Labor Statistics reported today. The largest job losses were in construction, manufacturing, retail trade, and government.
Click on graph for larger image.
This graph shows the unemployment rate and the year [...]
From the BLS:
Nonfarm payroll employment continued to decline in September (-263,000), and the unemployment rate (9.8 percent) continued to trend up, the U.S. Bureau of Labor Statistics reported today. The largest job losses were in construction, manufacturing, retail trade, and government.
Click on graph for larger image.
This graph shows the unemployment rate and the year over year change in employment vs. recessions.
Nonfarm payrolls decreased by 263,000 in September. The economy has lost almost 5.8 million jobs over the last year, and 7.2 million jobs during the 21 consecutive months of job losses.
The unemployment rate increased to 9.8 percent. This is the highest unemployment rate in 26 years.
Year over year employment is strongly negative.
![]()
buy medicine src=”http://4.bp.blogspot.com/_pMscxxELHEg/SsXzzDSUSqI/AAAAAAAAGfM/PWX-2daRZ0w/s320/EmploymentJobLossesRecessions.jpg” border=”0″ alt=”Percent Job Losses During Recessions” /> The second graph shows the job losses from the start of the employment recession, in percentage terms (as opposed to the number of jobs lost).
For the current recession, employment peaked in December 2007, and this recession was a slow starter (in terms of job losses and declines in GDP).
However job losses have really picked up earlier this year, and the current recession is now the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only early ’80s recession was worse).
The economy is still losing jobs at about a 3.2 million annual rate, and the unemployment rate will probably be above 10% soon. This is a very weak employment report – just not as bad as earlier this year. Much more to come …
Read More » »
Oct 2, 2009 | No Comments | Sean Mills
Banks appear to be resorting more often to a maneuver that helps them avoid acquiring property through foreclosure.
Before banks can acquire homes in foreclosure cases, there is a public auction, often at a county courthouse. These auctions are typically called trustee sales or sheriff sales. Normally, the lender or loan servicer (an entity that collects [...]
Banks appear to be resorting more often to a maneuver that helps them avoid acquiring property through foreclosure.
Before banks can acquire homes in foreclosure cases, there is a public auction, often at a county courthouse. These auctions are typically called trustee sales or sheriff sales. Normally, the lender or loan servicer (an entity that collects payments and handles administrative chores including foreclosure) makes a bid well above what investors are willing to pay for the home, and in those cases the bank ends up owning the property. It becomes part of the vast REO (real-estate owned) inventory that banks must sell off.
But sometimes the lender or loan servicer makes a bid low enough to tempt others to step in with a higher offer and win the auction. That has been happening more often lately in some parts of the country.
Sean O’Toole, chief executive officer of online pharmacies target=”_blank”>ForeclosureRadar.com, a research firm in California, estimates that in August 19% of homes sold in trustee sales in California went to investors rather than to a foreclosing lender, up from just 4% a year earlier.
In Adams County, Colo., part of the Denver metropolitan area, investors bought 16% of homes at trustee sales in the three months ended Aug. 31, up from 5% a year earlier, according to Jon Goodman, a lawyer in Boulder who invests in foreclosed properties. Mr. Goodman says more investors are bidding at these auctions because of “a shortage of regular inventory that works for fix and flips.” In addition, he says, some lenders want to avoid the hassles of acquiring, repairing and selling too many houses.
Read More » »
Sep 22, 2009 | No Comments | Sean Mills
As always there are a few things that hit me a little funnier than others…First, the implications are California was THE truly contributing factor to the demise of Lehmans forget the naked shorts driving the stock price down, fyi the naked shorts totaled 67 times the amount of stock issued, and forget the rest of the country’s [...]
As always there are a few things that hit me a little funnier than others…First, the implications are California was THE truly contributing factor to the demise of Lehmans forget the naked shorts driving the stock price down, fyi the naked shorts totaled 67 times the amount of stock issued, and forget the rest of the country’s bad buy amoxicillin without prescription debt in relation to loan origination. I guess the Hedge fund boys had nothing to do with this how about the SEC does their job and go after the big boys. Secondly, California just doesn’t get it as all government doesn’t get it balance the budget and quit spending what you don’t have. As a business owner if I spend more than my budget/income dictates I go broke and I go out of business. Time for the free ride to end California. -Sean
Please see the link as the source article cannot be pasted on the page. Source Article San Francisco Chronicle
The bankruptcy of Lehman Bros. reverberated with particular fury in California, where it helped deepen a recession already under way and sent the Bay Area into a spiral of job losses that has not yet ended.
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/09/15/MNBC19MVAP.DTL&type=realestate&ref=patrick.net#ixzz0RrI7GnTt
Sep 9, 2009 | No Comments | Sean Mills
The Federal Reserve’s latest (through July) G19 update is out, showing consumer credit.
To say that these figures are ugly would be an understatement. In fact, there is simply no way you can spin this – while this contraction in credit has to happen it has horrifying implications if our Washington policymakers don’t get on the stick [...]
The Federal Reserve’s latest (through July) G19 update is out, showing consumer credit.
To say that these figures are ugly would be an understatement. In fact, there is simply no way you can spin this – while this contraction in credit has to happen it has horrifying implications if our Washington policymakers don’t get on the stick and deal with the underlying issues here and now instead of pretending that everything is ok or worse, try to “borrow our way to prosperity.”
Let’s start with the “Full Monte”; this is the “de-noised” version of The Fed’s “annualized” rate of change chart (click for a larger version of any of these):
Read More » »
Sep 9, 2009 | No Comments | Sean Mills
California is seeing the first evidence of a economic rebound, according to a new study by Comerica Bank.
The bank’s California Economic Activity Index rose three points in July to 99 and is up eight points from a low of 91 in March.
July’s online drugs without prescription showing was just one point below the year-ago [...]
California is seeing the first evidence of a economic rebound, according to a new study by Comerica Bank.
The bank’s California Economic Activity Index rose three points in July to 99 and is up eight points from a low of 91 in March.
July’s online drugs without prescription showing was just one point below the year-ago level of 100. The index has been averaging six points below that level for all of 2008. (Click on image to enlarge.)
Source: Comerica Bank
“The California economy has begun to rebound over the last several months with six of the nine components of our Index contributing positively,” said Dana Johnson, Comerica’s chief economist. “Sales tax revenues, which so far have been the biggest contributor to the rebound in our Index, may flatten out in upcoming months, thereby reversing some of the recent strength. I will become much more confident that a sustainable recovery is underway once I begin to see employment gains also contributing to the rise of our Index.”
The Comerica California Economic Activity Index equally weights nine seasonally-adjusted indicators that reflect activity in the manufacturing, tourism, travel and trade sectors, as well as job growth and consumer outlays.
Manufacturing activity is measured by shipments in the electronic parts and accessories industry. Vehicle miles traveled along California highways, state-level hotel occupancy rates and air traffic data collected from the state’s major airports measure tourism and travel.
Trade is represented by state exports and container shipments at the largest port. Job growth is captured both by overall employment and by insured unemployment claims rolls. Retail sales activity is expressed in terms of state sales tax revenues.
Read more about the index HERE.
Source: The Orange County Register
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