Trouble on the Home Front

HenryTo · Posted: Tue Dec 11, 2007 10:54 am Post subject:

Freddie sees more losses over the next few years. Look for liquidity in the mortgage market to contract significantly over the next few months, as the additional fees and other "cautionary" measures start to kick in.
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Freddie Sees $5.5B-$12B More Losses
Tuesday December 11, 11:45 am ET
By Marcy Gordon, AP Business Writer
Freddie Mac Chief Says Business Will 'Get Tougher Before It Gets Better' As Defaults Rise

WASHINGTON (AP) -- The chief executive of Freddie Mac estimated Tuesday the mortgage finance company will lose an additional $5.5 billion to $7.5 billion over the next few years as the housing crisis worsens and home-loan defaults rise.

The government-sponsored company has already logged about $4.5 billion in projected losses during the first nine months of this year.

"I honestly think it's going to get tougher before it gets better," Richard Syron, the company's chairman and CEO, said in a discussion with financial analysts in New York.

Freddie's shares fell $1.80, or more than 5 percent, to $33.24 in morning trading.

While the mortgage crisis has brought a rising wave of foreclosure notices into public view, less evident have been "pictures of people standing with furniture on the lawn" after being forcibly evicted from their homes, Syron said. "As that begins to happen, and it will happen, I am afraid of the impact that this has."

Syron's remarks came a day after Freddie Mac and its larger government-sponsored rival Fannie Mae said they are changing their criteria for purchasing delinquent home loans they've guaranteed, in order to reduce the number they buy from investors.

On Tuesday, Freddie Mac announced it was imposing a 0.25 percent fee on all new home loans it buys or guarantees with settlement dates starting March 9, matching an earlier move by Fannie Mae.

The two companies, which together own or guarantee around two-fifths of U.S. home-mortgage debt, have cut their dividends and sold billions of dollars of special stock recently to buttress their finances after posting stunning third-quarter losses. They have been forced to set aside billions of extra dollars to account for bad home loans, eroding their profits at a time when home prices are falling and defaults are spiking on high-risk mortgages made to borrowers with weak credit histories.

Fannie's shares declined $1.85, or 5 percent, to $35.06.

rffrydr · Posted: Sun Dec 23, 2007 10:39 am Post subject:

The spillover effect:

http://www.sacbee.com/103/story/586093.html
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rffrydr · Posted: Sun Dec 23, 2007 8:29 pm Post subject:

But the prop tax remains:

http://biz.yahoo.com/ap/071223/taxed_out.html
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Mon Dec 24, 2007 8:59 pm Post subject:

It's a crime:

http://www.nytimes.com/2007/12/25/us/25fraud.html?pagewanted=2&_r=1
_________________
Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Thu Dec 27, 2007 9:48 am Post subject:

Thy neighbor's keeper:

http://www.cnbc.com/id/22398678
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Thu Dec 27, 2007 8:03 pm Post subject:

And the mighty shall become meek: how a community goes down.

http://www.sacbee.com/103/story/593143.html

Pay attention muni investors--yes, china.
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rffrydr · Posted: Fri Dec 28, 2007 9:29 am Post subject:

...And how community comes together. IRA investing takes it up a notch:

http://www.cnbc.com/id/22398678
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Wed Jan 02, 2008 3:10 pm Post subject:

Motley Fool on the latest housing statistics:

http://www.fool.com/investing/general/2008/01/02/another-dose-of-housing-hogwash.aspx

rffrydr · Posted: Fri Jan 11, 2008 6:33 am Post subject:

One man's trouble is another....

http://news.yahoo.com/s/ft/20080110/bs_ft/fto011020080347221414
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rffrydr · Posted: Fri Jan 11, 2008 9:40 am Post subject:

DJ Cleveland Sues 21 Banks Over Foreclosure Crisis
2008-01-11 09:07 (New York)

CLEVELAND (AP)--The city of Cleveland, an epicenter of the U.S.'s home
foreclosure crisis, has sued 21 banks, claiming subprime mortgage lending in
inner-city neighborhoods has created a public nuisance that hurt property
values and city tax collections.
The one-of-a-kind suit, filed in Cuyahoga County, Ohio Common Pleas Court,
accuses venerable institutions such as Deutsche Bank (DB), Goldman Sachs (GS),
Merrill Lynch (MER) and Wells Fargo (WFC) of creating a public nuisance. The
lawsuit seeks to recover hundreds of millions of dollars in damages, including
lost taxes from devalued property and money spent demolishing and boarding up
thousands of abandoned houses.
"To me, this is no different than organized crime or drugs," Mayor Frank
Jackson told The Plain Dealer. He arranged a news conference Friday to detail
the city's legal strategy.
"It has the same effect as drug activity in neighborhoods. It's a form of
organized crime that happens to be legal in many respects," Jackson said.
On Tuesday, Baltimore sued Wells Fargo, alleging the bank intentionally sold
high-interest mortgages more to blacks than to whites in violation of federal
law.
Cleveland based its legal challenge on a state law that relates to public
nuisances.
Jackson and city Law Director Robert Triozzi said Cleveland should have been
excluded from the frenzy of selling mortgage-backed securities to investors.
The practice, known as securitization, became popular during the housing boom
earlier this decade.
The city said Cleveland housing prices remained relatively flat amid
industrial layoffs as real estate values jumped elsewhere. The suit claimed
that even though these issues were well documented, investment bankers pushed
loans to investors at the expense of borrowers.

(END) Dow Jones Newswires
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rffrydr · Posted: Wed Jan 16, 2008 9:05 am Post subject:

While we were all looking at the the second and third derivatives of the past the actual market moved on:

http://www.cnbc.com/id/22679136

5.42 ain't bad on a 30year fixed. Master H., whattya think of PMI's rec on Houston? Guess they like the lack of appreciation this last few years. But it's been a builder's extravaganza, no? --city building, not just residential, right?
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rffrydr · Posted: Sat Jan 19, 2008 8:22 am Post subject:

Again, foreign money stepping up:

http://www.sacbee.com/103/story/646521.html
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rffrydr · Posted: Tue Jan 22, 2008 8:45 am Post subject:

Ryland offering "floors":

http://www.lvrj.com/real_estate/13917222.html
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Wed Jan 23, 2008 3:17 pm Post subject:

that's a cool idea:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aP_dK4hKcQq8&refer=home

--except now the banks WILL take the writeoff.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Thu Jan 24, 2008 12:04 pm Post subject:

This is something else I had been looking for:
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US package may up GSE loan cap to $625,000-sources

WASHINGTON, Jan 24 (Reuters) - The loan limit U.S. mortgage funders Fannie Mae FNM.N and Freddie Mac FRE.N can finance will be raised to $625,000 from the current $417,000 in an economic stimulus package now being put together by lawmakers, sources familiar with the negotiations said on Thursday.

While many lawmakers favor a plan that would raise the conforming loan limit across the country to $625,000, several sources said the final plan might be narrowly tailored to raise the loan level for some high-cost metro areas as high as $700,000.

A U.S. Treasury Department spokeswoman said on Thursday that the department opposes expanding the loan size for Fannie Mae and Freddie Mac before lawmakers pass comprehensive reform.