Geithner testifies to TARP Congressional Oversight Panel…

Update: Elizabeth Warren, Chair of the TARP C.O.P., spoke about her frustrations this morning on CSPAN:

10:00 am EST hearing beginning now. THIS will be good considering Geithner wants to extend TARP. Elizabeth Warren will have LOTS to say about the abject failure of the Treasury’s Mortgage Modification Program….

CNBC live stream here

Elizabeth kicks off with TARP Treasury Mortgage mod program has not achieved SCOPE SCALE or PERMANENCE necessary to stabilize housing market.

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December 10, 2009. Tags: , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Wall St. Comments off.

Video Update: Market Movers this week: Case Shiller Index-still declining but off lows, monthly jobs report Friday…

Update 2: More on that shadow inventory courtesy of Smart Money:

(…)the outlook for housing by Amherst Securities Group, whose stuff we’ve quoted before and whose analysis is invariably first-rate. The report, dated last Wednesday, festooned with gory detail, focuses on the swollen overhang, the so-called shadow inventory, that has grown inexorably in the wake of the tsunami of default and foreclosure.

Amherst estimates this massive overhang at seven million units. That’s the equivalent of 135% of a full year’s existing-home sales and chillingly greater than the 1.27 million units that made up the overhang in early 2005, when the housing bubble had just begun its dizzying and more than a little lunatic ascent.

…Three factors are cited by Amherst as the chief culprits in this sorry narrative. The first is the rapidity with which what it describes as the nonperforming bucket (where the mortgages are at least 60 days delinquent) is filling. The second is the strikingly low “cure rate” on delinquent loans. In 2005, homeowners retrieved 66% of their loans delinquent 60 days or longer. That percentage shriveled to a paltry 5% in the second quarter of ’09.

And, finally, bloating the inventory overhang is the lengthening time between delinquency and liquidation. Of the loans in the delinquent pipeline in August 2009, 9% have not made a payment in over 24 months, compared with 4% in 2008. The reasons cited by Amherst for this stretching out include moratoriums on foreclosures and the slow pace of the judicial process in states where a judge’s O.K. is required for foreclosure...GO READ THE WHOLE EXCELLENT PIECE!

wall-street21

UPDATE: More on the Case Shiller Home Price Index:

  • 10 & 20 city composites are up 3.6% from their lows.

These guys are hyping minimal improvement here, AGAIN. SHOCKAH! They are looking at month-to-month which is not the way to gauge, you need y/y in RE!

Here comes David Blitzer to break it out- he sees ‘clear signs it is turning up’, it ‘will be slow’ still ‘clear risk there may be backsliding at some point but it definitely looks encouraging’ Erin Burnette is ‘clinging’ to the ALMOST FLAT Y/Y for Dallas and Denver HA! Blitzer notes they include foreclosure sales and anecdotal data is foreclosures are out there, and he acknowledges the resets in 2010 are coming, and HA he finally notes the tax credit is ending in November, ya!

Here is the REAL DATA YEAR OVER YEAR from the same report – 1 YEAR CHANGE:

Dallas down 1.6%

Denver down 2.9%

Detroit down 24.6%

Las Vegas down 31.4%

L.A. down 14.9%

Miami down 21.2%

Minneapolis down 17.3%

New York down 10.3%

Phoenix down 28.5% (ouch!)

Portland down 13.9%

San Diego down 12.3%

San Francisco down 17.9%

Seattle down 15.3%

Tampa down 18.4%

Washington down 9.8%

THESE ARE NOT GOOD NUMBERS FOLKS!!!!

Here are the ridiculous tiny blips they are getting excited about, recall these are the 30 day change from June to July in %:

Atlanta up 2.3%

Boston up 1.2%

Charlotte up 0.6% (wow let’s take out some equity and restart the economy! uhm NOT!)

Continues after the break:

(more…)

September 29, 2009. Tags: , , , , , , , . Economy, Housing, Labor Department, Wall St. 1 comment.

All About FHA: A Bumpy Ride Gets Worse…

Okay so it appears that the FHA has 4.4% reserves ‘insured’ for potential losses, yet 14% of their loans are late. They repeatedly ‘assure’ us they will not require a taxpayer bailout, yet UBS and RealtyTrac project mortgage losses escalating through 2011 and FHA is at last count approx 25% of the mortgage market…D-E-N-I-A-L? Or is there enormous pressure perhaps,  to push back any oncoming bailout until the dopey health care bill gets rammed through?

Diana Olick Realty Check:

Someone get me the smelling salts, because I’m shocked, yes passing out over the latest headline from the FHA: “Officials Anticipate Annual Actuarial Study to Show Capital Reserve Ratio Dropping Below Congressionally-Mandated 2 Percent.”Read news story here.

The writing has been on the wall, in red, for a good long time. Last Tuesday, on this very blog, I wrote: FHA Claims It Won’t Need Bailout.

When I put the question of undercapitalization to FHA officials last week, they sent me this very complicated statement, which you can go back and read, but which starts by saying they would not comment until they receive the actuarial study. Today they say said study is “being completed.”Sept. 30th, I’m told, is the due date.

Last week they told me the same thing they’re saying today, that they are undercapitalized, but still okay.(Except last week they said they hold more than 5 percent of their insurance in force. Today they put that at 4.4 percent.)

“To be clear, the fund’s reserves are sufficient to cover our future losses, so the FHA will not require taxpayer assistance or new Congressional action,” said Commissioner David Stevens in a statement this morning. “That said, given the size and scope of the FHA and its importance to today’s market, these risk management and credit policy changes are important steps in strengthening the FHA fund, by ensuring that lenders have proper and sufficient protection.”

Ok, so why won’t they need a bailout? Next paragraph:

“FHA’s congressionally mandated capital reserve ratio…measures excess reserves above and beyond projected losses over the next 30 years. FHA continues to hold more than $30 billion in its reserves today, or more than 4.4 percent of it insurance in force.”

And the upshot is they will HAVE to tighten standards to avoid the losses (because we are, as Kudlow said just this morning on The Call, repeating the exact steps that led to the housing collapse). That will pressure the housing market recovery (albeit for excellent reasons).

At MiM we always say, take the loss and move forward! The incessant attempts to avoid cyclical recessions always, always leads to a bubble and a BIGGER downturn than we would have if we just let the business and economic cycle naturally ..well cycle!

When this lending standard tightening goes into effect we predict ACORN and Co. will scream until Barney Frank (D-MA) writes more legislation that either turns all the homes into subsidized low income rental housing, or forces more lending below GAAP underwriting standards, reinflating the bubble. And this is without even touching the Team TOTUS plan to remake FANNIE and FREDDIE which they have not yet revealed. So buckle up for a bumpy housing ride!

September 18, 2009. Tags: , , , , , , , , , , , , , , , . Celebrities, Economy, Film, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, Suspense, Unemployment Statistics, Wall St. 4 comments.

Housing Update: Median Home Price drops 16.8% y/y….MBA makes 700B downward revision to ’09 originations forecast…

Ouch: National Median Home Price at $173,000 for May, a drop of 16.8% year over year….May existing home sales up 2.4%, same as April….much lower than needed for this inventory, especially since roughly 45% of the sales are foreclosure sales to investors….dollar is extending its losses and markets are down, DOW off 40 now to 8298….10 yr yield 3.63%….Gold 918….Oil down to 67…

So taking a closer look at the incredible revisions by MBA yesterday, it appears as though the Making Home Affordable Program has been a failure to date. Not the EPIC FAIL of Hank Paulson’s original plan, but a FAIL nonetheless….

MBA dropped the hammer on the outlook yesterday:

…The Mortgage Bankers Association cut its forecast of home-mortgage lending this year by 27% amid deflating hopes for a boom in refinancing. The trade group said Monday that it now expects $2.034 trillion of originations of mortgages for one- to four-family homes in 2009, down from a forecast of $2.780 trillion in March, when falling interest rates spurred expectations for huge volumes of refinancing….

Here are the numbers, of the millions of homeowners facing foreclosure, a grand total of 13,000 loans have been modified/refi’d. Yep.

WSJ:

…Meanwhile, the MBA said, the volume of refinancing under the Obama administration’s Home Affordable Refinance Program so far has been “very low.” This program is designed to help borrowers whose loans are backed by government-owned investors Fannie Mae and Freddie Mac, the biggest providers of funding for U.S. mortgages.

“While the number of loans completed under this program is likely to increase, it is difficult to craft a scenario under which origination volumes would come anywhere close to reaching the numbers originally envisioned for the program, particularly under our higher rate environment,” the trade group said.

So how low is it? Let’s check in on the housing beat with Diana Olick of CNBC who has the real scoop:

…Today the Mortgage Bankers Association put out a revision in its 2009 originations forecast. A big revision. A $700 billion revision. “$84 billion of the drop is due to lower purchase originations and the rest is due to lower rate/term refinances and very low volumes in the Fannie Mae and Freddie Mac Home Affordable Refinance Program (HARP).”

…The MBA had raised its forecast by over $800 billion in March following the drop in interest rates associated with the Fed’s announcement on the Treasury bond and mortgage-backed securities purchases programs as well as the implementation of the HARP….

……The refi’s dropped off for two reasons, one being the interest rate rise, and the second being the poor results on the HARP….While generally accepted estimates were that around 1.5 to 2 million borrowers might avail themselves of this program, with many more potentially eligible, to date only about 13,000 loans have been completed, notes the MBA’s chief economist, Jay Brinkmann.

Did anyone else catch Larry Kudlow get curt and rather harsh with Diana on The Call last week? Diana makes it clear in this blog report her position and reporting on the housing market is based on the facts, not the ‘Goldilocks wannabe green shoots’ scenario we all know Larry wants to find…..the harsh  reality of our housing market, and it is pretty damned harsh here in AZ lemme tell ya:

A lot of folks out there contend that I am overly bearish on the beat I cover. Some go so far as to call me “miserable,” while others claim I choose to see the glass half empty. I am and do neither. I’m not a bear; I’m a realist. It’s your right to have an opinion, but it’s not my job. My job is to gather for you and funnel to you the facts: The numbers, the trends, the industry forecasts and the experts’ analyses. I have no agenda and frankly gain nothing from being either a bull or a bear. If anything, I’d be better off personally as a housing bull. CNBC doesn’t allow me to own stock, but I can own a house, and I do. If you think housing has bottomed, that’s your opinion, but that’s just what it is: Opinion.

June 23, 2009. Tags: , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Music. Comments off.

Housing and the Federal Reserve….

Vodpod videos no longer available.

Bill Gross at Pimco is saying the Fed needs to let the 10 yr float above 4% to attract private investors like himself, while Mark Zandee notes the Fed needs to increase MBS purchases to drive the 10 yr back down and keep boosting refis….dueling economists baby

more about “Housing and the Federal Reserve….“, posted with vodpod

May 29, 2009. Tags: , , , , , , , . Economy, Finance, Housing. Comments off.

Bond Vigilantes Ride Again – CNBC.com

Vodpod videos no longer available.

The 30 yr mortgage rate is rising above 5% again..Rickster lays down the case that quantitative easing is only effective very short term…

How about we make some use of Fannie and Freddie now that we own them and all, and have 3% mortgages bought by FAN/FRED…..HOLC HOLC Baby….

more about “Bond Vigilantes Ride Again – CNBC.com“, posted with vodpod

May 28, 2009. Tags: , , , , , , , , , , , . Economy, Finance. Comments off.

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