Housing Bubble Bursting?

[Randolph Kinney]

Sunshine in my pocket - gov't to share risk

Banks looking to share mortgage risk with government: report

NEW YORK (MarketWatch) - Banks are looking to spread some of the risk for mortgage loans to the federal government, The Wall Street Journal reported on Thursday. Credit Suisse Group executives have proposed expanding the scope of loans guaranteed by the Federal Housing Administration, the report said. The proposal would let the agency guarantee mortgage refinancings by some delinquent borrowers, the Journal reported. Citing people familiar with the situation, the report said another plan looks to make it easier for banks to write off part of the unpaid balance on loans that is higher than a property's value. If that happens, homeowners would owe less, and they might be able to refinance their loans and avoid foreclosure, the Journal reported. Executives at J.P. Morgan Chase are working on their own deal to expand the number of troubled homeowners who could refinance into FHA-backed loans, the paper said.

 

[Riick]

^ ^ ^
Isn't it GREAT that FHA has just now, quite spontaneously, reduced the knowledge requirements for their appraisers?
Sniff... SNIff... SNIFF... I smell money ......wonder where the trail leads?

 

[Randolph Kinney]

So goes the economy, so goes the markets

Now Bernanke's telling us


U.S. stocks turn tail after Fed chief acknowledges slower growth ahead

 

[Randolph Kinney]

IndyMac reserve for losses are too low

S&P DOWNGRADES RECOMMENDATION ON SHARES OF INDYMAC BANCORP TO SELL FROM HOLD

IMB; $8.00

Although we support IndyMac's plan to shrink its balance sheet, we are concerned that legacy loans will hurt performance. IndyMac added $450 million in credit costs in Q4 compared with Q3, and we still believe it is under-reserved. Notably, allowances total only 30% of non-performing loans, well below peers, especially considering the roughly $10 billion of low quality held-for-sale loans transferred to held-for-investment. We are widening our '08 loss estimate to 74 cents per share, from a loss of 37 cents, and lowering our target price by $3 to $6, 0.35X book value.

 

[murray stroupe]

Sell IMB; target $ 6.00

S&P DOWNGRADES RECOMMENDATION ON SHARES OF INDYMAC BANCORP TO SELL FROM HOLD

IMB; $8.00

Although we support IndyMac's plan to shrink its balance sheet, we are concerned that legacy loans will hurt performance. IndyMac added $450 million in credit costs in Q4 compared with Q3, and we still believe it is under-reserved. Notably, allowances total only 30% of non-performing loans, well below peers, especially considering the roughly $10 billion of low quality held-for-sale loans transferred to held-for-investment. We are widening our '08 loss estimate to 74 cents per share, from a loss of 37 cents, and lowering our target price by $3 to $6, 0.35X book value.

================

Randolf;
Glad they finally had a sell @ $8.00, down from 2007 high of $46;
better late than never.LOL Its downtrending again.

 

[Randolph Kinney]

As economy slows, defaults rise even on AAA companies

Investment-Grade Defaults to Rise, Credit Models Show

Feb. 15 (Bloomberg) -- The seizure in the credit markets caused by the collapse of subprime mortgages is making investors doubt even the AAA rated securities of companies with investment-grade credentials.

The Markit CDX North America Investment-Grade Index of 125 U.S. companies from AT&T Inc. to Walt Disney Co. signals the greatest risk of its members defaulting at the same time since the measure started trading in 2003, according to Royal Bank of Scotland Group Plc. The so-called default correlation model rose to 42 percent on the part of the index that's most exposed to losses, according to data compiled by Bloomberg and Milan-based UniCredit SpA. In May, the model was at 15 percent.

Investors are concerned that the fallout from last summer's sudden increase in credit costs will spread to companies that have no difficulty paying their bills as the U.S. economy slows. Seven companies defaulted last month, including Quebecor World Inc., North America's second-biggest publicly traded printer, and restaurant chain Buffets Holdings Inc., the most since 2004, Moody's Investors Service said.

Rising default correlation increases the risk of losses for investors in the AAA rated super-senior CDO portions because it costs more to buy credit-default swaps to protect against nonpayment. Mark-to-market losses on the CDOs may trigger selling of the securities, Royal Bank's Venizelos said.

``It's demonstrating the limits of these models,'' said Byron Douglass, an analyst at Credit Derivatives Research LLC in Walnut Creek, California. ``The model assumptions are that defaults happen with a certain distribution, and the market has always known that they don't in the real world actually behave that way.''

Credit is going to become even tighter as defaults trigger more defaults that trigger tighter credit conditions that trigger more defaults, etc.

 

[Randolph Kinney]

San Diego county looks like dog food - buyers wanted

Home loans failing at record rates; foreclosures up 257% over Jan. '07

“As depreciation deepens in some areas and creeps into others, more and more people who fall on hard times are falling behind on their mortgage payments,” LePage said. “Often they just can't sell their homes for enough, or fast enough, to avoid defaulting.”

DataQuick estimated that about 59 percent of the people receiving notices of default statewide are moving into foreclosure.

Marc Carpenter, a San Diego real estate agent who specializes in defaults, says sometimes it's better for consumers to go into foreclosure than to keep sinking into debt.

One of those people is Dave Pierce, a veteran real estate agent who recently went into default on a five-bedroom, 3,864-square-foot Torrey Highlands home, which he bought for about $1 million 3½ years ago.

Despite his 30 years in the real estate business, Pierce says he misjudged the market, getting in over his head with financing much like thousands of other San Diegans. He can't refinance his loan because his home is now worth far less than he paid for it.

He is seeking permission from his lender to do a short sale, selling the home for $790,000 and repaying less than the full amount of his loan.

“I know about a dozen people who are losing their houses,” Pierce said. “All are in real estate. This business is really hurting.”

NAR strikes again! Realtors believe their own propaganda and ate their own dog food.

 

[Tim The Enchanter]

My case by case job by job market analysis in North Hollywood, Panorama City, Mission Hills, and other similar competing areas is showing steady median prices until about 6 months ago. Then they go in the toilet by 20% or so over 2 -4 months time. FWIW. :new_blowingup:

 

[Marcia Langley]

Randolph,

At that pace the trustee deeds will actually outnumber the sales in a month or so.

 

[Austin]

http://finance.myway.com/jsp/nw/nwd...ap&src=601&news_id=ap-d8uslgl81&date=20080218

Foreclosed Homes Occupied by Homeless
The nation's foreclosure crisis has led to a painful irony for homeless people: On any given night they are outnumbered in some cities by vacant houses, and some street people are taking advantage of the opportunity by becoming squatters....

I vacationed in Charleston SC a few years ago and took a guided walking tour of the downtown are. After the Civil War downtown Charleston was left with vacant buildings due to terror bombing by the North all through the war. These buildings were occupied by homeless squatters until the downtown under went gentrification in the 1980.
The morale of the story is it took a major city 125 years to recover from the squatters occupation. Once they take over you can't get them out. The price of political correctness. :new_all_coholic: