Finance Mortgage Banking
Economy Watch: No Rush to Build More Houses
Oct 21, 2009
U.S. housing starts posted a gain in September, but only a modest one,pointing to a still-modest rate of recovery for the overall economy.According to the U.S. Department of Commerce, the rate of new homestarted inched upward by 0.5 percent during the month to a seasonally adjustedrate of about 590,000 units. Ever-optimistic economists, it seems, wereexpecting more.
Economy Watch: More Medicine for Ill Housing Market
Oct 20, 2009
The U.S. housing market might not be quite as deathly ill as it was a
year ago, but no one is suggesting--to stretch the health
metaphor--that it will get up and run a marathon any time soon. In
fact, the industry is wheezing and gasping a little at the thought of
the looming expiration of the $8,000 first-timer tax credit, so plans
have been hatched in Congress to keep the credit in place.
RCA: Recovery Rate on Defaulted Loans Only 60%
Oct 19, 2009
It comes as no surprise that lenders continue to be plagued by
commercial mortgage defaults and, according to a recently released U.S.
Capital Trends report by global research and consulting firm Real
Capital Analytics, the recovery rate on these troubled loans is just 60
percent.
Economy Watch - Foreclosures Trend Upward in Usual Places
Oct 16, 2009
More than 925,000 U.S. homeowners received a foreclosure notice of some
kind -- a default notice, scheduled auction or bank repossession --
during the third quarter of 2009, according to RealtyTrac, a figure
that represents a 5 percent increase over the second quarter and a 23
percent increase over 3Q08. One in every 136 U.S. housing units
received a foreclosure filing during the quarter, which was the highest
quarterly foreclosure rate since the company began issuing its report
in the first quarter of 2005 -- though admittedly, that was during the
run up to the bubble peak.
Distressed Debt Sales Likely to Soar
Oct 15, 2009
Like moths to a flame, investors these days are forming around what
some believe could be the biggest distressed debt sales market since
the days of the U.S. savings and loan crisis, according to a recent
Ernst & Young survey.
Economy Watch - Feds to Publish CRE Loan Modification Guidelines Soon
Oct 15, 2009
The heads of the Federal Deposit Insurance Corp., Office of the
Comptroller of the Currency and Office of Thrift Supervision were all
before the U.S. Senate Subcommittee on Financial Institutions on
Wednesday sounding a warning about bad commercial real estate loans and
their threat to the health of the banking system, none of which is
news, but all of which is troubling.
Economy Watch - Foreclosure Efforts Not Paying Off?
Oct 12, 2009
Is the federal effort to forestall residential foreclosures all the administration is cracking it up to be? As reported by CPE,
late last week the U.S. Treasury Department was trumpeting 500,000 as
the number of homeowners who have had their mortgage payments
(temporarily) lowered under the Making Home Affordable program, which
began earlier this year.
Economy Watch: Fannie, Freddie Still Vexed by Mortgage Defaults
Oct 09, 2009
Federal Housing Finance Agency acting director Edward J. DeMarco told
Congress on Thursday that it ain’t over till it’s over when it comes to
the problems caused by U.S. housing mortgage delinquencies. And for
Freddie Mac and Fannie Mae especially, it’s not nearly over.
Dog Days of Distress
Oct 07, 2009
Long lines of cash-rich investors, including REITs, are forming around what some believe could be the biggest distressed debt sales market since the days of the U.S. savings-and-loan crisis, but Ernst & Young L.L.P.’s latest survey of those investors suggests this market won’t follow quite the same pattern it did in the 1990s.
Economy Watch: What the Fed Wants
Oct 02, 2009
Ahead of the report on Friday about unemployment from the U.S.
Department of Labor, from which no one is expecting particularly good
news, various members of the Federal Reserve were on the speaking
circuit talking about the economy and the role of the Fed.
Economy Watch: Mortgage Delinquencies Rise Again
Oct 01, 2009
The U.S. Office of the Comptroller of the Currency reported on
Wednesday that 5.3 percent of all residential mortgages that it tracks
(about 64 percent of the outstanding total nationwide, or about $6
trillion in principal balances) were seriously delinquent, or more than
60 days behind, in 2Q09. That’s up from 4.8 percent during the first
quarter of the year, and up from 3 percent a year ago.
New Program Offers $1B for Green Retrofits
Sep 30, 2009
A new program could provide a sizable jolt to the already-popular
practice of retrofitting existing commercial properties to increase
environmental sustainability. The Community Preservation Corp., a
non-profit affordable housing lender, has unveiled a new public-private
partnership that aims to provide $1 billion in funding for energy
efficient upgrades and green retrofits to multi-family properties.
Economy Watch: Home Prices Edge Upward, But Consumers Still Nervous
Sep 30, 2009
Home prices in the 20 metro markets surveyed by the S&P
Case-Shiller home-price indexes were up in July from June by 1.6
percent, which is believed to be a sign that there’s finally a floor
under the U.S. housing market, especially since it’s the third monthly
increase in row. The floor is in the basement, since prices are still
13.3 percent lower than in July 2008, and roughly at the same levels as
in 2003.
Economy Watch - New Home Sale Eke Out August Uptick
Sep 28, 2009
New home sales were up in August according to the U.S. Department of
Commerce, but only by 0.7 percent when compared with July. New-home
sales were 429,000 in August, up from 426,000 in July; the August 2009
total was 3.4 percent less than in the same month in 2008. Reportedly
economists, as polled by Thomson Reuters, were surprised that sales
weren't more robust. But apparently a technical recovery from a
recession isn't a terrific impetus to run out and buy a house.
CRE Mortgage Debt Drops in Q2, But News Not All Good
Sep 25, 2009
The overall level of outstanding commercial and multi-family mortgage
debt decreased in the second quarter, according to the Federal Reserve.
But despite the drop, the news was not all good, and many significant
issues remain to be worked out in the debt market.
Economy Watch - Bernanke Says Recession Over--Technically
Sep 16, 2009
Federal Reserve Chairman Ben Bernanke, speaking at the Brookings
Institution on Tuesday, said that the recession is "very likely" over.
Or, to quote the chairman more fully: “From a technical perspective,
the recession is very likely over at this point.”
Economy Watch - Lessons Learned from Lehman?
Sep 15, 2009
A year after the failure of Lehman Brothers, President Obama came to
Federal Hall in New York--the literal Wall Street--to push for reform
of the financial sector, including a "resolution authority" that would
let the federal government deal with companies that pose "systemic
risk" for the economy. Such as Lehman or other even bigger institutions
that were not allowed to fail last year. Unlike other audiences
recently, the president was reportedly met with mostly silence by the
gathered financial executives, members of Congress and other assorted
non-nattering nabobs at the speech.
Economy Watch - One Year Later, No Agreement on Impact of Lehman
Sep 14, 2009
On the eve of the first anniversary of the Lehman Brothers Holdings
Inc. collapse, economists are busy doing what they do best--disagreeing
with each other about what it meant, and what has changed since then
(besides the fact that many people are poorer than they used to be) and
where things are headed from here.
Economy Watch - Dollar Stores Still U.S. Retail Winners
Sep 11, 2009
Dollar stores, one of the few categories of retail winner during 2009
(besides Wal-Mart), keep piling on the positive numbers. Dollar General
Co. reported numbers for its second fiscal quarter on
Thursday, turning in 8.6 percent increase in same-store sales compared
with 2Q08. Its quarterly net income increased 238 percent.
Economy Watch - Beige Book Offers a Little Optimism
Sep 10, 2009
The Federal Reserve's latest Beige Book, released on Wednesday, was
redolent with cautious optimism, a fairly common sentiment in this
fifth--sixth?--seventh? inning of the Great Recession (which could also
go into extra innings).
Less Distress?
Sep 02, 2009
TALF – the Term Asset-Backed Securities Loan Facility – is the
government’s premier program to help liquefy the credit markets for
commercial real estate. Yet TALF and its cousin, PPIP – the
Public-Private Investment Program, address CMBS, not whole loans, which
are the bigger problem, at least in terms of outstanding debt. CMBS and
other securitized loans account for 21 percent of outstanding CRE debt
according to the Mortgage Bankers Association, while commercial banks,
which make whole loans, account for about 45 percent.
Economy Watch - Buyers Flock to Cheaper Houses
Sep 02, 2009
The volume of pending U.S. home sales increased again in July,
according to the National Association of Realtors, representing the
sixth monthly increase in row. The association's Pending Home Sales
Index increased 3.2 percent in July to 97.6, which is 12 percent points
higher than in July 2008, back before the full force of the recession,
but not before the housing bubble popped.
Economy Watch - Case-Shiller Index Sees Another Uptick
Aug 26, 2009
Is this the bottom? For sure? Everyone in the housing industry, and a
lot of other people besides, are probably asking that question after
the release of the latest S&P/Case-Shiller index report on Tuesday.
The index, which measures home prices in 20 major metro areas, ended
June up 1.4 percent, turning in a second monthly gain in a row. Prices
were up in 18 out of the 20 metro areas, and it was the second monthly
increase in the index since the mid-2006, just before the bubble popped.
Economy Watch - Is Delinquency Forever? Mostly, Says Fitch
Aug 25, 2009
The next big concern about the housing market might the concept of
delinquency cure rates, according to a new study by Fitch Ratings. The
cure rate is the percentage of delinquent prime loans returning to a
current payment status each month, and for most of this decade (2000 to
2006), the rate averaged about 45 percent.
Capital Markets Showing Some Signs of Life
Aug 25, 2009
Strong interest in public markets and the slow but steady return of
securitization provide some indicators that relief in the commercial
real estate market may be on the way, according to the latest capital
markets report by Cushman & Wakefield Sonnenblick-Goldman.
Economy Watch - 2Q Mortgage Delinquencies Set Dubious Record
Aug 21, 2009
The Mortgage Bankers Association has been keeping track of residential
mortgage delinquencies (those more than 30 days late) and residential
foreclosures since 1972, and the percentage of delinquencies has never
been higher than it was during the second quarter of 2009. At the end
of 2Q09, the seasonally adjusted rate of mortgage delinquencies stood
at 9.24 percent, up 12 basis points from 1Q09, while the non-adjusted
rate is 8.86 percent, according to the MBA's most recent calculations,
released on Thursday.
Economy Watch - TALF Gets Longer Life
Aug 18, 2009
The real estate securitization business, which has had enough problems
lately, got a bit of good news on Monday when the Federal Reserve
extended the Term Asset-Backed Securities Loan Facility, better known
as the TALF. For new CMBS--the little that there is--the extension runs
through June 30, 2010, while legacy CMBS has until March 31.
Fundamentals Continue to Buoy Seniors Sector as SHPT Closes $513M Financing
Aug 17, 2009
With more than 40 percent of the U.S. population currently aged 60 or
older, and the Baby Boomer generation nearing retirement age, the
seniors housing sector is set to benefit from these strong fundamentals
for some time to come. That positive outlook has allowed owners of
seniors housing to continue getting their hands on funding, despite the
sluggish lending market. Case in point: Senior Housing Properties
Trust's recently-closed $513 million credit facility through Citi and
Fannie Mae, the largest seniors financing deal so far this year.
Economic Update - Deutsche Bank Offers Grim View of U.S. Mortgages
Aug 07, 2009
Like a trailer for a monster movie, a new report by Deutsche Bank is promising scary things in the not-too-distant future. Assuming that housing prices continue a decline, the percentage of underwater mortgages might rise to 48 percent of the total, or roughly 25 million loans, by the first quarter of 2011. The bank is predicting that U.S. home prices will decline a further 14 percent from current prices by the first quarter of 2011.
Economic Update - MIT/CRE Index Takes Hit in 2Q09
Aug 05, 2009
Commercial real estate took a drubbing in the second quarter, according
to Massachusetts Institute of Technology Center for Real Estate, whose
index tracking commercial properties sold by institutional investors
dropped 18.1 percent during 2Q09. The index is down 32 percent from the
end of 2Q08, and 39 percent from its mid-2007 (that is, bubble) peak.
Economic Update - Disney Weighs in on the Economy
Jul 31, 2009
Is Disney a major lagging indicator for the U.S. economy? Maybe. In any
case, Walt Disney Co. CEO Robert Iger sounded like a central banker on
Thursday during the company's second-quarter conference call: "We do
see signs of economic stabilization, but the pace and strength of
recovery remain uncertain, and we are managing accordingly," he said.
Economic Update - Could Be Worse, Says Fed
Jul 30, 2009
The latest Beige Book from the Federal Reserve is out, and the
message is that the economy is still fairly bad, but not quite as bad
as it was, or could be. Employers are still laying workers off, but not
as quickly as before. Lenders are still reluctant to lend and borrowers
are still reluctant to borrow. but there's a modicum of activity.
Regarding real estate, some member banks--Atlanta, Cleveland, San
Francisco--reported rising real estate loan delinquencies.
Economic Update - New Home Sales See Uptick
Jul 28, 2009
New single-family home sales recorded an uptick in June, increasing 11
percent compared with May, to an annualized rate of 384,000. It looks
like a little pent-up demand for new homes is being unleashed,
especially since prices are still falling. The Commerce Department also
reported that the median price for a new house stood at $206,200 in
June, down 12 percent from last June.
Economic Update - Four More Years for Bernanke?
Jul 27, 2009
Economist Nouriel Roubini, also known as Dr. Gloom (or is it Dr. Doom?)
for his voice-in-the-wilderness prediction of the soon-to-pop bubble
back during the bubble's expansion phase, opined in the New York Times
on Sunday that Federal Reserve chairman Ben Bernanke deserves another
term after his current one expires in January, crediting him with
"decisions [that] prevented the Great Recession of 2008-2009 from
turning into the Great Depression 2.0."
Economic Update - Housing Treads on the Bottom?
Jul 24, 2009
Could spring 2009 have been the housing bottom everyone has beenwaiting for since the pop of the bubble? Residential real estatespecialists hope so. According to the National Association of Realtors,U.S. existing home sales were up 3.6 percent in June to an annualizedrate of 4.89 million. That's more than economists were predicting, andthe most since October 2008.
Economic Update - Fed Paying Attention to CRE Time Bomb
Jul 23, 2009
Federal Reserve Chairman Ben Bernanke, wrapping up two days of
testimony to Congress on Wednesday, talked about a number of weighty
economic issues, including concerns about commercial real estate. The
ticking time bomb analogy didn't come up--pundits talk that way, not
central bankers--but the commercial real estate debt problem
nevertheless got a fair amount of attention.
Economic Update - Panning for Gold in CRE Debt
Jul 22, 2009
Federal Reserve Chairman Ben Bernanke, high oracle of the U.S. economy,
began two days of testimony before Congress on Tuesday, and said that
things will slowly get better, eventually. He also noted that he and
his banking brethren are watching developments in the commercial real
estate industry--that ticking time bomb--with all the attention that a
ticking time bomb deserves. Meanwhile, down in the trenches, there's a
gold rush of sorts going on to find profits in real estate debt.
Ginnie Mae Issues $43B in MBS in June
Jul 14, 2009
The Government National Mortgage Association (Ginnie Mae) issued more
than $43 billion in mortgage-backed securities in June, marking the
first time the agency has broken the $40 billion barrier in a single
month.
Economic Update - Loan Delinquencies Edge Ever Upward
Jul 08, 2009
It's an age of loan delinquency. According to a report released Tuesday
by the American Bankers Association, delinquencies on consumer debt --
those debt holders more than 30 days late -- stood at a record 3.23
percent during 1Q09. That's only up a little from 4Q08, yet still the
highest rate since the organization began tracking such things in 1974.
Economic Update - Home Sellers, Appraisers Quarrel Over Valuations
Jul 06, 2009
Writing in the Wall Street Journal late last week, Stan
Liebowitz noted that "the evidence from a huge national database
containing millions of individual loans strongly suggests that the
single most important factor [in foreclosures] is whether the homeowner
has negative equity in a house..." Blaming subprime mortgage lending
for the current housing crisis, he asserted, misses the point.
With Fannie, Freddie Still Active, DC-Area Portfolio Fetches $79M in Financing
Jun 30, 2009
Throughout the credit crisis and their own internal financial trials,government-sponsored enterprises Fannie Mae and Freddie Mac have continued to steadily dole out loans in the multi-family market, and The Cafritz Cos. is among the latest firms to take advantage of the entities' willingness to lend. Cafritz has just secured $79.2million in permanent financing for a five-property portfolio in Metropolitan Washington, D.C., relying on Fannie Mae's multi-family lending programthrough M&T Realty Capital Corp.
Economic Update - CRE Still Faces Stress, Distress
Jun 26, 2009
Not-quite-so-bad news still passes for good news: the U.S. Department
of Commerce has revised its estimate of the annualized contraction of
the American economy in the first quarter of 2009 to 5.5 percent,
instead of the 5.7 percent previously estimated. Still, paired with the
4Q08 annualized contraction of 6.3 percent, the six months between last
October and this March represent the poorest economic performance for
the U.S. economy in over a half century.
Philly Shopping Center Lands $17M in Financing
Jun 24, 2009
The New Jersey office of Holliday Fenoglio Fowler L.P. has secured $17
million in financing for Columbus Crossing, a 142,000-square-foot,
grocery-anchored shopping center in Philadelphia.
Economic Update - Housing Reports See Short-Term Funk, Long-Term Hope
Jun 23, 2009
The residential refinancing boom that budded so promisingly in the spring has wilted, according to the latest predictions by the Mortgage Bankers Association. Back in March, the organization predicted refi activity to the tune of about $2.75 trillion nationwide by the end of 2009, spurred by historically low interest rates. Now that those low rates have evaporated, MBA says that total originations for the year will probably come in just above $2 trillion.
MBA: Outstanding Mortgage Debt Remains Unchanged in First Quarter
Jun 19, 2009
The level of commercial mortgage debt outstanding remained relatively unchanged in the first quarter, at $3.48 trillion, according to the Mortgage Bankers Association analysis of the Federal Reserve Board Flow of Funds data. The $3.48 trillion in commercial/multi-family mortgage debt outstanding recorded by the Federal Reserve was a decrease of $33 million from the fourth quarter of 2008. Multi-family mortgage debt outstanding grew to $908 billion, an increase of $5 billion, or 0.6 percent from the fourth quarter.
Economic Update - Recovery or Continued Slowdown?
Jun 17, 2009
Is the economy picking up or continuing to struggle? It seems to depend upon who you talk to and when you talk to them. While many reports gave a variety of accounts Tuesday, most supported bets that the pace of the recession is slowing.
Economic Update - CRE Defaults Head for High Ground
Jun 10, 2009
A new report by Real Estate Econometrics, based on FDIC data, puts thecommercial real estate loan default rate at its highest level in morethan a decade and a half, at least those loans held by regulateddeposit-taking institutions—banks and thrifts, for the most part. Thedefault rate soared from 1.62 percent in the last quarter of 2008 to2.25 percent in the first quarter of 2009. That rate doesn’t includedefaults on loans associated with multi-family rental properties, whichReal Estate Econometrics put at 2.45 percent in the first quarter of2009, up 68 basis points from the previous quarter.
CRE Mortgage Starts Plummeted in '08: MBA
Jun 05, 2009
After seeing phenomenal commercial mortgage originations in 2006 and 2007, figures from 2008 show a 65 percent decrease in volume, according to the Mortgage Bankers Association's 2008 commercial real estate/multi-family finance report.
M-F Mortgage Delinquencies Increase in Q1, Says MBA
Jun 03, 2009
The weakening economy and continued credit crunch led to increases incommercial/multifamily mortgage delinquencies during the first quarterof 2009, according to the latest Commercial/Multifamily DelinquencyReport, released by the Mortgage Bankers Association.
M-F Mortgage Delinquencies Increase in Q1, Says MBA
Jun 03, 2009
The weakening economy and continued credit crunch led to increases incommercial/multifamily mortgage delinquencies during the first quarter of 2009, according to the latest Commercial/Multifamily DelinquencyReport, released by the Mortgage Bankers Association.
Economic Update - Mortgage Rate Worries Weigh on Housing Market
Jun 01, 2009
General Motors was in the news over the weekend before the largest
bankruptcy in U.S. history (that is, its own), but more worrying for
many policymakers, economists and ordinary borrowers is last week's
sudden spike in mortgage interest rates.
Economic Update - Foreclosures Spike Among Prime-Mortgage Holders
May 29, 2009
The tsunami of residential foreclosures may have started, back in the
days of easy mortgage money, with borrowers whose only qualification
was being able to fog a mirror. About half of those kinds of subprime
mortgages have resulted in a foreclosure outcome, and Alt-A-inspired
foreclosures are spiking too. But now, according to the Mortgage
Bankers Association, foreclosures on prime fixed-rate loans represent
the largest share of brand-new foreclosures.
As Condo Market Remains Tight, Miami Tower Scores Key Fannie Approval
May 27, 2009
In the midst of the sluggish economy and tight credit market, condominium developers are having a tough time selling units. As a result, many projects across the nation have been reverted to rental or stalled outright. But in the midst of one of the most hard-hit condo markets--South Florida--at least one developer is breathing a bit easier.
Stimulus Programs, Financial Market Intervention to Benefit CRE--But Not Right Away
May 19, 2009
The government's pumping up of the economy via various programs created by the nearly $800 billion economic stimulus package and interceding in the financial market will indirectly incite the revival of the commercial real estate market, according to a new report by Marcus & Millichap Real Estate Investment Services. But the major impact is unlikely to be felt this year.
Economic Update - Spooked by Economy, Consumers Consume Less
May 14, 2009
The U.S. Department of Commerce reported that retail sales dropped by 0.4 percent in April, compared with the previous month. The decline was a little more than expected, but less than the revised March drop of 1.3 percent. The recent two months of decline followed unexpected increases in consumer spending in January and February.
With Pool of Distressed Assets on the Rise, A10 Kicks Off $100M Lending Program
May 11, 2009
The number of distressed assets continues to grow and lenders across
the country have been debuting new programs and establishing funds to
provide loans for owners and buyers of these troubled assets in a
climate where securing financing has become a monumental challenge.
Now, Boise, Idaho-based A10 Capital has jumped on the bandwagon with
$100 million in capital for the origination of first mortgage
commercial real estate loans and the supplying of financing for
commercial real estate-secured distressed debt acquisitions through its
new Lending Group.
Economic Update - Smaller Banks Face CRE Woes
May 07, 2009
On Wednesday, the eve of the stress test results, observers were
wondering just how much trouble sour commercial real estate loans are
going to cause those banks that hold them. Knee deep, waist deep, or up
to their eyeballs?
CMBS Sector Sees Jump in Special Servicing Loans
May 04, 2009
CMBS loan delinquencies and defaults are pushing up special servicing
volume at a blistering pace, according to a pair of first-quarter
updates published last week by Fitch Ratings.
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