Posts from ‘February, 2007’

These are not good times for subprime lenders. The rattling continues as the nations third largest subprime loan provider is postponing filing its earnings:
Bloomberg.com: Worldwide: “Feb. 28 (Bloomberg) — Shares of Fremont General Corp. hit a three-year low as the third-largest provider of subprime U.S. mortgages through brokers postponed filing its earnings for the fourth [...]

Borrowers with credit scores in the low 600’s will be the most affected by this:
Freddie Mac raises bar on high-risk mortgages Chron.com - Houston Chronicle: “WASHINGTON — Freddie Mac plans to toughen its standards and stop buying certain kinds of risky mortgages that have been linked to a high number of defaults.”

Why did the Chinese stock market drop 9% in a single day? Here are some answers:
China stocks post biggest drop in a decade - MSN Money: “A contributing factor to today’s market upheaval was the action late yesterday by the People’s Bank of China to raise — for the fifth time in eight months — [...]

The clean up continues:
Mortgage company shut down: “Mortgage company shut downMesa-based firm caught in state’s fraud crackdown
Regulators have shut down Mesa-based Eagle First Mortgage and its more than 75 Valley branches, citing illegal lending practices.”

Here is something to ponder:
National Association of Residential Real Estate Investment Advisors: “Even in a slowing year, the local resale housing market should show historical improvement in a rapidly growing area like Greater Phoenix, according to Jay Q. Butler, director of Realty Studies at Arizona State University’s Polytechnic campus.”

The Senate is holding hearings on sub-prime lending and lending practices in this country. I guess after so many sub-prime lenders bit the dust the past few months and foreclosures increasing it was only a matter of time before Congress stepped in.
UPDATE 2-US mortgage practices out of balance - key senator Regulatory News [...]

Cash in on the housing crush - MSN Money: “It’s a familiar play. When other investors flee, a few smart opportunists swoop in and buy on the cheap. But that’s not so easy with the housing rout.”

To adapt the late Speaker Tip O’Neill’s phrase “all politics is local”; I believe “all real estate is local”. Meaning an overall picture is only interesting to economists and decision makers. For the average guy real estate is a local phenomenon. So is the housing crunch over? Depends on how local you want to [...]

As of today there are 44,954 homes listed for sale on the Greater Phoenix MLS of which 40,511 (90%) are unsold. About 10% of homes sold in the last 30 days which corresponds to 4,443 homes. For comparison5,603 homes sold in December of 2006; 5,266 homes sold in January of 2006 and 6,632 in January [...]

In case you were not aware the sub-prime market is being shaken up. Some aggressive lenders in this category have already gone out of business and the remaining ones are tightening their guidelines. Here is a timely article:
Bloomberg.com: U.S.: “Underwriting standards for sub-prime loans have been too low for at least a year, resulting in [...]