Employment in the residential construction field overall slipped 2.1% from October to November, with some 3.2 million workers employed during the month, according to the Bureau of Labor Statistics. The figure marked a 5.1% drop from levels in November, 2006.
Some 963,900 workers building residential units were employed in November, down 2.0% from October, while 2.2 million residential specialty trade contractors were employed, a 2.2% month-to-month drop.
For the economy as a whole, the unemployment rate held at 4.7%. Average hourly earnings increased just half a percent from October to November to $17.63; the mark was 1.8% higher than the same month last year.
Friday, December 7, 2007
Monday, December 3, 2007
More Than Half of Sub-Prime Borrowers Could Have Gotten Conventional Loans
The Wall Street Journal finds a study that says 55% of the borrowers in 2005 who got sub-prime mortgages could have qualified for more conventional mortages with better terms. In 2006, 61% did. "The analysis also raises pointed questions about the practices of major mortgage lenders. Many borrowers whose credit scores might have qualified them for more conventional loans say they were pushed into risky subprime loans. They say lenders or brokers aggressively marketed the loans, offering easier and faster approvals -- and playing down or hiding the onerous price paid over the long haul in higher interest rates or stricter repayment terms," says the Journal.
In other news, Lennar Homes has sold $1.3 billion in land to Morgan Stanley for 40 cents on the dollar.
In other news, Lennar Homes has sold $1.3 billion in land to Morgan Stanley for 40 cents on the dollar.
Friday, November 30, 2007
How We Got Here
From the court documents in the fallout of the Duke Cunningham bribery case. Former Congressman Cunningham is currently serving eight years for taking bribes from a number of individuals, including the Thomas Kontogiannis mentioned here:
"The government’s investigation indicates that Kontogiannis’s typical mortgage fraud involved the following scenario. (With regard to the following narrative, see Exhibit 5 and Exhibits 12-19.)
Kontogiannis would have a loan application prepared in the name of a putative home purchaser, sometimes with the knowledge of the person (who might be paid a fee) and sometimes without the person’s knowledge, for a property that Kontogiannis either had developed or had planned to develop. Fraudulent paperwork would be prepared related to, for example, income, assets, or appraisal. (Kontogiannis presumably would pay a kickback to the individual preparing these documents.) Applications would then otherwise be submitted for approval to various financial institutions in accordance with normal industry practices. At closing, all title documentation (such as the mortgage and note, the uniform settlement statement (HUD-1 form), title-insurance paperwork, and affidavits pertaining to the purchaser’s identity and intent of occupancy) would be fraudulently executed by a loan officer controlled by Kontogiannis. ... The mortgage and note, however, would never be recorded, the taxes never paid, and title insurance never purchased. Instead, the funds that had been disbursed for these purposes would eventually be steered to another company ostensibly owned by one of Kontogiannis’s daughters but controlled by Kontogiannis.
These fraudulent loans would ultimately be sold into the secondary-mortgage market to a lender who would be led to believe, based on the loan documentation provided by Kontogiannis’s agent, that the loan had been sent for recording and that all taxes and recording fees had been paid....
One company alone had purchased over 100 of the loans in the secondary market, with an average loan amount of approximately $500,000. That publicly traded and federally chartered bank thus had approximately $50,000,000 in loans that were potentially worthless because, as a result of Kontogiannis’s scams, none of the mortgages were recorded in primary position as the bank had assumed. That, in turn, meant that if any of the loans defaulted, the bank would not be able to foreclose on any real property and thereby recoup any of the losses. ”
Published speculation says the "one company" may be Washington Mutual, which you may remember surfaced in another matter.
"The government’s investigation indicates that Kontogiannis’s typical mortgage fraud involved the following scenario. (With regard to the following narrative, see Exhibit 5 and Exhibits 12-19.)
Kontogiannis would have a loan application prepared in the name of a putative home purchaser, sometimes with the knowledge of the person (who might be paid a fee) and sometimes without the person’s knowledge, for a property that Kontogiannis either had developed or had planned to develop. Fraudulent paperwork would be prepared related to, for example, income, assets, or appraisal. (Kontogiannis presumably would pay a kickback to the individual preparing these documents.) Applications would then otherwise be submitted for approval to various financial institutions in accordance with normal industry practices. At closing, all title documentation (such as the mortgage and note, the uniform settlement statement (HUD-1 form), title-insurance paperwork, and affidavits pertaining to the purchaser’s identity and intent of occupancy) would be fraudulently executed by a loan officer controlled by Kontogiannis. ... The mortgage and note, however, would never be recorded, the taxes never paid, and title insurance never purchased. Instead, the funds that had been disbursed for these purposes would eventually be steered to another company ostensibly owned by one of Kontogiannis’s daughters but controlled by Kontogiannis.
These fraudulent loans would ultimately be sold into the secondary-mortgage market to a lender who would be led to believe, based on the loan documentation provided by Kontogiannis’s agent, that the loan had been sent for recording and that all taxes and recording fees had been paid....
One company alone had purchased over 100 of the loans in the secondary market, with an average loan amount of approximately $500,000. That publicly traded and federally chartered bank thus had approximately $50,000,000 in loans that were potentially worthless because, as a result of Kontogiannis’s scams, none of the mortgages were recorded in primary position as the bank had assumed. That, in turn, meant that if any of the loans defaulted, the bank would not be able to foreclose on any real property and thereby recoup any of the losses. ”
Published speculation says the "one company" may be Washington Mutual, which you may remember surfaced in another matter.
Thursday, November 29, 2007
People Feel At Home in Their Kitchens
A friendly reminder from eBay, and you've only yourself to blame if you click through.
New Home Sales Drop 23.5% in October
New home sales dipped 23.5% in October to a seasonally adjusted annualized rate of 728,000 units, according to the most recent figures from the Census Bureau. That figure was reported widely as an month-to-month increase, but while it was a 1.7% increase over the revised September rate, it was well below the initially reported rate of 770,000 units in September.
Through the first ten months of 2007, some 689,000 new homes have been sold, down 24.2% from the same period last year.
The median new home price for October was $217,800, down 8.6% from September's median and down 13.0% from October, 2006's median price. Builders were reckoned to have 8.5 months worth of unsold inventory. The average house sold had been on the market nearly six months, up from 3.7 months in October, 2006.
Through the first ten months of 2007, some 689,000 new homes have been sold, down 24.2% from the same period last year.
The median new home price for October was $217,800, down 8.6% from September's median and down 13.0% from October, 2006's median price. Builders were reckoned to have 8.5 months worth of unsold inventory. The average house sold had been on the market nearly six months, up from 3.7 months in October, 2006.
October Foreclosures Level Off, But Are Still Nearly Double 2006's Pace
Some 224,451 foreclosure notices were filed in October, up 94% from the same month last year, according to online marketplace RealtyTrac®. However, the mark was up just 2% from September. The national foreclosure rate for the month was one foreclosure filing for every 555 households.
“Overall foreclosure activity continues to register at a high level compared to last year, but it appears to have leveled off over the past two months after hitting a high for the year in August,” said James J. Saccacio, chief executive officer of RealtyTrac. “Default notices were down nearly 9% in October, indicating that some of the efforts on the part of homeowners, lenders and advocacy groups to find alternatives to foreclosure may be starting to have an impact. On the other hand, bank repossessions were up nearly 35% , evidence that more homeowners who enter foreclosure are losing their homes.”
“Overall foreclosure activity continues to register at a high level compared to last year, but it appears to have leveled off over the past two months after hitting a high for the year in August,” said James J. Saccacio, chief executive officer of RealtyTrac. “Default notices were down nearly 9% in October, indicating that some of the efforts on the part of homeowners, lenders and advocacy groups to find alternatives to foreclosure may be starting to have an impact. On the other hand, bank repossessions were up nearly 35% , evidence that more homeowners who enter foreclosure are losing their homes.”
Wednesday, November 28, 2007
October Existing Home Sales Drop Below 5-Million-Unit/Year Pace
The National Association of Realtors reported that existing home sales slipped below a 5 million units per year pace in October. October sales reached a 4.97-million-unit seasonally adjusted annualized rate, down 20.7% from the same month last year. Single family existing home sales fell to a rate of 4.37 million units, down 20.8% from October, 2006.
Through the first ten months of 2007, some 4.90 million existing homes have been sold.
Lawrence Yun, NAR chief economist, said, “As noted last month, temporary mortgage problems were peaking back in August when many of the sales closed in October were being negotiated. We continue to see the biggest impact in high-cost markets that rely on jumbo loans,” he said. “Mortgage availability has improved as evidenced by much lower mortgage interest rates and a sharp jump in FHA endorsements for home purchases.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.38% in October, unchanged from September; the rate was 6.36% in October 2006. Last week, Freddie Mac reported the 30-year fixed rate fell to 6.20%.
Through the first ten months of 2007, some 4.90 million existing homes have been sold.
Lawrence Yun, NAR chief economist, said, “As noted last month, temporary mortgage problems were peaking back in August when many of the sales closed in October were being negotiated. We continue to see the biggest impact in high-cost markets that rely on jumbo loans,” he said. “Mortgage availability has improved as evidenced by much lower mortgage interest rates and a sharp jump in FHA endorsements for home purchases.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.38% in October, unchanged from September; the rate was 6.36% in October 2006. Last week, Freddie Mac reported the 30-year fixed rate fell to 6.20%.
November Consumer Confidence Dips 17%
The Conference Board's Consumer Confidence Index was just 87.3 (1985=100) in November, down 17.1% from the same month in 2006. The month’s mark was 8.3% below October’s revised Index.
Said Lynn Franco, Director of The Conference Board Consumer Research Center: "This month's deterioration in confidence was due primarily to the sharp decline in the Expectations Index. Consumers' apprehension about the short-term
outlook is being fueled by volatility in financial markets, rising prices at the pump and the likelihood of larger home heating bills this winter. In fact, consumers' inflation expectations have surpassed the spike experienced this spring and a larger percentage than last month expect stock prices to decline.” Just 10.8% of consumers expect more jobs in the months ahead, while 23.1% expect the number of jobs to decrease. And 11% of consumers expect their incomes to drop over the next six months.
Said Lynn Franco, Director of The Conference Board Consumer Research Center: "This month's deterioration in confidence was due primarily to the sharp decline in the Expectations Index. Consumers' apprehension about the short-term
outlook is being fueled by volatility in financial markets, rising prices at the pump and the likelihood of larger home heating bills this winter. In fact, consumers' inflation expectations have surpassed the spike experienced this spring and a larger percentage than last month expect stock prices to decline.” Just 10.8% of consumers expect more jobs in the months ahead, while 23.1% expect the number of jobs to decrease. And 11% of consumers expect their incomes to drop over the next six months.October Starts Down 16%
The Census Department reports that housing starts for October racked up a 1.23-million-unit seasonally adjusted annualized rate, down 16.4% from the pace for the same month in 2006. Single family starts fell to an 884,000-unit annualized rate, down 25.1% from October, 2006.
Through the first ten months of this year, some 936,400 homes have been started, down 27.5% from the same period of 2006.
Building permits for October dipped 24.5% from the same month last year to an annualized rate of 1.18 million units. Through the first ten months of this year, nearly 1.22 million permits have been issued, down 24.7% from the same period last year.
Through the first ten months of this year, some 936,400 homes have been started, down 27.5% from the same period of 2006.
Building permits for October dipped 24.5% from the same month last year to an annualized rate of 1.18 million units. Through the first ten months of this year, nearly 1.22 million permits have been issued, down 24.7% from the same period last year.
Home Price Index Hits Record Low
The Standard & Poor’s /Case-Shiller® U.S. National Home Price Index for the third quarter of 2007 dipped 1.7% from the second quarter of the year, the largest quarter-to-quarter decline in its more than 20 years of history. The mark was down 4.5% from the same period last year, the largest year-over-year decline ever and the second consecutive record low. All 20 metropolitan areas tracked by S&P were in decline in September over August.
Friday, November 16, 2007
Have a Happy Holiday
K + B DeltaVee will be dark until November 28th. Everybody have a happy Thanksgiving day!
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