Archive for July 2nd, 2008
Continue Reading July 2nd, 2008
As the housing slump winds on, builders and Realtors are getting very creative in their marketing. We could almost do an awards show about the best promotions. Here are a few of my favorites:
Pardee Homes has a red door list of complete comes they are putting on special sale price each week.
Shea Homes is offering a chance to win free gas for year to new home buyers.
Only in LA: I saw an ad saying a listing was the first duplex in the neighborhood offered for under $1 million since 2004.
I’m noticing that price reductions are now called price improvements. That’s not an improvement for the seller.
My favorite pitch of all: DR Horton offering $100,000 off to any buyers, but they have to bring the coupon!
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Continue Reading July 2nd, 2008
Hope Now, the mortgage industry alliance of lenders, servicers and housing counselors, reported Wednesday that it helped roughly 170,000 homeowners avoid foreclosure in the month of May.
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Continue Reading July 2nd, 2008
The next wave of foreclosures is expected to gather strength when the million or so option ARMs start resetting in large numbers next spring. But it seems that many of these loans, which allow borrowers to make minimum payments that don’t even cover the accrued interest, are already going delinquent.
According to a recent analysis by Lehman Brothers, option ARMs that originated in 2006 performed about as well as fixed-rate Alt-A debt for the first 12 months. But by the time they were 2 years old, about 2.1% of performing loans were going 60-days delinquent each month. Compare that to a 1.2% of current loans going delinquent with other Alt-A loans. The rate of increase in delinquencies is even beginning to approach that of subprime, which is about 2.5%.
“It’s a better quality borrower but the rate of increase in delinquency is looking closer to subprime than Alt-A,” said Akhil Mago, the head mortgage credit strategist for Lehman Brothers, said.
Strange, right? The loans were generally given to folks with good credit, most of whom are still only making minimum payments.
Looks like these borrowers might simply be giving up on the mortgages because they have less and less of an incentive to keep paying. Option ARMs give borrowers a choice of making a minimum payment that only covers a small portion of the interest, the rest of which is added to the loan balance. With years of unpaid interest accumulating and house prices falling, some homeowners have seen their equity disappear and now owe more than their initial loan balance. The gap between the original loan balance and the value of their home is only widening as home prices fall. Many of these borrowers were given the loans with only a requirement that they “state” their income rather than verify it (The result: Lots of folks exaggerated their salaries). So, these borrowers might only be able to afford the minimum payment, which can increase by 7.5% a year and then more than double when the loan recasts.
A major concern is that 70% of option arms are concentrated in California and Florida – two states that have already been hard hit by the housing slump. Subprime mortgages, on the other hand, were dispersed across the country (about 60% of them were outside Florida and California) And as prices in those states continue to fall, refinancing options for these borrowers disappear even as recasts loom.
Option ARMs originated in 2006 make up about $140 billion of the $350 billion of outstanding option ARMs and 45% to 50% of them are expected to default. The 2007 option ARMs, which were originated just as home prices began falling, are expected to perform similarly badly.
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Continue Reading July 2nd, 2008
Mack-Cali Realty Corp. said today that Tullett Prebon Holdings Corp. has leased 100,759 square feet at 101 Hudson Street in Jersey City, N.J. Read more »
Continue Reading July 2nd, 2008
PropertyShark.com, in collaboration with the Corcoran Group, released the first Corcoran Report with sales data audited and supplemented by PropertyShark.com. The report covers Manhattan residential real estate sales for the second quarter of 2008. Read more »
Continue Reading July 2nd, 2008
The Hampshire Cos. has inked a 20,851-square-foot lease deal with More Specialized Transportation at its industrial building located at 30 Wesley Street in South Hackensack, N.J. Read more »
Continue Reading July 2nd, 2008
Kushner Cos. has sold a controlling interest in the 90,000 square feet of retail space at 666 Fifth Ave. in Manhattan to The Carlyle Group and Crown Acquisitions for $525 million, the companies announced today. Read more »