Archive for July 30th, 2009
Continue Reading July 30th, 2009
It was an inauspicious debut for PennyMac Mortgage Investment Trust, the new mortgage REIT founded by former Countrywide Financial CEO Stanford Kurland. The mortgage industry veteran had originally hoped to raise $750 million to buy troubled loans. Instead his fund raised only $335 million and the stock—initially priced at $20 a share—closed its first day down at $19.10.
Kurland’s strategy is to buy portfolios of troubled loans and restructure them. The PennyMac prospectus says the firm will rely on a “high touch” approach aimed at keeping borrowers in their homes through loan modifications. It also has a high-tech tool, something called the Loan Enhanced Normalization Engine, which helps the company determine the best solution for each borrower and loan. PennyMac’s Web site actively invites borrowers to refinance their loans at “Rates as low as 4.99%.” It also lists real estate for sale.
Kurland’s fund kicks off with $2.8 billion in assets, The prospectus says that more than $1 trillion of the nation’s $4 trillion in residential loans outstanding are at risk of default. The filing also says that 53 banks with more than $25 billion in assets have failed so far this year.
As of June 26, 2009, we estimate that the FDIC held more than $3 billion in residential mortgage loans from failed depository institutions. In addition, there were 305 depository institutions with a combined $220 billion of assets on the FDIC’s Problem List as of March 31, 2009.
There are a lot of troubled assets out there no doubt. Kurland’s private partnership collects a 1.5% management fee from the trust’s assets and 20% of any profits over 8%. Given how much distress is out there, investors seem to feel there won’t be much left for them.
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Continue Reading July 30th, 2009
The Las Vegas Review-Journal is reporting that Michael Jackson’s former doctor, Conrad Murray, could possibly lose his home to foreclosure.
The paper reports that Dr. Murray is late on $15,165 in payments on his Las Vegas residence, which is located in a gated community on the Red Rock Country Club west of the Strip. Dr. Murray reportedly left his practice for a $150,000 a month gig to serve as Jackson’s personal physician. He hasn’t been paid for his time with Jackson.
Dr. Murray bought the 5,200 square foot, four bedroom home for $1.1 million in 2004 but refinanced it for $1.6 million in January 2008. The lender is Indiana-based Irwin Union Bank, according to the paper. Stewart Title filed a default notice on July 23.
Dr. Murray’s office in Houston and his home and office in Las Vegas were raided by law enforcement authorities in the past week. He is under investigation for his role in the singer’s death.
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Continue Reading July 30th, 2009
Home mortgage rates were nearly unchanged from the previous week as investors weigh better-than-expected corporate earnings against the record volume of debt the government is selling.
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Continue Reading July 30th, 2009
After three years of Silicon Valley-based GlobalFoundries and the State
of New York working together to lay the financial groundwork,
construction of GlobalFoundries’ $4.2 billion semiconductor wafer
manufacturing facility at the new 1,400-acre Luther Forest Technology
Campus in Malta, N.Y., has just commenced. Officials expect the
GlobalFoundries development to create 1,400 new manufacturing jobs, and
they are keeping their fingers crossed that the 1.3-million-square-foot
Fab 2 will spur additional investment in the area.
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Continue Reading July 30th, 2009
In today’s stalled condo market, many developers are looking for creative ways to attract buyers. To that end, Emanon Equities, a Long Island-based real estate development and construction firm, and Ramsgard Architectural Design have turned The Seitz Building, a collapsing historic building in Downtown Skaneateles, N.Y., into a luxury mixed-use condominium complex.
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Continue Reading July 30th, 2009
The foreclosure crisis has entered a new phase. It’s spreading beyond the wreckage of the housing bubble to metro areas in Oregon, Idaho, Utah, Arkansas, Illinois, and South Carolina where unemployment is rising, according to RealtyTrac’s Midyear 2009 Metropolitan Foreclosure Market Report released this morning.
California, Florida, Nevada, and Arizona continue to have the highest foreclosure rates in the nation. But some parts of Michigan, Ohio, Indiana, and California are seeing improvement, the report said. “While some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, new markets like Provo, Utah, and Boise, Idaho, have seen large increases,” James J. Saccacio, chief executive officer of RealtyTrac said in a prepared statement. “As unemployment rates increase in different parts of the country, it’s very likely that we’ll see similar patterns develop elsewhere.”
Unfortunately, the loan modifications being encouraged by the Obama Administration are being severely outpaced by new foreclosure starts. This graphic from the Center For Responsible Lending tells the story. The blue line represents the number of modifications. The yellow bars indicate the loans that are more than 60-days delinquent, and the red bars represent foreclosure starts.
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