Continue Reading October 12th, 2009
Mortgage interest rates are trending steadily downward. The research firm HSH reports that jumbo loans—those for higher-priced homes—dipped below 6% for the first time since September of 2005. This week the average for a 30-year jumbo loan is 5.96%.
The news comes along with mixed signals for the high-end home market. The Wall Street Journal reported today that more high-end homeowners are being foreclosed on. The top tier of homes now account for 30% of foreclosed homes, up from 16% three years ago, according to Zillow.com
Despite the lower rates, a lot of buyers are having trouble getting qualified for larger loans. According to real estate agents, lenders are denying loans because the homes aren’t appraising for the prices that sellers want to sell and buyers are willing to pay. Appraisers have been getting tougher about their standards. In some cases there aren’t enough comparable sales to paint an accurate picture for an appraisal. “The luxury segment is seeing a lot of appraisal problems,” says Las Vegas Realtor Rob Jenson.
Still, the blended rate on all 30-year loans, jumbo and conforming, has dropped to 5.35%, says HSH. In June it was 5.92%
Applications for new home purchases have jumped 13%. For refinances they are up 18%, according to the Mortgage Bankers Association. “Hopefully, those refinances will serve to recast balance sheets for households looking for extra cash to spend and/or to further pay down outstanding obligations,” writes HSH vice president Keith Gumbinger.
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Continue Reading October 12th, 2009
Big builder KB Home revealed in a Securities Exchange Commission filing that the federal regulator is examining the company’s accounting. The stock fell about 6% today.
The filing doesn’t offer much information. A spokesperson says: “KB Home strives to operate its business with the utmost transparency and integrity, and in accordance with generally accepted accounting principles. While the SEC has not specified the subject matter and we cannot speculate on it at this time, we understand that part of the SEC’s mandate is to conduct these sorts of investigations, which it has done with hundreds of public companies over the past few years.”
KB is still dealing with the legal fallout of some of its previous business practices. In 2006, then ceo Bruce Karatz resigned in a scandal involving the back dating of stock options. He later paid $7 million to settle charges with the SEC, but the company is still wrestling with shareholder suits regarding the matter. In 2005, KB paid $3.2 million to settle complaints its mortgage unit was qualifying buyers for government loans who didn’t meet the criteria.
Here’s the full text of the mention in Friday’s SEC filing:
On October 2, 2009, the staff of the SEC notified the Company that a formal order of investigation had been issued regarding possible accounting and disclosure issues. The staff has stated that its investigation should not be construed as an indication by the SEC that there has been any violation of the federal securities laws. The Company is cooperating with the staff of the SEC in connection with the investigation. The Company cannot predict the outcome of, or the timeframe for, the conclusion of this matter.
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