Continue Reading Add comment October 28th, 2009
Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?img src=”http://feeds.feedburner.com/~r/rss/money_realestate/~4/UgbBnj8Rv1A” height=”1″ width=”1″/ Read more »
Continue Reading Add comment October 28th, 2009
pFDIC Chief Sheila Bair spoke at the Town Hall Los Angeles this morning, sharing her thoughts on financial markets and some of the policy issues she faces as one of the nation’s top banking authorities. Formerly a professor of regulatory affairs at the University of Massachusetts, Bair speaks in a rapid fire style. So I’ll put her comments in bullet points./p
pimg class=imgRight alt=”bair_sheila.jpg” src=”http://www.businessweek.com/the_thread/hotproperty/archives/bair_sheila.jpg” width=”129″ height=”194″ //p
pstrongOn the economy as a whole/strongbr /
Bair said the Administration was winding down some of the emergency programs introduced in the wake of the crisis such as the TARP funding. “Things are getting better,” she said. “It’s time for government to get out and let the markets work.” /p
pstrongThey’ll be more bad news though./strongbr /
“Banking is a lagging indicator. They’ll go through the process of cleaning up their balance sheets for at least two quarters past the end of the recession.” There are now 416 trouble banks, 106 that have failed this year. Bair said banks will see $100 billion in losses over the five year period beginning in 2008. About $60 billion has been recognized already. /p
pstrongAnd more changes are coming./strongbr /
“There’s a difference between free markets and a free-for-all,” she said. Bair supports legislation proposed by Rep. Barney Frank that would create a government-run recovery fund, financed by private industry, that would take over investment banks and insurance companies deemed “too-big-to-fail.” The process would work in much the same way the FDIC takes over failed banks. In such cases, shareholders and lenders would take more of a hit than they did in the cases of bailouts such as AIG. “I want the market to understand there will be losses,” she said. /p
pstrongOn the unpopular decision to bail out big banks./strongbr /
“Everybody did what we had to do, a lot of us didn’t like it,” she said. Bair said she wants to see the quasi-governmental agencies Fannie Mae and Freddie Mac redesigned. “We either nationalize them or privatize them, but this hybrid approach didn’t work.”/p
pstrongIndyMac, no mas/strongbr /
She told a vocal group of folks who had invested more than the insured limit in IndyMac CDs that they wouldn’t be getting any more money—“there are virtually no assets left.” She said that if folks wanted to increase their recoveries in bank failures they’ll have to get Congress to change the laws./p
pstrongWhy loan officers don’t return calls/strongbr /
I asked the Chairwoman after her talk if the PPIP program would be expanded to purchase bad assets from good banks. She said yes. I also asked her take on why there have been so many complaints about banks taking so long to approve loan modifications. “They didn’t staff up,” she said. “There is still to too much of an inclination to just not do it. Investors are still unwilling to do modifications. We tried to streamline it, to make it about pay stubs and tax returns. That’s what you need.”/p
pstrongThe future of banking/strongbr /
When asked if the FDIC was slow in allowing new banks to be insured, she conceded it was. “The old model of brokered deposits funding commercial real estate, we have a lot of problems with that.” She also said she hoped federally insured institutions will have learned something from the crisis and avoid exotic financial instruments and focus instead on the basics. “We’re going to get away from models and math and make loans based on getting to the know the borrower. It’s not who comes up with the best financial engineered product or who made the most fees anymore.” /p
pWishful thinking, but let’s hope she’s right./pimg src=”http://feeds.feedburner.com/~r/bw_rss/hotproperty/~4/3VZp_BqDAHs” height=”1″ width=”1″/ Read more »
Continue Reading Add comment October 28th, 2009
pIt’s increasingly likely that Congress will extend and expand the popular home buyer tax credit, which will expire next month. CNN.com reported today that a compromise proposal based on bills that have already been introduced could pass the Senate as early as this week (assuming that it is attached to a bill to extend unemployment benefits). /p
pThe compromise bill would likely open the program to some existing homeowners. The expiring tax credit is limited to buyers who have not owned a home for the last three years./p
pAccording to a a href=”http://money.cnn.com/2009/10/28/real_estate/homebuyer_credit/”CNN.com story/a today:/p
p* First-time buyers could continue to claim up to $8,000. But existing homeowners who have lived in their home for five years could receive up to $6,500 if they trade up to a larger principal residence. /p
p* The full credit would be limited to buyers who earn less than $125,000 a year and for married couples with annual incomes up to $225,000./p
p* The credit could only be used for homes selling for $800,000 or less./p
p* Contracts must be signed by April 30, 2010 and sales must close by June 30./p
pMark Zandi, chief economist for Moody’s Economy.com (MCO), told me recently that he supports the extension because the housing market could take a big step back without it. But he agreed with critics that it is one of the most inefficient ways for the government to support housing. /p
pAccording to Zandi, only 22% of about 1.8 million buyers who will claim the soon-to-expire credit would not have bought a home but for the incentive. Expanding the credit to include previous homeowners and extending the credit through June will cost about $30 billion, on top of about $8 billion that would have already been spent, he said./p
pThe compromise bill outlined here might be cheaper because it seems to more narrowly define the existing homeowners who can take advantage of the credit.br /
/pimg src=”http://feeds.feedburner.com/~r/bw_rss/hotproperty/~4/vvpajKifUbg” height=”1″ width=”1″/ Read more »
Continue Reading Add comment October 28th, 2009
Sales of newly built homes fell unexpectedly in September after rising for five straight months, according to government figures released Wednesday.img src=”http://feeds.feedburner.com/~r/rss/money_realestate/~4/V9ueT1NVmCk” height=”1″ width=”1″/ Read more »
Continue Reading Add comment October 28th, 2009
While foreclosure rates are easing in some of the hardest-hit cities, the crisis is beginning to expand into new metro areas.img src=”http://feeds.feedburner.com/~r/rss/money_realestate/~4/FjKlXWo87Xw” height=”1″ width=”1″/ Read more »
Continue Reading Add comment October 28th, 2009
Private real estate firm Monday Properties has tapped former Jones Lang
LaSalle vice president Jordan Berger as the firms new director in its
New York office.
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Continue Reading Add comment October 28th, 2009
In testimony reminiscent of dogs getting credit-card applications
approved back during the mid-2000s credit bubble, a Treasury Department
inspector told Congress that kids as young as four years old have been
able to receive $8,000 first-time homebuyer tax credits. Some key
controls were missing to prevent an individual from erroneously or
fraudulently claiming the credit, J. Russell George told the House
Ways and Means Committees oversight panel on Thursday.
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Continue Reading Add comment October 28th, 2009
With the commercial real estate market still hindered by a chilly
credit market and declining property values, sale-leaseback activity
has dwindled, but London-headquartered HSBC Holdings plc’s HSBC Bank
USA N.A. still sees some advantages in such deals. The financial
services company has signed a $330 million cash sale-leaseback
agreement with a subsidiary of Israel-based IDB Group for its
865,000-square-foot New York City headquarters.
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Continue Reading Add comment October 28th, 2009
It’s been a rough year for retail, even in tony Manhattan. The
crumbling of Wall Street in the fourth-quarter of 2008 spurred the
downward spiral of the market and the recession just added salt to the
wound, according to a third quarter report by Marcus amp; Millichap
Real Estate Investment Services.
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Continue Reading Add comment October 28th, 2009
It’s almost like the good old days of 2007 when loans over $100 million
for commercial real estate practically rained from the sky. Undeniably,
those times have not returned, but news that Brooks Shopping Center
L.L.C., owner of the 1 million square-foot Cross County Shopping Center
in Yonkers, N.Y., has gotten its hands on a $135 million first mortgage
to finance the property’s redevelopment certainly brings back good
memories.
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