What the government will do when prime mortgages go foul
Posted on November 20, 2009 at 11:10 am
Analyst David Hendler of CreditSights sees more of what got us to today’s government-supported, not-really-healthy-at-all housing and banking sectors.
“[T]he prime residential mortgage crisis is probably going to require another massive government assistance program in that range of half a trillion [dollars] or more,” Hendler said. “And if this program is extended, it will lead to more bank regulatory restrictions with more capital and higher prudential liquidity levels. This would reduce the banks’ appetite and ability to take lending risks and put pressure on profitability.”
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At the FHA, it’s a case of ‘On the one hand…’
Posted on November 13, 2009 at 7:18 amThe bad news: The reserves at the Federal Housing Administration, which insures lenders against mortgage losses, are running below their mandated levels.
The encouraging news: More recent mortgages under the FHA umbrella are showing dramatically lower delinquency rates.
FHA’s recent books-of-business continue to experience elevated levels of stress due to house price declines, income loss and climbing unemployment, according to HUD’s report. For example, the ‘08 year of single-family insurance — representing 15.7% of total insurance — saw a 12.13% seriously delinquent rate as of the latest actuarial study. But the ‘07 year of insurance — representing only 5.7% of total insurance — saw an 18.53% serious delinquency rate.
The ‘09 year of insurance performed relatively well as of the most recent data, experiencing only 1.6% serious delinquencies although the loans insured in fiscal year 2009 account for more than 31% of all loans insured by FHA.
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Rising, but it could be worse
Posted on November 9, 2009 at 11:25 am
First American CoreLogic has the latest set of regional delinquency and foreclosure numbers, which are still worsening — but at a slower pace than the state and national data sets. Click at left to see foreclosures by local ZIP codes and then check here to compare the September chart’s color to March’s.
SEE ALSO: Plenty more info from the CoreLogic crowd.
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No distressed assets in this Habitat
Posted on at 7:42 amThe Nashville Area Habitat for Humanity says all of its borrowers — who make less than $30,000 per year – were current on their mortgages in September. The organization says a big part of the credit should go to its education programs.
HomeWORKS trainers prepare partner families for homeownership through a series of courses designed to teach new skills and encourage new habits. Delinquency committee members monitor mortgage payments monthly and develop the management processes.
Suggestion: We should spend a little of the remaining stimulus dough to expand HomeWORKS to the first-time homebuyers rushing into the market because of the $8,000 tax credit.
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Go on, book that Vegas trip
Posted on November 4, 2009 at 8:12 am
That’s almost what the investment community is saying to Gaylord Entertainment CEO Colin Reed, who on Tuesday put Sin City on a short list of cities his company may buy its way into.
A good chunk of the hotel/resort operator’s third-quarter earnings call Tuesday focused on Las Vegas, where a bunch of glitzy properties are struggling — or as Reed put it, “operating way below their pro formas” of six or seven years ago. Several analysts pushed Reed to clarify his recently floated strategic option of buying such a troubled property to add to his portfolio.
Generating an appropriate return is priority No. 1, Reed said, and such a return will have to come primarily from serving one of the company’s core customer groups — associations that rotate their meetings around the country each year. Half of those groups, Reed added, will never go to Vegas. The other half wants to be there regularly — and they could be enough to tip Gaylord’s M&A scales in the coming year or so, when Reed thinks the market will really hit bottom.
“I don’t think we should get into too much detail, but we’ve been consistent in telling people over the years that people rotate out of our system to go to Vegas,” Reed said. “Is it a market that interests us? It is. There are probably as well five, six, seven other markets in the United States that interest us as well.”
Investors seem plenty interested, too. Gaylord shares (Ticker: GET) jumped almost 8 percent Tuesday. Put a good chunk of that down to the company’s solid cost controls and the improving performance of its D.C.-area property, but also consider it a sign that the market is confident Reed and his team will soon find something to their liking in the Nevada desert.
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We’re almost ready to put a price tag on the toxic stuff
Posted on October 5, 2009 at 10:38 am
In the long-ago days before TARP, there was talk of PPIP, a plan to use government cash to clear the worst of the bad assets off banks’ books. More than a year later, the pieces are in place for investment firms to pool some newly raised capital with federal money and begin buying mortgage-backed securities.
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Moody’s: No end yet to banks’ credit troubles
Posted on September 10, 2009 at 1:01 pmThe ratings agency this morning reiterated its negative rating on the banking sector, saying it does “not believe asset quality deterioration for the US banking industry has reached its peak.” Commercial real estate in will be a particular thorn in the side going forward, Moody’s analysts said.
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The RTC to rise again?
Posted on September 9, 2009 at 8:11 am
Investment Dealers’ Digest says banking regulators are seriously considering creating a bad-asset management entity modeled on the Resolution Trust Corp. from 20 years ago.
“They are very, very keen to ensure it does not repeat itself,” says the industry participant who attended meetings with the FDIC about the RTC. “My guess is they’ll have the spirit of the PPIP investment plan where the investors share both upside and downside with the U.S. government.”
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More REO woe for GreenBank
Posted on August 20, 2009 at 6:33 amGreen Bankshares has acquired a 675-home high-end development near Chattanooga in a forelcosure sale. GreenBank, which has struggled mightily with bad loans this year, had financed the project.
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NAI targets troubled assets
Posted on February 19, 2009 at 4:01 pmNAI Nashville said today it would introduce new measures to help banks and owners sell troubled real estate holdings. The Commercial Property PowerSale, created by NAI Global, aims to accelerate the marketing of properties with a combination of live online property auctions and sealed bids. The initiative also looks to aggressively advertise assets in print, online and broadcast.
With more than $400 billion real estate loans coming due in 2009, many in the industry are expecting a flood of troubled assets to land in the hands of creditors. Already there are $25.7 billion in troubled assets in today’s market, according to numbers from Real Capital Analytics.
For more information visit NAI Global’s site.
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