Here are this week's Worthy Nods from the news and from around the blogs ...
Wall Street Journal: Is Your Home a Good Investment? - "Since 1987, when the Case-Shiller index of 10 major cities begins, it's risen from an index value of 63 to 151. Annual return: Just 4.1% a year. During that period, according to the Bureau of Labor Statistics, consumer prices rose by 3% a year. Net result: Home prices produced a real return of just 1.15% a year over inflation over that time." Read the arguments on both sides of the issue.
New York Times:Off the Charts - Troubled Bank Loans Hit a Record High - The FDIC released statistics this week that show the loan quality at U.S. banks is the worst in 25 years. Old fashioned loans going bad. 7.75 percent of loans are showing some sign of distress, up from 6.9 at the end of 2008 and 4.1 a year earlier. It now exceeds the previous high of 7.26 set in 1990/91 during the S&L crisis.
Calculated Risk:May Economic Summary in Graphs - As always, excellent collection of graphs of economic and real estate market indicators reporting in May.
New York Times:Credit Relief May Not Last Long- "2009 is starting to feel a little like 1980. Then, as in recent months, a sudden credit contraction choked off economic activity. When the credit squeeze eased, a sense of relief spread. Within a few months, consumer confidence leaped amid expectations that both employment and business conditions would soon improve. The improvement came, but it did not last long..."
Washington Post:Jumbo Loans, Down-to-Earth Rates -Not long ago, you would have been charged about 8 percent interest on a jumbo loan -- if you could find a lender willing to grant you one. Now, rates on these supersized loans are much more affordable, having settled in the low 6 percent range, on average, for the past few weeks. But taking advantage of the lower rates remains tough.
Slate: The Summer Home Bust - "In recent years, I've approached the summer with something resembling dread... In the late boom, the lack of a second home marked you as a downscale outlier. In 2008, sales of vacation homes and investment properties nose-dived 50 percent from the peak."
Daily Beast:Jay Leno's Greatest Hits - See video clips of some of the funniest interviews on the Tonight Show ...
The Mortgage Bankers Association Q1 report came out Friday followed by their updated forecast. Needless to say, it was less than rosy. No, the housing outlook is not improving and it looks like Cramer's (Jim-CNBC) June 30 housing bottom prediction tops the list of myth busters.
Foreclosure actions were started on 1.37 percent of first mortgages during Q1'09 according the MBA. That's a whopping 29 percent increase over the Q4'08 and a 36 percent increase year-over-year. Both initiations and increases quarter-over-quarter are record highs.
The combined percentage of loans in foreclosure and at least one payment past due, meaning the percentage of mortgage holders not current on their mortgages, was 12.07 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey.
In looking at these numbers, it is important to focus on what has changed as well what continue to be the key drivers of foreclosures. What has changed is the shifting of the problem somewhat away from the subprime and option ARM/Alt-A loans to the prime fixed-rate loans. The foreclosure rate on prime fixed-rate loans has doubled in the last year, and, for the first time since the rapid growth of subprime lending, prime fixed-rate loans now represent the largest share of new foreclosures. In addition, almost half of the overall increase in foreclosure starts we saw in the first quarter was due to the increase in prime fixed-rate loans. More than anything else, this points to the impact of the recession and drops in employment on mortgage defaults.
“Looking forward, it does not appear the level of mortgage defaults will begin to fall until after the employment situation begins to improve. MBA’s forecast, a view now shared by the Federal Reserve and others, is that the unemployment rate will not hit its peak until mid-2010. Since changes in mortgage performance lag changes in the level of employment, it is unlikely we will see much of an improvement until after that,” said Brinkmann.
This means that the housing bust has cycled from a sub-prime to Alt-A to now an employment issue. Since we were already in the midst of the drop when the layoff began, those losing jobs had no way to sell their homes. Now even good borrowers with conforming loans are defaulting at a record rate.
Want more bad news? What could be worse? Well, we are actually in a trough for Alt-A and Option Arm resets as the following chart shows (click chart to enlarge):
Simply put? It gets worse from here and here is already really bad... So aside from the damage already done, rapidly rising mortgage rates and more folks losing their jobs, we have a wave of resets coming that dwarfs the first one that pushed housing off the cliff. Now, there is no way to know what percentage of those in 2010-11 set to reset have either a) already lost their job and will default before then, b) have already defaulted or c) have already converted into conforming loans.
But, we do know this, no matter how large the percentage of those set to reset that fit into a, b or c above, there is another serious body blow to the housing market waiting around the corner.
We also know that government programs designed to help have been abject failures as HOPE for Homeowners, designed to save 400k homes, has saved, ummm, 1 (that is 1...not a misprint). A Fannie Mae program, HomeSaver Advance [HSA] has seen 70% of the people it actually did help re-default. This isn't an issue we can govern our way out of, and to be honest, government meddling is making it worse. How many people held on to homes, wiping out savings in the HOPE a government program was going to bail them out? Only after it was too late did they find the program would not work for them and now not only were they losing their home, their saving was gone also.
It is the unintended consequence of government trying to artificially prop up a market.
The sad truth is this just has to play out and it will be a long and difficult process. Do not let anyone tell you any different...
With every new graduating class comes a sense of renewal and a belief in the possibility of a brave new world where greed and short-term gain does not rule the day.
From the campus of Harvard University comes a promise of better things from a new crop of MBAs preparing to enter the corporate world. Armed with new - or recycled - ethics, they vow to hold themselves accountable to the standards they set forth in the "MBA Oath."
"The oath is a voluntary pledge for graduating MBAs to 'create value responsibly and ethically.' Our goal is to begin a widespread movement of MBAs who aim to lead in the interests of the greater good and who have committed to living out the principles articulated in the oath."
Imagine a corporate world where long-term gain trumps short-term profits. That would make these new MBAs the true Masters of the Universe.
Over a hundred Harvard Business School grads and several new MBAs from other schools have already signed the oath. Their roster is posted on the website.
The MBA Oath
As a manager, my purpose is to serve the greater good by bringing people and resources together to create value that no single individual can build alone. Therefore I will seek a course that enhances the value my enterprise can create for society over the long term. I recognize my decisions can have far-reaching consequences that affect the well-being of individuals inside and outside my enterprise, today and in the future. As I reconcile the interests of different constituencies, I will face difficult choices.
Therefore, I promise:
I will act with utmost integrity and pursue my work in an ethical manner. My personal behavior will be an example of integrity, consistent with the values I publicly espouse.
I will safeguard the interests of my shareholders, co-workers, customers, and the society in which we operate. I will endeavor to protect the interests of those who may not have power, but whose well-being is contingent on my decisions.
I will manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the people it serves. The pursuit of self-interest is the vital engine of a capitalist economy, but unbridled greed can be just as harmful. I will oppose corruption, unfair discrimination, and exploitation.
I will understand and uphold, both in letter and in spirit, the laws and contracts governing my own conduct and that of my enterprise. If I find laws that are unjust, antiquated, or unhelpful I will not brazenly break, ignore or avoid them; I will seek civil and acceptable means of reforming them.
I will take responsibility for my actions, and I will represent the performance and risks of my enterprise accurately and honestly. My aim will not be to distort the truth, but to transparently explain it and help people understand how decisions that affect them are made.
I will develop both myself and other managers under my supervision so that the profession continues to grow and contribute to the well-being of society. I will consult colleagues and others who can help inform my judgment and will continually invest in staying abreast of the evolving knowledge in the field, always remaining open to innovation. I will mentor and look after the education of the next generation of leaders.
I will strive to create sustainable economic, social, and environmental prosperity worldwide. Sustainable prosperity is created when the enterprise produces an output in the long run that is greater than the opportunity cost of all the inputs it consumes.
I will be accountable to my peers and they will be accountable to me for living by this oath. I recognize that my stature and privileges as a professional stem from the respect and trust that the profession as a whole enjoys, and I accept my responsibility for embodying, protecting, and developing the standards of the management profession, so as to enhance that trust and respect.
Few hammers are heard on new home construction sites these days. Fewer every month it seems as builders fight upstream to recover market position. But it’s tough when at least half of the competition for new homes are REO properties and half of the buyers are concentrated in the lower, entry-level price range.
Flat new home sales over the last couple of months give cause for hope of a bottom forming. (See below for HUD New Home Sales numbers for April.) At least the number of new home sales are no longer falling off a cliff, although prices continue to decrease. No sustainable recovery for new construction can gain legs until foreclosures are abated and existing home prices start to stabilize.
The following graph from Calculated Risk shows the effect of the distressed sales activity on new home sales. The gap started in 2007 and has gotten worse since. The other problem is that the number of existing homes on the market is now over four million as compared to 297,000 new home inventory.
Click on graph for larger view.
But the big story this week is not the housing numbers, which remained relatively flat across the board, but the rise in interest rates to their highest level in more than three months. Despite all this, consumer confidence is soaring on hope.
In terms of the burden on home buyers, Credit Suisse estimates that each rise of 0.10 percentage point in mortgage rates is equivalent to a 1% rise in home prices.
Those buyers or homeowners seeking to refinance that were waiting for the elusive four percent 30-year fixed-rate are likely to feel completely bereft today. The fear is that April's record low interest rates may have come and gone.
The Wall Street Journal reported that the “average rate for 30-year fixed-rate loans jumped to 5.44% on Thursday, the highest level since early February, according to a survey by HSH Associates, a financial publisher. That was up from 5.29% Wednesday and 5.03% Tuesday.” This week’s steep increase in yields on long-term Treasury bonds are partly to blame for higher rates.
The Mortgage Bankers Association confirms that mortgage applications have dramatically fallen off 19 percent this week alone. Loans in progress are trashed when the borrower no longer sees a cost effective opportunity to lower monthly payments, or they simply no longer qualify. Defaults are up and the MBA reported that at the end of March there were about 12% of all first liens in some stage of default, the highest default rate ever recorded by the trade group.
HUD report on New Home Sales for April:
Sales of new one-family houses in April 2009 were at a seasonally adjusted annual rate of 352,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.3 percent (±14.5%)* above the revised March rate of 351,000, but is 34.0 percent (±11.0%) below the April 2008 estimate of 533,000.
The median sales price of new houses sold in April 2009 was $209,700; the average sales price was $254,000. Median prices of a new home decreased 14.9%
The seasonally adjusted estimate of new houses for sale at the end of April was 297,000. This represents a supply of 10.1 months at the current sales rate.
He said ... there is now more than a three-year supply of existing houses on the market over $750,000!
This is the news from Lawrence Yun himself. He, of course, is the Chief Economist for the National Association of Realtors. Yesterday, the NAR released Existing Home Sales data for April and sales were slightly up but offset by slightly higher inventory. Again the larger percentage of sales were foreclosures and the lower price ranges predominated the monthly sales.
No real surprises in the small movements in the April NAR sales numbers, except for the realization that there is more than a three year supply of houses on the market over $750,000. Yikes!
There is not a lot of good news on the horizon for the luxury market. Jumbo financing is difficult, or at least harder, to obtain. The rates are substantially higher than conventional financing and the move-up sales ladder is dilapidated. More foreclosures in the upper price ranges are expected, encouraged by job losses. And prices continue to fall.
Diane Orlick, CNBC, who spoke to Lawrence Yun, writes about the upper-end crisis, "Now that the administration has managed to lower interest rates for conforming loans, they have to focus on jumbos, on jumbo rates and modifications. These are not all million-dollar homes of the rich and famous. In many markets, especially urban markets, a million-dollar home is a basic three bedroom, two bath on a postage stamp lot."
Existing-home sales rose in April with strong buyer activity in lower price ranges. Including single-family, townhomes, condominiums and co-ops – increased 2.9 percent to a seasonally adjusted annual rate of 4.68 million units in April from a downwardly revised pace of 4.55 million units in March, but were 3.5 percent below the 4.85 million-unit level in April 2008
The national median existing-home price for all housing types was $170,200 in April, which is 15.4 percent below 2008. Distressed properties, which accounted for 45 percent of all sales in April, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.
Total housing inventory at the end of April rose 8.8 percent to 3.97 million existing homes available for sale, which represents a 10.2.-month supply at the current sales pace, compared with a 9.6-month supply in March.
"In response to Lifestyle Liquidation - Estates of the Fabulously Rich, an article about an aborted move by the Peacock family to sell a 10,000-square-foot home complete with an exotic game room featuring a hyena and the heads of an elephant and wildebeest, along with 6 sports cars and other items, I received this email from 'MB'."
I’m a longtime reader and always enjoy your take on things. Your article on the failed auction of the mansion in Florida points out a change I think we are facing: huge, overly ostentatious homes are dinosaurs. I am a builder, not working for the past two years because I don’t like to work and lose money, but I was recently tempted by a “bargain” property here in the Portland area.
The bargain property is a ten thousand square feet home on 1.4 acre lot in the most prestigious gated community around. It is appraised at $3.5 million, has a $2.7 million mortgage, is bank owned by a mortgage company in bankruptcy, and the price has kept dropping until it is now at $900,000.
The home has been empty for two years with no heat or water, the beautiful yard is now out of control, the wood windows are all dry rotted from neglect, and as much as I would love to take on a project like that (I truly do love the challenges of building) I can’t see ending up with a 10,000 square foot home with a tax bill of $41,000 and huge utility bills. Who will ever want to live in a home like this again? I considered offering $600,000, but decided to walk away, not wanting to own it at any price.
On the heels of the S&PCase-Shiller Q1 Home Price Index citing dismal home price declines, the Federal Housing Finance Agency (FHFA) reports only a small decline in home prices for the first quarter of 2009 year-over-year.
The FHFA seasonally-adjusted purchase-only house price index (HPI) for January and February showed increases in house prices but was offset by a March decrease. Seasonally-adjusted prices fell 7.1 percent from the first quarter of 2008 to the first quarter of 2009. And the decline from Q4’08 to Q1’09 was only 0.5 percent lower on a seasonally-adjusted basis, a much more modest decline than the 3.3 decline from the previous quarter.
Click to enlarge the chart to see the quarterly comparison of prices tracked through Fannie and Freddie home loans.
The FHFA HPI is calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages which means the data does not include any non-conforming loans, specifically jumbo loans for the luxury market.
The Case-Shiller Index is considered to be a much broader and inclusive indicator of the housing market even using its limited market areas.
But still the discrepancy between the two indices is huge. Case-Shiller showed a 19.1 percent decrease in home prices for the first quarter, year-over-year as compared to the FHFA data which showed only a drop of 7.1 percent in the same Q1 comparison.
The obvious assumption is that the lower price product is showing more strength because of the federal tax credit for first-time homebuyers. Also those buyers are not saddled with a house which they have to sell so are able to act on the incentives being offered in today's market, including record low interest rates.
Click here to see the entire FHFA report including the quarterly HPI numbers from 1991 to today and area comparisons.
While Residential Mortgage-Backed Securities servicers are ramping up to rescue distressed homeowners and keep them in their houses instead of in foreclosure, the economy continues to hammer away at their efforts. It is a "lofty battle to mitigate the effects of recession, shrinking disposable income, escalating job losses and possibly some deceptive practices on the part of the borrowers themselves, according to Fitch Ratings."
Click to enlarge chart.
The Fitch Ratings report (registration required) discusses loss mitigation (home retention) where the market spotlight is focused, and the servicer sector's effort to ebb the flow of losses from foreclosures to the loan pools backing RMBS.
Despite the efforts to mitigate the bloodbath of foreclosures, the Fitch report finds that re-defaults on loans that have been modified in some fashion are at an alarmingly high rate. New administration programs may boost the number of modifications, though concern lingers over whether the newly modified loans will perform any better over time than loans modified to date.
The sad news is that taking the "various macroeconomic pressures into account, Fitch projects that between 65%-75% of mortgage loans that are modified will re-default after 12 months."
That finding echoes prior U.S.-bank-regulatory agency reports of high re-default rates for modified loans.
Even if a loan modification provides affordable payments for homeowners, often other factors like credit card debt and expenses is enough to derail the effects of a modification. Fitch Managing Director Diane Pendley says, "With continued home value declines in many markets, there is growing evidence that some homeowners are voluntarily walking away from their homes even if they can financially afford to stay."
The Fitch report analyzed mortgages bundled into securities between 2005 and 2007 and studied pools of mortgages that are managed by more than 30 servicing firms collecting and modifying loans on behalf of investors in residential mortgage-backed securities.
The report also cited another reason for the high re-default rate was public pressure to modify loans even for borrowers who were likely to default whether the loan terms were changed or not.
"Fully assessing the effect of how modified loans will perform from a ratings perspective could take months. In addition, as the new administration's guidelines are only now being implemented, identification of any impact they may have on re-default rates will also be delayed. In the interim, Fitch will be closely watching the possible implementation, repercussions, and performance of modification strategies on its rated servicers, along with its rated RMBS transactions." Fitz Report
When it comes to commencement addresses, all are not created equal. Tune into a few tidbits of the commencement address at Yale University. The somewhat -hmm - dry send-off received by this Ivy League class of 2009 was delivered by Yale President Richard C. Levin (Joe Biden canceled at the last minute to speak at Wake Forrest).
If you feel compelled, you can read the entire Yale address of 2009 on their website. Hang in there - you'll be rewarded with the Tulane commencement speech in just a minute.
Who would have imagined, four years ago, that the world economy would collapse? As you leave here, it is hard not to think about this unhappy reality. So, as an economist and as your president, I would like to offer you my perspective on what has happened and what it means for you.
The world economy is a mess.1 In the United States, we have experienced the sharpest reduction in gross domestic product in five decades, and the ride is not yet over. As many of you know all too well, jobs are scarce. Within the past year, the unemployment rate has increased from 5.0% to 8.9%, and, unfortunately, it is more likely than not to exceed 10% before declining again.
How did we get here? ... The cause of the current crisis is less fundamental ... As we have seen all too painfully, when individuals have lots of debt ... History teaches that all credit expansions are followed by recessions or depressions ...
But this show stopper woke them up:
You may be wondering why you had the bad luck to graduate now...
Since 90 percent of the graduating class left to register for Grad School after that last comment, there were few remaining to eventually, at long last, hear the forgettable conclusion:
Women and men of the class of 2009: The world is all before you. Choose your direction ... You can do it. Yes, you can.
Now compare that to the commencement address at at Tulane University. Those guys really know how to send their graduates out into the world ... with a smile on their face.
March '09 concludes with little good news from the S&P/Case-Shiller Home Price Index as reported this morning. Considered by much of the real estate industry as the gold standard indicator, Case-Shiller HP Index continues to set record declines returning a 19.1% decline for Q1 as compared to the first quarter of 2008, the largest decline in the series’ 21-year history.
But as home prices were tanking at the end of March, April and May brought shouts of optimism from consumers and set the highest level since last September. Now if we can just convert those optimistic shoppers into happy home buyers.
Moving back to the reality of the real estate market ... the chart below compares the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. Click to enlarge.
The long march of declining home prices began in 2007 and has continued ever since. David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, said in a press release, “All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines.. Based on the March data, however, we see no evidence that that a recovery in home prices has begun.”
The chart below shows the index levels for the U.S. National Home Price Index, as well as its annual returns. Nationally, home prices are back to their late 2002 levels. Click image to enlarge.
Other Case-Shiller points of note:
From the peak in the second quarter of 2006, average home prices are down 32.2%.
The New York index is still up 73.4% from January 2000, though down 19.7% from its June 2006 peak.
The Detroit index is 29.0% lower than in January 2000. Detroit home prices are back to their mid-1995 levels.
In terms of annual declines, the three worst performing MSAs continue to be the same three from the Sunbelt, each reporting negative returns in excess of 30%. Phoenix was down 36.0%, Las Vegas declined 31.2% and San Francisco fell 30.1%.
Denver, Dallas and Boston continue to fare the best in terms of annual declines down 5.5%, 5.6% and 8.0%, respectively.
Looking at the data from peak-thru-March 2009, Dallas has suffered the least, down 11.1% from its peak in June 2007; while Phoenix is down 53.0% from its peak in June of 2006.
All of the 20 metro areas are in double digit declines from their peaks, with ten of the MSAs posting declines of greater than 30% and two of those – Phoenix and Las Vegas – in excess of 50%.
Here are this week's Worthy Nods from the news and from around the blogs:
New York Times: It's Tee Time. Where Is Everybody? - Bobby Ginn's empire slips and slides as the "club" lifestyle looses its luster. As the real estate boom expanded in recent years, developers and home buyers believed that residential golf resorts were a sure-fire bet. While there is no reliable data on the growth in residential golf resorts, analysts say the market is well past its peak — particularly in the Sun Belt — and there is now an overabundance of developments and empty clubhouses and golf courses.
Slate Magazine: Are High Ceilings a Sign of Architectural Excess or Just Good Taste? - Interesting article that sheds some historical light on the changes in ceilings heights through the ages. Wall Street Journal:Recession Turns Malls Into Ghost Towns- One industry rule of thumb holds that any large, enclosed mall generating sales per square foot of $250 or less -- the U.S. average is $381 -- is in danger of failure. If retail sales continue to decline at current rates, the dead-mall roster could exceed 100 properties by the end of this year. That's up from an estimated 40 failing malls in 2006, before the recession began. Barron's: Bargain Hideaways- Cover Story. Take a look at swanky summer digs at a discount from Carmel to Newport News. Frustrated sellers resort to creative means to move their mansions. Snag a bargain while you can...
Wall Street Journal:As Would-Be Home Sellers Hold Back, Shadow Market Looms - Almost one-third of owners are at least “somewhat likely” to put their homes on the market in the next 12 months, should they see indications of a recovery, according to a Zillow survey. That makes for a shadow supply inventory that could help give housing’s recovery an “L” shape–as it bounces along the bottom–instead of a “V” shape, representing an upward climb. “These sustained supply levels will serve to keep downward pressure on prices, which can only increase as demand begins to outstrip supply.” The Christian Science Monitor: New Round of Foreclosures Delivers Blow to Recovery - “The sky is falling,” says John Taylor, president and CEO of the National Community Reinvestment Coalition, a Washington-based group that has tried to make housing affordable. “We all wanted things to get better, but it looks like foreclosures are going to worsen.”The new rise in foreclosures is likely to have some large-scale implications. As banks take over properties, they will probably put them on the market, adding to the downward pressure on home prices and further destabilizing the industry.
Barron's:Housing Hurricane Will Howl Again - From the publication that has called a housing bottom, not once, but twice, is now howling that we are nowhere near a bottom. "We're out of the eye of the hurrican, but here comes the back half of the storm."
Wall Street Journal:At Estates of the Fabulously Rich, Gilded Era is Going, Going, Gone - Fire-sale auctions of mansions, yachts, sports cars and other trappings of wealth have become increasingly common as the rich become less rich. A commercial real estate developer tried to downsize in just one day. The event was less an auction than a lifestyle liquidation, a clearance sale on a decade's worth of conspicuous consumption. It was a dismal failure.
New York Post:Brooke Astor: Camilla Parker Bowles Mistress Diss - How's this for a faux pas? Brooke Astor, noted philanthropist, age 97, reminding Camilla Parker Bowles, during a toast at a crowded gathering, that Parker Bowles' own great-grandmother had also been a royal mistress.
President Obama on Wednesday signed legislation aimed at curbing financial fraud in the mortgage and other industries, including a provision that created an independent panel to investigate the root causes of the nation’s economic downturn. New York Times
When I read this I immediately thought of Jack Nicholson's famous line in A Few Good Men - "You can't handle the truth."
Once the members of this new commission are identified, they will need a post-graduate education in finance and economics in order to understand the mess in which we find ourselves. Then they can start their investigation. I've got time.
Nancy Pelosi and "prominent" Democratic senators, with "significant" Republican support, called for this commission modeled after a Depression-era set of financial hearings called the Pecora commission.
Historical accounts of the Pecora hearings provide a reading experience that is as page-turning as a suspense novel. Mr. Pecora, a former New York prosecutor, took a rather moribund inquiry and ran away with it. With Franklin D. Roosevelt’s election to the presidency, Pecora was given a green light in 1933 to make abundant use of a committee’s subpoena power. He summoned the nation’s most respected bankers before the panel and shredded their reputations in public. Replete with his blistering cross-examinations of the titans of Wall Street, the hearings did indeed capture huge headlines in the early 1930s – including those of The New York Times — and perhaps were among the first of congressional inquiries broadcast in newsreels to the nation.
“The Pecora commission created villains essentially,” said Donald Ritchie, associate historian for the Senate. “This riveted the public because it was daily headlines for months and what otherwise would be seen as fairly arcane practices, Pecora was able to dramatize it very much.” Financial Inquiries and the Pecora Legacy - NYT
This new investigative commission is to be called the Financial Crisis Inquiry Commission. After signing the bill Obama proclaimed that he will invoke executive privilege if there is information the commission needs which is beyond the public purview.
I'll bet these hearings, once they get underway, will generate massive ratings. This is going to be ugly.
Click here to see slide show of the Pecora hearings.
See a bipartisan CNBC video on the legislation. Click here if video does not aprear below. If Sen. Johnny Isakson (R-Ga) says we need it, I'll climb onboard. It's still going to be ugly. Sen. Kent Conrad (D-ND) tells Dennis to stop interrupting. He and Michelle should also stop yelling. Amen.
The financial and real estate markets are fighting on the playground. Obama tries to enforce playground etiquette but with only small successes. A stream of new government incentives and "fixes" flood the news with Obama's efforts to stem the foreclosure tide and rescue distressed borrowers.
The refinancing of distressed loans held by Fannie Mae and Freddie Mac under the Making Homes Affordable program is an excellent move in as far as it goes. It is particularly excellent on an individual basis. But while the market continues to decline, those underwater borrowers will continue to sink, eventually many arriving back at the day of reckoning.
Some say the government programs just haven’t had enough time to make a difference. Try as they may, the government's foreclosure avoidance efforts will be negligible, but it won't be for lack of effort. We have not yet hit a bottom in foreclosures and the Making Home Affordable program, gallant as the premise is, will not make an appreciable difference in a housing market recovery. In fairness to Obama, et al., they have stated their purpose is to keep people in their houses. They haven't oversold the mission, just overstated the numbers.
Obama is begging banks to do short sales ahead of foreclosures. Or to take a deed-in-lieu-of foreclosure, which makes little sense to lenders in most cases. The numbers will prove so negligible as to have no recognizable impact on the housing market. Short sales would prove less costly to the bank than moving through the foreclosure process, but the time involved as well as the degree of difficulty make it only marginally successful. Loan modifications requiring more than minimal principal reductions is like Sisyphus rolling the bolder uphill for eternity.
Short sales and deed-in-lieu-of-foreclosure are both messy and can leave problems embedded in the property. On the other hand a foreclosure wipes the slate clean with no overhanging hidden liabilities. And foreclosures are generally better deals for the buyer drawing attention away from the short sale process.
The complicated nature of securitization not only makes short sales maddening and time consuming it also makes negotiating a real estate sale that results in a loss nearly impossible.
Everyone involved in the credit houses are stressed beyond measure making even easy tasks difficult. The financial system simply can't handle a collapse of the magnitude of what they have been hit with. Based on current foreclosure rates, the U.S. could see foreclosures top 3 million units for 2009.
The problem with wholesale loan modifications, short sales or buying up toxic assets, continues to land at the feet of a less than sinister financial tool - securitization. But what Wall Street did with securitization is sinister and scary and the complexities of the web they weaved, virtually impossible to unravel. Like any good mystery, the story starts out simply on a sunny day. But the tension quickly builds as the plot is driven towards its cliff-hanging climax.
Until relatively recently, mortgage originations and the issuance of mortgage-backed securities was dominated by loans to prime borrowers underwritten by the old conforming standards set by the GSEs, Fannie Mae and Freddie Mac. This was that sunny day when the story begins with good solid investments.
Then a savvy group of financial “Masters of the Universe” strolled across Wall Street with a whole new securitization plan that promised to rock the world with profits beyond the imagination. And rock it did – the world that is.
First a very elemental discussion on securitization ... Mortgage-backed securities (MBS) are a group of loans lumped together as one instrument, or bond, and sold to investors. The initial sale of the MBS is put together either by a GSE, Fannie Mae, Freddie Mac or Ginny Mae (for FHA and VA loans), or by private financial institutions such as Countrywide, Lehman Brothers, or Wells Fargo (all among the top six private issuers in 2006). They allow lenders to sell the mortgages they make, thus replenishing their coffers and allowing them to lend again. For their part, buyers of mortgage-backed securities take comfort in the knowledge that the value of the MBS package doesn't just rest on the creditworthiness of one borrower, but on the collective creditworthiness of a group of borrowers.
This chart offers a visual explanation. We’ll get to CDOs in a minute.
The increasingly lucrative MBS market drove a larger share of home mortgages to be securitized. In 2006 private firms made up 56% of securitized investors. The basic pass-through nature of most MBSs is the same: the borrower pays his mortgage payment to the servicer which is then paid to the investor. Payments are made on the underlying mortgages as you would expect. The profit is the spread on interest.
A typical issue of MBSs however, is much more complicated, in part because of the intricate allocations of the risks of the underlying mortgages to investors. There are three major risks to MBS investors: interest rate, prepayment and default, each representing breach or change in the income stream and negatively affecting the return for the investors.
The chart below represents a sample structure for a MBS. A MBS can include multiple classes of bonds that differ in the order in which they are repaid (these classes are typically referred to as “tranches”). For example, all principal payments could be allocated to the A bonds until those are completely repaid. Then, principal payments would start being allocated to the B bonds.
Pools of MBSs are sometimes collected and securitized. Bonds that are backed by pools of MBSs set up on the principal of the tranch are referred to as collateralized debt obligations (CDO). Each tranch has a different maturity and risk associated with it. The higher the risk, the more the CDO pays. CDOs can also include various types of assets. The issuers of CDOs were the major buyers of the low-rated classes of subprime MBSs in 2006.
When Paulson came up with his scheme last fall to resolve the credit crisis by buying toxic assets with TARP funds, it seemed like a brilliant plan. But Paulson’s plan was stopped dead in its tracks by the same insurmountable obstacle that is stymieing the foreclosure prevention programs and short sales – securitization.
The following video will further explain the world of CDOs and offer the key to the untenable Paulson plan to buy toxic assets and why Geithner's Public-Private partnership to do the same never gained much anticipatory steam - interest anticipated just never materialized. But Geithner will be ready within six weeks with his final plan. We'll see what interest he can garner.
The next layer that makes the securitization process even more complicated are credit default swaps (CDS). CDSs are insurance contracts that Wall Street created in the early 1990s. They allow holders of CDOs to protect themselves against losses if a debt issuer defaults. The credit-default swaps were wildly profitable until defaults started rising. Many argue that the credit markets are dysfunctional today because of credit-default swaps.
I have two more very worthwhile videos that explain credit default swaps perfectly. It will take a few minutes but is well worth the time investment to watch both. On the other side you will understand the difficulty of modifying mortgage principal and completing short sales. But most important you will understand the rudiments of the house of cards that collapsed last fall. And you will have the ability to impress friends with your knowledge at your next dinner party. It’s really fascinating stuff.
"We've been trying to figure out probably for close to two years now why so few mortgages are being modified when it seems to make absolute business sense for the person holding the mortgage to modify rather than foreclose or to take a smaller loss selling it rather than a bigger loss foreclosing on it," said Rep. Brad Miller (D-N.C.).
Miller points his finger at securitization. Once the mortgages are bundled and sliced up into different pieces, known as tranches, the owners of the pieces get paid back according to a certain pecking order. Senior investors get paid back first and if there's a loss, the most junior investors won't get anything. It's those investors who are blocking short sales.
"The people with the least senior tranches have no reason to agree to the modification because they take a complete loss and the people in the most senior tranches don't lose anything. So they've managed to structure their mortgages in a way that makes it almost impossible to modify or sell short," said Miller.
Now you start to see the complicated path of a single mortgage securitized in this fashion. By no means are all mortgages securitized in this way but the prevalence of the practice almost brought a world economy down. The bonds were sold all over the world to hedge funds and entities as weird as the Abu Dhabi Camel Drivers' Pension Fund.
“What people do not understand is that the lender has "insurance" on most of these loans, the credit-default swaps that you hear about but do not understand, or other types of insurance that pay them in the event of default. However, to file an insurance claim, the lender MUST foreclose and take back the home.” explained Patrick Pulatie, forensic loan auditor and consumer advocate working in California.
How do you extract one particular loan from this complicated morass of debt and get permission from an uncooperative investor who has little to gain from a release and reduction of principal? Huffington Post reported that according to research firm Campbell Communications, only 23 percent of short sale transactions are actually completed.
Obama’s urgings to short circuit the foreclosure process will fall on deaf investor ears.
The lack of responsibility for the originator of the toxic mortgages encourages the seller of the loan to be indifferent to the qualifications of the borrower to repay the loan. As many of the loans were sold, the emphasis in creating a loan was only on the profitability of selling the securities created from the loan. But now the backlash of the irresponsibility in lending has caused the secondary mortgage markets to go up in smoke, freezing the credit markets. With little appetite for these mortgages, the system isn't working properly and money isn't flowing in its usual channels.
With credit worthy borrowers and a steady market, there are few problems. But by 2006 non-conforming loans of $1.480 trillion was more than 45% larger than conforming (agency) originations. The issuance of non-agency MBSs and then CDOs grew to staggering proportions. "It's going to blow!" And it did.
Last Thursday, Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan announced new steps to encourage short sales or voluntary transfer of property (deed-in-lieu-of-foreclosure) when a loan modification is not possible. The much-to-do-about-nothing plan is offering incentive payments of up to $1,000 to banks for allowing a short sale if a loan modification is not possible. Big deal! Not worth the time and trouble say the banks.
“The Obama plans may have some impact on the margin but the ultimate solution to this problem is going to be the same as the solution to any other asset bubble. Prices are going to have to reach a clearing level and the excess inventory absorbed over time. The world will begin to properly spin on its axis again but it won’t be due to the intervention of the government,” wrote Tom Lindmark for Seeking Alpha. I regretfully agree.
But Obama can't just sit by and do nothing. That would be political suicide, and he is, if anything, a talented politician.
I leave you with a few words on the bust of AIG and an example of the effects of the unraveling of these financial instruments. From Barry Ritholz, The Big Picture:
Of all the corporate bailouts that have taken place over the past year, none has proved more costly or contentious than the rescue of American International Group (AIG). Its reckless bets on subprime mortgages threatened to bring down Wall Street and the world economy last fall until the U.S Treasury and the Federal Reserve stepped in to save it.
So far, the huge insurance and financial services conglomerate has been given or promised $180 billion in loans, investments, financial injections and guarantees - a sum greater than the annual cost of the wars in Iraq and Afghanistan.
For the future, the point is to prevent the AIG problem where a big company has sold so many derivatives, with no reserves, to so many financial institutions around the world, that if it collapses the whole global economy might collapse. Regulation is on the table, but I often think had they exercised any degree of responsibility my 3,000 shares of AIG might at least be worth a cup of java.
A last word from Patrick Pulatie describing what loan work-outs are like for the borrower: "The loan modification process is one of the most convoluted processes imaginable. Each lender has its own standards and procedures, ones that change on a daily basis, and from person to person. To make matters worse, you will hang on the phone for hours, never speaking to the same person twice, and when you do talk to a live person, you will have to retell your story again and again. What is never mentioned is that each negotiator for the lender has from 500-700 files that they are working on at the same time. Most of these people NEVER get help, and many end up losing their homes. Of those people who attempt to do it for themselves, perhaps 20% actually succeed."
Wall Street was surprised that total housing starts dropped 12.8% in April compared to March. According to a Dow Jones survey, economists had forecast a 2.0% increase. The experts were caught out because of a dramatic decrease in condo and apartment starts.
Single-family starts showed another slight increase of 2.8% to 368,000 after a 0.3% increase in March. But multi-family was the big drag in April with a drop of 46.1% to 90,000 units. Considering the glut of condominiums in many markets and the lack of credit sources for rental units, it is not surprising that starts for an oversupplied multi-family market is trending downward.
Year over year, housing starts were 54.2% below the pace of construction in April 2008.
New-home sales have shown a slight improvement from a January low and builder confidence in the housing market is up according to the National Association of Home Builders' latest Housing Market Index , which rose to 16 in May, from 14 in April and nine in March.
Starts surged 42.5% in the West. Regionally, housing starts dropped 21.1% in the South, 30.6% in the Northeast, and 21.4% in the Midwest.
Starts for single-family homes is anticipated to remain minimal as foreclosure inventory increases, pushing median home prices below replacement costs. With first-time buyers comprising over 50% of the existing home sales in March, it follows that much of the demand for new homes is also in the entry level product where selling of another home is not necessary.
NPR trumps headlines on the Donald's libel suit du jour while it scoops this quote from the Wall Street Journal:
"My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feeling," [Donald Trump] told lawyers in the December 2007 deposition.
Here I am giving the thumbs up to the National Association of Realtors twice in one month. I haven’t gone soft, but the Realtor's leaders are doing something good for the housing market. NAR is using their muscle to lobby the government to buy mortgage-backed securities consisting of jumbo loans with TALF dollars.
According to the Wall Street Journal, the feds said earlier this year they would consider expanding TALF funds to include “non-agency residential mortgage-backed securities” which would include jumbo loans. After all, the purpose of TALF is to “repair securitization markets that have largely disappeared during the credit crunch.”
The NAR reports that the inventory of homes priced above $750,000 has grown to a staggering 41 month supply as compared to a 19 month supply in 2007. These numbers do not include inventory that needs a mortgage between $417,000 and $729,750. Limits on conforming loans have been increased to $729,750 only in some high-priced areas, but the limit for conforming loans in most markets is $417,000.
Jumbo loans are now considered high risk driving the interest rates higher and requiring large downpayments. The taste for and ability to obtain these loans has constricted the market for luxury homes. Cash is king but not in large supply.
No matter how you feel about homeowners in these more expensive homes, they are an integral part of the housing market. The health of housing across the board is important for a recovery.
Now if the NAR will recognize condos as part of the housing market and set their lobbyists on the Fannie Mae requirements for condo loans.
Here are this week's Worthy Nods from the news and from around the blogs ...
Wall Street Journal: Oprah - It's Great To Have a Private Jet - The woman was just being honest as she addressed the graduating class at Duke University. “It’s great to have a private jet. Anyone that tells you that having your own private jet isn’t great is lying to you.” She's absolutely right about that. The private jets along with compensation are two excellent reasons not to take the government's bailout money.
Wall Street Journal:Should the Government Start Buying Jumbo Loans? - Not a bad idea and from the National Association of Realtors at that. The NAR is lobbying the government to do just that, by purchasing mortgage-backed securities that consist of jumbos, which are too large to qualify for government backing from Fannie Mae or Freddie Mac. They’re pushing for the government to scoop up the securities through the Term Asset-Backed Securities Loan Facility, or TALF.
Forbes:Housing Market May Be Healing Itself - According to Chris Mayer, senior vice dean at Columbia Business School, the foreclosure crisis may be near its peak. Following a springtime burst of bank repossessions--mainly due to the expiration of government moratoriums--seizures are likely to begin tapering off in the summer, he says.
Wall Street Journal:Economists See Protracted Recovery - Fifty-two economists in the latest Wall Street Journal survey see an end to the recession by autumn, but say it will take years for the economy to fully recover.
Calculated Risk: Zillow: High Percentage of Homeowners Waiting for a Market Turnaround - "With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices."
Wall Street Journal:Latest Housing Recovery Prediction - 2015 - While others have been predicting when the overall housing market will recover. (Fitch says 2010; HUD calls 2009), The Concord Group, a real estate advisory firm, looks just at the market for newly-built single-family homes. Ready for this? The dates stretch into 2015.
Washington Post:Paying Tax Credit Forward Would Bring More Through the Door - Efforts to monetize the $8,000 tax credit for first-time homebuyers is getting traction. "At least 10 states say they have come up with ways to work monetary magic. They have created innovative bridge-loan programs that advance credit-eligible purchasers the cash they need for their closings. Generally the advances take the form of second mortgages -- with or without interest charges -- that become due whenever purchasers receive their credits in the form of refunds from the IRS."
Harvard Business Blog:Meet the New Bank... - Interesting anecdotal story about a businessman that is offered a small business loan, with virtually no questions asked. Credit freeze?
Wall Street Journal:Suburban Affinity for Fake Grass - A wig for your lawn and no cutting or styling necessary. But no freshly cut grass smell either. Synthetic grass suppliers are doing surprisingly well selling to homeowners in the suburbs.
WNYC.org:In a Landscape of Predatory Loan, One Homeowner Strikes Back - Listen to this outraged homeowner/victim who is suing United Homes, alleging that the company knowingly sold her a house in poor condition and overcharged her by more than a hundred thousand dollars.
NPR:Are There More Foreclosures Than Necessary? - Listen to the audio file from the Planet Money team that found some people in the mortgage industry are saying something remarkable: As many as half of these foreclosures don't need to happen.
Wall Street Journal:B of A's Ken Lewis Cuts Vacation Home Price - Ken Lewis is trying to sell his SC coastal vacation home. Just like everyone else, he has to lower price. See other luxury home drastic price cuts and view the slide show.
Slate Magazine: Just interesting ... We've seen vast improvements in technology in just a few decades, which means the gulf between now and, say, the 1920s seems almost unimaginable. The exception to this rule is the American train system which runs slower now than it did in the 1920s.
I've heard many predictions that these tough times will likely produce a nice harvest of wildly innovative and creative entrepreneurs. No doubt. With many rule books thrown out the window, the business world tomorrow will probably have a different look and feel from yesterday, probably reshaped by the entrepreneurial spirit.
The article was written for the Harvard Business blog by Bill Taylor, who is "an agenda-setting writer, speaker, and entrepreneur. His new project, Practically Radical, chronicles the radical shifts transforming business and the practical steps that will determine who wins. His most recent book,Mavericks at Work, has been a New York Times, Wall Street Journal, and BusinessWeek bestseller."
The one growth business in this shrinking economy is speculation about where MBAs and other elite students will flock now that Wall Street is a vast wasteland. "What will new map of talent flow look like?" wondered a piece last month in the New York Times. The tentative answer: towards government, the sciences, and teaching, "while fewer shiny young minds are embarking on careers in finance and business consulting."
Just five days after that article, the Times was at it again, chronicling the difficult career choices for business students, including one former Goldman Sachs intern who started her own shoe-importing company, and a Wharton grad contemplating rabbinical studies. (He wound up in real estate.)
Now, I understand the use of students from elite business schools as a proxy for "talent" in the business world. But as the economy experiences the most deep-seated changes in decades, maybe it's time to change our minds about what kinds of people are best-equipped to become business leaders. Is our fascination with the comings and goings of MBAs as obsolete as our lionization of investment bankers and hedge-fund managers? Is it time to look elsewhere for the "best and the brightest" of what business has to offer?
One place to look for answers is the fascinating research of Professor Saras Sarasvathy, who teaches entrepreneurship at the Darden Graduate School of Business at the University of Virginia. It's been a long time since I've encountered academic research as original, relevant, and fascinating as what Professor Sarasvathy has done, in a series of essays, white papers, and a book. Her work revolves around one big question: What makes entrepreneurs "entrepreneurial?" Specifically, is there such as thing as "entrepreneurial thinking" — and does it differ in important ways from, say, how MBAs think about problems and seize opportunities?
The answer, Sarasvathy concludes, is an emphatic yes — and the differences boil down to the "causal" reasoning used by MBAs versus the "effectual" reasoning used by entrepreneurs. Causal reasoning, she explains, "begins with a pre-determined goal and a given set of means, and seeks to identify the optimal — fastest, cheapest, most efficient, etc. — alternative to achieve that goal." This is the world of exhaustive business plans, microscopic ROI calculations, and portfolio diversification.
Effectual reasoning, on the other hand, "does not begin with a specific goal. Instead, it begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with." This is the world of bootstrapping, rapid prototyping, and guerilla marketing.
The more Sarasvathy explains the differences in the two styles of thinking, the more obvious it becomes which style matches the times. Causal reasoning is about how much you expect to gain; effectual reasoning is about how much you can afford to lose. Causal reasoning revolves around competitive analysis and zero-sum logic; effectual reasoning embraces networks and partnerships. Causal reasoning "urges the exploitation of pre-existing knowledge"; effectual reasoning stresses the inevitability of surprises and the leveraging of options.
The difference in mindset, Sarasvathy concludes, boils down to a different take on the future. "Causal reasoning is based on the logic, To the extent that we can predict the future, we can control it," she writes. That's why MBAs and big companies spend so much time on focus groups, market research, and statistical models. "Effectual reasoning, however, is based on the logic, To the extent that we can control the future, we do not need to predict it." How do you control the future? By inventing it yourself — marshalling scarce resources, understanding that surprises are to be expected rather than avoided, reacting to them fast.
Ultimately, she says, entrepreneurs begin with three simple sets of resources: "Who they are" — their values, skills, and tastes; "What they know" — their education, expertise, and experience; and "Whom they know" — their friends, allies, and networks. "Using these means, the entrepreneurs begin to imagine and implement possible effects that can be created with them...Plans are made and unmade and revised and recast through action and interactions with others on a daily basis."
Sounds like a plan to me! So the next time you read an article about what MBAs are doing, don't forget to think about what entrepreneurs are doing as well. They're the ones with the right stuff for tough times.
Just for the record: In 1974, Congress enacted the Real Estate Settlement Procedures Act (RESPA) to address problems in the real estate settlement process including: abusive practices that increased costs to homebuyers and; lack of understanding about the settlement process and its costs.
RESPA's purpose is twofold: to provide consumers with information about the real estate mortgage transaction and the costs associated with it and; to prohibit certain practices, such as referral fees between settlement service providers, that result in higher costs and reduced quality to consumers.
At the NAR Mid-Year Legislative Session last week, Phil Schulman drew an over-capacity crowd to his session on HUD’s new RESPA Final Rule. Handouts from the session appear below.
The big losers under the RESPA Final Rule are homebuilders.
HUD's Final Rule deals with how home builders work incentives and/or upgrades with affiliated mortgage companies in regards to the Real Estate Settlement Procedures Act (RESPA), preventing home builders from requiring that buyers use an affiliated mortgage company in order to receive discounts. HUD's intent is to "require more timely and effective disclosures related to mortgage settlement costs for federally related mortgage loans to consumers. The changes made by this final rule are designed to protect consumers from unnecessarily high settlement costs," according to the department.
On Dec. 22, more than 30 builders and lenders, as well as the NAHB, filed suit against HUD in the U.S. District Court's eastern district of Virginia, claiming that the change in definition is "illegal" and "arbitrary and capricious."
"For the first time ever, HUD has disallowed home builders from offering bona fide discounts and packaging of real estate settlement services, which have saved home buyers thousands of dollars over the years in closing costs, title searches, and other fees. This rule is bad for consumers, bad for the housing industry, and bad for the economy." Big Builder OnLine
The Federal Housing Finance Agency yesterday issued their report on the Foreclosure Prevention Program results for February. Excellent companion reading with the report findings from the New York Times: Slow Start to U.S. Plan for Modifying Mortgages.
News Release: FHFA REPORTS HOMEOWNER ASSISTANCE INCREASING IN FEBRUARY FORECLOSURE PREVENTION REPORT
The report, based on data from the Enterprises’ 30.2 million residential mortgages as of February 28, shows significant foreclosure prevention activity.
Foreclosure Prevention Actions:
• Completed foreclosure prevention actions increased by 9 percent in February with completed loan modifications growing by 26 percent. Repayment plans grew 38 percent. • As the Enterprises intensified their loan modification efforts, loan modifications accounted for 43 percent of all completed foreclosure prevention actions in February, up from 38 percent in January. Approximately 70 percent of loan modifications completed in February involved both interest rate reductions and term extensions. • Completed alternatives to foreclosure – short sales and deeds in lieu – accounted for approximately 9 percent of all completed foreclosure prevention actions.
Mortgage Performance:
• Credit quality continued to decline as approximately 41,000 more loans became 60 days or more delinquent in February. Loans 60 days+ delinquent increased approximately 4 percent in February to 1.1 million. • One in 10 nonprime loans was 60 days+ delinquent at the end of February compared with two in 100 prime loans. Non-prime loans were 16 percent of the total 30.2 million loans.
Foreclosures:
• The Enterprises temporarily suspended all foreclosure sales on owner-occupied properties during the periods November 26, 2008 through January 31, 2009 and the last two weeks of February 2009. The suspension led to a substantial reduction in completed foreclosure sales in December 2008 and January 2009. However, completed foreclosure sales surged to 28,897 in February (from 3,222 in January) when the moratorium on foreclosures was lifted during the first half of February, 2009. The moratorium ended on March 6, 2009.
Click on the images to enlarge.
Foreclosure Prevention Actions Completed (# of loans)
Gerry Davidson is a consultant to real estate developers and builders with 30 years of experience in the start-up, branding, sales, and marketing of mixed-use developments. She's obviously not very busy these days.
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gerry@grdavidson.com
