Real estate Newsletter

Sales Stir Hope for Housing Market

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Sales Stir Hope for Housing Market

Sales of previously owned homes rose in December for the third straight month, bringing the supply of homes listed for sale to the lowest level since 2006 and offering a glimmer of hope that the housing market could be starting to climb out of a profound downturn.

Existing-home sales increased 5% in December from a month earlier, to a seasonally adjusted annual rate of 4.61 million units, the National Association of Realtors said Friday. Lawrence Yun, the Realtors’ chief economist, called the December gain “a good finish to a very tough year.”

Southern California Real EstateMany economists had predicted that 2011 would be the worst year on record for existing home sales, but the year ended with 4.26 million sales, about 1.6% higher than the 4.19 million existing homes sold in 2010. Market-watchers attributed this to a minor surge in sales at year-end, driven by historically low mortgage rates, falling prices, active investor-buyers and increasing consumer confidence.

Still, economists cautioned that it’s too early to assume that the market is recovering. “These were positive numbers, but that doesn’t mean the market is getting better. Lenders have been trying to get rid of distressed homes, and investors been snapping them up,” said Patrick Newport, chief economist at IHS Global Insight. According to the Realtors report, investors purchased 21% of all homes in December, up from 19% in November.

The inventory of homes for sale declined in December to 2.38 million, the equivalent of a 6.2-month supply, assuming the pace of sales remain at December’s level. A six-month supply of homes typically is considered healthy, although NAR’s numbers don’t take into account the “shadow inventory” of homes that are either in foreclosure or on bank balance sheets and not yet listed for sale.

Prices, meanwhile, continue to fall. The median price in December was $164,500, down 2.5% from a year earlier. Prices were down in all regions except the West, where prices rose slightly, compared with a year ago. For all of 2011, the median was $166,100, the lowest since 2002.

“What you really want to see is sales going up, inventories going down, and prices going up, not down,” said David Semmens, an economist with Standard Chartered. “People still feel they can hold off buying a house because the recovery won’t be that aggressive. It’s still very much a buyer’s market.”

That buyer’s market allowed Andrew Gonzales, a 24-year-old police officer in Santa Fe, N.M., to be picky about price when looking for a home for himself and his three-year-old daughter. He closed last month on a $132,000, three-bedroom home in Rio Rancho, a suburb of Albuquerque, after the price was cut twice. Just before closing, the home was appraised for $18,000 higher than the sales price, at $150,000, by a private appraiser.

“I got tired of paying rent, and I’m a single father, so I wanted a home for my daughter,” he said. “I was just waiting for the price to come down.”
Article courtesy of The Wall Street Journal, January 21, 2012

Hermosa Beach Properties for Sale

Interest rates should stay low until late 2014

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Interest rates should stay low until late 2014

The Federal Reserve signaled Wednesday that a full economic recovery could take nearly three more years, and it went further than ever to assure consumers and businesses that they will be able to borrow cheaply well into the future.

The central bank said it would probably not increase its benchmark interest rate until late 2014 at the earliest — a year and a half later than it had previously said.

The new timetable showed the Fed is concerned that the recovery remains stubbornly slow. But it also thinks inflation will stay tame enough for rates to remain at record lows without igniting price increases.

Chairman Ben Bernanke cautioned that late 2014 is merely its “best guess.” The Fed can shift that plan if the economic picture changes. But he cast doubt on whether that would be necessary.

“Unless there is a substantial strengthening of the economy in the near term, it’s a pretty good guess we will be keeping rates low for some time,” he said.

The Fed has kept its key rate at a record low near zero for about three years. Its new time frame suggests the rate will stay there for roughly an additional three years.

The bank’s tepid outlook also suggests it’s prepared to do more to help the economy. One possibility is a third bond-buying program that would seek to further drive down rates on mortgages and other loans to embolden consumers and businesses to borrow and spend more

In a statement after   a two-day policy meeting, the Fed said it stands ready to adjust its “holdings as appropriate to promote a stronger economic recovery in the context of price stability.”

Treasury yields fell after the midday announcement. But yields stopped falling after the bank later issued forecasts for the economy and interest rates. They showed that while some members foresee super-low rates beyond 2014, six of the 17 members forecast a rate increase as early as this year or next.

It was the first time the Fed had released interest-rate forecasts from its committee members. It will now do so four times a year, when it also updates its economic outlook.

The rate forecasts are an effort to provide more explicit clues about the Fed’s plans. They also coincide with a broader Fed effort to make its communications with the public more open.

Lower yields on bonds tend to encourage investors to shift money into stocks, which can boost wealth and spur more spending.

Stocks, which had traded lower before the Fed’s announcement, quickly recovered their losses. The Dow Jones industrial average closed at 12,756.96, its highest close in more than eight months.

Some economists said the new late-2014 target may foreshadow further Fed action to try to invigorate the economy.

Julie Coronado, an economist at BNP Paribas, said she thought the Fed was indicating that it will step up its purchases of bonds and other assets if economic growth fails to accelerate — even if it doesn’t slow.

That is a “very low bar indeed,” she wrote in a note to clients.

Other analysts fear that the Fed’s longer-term timetable for a rate increase could hamstring it, even though Bernanke stressed the Fed’s ability to adjust rates as it sees fit.

Dana Saporta, an economist at Credit Suisse, worried that the much-longer timetable would compromise the Fed’s credibility if it must raise rates sooner because of unexpectedly strong growth and inflation.

“It’s striking that the Fed would make an implicit commitment for almost three years,” Saporta said. “It seems like an awfully long time to make such a statement. Given that no one knows what will happen … the (Fed) may eventually regret this.”

The central bank slightly reduced its outlook for growth this year, from as much as 2.9 percent forecast in November down to 2.7 percent. For the first time, the Fed provided an official target for inflation — 2 percent — in a statement of its long-term policy goals.

The bank sees unemployment falling as low as 8.2 percent this year, better than its earlier forecast of 8.5 percent. December’s unemployment rate was 8.5 percent.

Those rates are still far higher than normal. The Fed didn’t set a formal target for unemployment, but it said a rate between 5.2 and 6 percent would be consistent with a healthy economy.

Bernanke noted that the Fed expects only moderate growth over the next year. He pointed to the persistently depressed housing market and continued tight credit for many consumers and companies.

But for now, the American economy is looking a little better. Companies are hiring more, the stock market is rising, factories are busy and more people are buying cars. Even the home market is showing slight gains after three dismal years.

Associated Press, January 25, 2012

Irvine CA Homes for Sale

Calif. House Price Drop 7th Biggest in U.S.

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Calif. House Price Drop 7th Biggest in U.S.

Real Estate for Sale

Core Logic Chart

California house prices had the seventh-biggest price drop among U.S. states in November, falling 5.9% from year-ago levels, according to Santa Ana-based data firm CoreLogic.

When distressed houses — bank-owned properties and homes selling for less than their mortgages — are removed from the mix, prices were down 0.9% from the previous November.

On the one hand, California no longer ranks among the top five states with the biggest price drops. But six years into the housing market crash, it’s still in the top 10 (See chart at right).

By comparison, the national average price drop was 4.3% including all single-family houses in the nation, and 0.6% when distressed housing was excluded.

Said Mark Fleming, CoreLogic’s chief economist:

“With one month of data left to report, it appears that the healthy, non-distressed market will be very modestly down in 2011. Distressed sales continue to put downward pressure on prices, and is a factor that must be addressed in 2012 for a housing recovery to become a reality.”

In addition, CoreLogic’s latest Home Price Index (HPI) shows …
•    In Orange County, single-family house prices fell 4.9% from November 2010. That compares to a 4.7% decrease year-over-year in October.
•    Excluding distressed houses, O.C.’s prices were down 2.5% (compared to 3.2% in October).
•    Nationwide, home prices declined 1.4% from October to November, the fourth consecutive month-to-month decrease.
•    U.S. home prices were 32.8% below the peak of the housing bubble in April 2006; non-distressed house prices were down 23.1% from the market peak.
•    Nevada had the nation’s biggest price drops in November: Down 11.2% for all houses and down 8.8% excluding distressed properties.
•    Vermont had the nation’s biggest price gain: Up 4.3% including distressed housing and up 1.5% without it.
•    Of the 50 states, prices were up in just nine and in Washington, D.C.; they were down in 38 states and unchanged in three.
•    Of the 100 biggest metro areas, 77 showed year-over-year price declines.
•    Among the biggest metro areas, Chicago had the biggest price drop: Down 10.5% and down 1.9% excluding distressed houses.
•    New York City and environs had the biggest gain: Up 1.3% and up 1.9% excluding distressed houses.
•    Prices were down 5.7% in Los Angeles County and in the Inland Empire.

Posted by Jeff Collins on January 10, 2012 in Lansner on Real Estate

Pacific Palisades real estate for sale

Fannie Mae Outlook for Home Prices Rises Again

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Fannie Mae Outlook for Home Prices Rises Again

The consumer outlook for U.S. home prices improved again in January, extending a recent upward trend in housing market sentiment, according to mortgage market firm Fannie Mae.

For its monthly reading, Fannie Mae said respondents in its January survey predicted home prices will rise by 1% over the next year, up from the 0.8% gain forecast in December.

Views on the direction of the U.S. economy also continued to improve. According to the respondents, 30% said they believe the U.S. economy is on the right track, up from 22% with that view in December. The percentage who said the economy is headed in the wrong direction fell to 63% of respondents, marking a 6 percentage point decline from the previous month.

Fannie Mae Chief Economist Doug Duncan pointed to a slowly improving U.S. job market as one cause for rising confidence in the long-battered housing market. ”The strengthening employment picture last Friday provides encouragement that the improving trend in consumer confidence will continue and will at some point be reflected in a firming up of consumer spending,” Duncan said.

A report last week from the U.S. Labor Department showed non-farm payrolls grew 243,000 last month, the largest gain since April. The jobless rate fell from 8.5% to 8.3%, the lowest it has been since February 2009.

Fannie Mae’s January survey also found 44% of respondents expect their personal financial situation to improve over the next year, up from 40% with that view in December.

The survey is based upon a monthly poll of roughly 1,000 adults and has a margin of error of plus or minus 3.1%.

Wall Street Journal, February 7, 2012

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A Reprieve for Unemployed Borrowers

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A Reprieve for Unemployed Borrowers

The New York Times

Fannie Mae and Freddie Mac recently extended their foreclosure forbearance programs to give short-term aid to unemployed homeowners, but housing counselors warn that these borrowers will need to look at longer-term solutions.
Making sense of the story

  • In a forbearance program, a lender agrees not to foreclose on a property and gives the borrower several months’ grace from or reduction in monthly mortgage payments.  The programs work best for temporary setbacks, like job loss, health problems, or natural disasters.
  • There are drawbacks to the forbearances though. The most-significant drawback is a larger total debt from the smaller payments.  The unpaid balance continues to increase during this time.
  • The new temporary mortgage payment is often set to 31 percent of the household income; in some cases lenders agree to accept no payments.  Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring approval by both Fannie Mae and the lender.
  • However, even with the program in place, the lender could still report a mortgage as delinquent, which could adversely affect the borrower’s credit score.
  • Because some agreements add onerous term and conditions, homeowners should also consult with a housing counselor certified by the Dept. of Housing and Urban Development.
  • In a forbearance program, a lender agrees not to foreclose on a property and gives a borrower several months’ grace from or reduction in monthly mortgage payments. The programs work best for temporary setbacks, like job loss, health problems or natural disasters.
  • Along with the reprieve come drawbacks — most significantly a larger total debt from the smaller payments. “Your unpaid balance keeps getting higher and higher and higher,” said Jennifer Murphy, the director of lender-servicer relations for the nonprofit Center for New York City Neighborhoods.
  • The new temporary mortgage payment is often set to 31 percent of your household income; in some cases lenders agree to accept no payments. Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring its approval as well as the lender’s.

But even with the program in place, your lender could still report a mortgage as delinquent, which would adversely affect your credit, so ask about its policy, said Martha Cedeno-Ross, a foreclosure assistance counselor with Neighborhood Housing Services of Waterbury, Conn. Because some agreements may add onerous terms and conditions, homeowners should also consult with a real estate lawyer, or a housing counselor certified by the Department of Housing and Urban Some 26,801 homeowners completed Fannie Mae loan forbearance and repayment plans in the first nine months of 2011, up 13 percent from the same period in 2010. By comparison, the total for all of 2008 was 7,892, according to Fannie Mae’s financial filings with the Securities and Exchange Commission.

To qualify, borrowers must be unemployed, which means not working at all, though a co-borrower could still be employed, said Brad German, a Freddie Mac spokesman.

To get started, gather up your financial information and consider writing a “hardship letter,” an overview that clearly states what happened and when, Ms. Cedeno-Ross said. The letter could also serve as a starting point for a loan modification and other programs. Give details about your previous salary, severance payments and unemployment benefits; if you have had job interviews, include those details, she said.

You will need to fill out the four-page uniform borrower assistance form used by both Freddie and Fannie, Mr. German said. It is also good for government mortgage assistance programs like Making Home Affordable — http://www.makinghomeaffordable.gov — and Knowyouroptions.com.

Be sure to plan an “end strategy” well before the forbearance agreement runs out.

“The big question every homeowner should find out: Where will this forbearance lead me?” said Charles Das, a housing counselor for Brooklyn Housing and Family Services. Homeowners usually get a repayment plan or a loan modification, he said, but he has seen some denied the modification because of low income.

Ms. Murphy says homeowners should use the 6 to 12 months of reduced payments to work with a financial or housing counselor, and if possible, save money and pay off secured debts.

Sometimes borrowers may determine after counseling that they cannot afford the home, said John Walsh, the president of Total Mortgage Services of Milford, Conn. They may then need to sell the home or arrange for “a graceful exit” — for instance, agreeing to give up the deed in lieu of foreclosure, or pursuing a short sale, in which the lender agrees to accept less than the mortgage balance.

To get started, gather up your financial information and consider writing a “hardship letter,” an overview that clearly states what happened and when, Ms. Cedeno-Ross said. The letter could also serve as a starting point for a loan modification and other programs. Give details about your previous salary, severance payments and unemployment benefits; if you have had job interviews, include those details, she said.

You will need to fill out the four-page uniform borrower assistance form used by both Freddie and Fannie, Mr. German said. It is also good for government mortgage assistance programs like Making Home Affordable — http://www.makinghomeaffordable.gov — andKnowyouroptions.com.

Be sure to plan an “end strategy” well before the forbearance agreement runs out.

“The big question every homeowner should find out: Where will this forbearance lead me?” said Charles Das, a housing counselor for Brooklyn Housing and Family Services. Homeowners usually get a repayment plan or a loan modification, he said, but he has seen some denied the modification because of low income.

Ms. Murphy says homeowners should use the 6 to 12 months of reduced payments to work with a financial or housing counselor, and if possible, save money and pay off secured debts.

Sometimes borrowers may determine after counseling that they cannot afford the home, said John Walsh, the president of Total Mortgage Services of Milford, Conn. They may then need to sell the home or arrange for “a graceful exit” — for instance, agreeing to give up the deed in lieu of foreclosure, or pursuing a short sale, in which the lender agrees to accept less than the mortgage balance.

By VICKIE ELMER, The New York Times
Published: Monday, January 23, 2012

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More mortgage relief from White House, Congressional OK doubtful

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More mortgage relief from the White House — but congressional OK doubtful

President Barack Obama on Wednesday announced a sweeping plan to help underwater homeowners refinance into lower-interest loans, but funding for the proposal must be approved by a combative Congress, lowering the possibility that it will help anyone soon.

The refinancing program would be a major source of relief for the many Bay Area homeowners whose loans are for amounts higher than the value of the home but are not held by two government-sponsored entities — Fannie Mae and Freddie Mac.

Operated by the Federal Housing Administration, the plan would allow underwater homeowners to refinance into cheaper federally insured loans up to $729,750 — the FHA’s conforming loan limit in the Bay Area. Borrowers with good credit who are current on their loan payments are eligible.

Since a highly partisan Congress must approve $5 billion to $10 billion in funding, housing experts were skeptical about it passing this year, but they praised its objectives.

“We’re supporting it because it will help to stabilize an already difficult housing market,” said LeFrancis Arnold, president of the California Association of Realtors.

“It is a big deal for homeowners here who can’t qualify under normal criteria,” said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley. “A lot of people would take advantage of this if it were up and running.”

The measure also streamlines the process of refinancing an underwater mortgage, eliminating the need for an appraisal or submitting a new tax return.

Obama announced the plan in a speech in Fairfax, Va., saying it would save an average $3,000 a year per borrower. “No more red tape,” Obama said. “No more runaround from the banks. And a small fee on the largest financial institutions will make sure that it doesn’t add to the deficit.”

The plan will help “millions of responsible homeowners,” Obama continued. “If you’re ineligible for refinancing just because you’re underwater on your mortgage, this plan changes that. You’ll be able to refinance at a lower rate, saving hundreds of dollars a month you can put back in your pocket.”

To qualify, borrowers must be current on their mortgage, have a minimum credit score of 580, and they must be refinancing a loan on a single-family, owner-occupied principal residence. Lenders only need to confirm that the borrower is employed. Loans that are more than 140 percent of the home value probably would not qualify until banks wrote down part of the balance.

Under the administration’s Home Affordable Refinance Program, more than 900,000 underwater homeowners whose loans are held by Fannie Mae or Freddie Mac already have refinanced their mortgages. That is fewer than the administration hoped, and a revision to the program was announced recently that removed limits on the size of the loan relative to the value of the house.

“There are so many people that could be helped” by the new plan, said Cathy Warshawsky, a San Jose mortgage broker and officer in the California Association of Mortgage Professionals. “They are people who are making lots and lots of money, who purchased homes that are now upside-down. They are making enough money to be able to pay their mortgages, but nobody will refinance them. If we drop their mortgage payment, they are going to go out there and spend money, buy cars and washing machines.”

Mortgage market and housing analysts were doubtful that the plan will become a reality this year.

“The goal of the program is good,” said Kevin Stein of the California Reinvestment Coalition who is also concerned about Congress. “Whether they can reach the goal is another question.”

Dustin Hobbs of the California Mortgage Bankers Association called the plan “a positive sign,” but added that “the proposal is a long way from being a reality, so at this point it’s tough to say what the end result would be.”

The proposal to pay for the program with a tax on large banks will likely be dead on arrival at a fiercely partisan Congress in an election year, noted Ed Mills, a financial policy analyst with FBR Capital Markets in Washington, D.C.

“It sounds great, but in an election year, unfortunately, it has little to no chance of ever coming into reality,” Mills said. “This is likely to be another mortgage program that comes out with great fanfare, overpromises and underdelivers.”

Underscoring that prediction, a leading House Republican released a statement blasting the plan.

Rep. Scott Garrett, R-N.J., head of the House finance subcommittee that oversees Fannie Mae and Freddie Mac, called the plan the “latest salvo of the federal government’s unprecedented expansion into our nation’s housing market.”

The White House also announced several other measures to shore up the housing market, several of which were announced by Obama in his State of the Union address. The measures include a “homeowner bill of rights” to protect borrowers from hidden fees and penalties and provide an appeal process for families fighting “inappropriate” foreclosure; a pilot program to transition foreclosures into rental housing and a program to rehabilitate neighborhoods hit by foreclosures.

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Mortgage Deal Could Bring Billions in Relief

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Mortgage Deal Could Bring Billions in Relief

WASHINGTON (CNNMoney) — In the largest deal to date aimed at addressing the housing meltdown, federal and state officials on Thursday, February 8, 2012  announced a $26 billion foreclosure settlement with five of the largest home lenders.

The deal settles potential state charges about allegations of improper foreclosures based on robosigning, seizures made without proper paperwork.

The settlement includes the Justice Department and the U.S. Department of Housing and Urban Development, as well as 49 state attorneys general — all but Oklahoma.

“We are using this opportunity to fix a broken system,” said U.S. Attorney General Eric Holder at the news conference announcing the settlement.

The settlement sets up a federal monitor to oversee the process and try to prevent roadblocks and red tape that tripped many homeowners seeking help in earlier programs designed to address the housing crisis.

President Obama said the settlement will “begin to turn the page on an era of recklessness that has left so much damage in its wake.”

“No action, no matter how meaningful, is going to by itself entirely heal the housing market,” he said in separate remarks. “But this settlement is a start.”

Most of the relief will go to those who owe far more than their homes are worth, known as being underwater on the loans. That relief will come over the course of the next three years, with the banks having incentives to provide most of the relief in the next 12 months.

“This settlement is about homeowners, homeowners in distress,” said Iowa Attorney General Tom Miller at the news conference with state and federal officials.

Most of the relief will go to those who owe far more than their homes are worth, known as being underwater on the loans. That relief will come over the course of the next three years, with the banks having incentives to provide most of the relief in the next 12 months.

“This settlement is about homeowners, homeowners in distress,” said Iowa Attorney General Tom Miller at the news conference with state and federal officials.

What the settlement means to you

Principal reduction: At least $17 billion will go to reducing the principal owed by homeowners who are both underwater and behind on their mortgages.

The agreement calls for principal reduction for as many as 1 million people. But it’s unlikely the money will go that far, because many people need more than the $17,000 average reduction that would result if the money is split among 1 million homeowners.

At the same time, total principal reduction could go higher — to as much as $34 billion — since the agreement requires deeper principal reductions for the most troubled loans.

Refinancing: Officials say up to 750,000 other underwater homeowners who are current on their mortgages will be able to refinance their current loans at lower rates. They will not receive a reduction in principal, but with mortgage rates now near record lows, they could receive substantial savings on their monthly payments.

The settlement sets aside $3 billion to account for the reduced interest payments the banks will receive after the refinancing.

Robosigning payments: About $1.5 billion of the settlement will go to homeowners who had their homes foreclosed upon between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria. They will receive up to $2,000 each.

Accepting that payment does not preclude homeowners who lost their home in an improper foreclosure from suing the bank to recover damages, Donovan said.

Federal officials say negotiations are underway to expand the settlement to nine other major servicers, which would raise the overall value of the settlement to $30 billion.

Related settlements: The deal spurred pacts between the authorities and banks in similar cases.

Oklahoma Attorney General Scott Pruitt announced a separate $18.6 million settlement that addressed homeowners whose homes were foreclosed through improper means, but did not provide help to those whose mortgages were underwater. He said he believes the broader agreement “overreached” the authority of both federal and state governments.

“We had concerns that what started as an effort to correct specific practices harmful to consumers, morphed into an attempt by President Obama to … fundamentally restructure the mortgage industry in the United States,” Pruitt said.

The Federal Reserve said it had reached an agreement with the five banks to pay $766.5 million in sanctions related to their servicing practices.

And Loretta Lynch, the U.S. Attorney in Brooklyn, N.Y., announced a $1 billion settlement with Bank of America to resolve claims of underwriting and mortgage origination fraud by B of A and mortgage lender Countrywide Financial, which B of A bought in 2008.

The bigger foreclosure problem: The $26 billion deal announced Thursday is the second biggest settlement ever involving states. It trails only the $206 billion pact in 1998 with the tobacco industry.

And it dwarfs any settlements that major Wall Street firms have reached to resolve other allegations of misdeeds related to the financial markets meltdown and the Great Recession.

Still it only will help a faction of those homeowners who are struggling with mortgages. The relief would not be available to those homeowners whose mortgages have been sold to the government-sponsored mortgage guarantors Fannie Mae and Freddie Mac.

There are 1.5 million homeowners who are 90 days or more delinquent on their mortgages but not yet in foreclosure, according to the most recent estimate from the Mortgage Bankers Association. An additional 1.9 million are in the foreclosure process. And Core Logic estimates that 11 million homeowners are underwater on their mortgages.

Obama proposes new home refinancing plan

The settlement does not preclude criminal prosecutions from being pursued. It also doesn’t stop investigations into other allegations of misdoings, such as the process of bundling loans into mortgage-backed securities and selling them to investors.

“It wasn’t the servicing practices that created the bubble nor caused the collapse,” said Donovan. “It was the origination and the securitization of these horrendous products. We will be aggressive about going after those claims.”

The deal is supposed to protect consumers when it comes to robosigning, and ensure that mortgage servicers agree to communicate better, avoid delays and give homeowners who are late on mortgage payments a fairer shake.

New York’s participation had been shaky this week, because some of the banks involved in the multi-state deal had also been sued by Attorney General Eric Schneiderman last week. Those banks — Bank of America, Wells Fargo and JPMorgan Chase — had also asked for a legal pass from Schneiderman’s lawsuit, which accuses them of deceptive foreclosure practices for relying on the Mortgage Electronic Registration System.

The big question throughout the negotiations was how much money would be available to help homeowners, which depended on how many states agreed to the deal. California’s participation raises the total settlement value by several billion dollars.

At least one consumer advocacy group, the Center for Responsible Lending, has said the deal — while “no silver bullet” — leaves room to hold banks accountable in other mortgage probes, said Kathleen Day, a spokeswoman for the nonprofit.

But other left-leaning groups, including Move On and the New Bottom Line, are continuing to urge states to hold out for a big criminal investigation and a $300 billion settlement award.

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New Residential Construction in December 2011

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U.S. Census Bureau News

Joint Release
U.S. Department of Housing and Urban Development

NEW RESIDENTIAL CONSTRUCTION IN DECEMBER 2011

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for December 2011:

BUILDING PERMITS

Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 679,000. This is 0.1 percent (±1.2%)* below the revised November rate of 680,000, but is 7.8 percent (±2.2%) above the December 2010 estimate of 630,000.

Single-family authorizations in December were at a rate of 444,000; this is 1.8 percent (±1.2%) above the revised November figure of 436,000. Authorizations of units in buildings with five units or more were at a rate of 209,000 in December.

An estimated 611,900 housing units were authorized by building permits in 2011. This is 1.2 percent (±1.3%)* above the 2010 figure of 604,600.

HOUSING STARTS

Privately-owned housing starts in December were at a seasonally adjusted annual rate of 657,000. This is 4.1 percent (±11.6%)* below the revised November estimate of 685,000, but is 24.9 percent (±18.3%) above the December 2010 rate of 526,000.

Single-family housing starts in December were at a rate of 470,000; this is 4.4 percent (±11.3%)* above the revised November figure of
450,000. The December rate for units in buildings with five units or more was 164,000.

An estimated 606,900 housing units were started in 2011. This is 3.4 percent (±2.4%) above the 2010 figure of 586,900.

HOUSING COMPLETIONS

Privately-owned housing completions in December were at a seasonally adjusted annual rate of 605,000. This is 9.2 percent (±15.1%)  above the revised November estimate of 554,000 and is 7.1 percent (±10.9%)* above the December 2010 rate of 565,000.

Single-family housing completions in December were at a rate of 448,000; this is 0.9 percent (±11.7%)* below the revised November rate of 452,000. The December rate for units in buildings with five units or more was 147,000.

An estimated 583,900 housing units were completed in 2011. This is 10.4 percent (±2.8%) below the 2010 figure of 651,700.

U.S. Department of Commerce Washington, D.C. 20233

  • Privately-owned housing starts in December were at a seasonally adjusted annual rate of 657,000. This is 4.1 percent (±11.6%)* below the revised November estimate of 685,000, but is 24.9 percent (±18.3%) above the December 2010 rate of 526,000.
  • Single-family housing starts in December were at a rate of 470,000; this is 4.4 percent (±11.3%)* above the revised November figure
  • The December rate for units in buildings with five units or more was 164,000.
  • An estimated 606,900 housing units were started in 2011. This is 3.4 percent (±2.4%) above the 2010 figure of 586,900.

HOUSING COMPLETIONS

  • Privately-owned housing completions in December were at a seasonally adjusted annual rate of 605,000. This is 9.2 percent (±15.1%)*above the revised November estimate of 554,000 and is 7.1 percent (±10.9%)* above the December 2010 rate of 565,000.
  • Single-family housing completions in December were at a rate of 448,000; this is 0.9 percent (±11.7%)* below the revised November rate of 452,000. The December rate for units in buildings with five units or more was 147,000.
  • An estimated 583,900 housing units were completed in 2011. This is 10.4 percent (±2.8%) below the 2010 figure of 651,700.

New Residential Construction data for January 2012 will be released on Thursday, February 16, 2012, at 8:30 A.M. EST.
://www.census.gov/new resconst

EXPLANATORY NOTES

In interpreting changes in the statistics in this release, note that month-to-month changes in seasonally adjusted statistics often show movements which may be irregular. It may take 2 months to establish an underlying trend for building permit authorizations, 4 months for total starts, and 5 months for total completions.

The statistics in this release are estimated from sample surveys and are subject to sampling variability as well as non-sampling error including bias and variance from response, non-reporting, and under coverage. Estimated relative standard errors of the most recent data are shown in the tables. Whenever a statement such as “2.5percent (±3.2%) above” appears in the text, this indicates the range (-0.7 to +5.7 percent) in which the actual percent change is likely to have occurred.

All ranges given for percent changes are 90-percent confidence intervals and account only for sampling variability. If a range does not contain zero, the change is statistically significant. If it does contain zero, the change is not statistically significant; that is, it is uncertain whether there was an increase or decrease. The same policies apply to the confidence intervals for percent changes shown in the tables. On average, the preliminary seasonally adjusted estimates of total building permits, housing starts and
housing completions are revised about three percent or less. Explanations of confidence intervals and sampling variability can be found on our web site listed above.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.census.gov/new resconst

Table 1. New Privately-Owned Housing Units Authorized in Permit-Issuing Places
[Thousands of units. Detail may not add to total because of rounding]

2 to 4 5 units

Total 1 unit units or more Total 1 unit Total 1 unit Total 1 unit Total 1 unit

2010: December 630 445 25 160 114 70 97 66 257 211 162 98

2011:

January 568 419 20 129 77 49 94 65 286 216 111 89
February 534 382 15 137 63 39 86 59 288 209 97 75
March 574 392 16 166 60 37 94 64 296 215 124 76
April 563 395 21 147 59 38 94 64 284 210 126 83
May 609 406 20 183 80 36 97 67 293 218 139 85
June 617 402 21 194 71 35 99 68 306 217 141 82
July 601 403 21 177 60 37 96 68 312 214 133 84
August 625 418 25 182 61 34 107 74 313 224 144 86
September 589 413 20 156 64 36 107 74 288 221 130 82
October 644 428 23 193 61 39 107 71 345 232 131 86
November (r) 680 436 21 223 77 41 104 70 339 236 160 89
December (p) 679 444 26 209 72 37 110 73 337 239 160 95

Average RSE (%)1 1 1 9 1 3 3 2 2 1 1 2 2

Percent Change:

December 2011 from November 2011 -0.1% 1.8% 23.8% -6.3% -6.5% -9.8% 5.8% 4.3% -0.6% 1.3% 0.0% 6.7%

90% Confidence Interval 3 ± 1.2 ± 1.2 ± 6.2 ± 2.0 ± 4.6 ± 6.6 ± 3.9 ± 5.3 ± 1.9 ± 2.4 ± 1.9 ± 2.6

December 2011 from December 2010 7.8% -0.2% 4.0% 30.6% -36.8% -47.1% 13.4% 10.6% 31.1% 13.3% -1.2% -3.1%

90% Confidence Interval 3 ± 2.2 ± 1.9 ± 9.2 ± 3.1 ± 7.3 ± 10.5 ± 3.7 ± 5.0 ± 2.4 ± 3.0 ± 4.7 ± 6.5

2010: 604.6 447.3 22.0 135.3 73.8 49.1 103.5 75.4 299.1 232.3 128.2 90.6

2011: (p) 611.9 413.7 21.0 177.2 67.5 38.4 101.4 69.7 310.1 221.6 132.8 84.0

RSE (%) 1 1 5 (Z) 3 3 1 1 1 1 2 2

Year to Year Percent Change 4 1.2% -7.5% -4.5% 31.0% -8.5% -21.8% -2.0% -7.5% 3.7% -4.6% 3.6% -7.2%
90% Confidence Interval 3 ± 1.3 ± 1.1 ± 6.5 ± 2.3 ± 5.1 ± 6.8 ± 1.7 ± 2.1 ± 0.8 ± 0.9 ± 2.7 ± 3.4

2010: December 47.6 30.6 2.0 15.0 8.9 5.3 6.3 3.6 19.9 14.8 12.5 6.9

2011:

January 36.0 26.3 1.2 8.5 4.6 2.9 4.4 2.7 19.9 15.1 7.2 5.5
February 37.2 26.5 1.0 9.7 3.6 2.0 4.5 3.3 22.0 15.9 7.1 5.2
March 53.7 37.6 1.4 14.7 4.7 3.0 8.0 6.0 29.4 21.3 11.6 7.3
April 49.9 36.9 1.8 11.2 4.9 3.3 9.0 6.8 24.8 19.2 11.2 7.7
May 56.3 39.2 1.8 15.3 7.2 3.5 9.6 7.1 26.6 20.4 12.8 8.2
June 62.4 40.9 2.0 19.6 8.2 3.6 9.9 7.3 29.9 21.3 14.4 8.8
July 51.2 35.3 1.8 14.2 5.0 3.3 8.9 6.3 26.5 18.3 10.9 7.4
August 60.9 40.8 2.5 17.6 5.8 3.3 11.1 7.6 30.1 21.6 13.9 8.3
September 51.8 35.6 1.8 14.5 5.8 3.5 10.3 6.8 24.3 18.3 11.4 7.0
October 50.5 33.6 1.9 15.0 5.6 3.4 9.9 6.4 24.9 17.2 10.1 6.6
November (r) 50.3 30.9 1.7 17.7 6.3 3.4 8.3 5.2 24.4 16.3 11.3 6.1
December (p) 50.7 29.3 2.0 19.3 5.6 2.7 7.3 4.0 25.7 16.3 12.1 6.4

Average RSE (%)1 1 1 9 1 3 3 2 2 1 1 2 2

(p) Preliminary. (r) Revised. RSE Relative standard error. S Does not meet publication standards because tests for identifiable and stable seasonality do not meet reliability standards.
X Not applicable. Z Relative standard error is less than 0.5 percent.

  1. Average RSE for the latest 6-month period.
  2. Reflects revisions not distributed to months.
  3. See the Explanatory Notes in the accompanying text for an explanation of 90% confidence intervals. 4 Computed using unrounded data.

Table 2. New Privately-Owned Housing Units Authorized, but Not Started, at End of Period
[Thousands of units. Detail may not add to total because of rounding]

2 to 4 5 units

Total 1 unit units or more Total 1 unit Total 1 unit Total 1 unit Total 1 unit

2010: December 84.8 47.2 2.3 35.2 11.9 7.0 7.6 5.3 42.2 24.5 23.1 10.5

2011:

January 79.4 46.3 2.3 30.7 11.5 7.6 6.2 4.5 39.5 24.1 22.2 10.2
February 79.3 46.3 2.0 30.9 11.0 7.6 6.9 4.8 38.8 23.7 22.6 10.3
March 81.9 48.6 1.8 31.5 10.1 7.3 8.3 6.0 38.8 24.6 24.6 10.7
April 81.8 48.2 2.1 31.5 9.7 6.8 8.8 6.9 38.5 23.9 24.8 10.6
May 82.6 47.6 1.8 33.2 11.1 6.5 7.9 6.0 39.4 24.3 24.2 10.8
June 84.7 45.5 1.7 37.5 11.7 6.2 5.7 4.5 42.4 23.5 24.9 11.2
July 80.7 43.4 1.9 35.5 8.3 5.8 6.2 4.2 43.2 23.6 23.1 9.8
August 87.4 45.5 2.5 39.4 8.7 5.9 7.8 5.9 46.2 23.6 24.8 10.1
September 79.9 45.0 3.5 31.4 8.9 5.8 7.9 5.9 41.6 23.8 21.5 9.5
October (r) 75.3 42.8 3.0 29.5 8.0 5.6 7.0 4.9 39.9 22.8 20.3 9.4
November (r) 73.2 41.8 3.2 28.2 6.7 4.8 7.9 5.0 40.2 22.4 18.4 9.6
December (p) 78.8 42.3 3.0 33.5 8.1 4.7 6.3 4.0 43.1 23.2 21.2 10.4

Average RSE (%)1 5 7 19 9 15 18 15 15 7 10 12 17

Percent Change: 2

December 2011 from November 2011 7.6% 1.3% -6.6% 18.6% 21.6% -1.5% -20.4% -19.7% 7.2% 3.7% 15.6% 8.0%
90% Confidence Interval 3 ± 5.2 ± 4.4 ± 9.7 ± 12.6 ± 14.0 ± 12.0 ± 14.4 ± 8.3 ± 7.3 ± 6.9 ± 9.7 ± 8.3
December 2011 from December 2010 -7.1% -10.4% 28.0% -4.9% -32.0% -32.7% -16.3% -24.2% 2.1% -5.1% -8.0% -0.8%
90% Confidence Interval 3 ± 7.8 ± 8.1 ± 52.8 ± 14.8 ± 16.4 ± 15.1 ± 17.4 ± 20.6 ± 10.1 ± 11.5 ± 18.5 ± 16.6

(p) Preliminary. (r) Revised. RSE Relative standard error. S Does not meet publication standards because tests for identifiable and stable seasonality do not meet reliability standards.

  1. Average RSE for the latest 6-month period.
  2. Computed using unrounded data.
  3. See the Explanatory Notes in the accompanying text for an explanation of 90% confidence intervals.

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Mortgage Crimes are Focus of New Task Force

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Mortgage crimes are focus of new task force

WASHINGTON (CNNMoney) — A new special task force to investigate and prosecute those responsible for bad mortgages during the housing boom will be part of President Obama’s 2012 agenda.

Obama announced Tuesday that he’s asked the Justice Department to create a special unit of prosecutors and state attorneys general to investigate abusive lending and packaging of risky mortgages that led to the housing crisis. And he’s tapped an avowed Wall Street enemy, New York Attorney General Eric Schneiderman, to help run the crime unit, according to a White House official.

“This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” Obama said in his State of the Union speech.

The new unit’s goal will be to investigate banks, financial firms and mortgage originators that broke the law, and to compensate victims and provide relief for homeowners, the White House official said.

Although the housing bust is more than four years old, this is the first time the Obama administration has indicated it will go after mortgage originators and Wall Street banks that got homeowners into loans they couldn’t afford — actions seen as a key culprit of the financial crisis.

The mortgage industry has often been blamed for its role helping homeowners get lines or credit and bigger mortgages during the housing boom. The industry saw little downside, unloading the risk that the loans would go bad on to the financial markets.

With Schneiderman, who has been working on his own investigations into big banks, Obama is signaling he’s ready to go after financial crimes. And left-leaning progressive groups cheered the news.

“Schneiderman has shown himself to be a courageous hero in his defense of the struggling underwater homeowners in his state and across the country,” according to a statement released by a coalition of left-leaning advocates such as MoveOn and New Bottom Line.

The news came as a surprise to the financial industry, which had been predicting Obama would tout a proposed settlement under discussion among federal regulators, state attorneys general and the largest bank mortgage servicers under investigation for improperly foreclosing on homeowners.

“We believe the industry is worried that this new task force will go after the banks for the origination of many of the mortgages that have defaulted or are now underwater,” said Jaret Seiberg, a senior policy analyst for the Washington Research Group.

The state attorneys general, the Justice Department and the Department of Housing and Urban Development have been in talks for nearly a year with big bank servicers that stand accused of using robo-signers to service home loans. The five largest mortgage servicers involved in the talks are: Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citigroup (C, Fortune 500) and Ally Financial (GJM).

According to people familiar with the talks, a draft settlement would result in those banks paying $20 billion to $25 billion toward housing relief. About 1 million underwater homeowners would be eligible for an average $20,000 off the principal owed.

In return, state attorneys general would not be able to file future lawsuits against the bank mortgage servicers that agree to the deal. The amount of relief available for homeowners depends on how many state attorneys general agree to the deal.

Obama didn’t mention the talks in his State of the Union speech. A White House official said Wednesday that the new task force would not prevent progress that has been made on that deal.

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Real Estate Recovery Expects to be Slow

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Real Estate Recovery Expects to be Slow

Fair warning to U.S. real estate players: Resign yourselves to “a slowing grind-it-out recovery” in 2012, as “enduring economic doldrums” continue to weigh heavily on the market.

Your best bets: a small handful of “property-wealth islands,” including San Francisco and San Jose/Silicon Valley, both seen as “primary 24-hour gateways located along global pathways,” according to a report being released today at the Urban Land Institute conference in San Francisco.

San Francisco ranks third out of 51 cities as a place to invest in and develop commercial and multifamily apartment properties and fourth in for-sale home building, with San Jose two or three rungs lower in each category, according to the survey compiled by the institute and Pricewaterhouse Coopers.

Washington, Austin and New York are the other top-rated cities.

“We come out very well as top investment places, although even here it’s still a bit of a chug,” said Kate White, executive director of ULI San Francisco.

Put the “chug” down to the enduring doldrums in the housing market, which continues to weigh on San Francisco and San Jose, if not as badly as in other parts of the Bay Area and nation. Even though both rank high in the home-building category, according to the report, their prospects for investment and development are described only as “fair.”

“There’s still an understandable reluctance by potential homeowners to get into the market,” said White.

Not so, however, when it comes to renting or leasing commercial space in high-tech areas like San Francisco’s Mid-Market and South of Market, a trend driven largely by the influx of a younger, more mobile and urban-oriented workforce.

“Gen Y is driving up the demand for apartments and driving up rents, which makes investing in apartments a safer bet,” said White.

Depending on how long it lasts, such a trend could be a game-changer for real estate.

“Living smaller, closer to work, and preferably near mass transit holds increasing appeal as more people look to manage expenses wisely,” notes the report. “More companies concentrate in urban districts where sought-after generation-Y talent wants to locate in 24-hour environments.”

A separate Urban Land Institute report, examining land use changes in California, takes the point further.

Projecting out to 2035, the report says demand for traditional single- family homes will decline, by as much as 10 percent, while “changing demographics” and other factors shift the real estate focus to smaller lots and “multiple or intergenerational households” within walking distance of “transit station areas.”

“California’s future is a lot more urban and transit-oriented than it has been historically. There’ll be an increasing demand for the 24-hour, livable city model,” said White. “The next generation is ushering it in, and local agencies need to plan accordingly.”