29 June 2011


Bank of America and its Countrywide unit will pay $8.5 billion to settle claims that the lenders sold poor-quality mortgage-backed securities that went sour when the housing market collapsed.
The deal, announced Wednesday, comes after a group of 22 investors demanded that the Charlotte, N.C. bank repurchase $47 billion in mortgages that its Countrywide unit sold to them in the form of bonds.
The group, which includes the Federal Reserve Bank of New York, Pimco Investment Management, and Blackrock Financial Management, argued that Countrywide enriched itself at the expense of investors by continuing to service bad loans while running up servicing fees.
Bank of America, which bought Countrywide in 2008 for $4 billion, has denied those claims.
Bank of America CEO Brian Moynihan said Wednesday that the settlement would minimize future economic uncertainty in the banking business and clean up the mortgage issues largely stemming from our purchase of Countrywide.
For several months, Bank of America battled claims based on estimates that were much different from they were using. But at this point, it made more sense to settle than to keep fighting.
They have said consistently if people are reasonable and can get to a reasonable assessment of their claims and it's in the best interest of shareholders, they will settle.
The settlement is subject to court approval and covers 530 trusts with original principal balance of $424 billion.
Citi analyst said the settlement, which amounts to only 2 percent of the original principal balance, removes one of the largest investor risks for Bank of America.
This could prove to be a step forward for Bank of America. It would show investors that the bank can manage through crisis without raising additional capital.
As a result of the settlement, Bank of America put its second-quarter loss at $8.6 billion to $9.1 billion. Excluding the settlement and other charges, the bank expects to post a quarterly loss of $3.2 billion to $3.7 billion.
Shares of Bank of America Corp. jumped more than 4 percent, or 48 cents to $11.30 before the market opened, with investors happy that the bank can put very big uncertainty behind it.
Investors may now be more confident that they can get similar concessions from other major U.S. banks that created markets for mortgage-backed securities with questionable pedigrees.
Yet stocks in the financial sector were rising in electronic trading Wednesday, likely because the Bank of America deal presents a framework for others to follow.

28 June 2011

Foreclosures Slow

Millions of homeowners in distress are getting some unexpected breathing room — lots of it in some places according to a nc foreclosure lawyer.
In New York State, it would take lenders 62 years at their current pace, the longest time frame in the nation, to repossess the 213,000 houses now in severe default or foreclosure, according to calculations of a prominent real estate data firm.
Clearing the pipeline in New Jersey, which like New York handles foreclosures through the courts, would take 49 years. In Florida, Massachusetts and Illinois, it would take a decade.
In the 27 states where the courts play no role in foreclosures, the pace is much more brisk — three years in California, two years in Nevada and Colorado — but the dynamic is the same: the foreclosure system is bogged down by the volume of cases, borrowers are fighting to keep their houses and many lenders seem to be in no hurry to add repossessed houses to their books and a mers foreclosure lawyer fights on.
If you were in foreclosure four years ago, you were biting your nails, asking yourself, “When is the sheriff going to show up and put me on the street?” Now you’re probably not losing any sleep.
When major banks acknowledged last fall that they had been illegally processing foreclosures by filing false court documents, they said that any pause in repossessions and evictions would be brief. All of the major servicers agreed to institute reforms in their foreclosure procedures. In April, the Office of the Comptroller of the Currency and other regulators gave the banks 60 days to draw up a plan to do so.
But nothing is happening quickly. When the comptroller’s deadline was reached last week, it was extended another month.
New foreclosure cases and repossessions are down nationally by about a third since last fall. In New York, foreclosure filings are down 85 percent since September.
A St. Petersburg, Fla., specialist in foreclosure defense, has 1,275 clients, up from 350 a year ago. About 75 clients have won modifications, dismissals or sold their properties for less than they owed. All the other cases are pending. Banks aren’t even trying to win, he said.
The chief judge of Florida’s Sixth Circuit, which includes St. Petersburg, agreed. He said they’re here to do what they are asked to do. But you’ve got to ask, and the banks aren’t asking, he said.
A spokesman for Bank of America said, any suggestion that they have a strategy to delay foreclosures is baseless. A Wells Fargo spokeswoman blamed changes in state laws governing foreclosure for any slowdown. A GMAC spokeswoman said it was following regulatory and investor expectations. JPMorgan Chase declined to comment. Servicers said some of the decline in foreclosures could be traced to an improved economy.
According to a Detroit foreclosure lawyer, there are many reasons that foreclosure, which has been slowing ever since the housing bubble burst, has been further delayed in many states.
The large number of cases nationally — about two million, plus another two million waiting in the wings — have overwhelmed many lenders and the courts.
Lenders, who service loans they own as well as those owned by investors, tried to circumvent the time-intensive process by using “robo-signers” who mass-produced documents, many of which made inaccurate claims. When the bad practices were discovered last fall, the lenders were forced to revisit hundreds of thousands of cases.
Over the last two years, most defaulting homeowners were people who had lost their jobs. Housing analysts say these homeowners are more likely to hire a lawyer and fight repossession than borrowers who had subprime loans that swelled beyond their ability to pay.
Judges these days are also more inclined to scrutinize requests for eviction rather than automatically approve them. The so-called foreclosure mills — law firms that handled many of the suits for the banks — are in retreat under law enforcement pressure. And some analysts suggest that banks are reluctant to take too many houses onto their books at any one moment for fear of flooding a shaky market.
In New York, lenders seeking to repossess face additional hurdles. The legislature has mandated that borrower and bank meet to discuss terms under the auspices of the court, but these conferences have turned out to be anything but brief or simple. Instead of one conference, 10 are often needed, and many foreclosure lawyers seem unable to meet a requirement, made last October by the New York Chief Judge, to affirm the accuracy of their documentation.
Last September, before the documentation crisis, nearly 1,500 New Yorkers lost their houses as a result of foreclosure. The average over the last six months: 286. That is far lower than at any point since the recession began.
Similar foreclosure cases can have different fates. To increase their odds of staying put, the foreclosed who can afford it are hiring lawyers, a move that can drastically slow down a case.
The Florida lawyer, said he divided his clients into three groups. Some are unemployed or disabled and just getting by. Others are able to save money and improve their financial situation as their case drags on. The third group are those who have strategically defaulted. They can afford to pay but are taking advantage of the banks’ plodding pace. Often the members of this group rent out the foreclosed home and keep the proceeds.
Though delays in foreclosure might seem like a gift to those behind on their mortgage, the foreclosed themselves do not necessarily feel that way.
One homeowner waited nervously in a Miami courtroom early this month. She and her husband, Roland, an architect, are among 97,000 households facing foreclosure in Dade County, where the average time to foreclose is 738 days and climbing.
The homeowner was on her third lawyer in a case that has stretched on many years. A friend of hers got her mortgage lowered through a modification and she would like to do that too. When her case came up, the judge told the lawyers they should try to work out a deal. They huddled outside the courtroom and agreed to meet again.

03 June 2011


The U.S. housing market is plagued by falling prices and slow sales. But in the nation's capital, open houses frequently end with closed deals.
The Washington metropolitan area is the only major U.S. housing market where prices increased on an annual basis in the first quarter, according to a 20-city home-price index released Tuesday. The region was helped by relatively stable employment, fewer foreclosures and an abundant supply of house hunters.
Other surveys indicate sales in the area are approaching boom-time levels. In April, 5,170 home-sale contracts were signed in the Washington region, the second highest number since 2006. A survey showed April's sales volume was up from the same month a year earlier, a surprising milestone because of last year's boost from a federal homebuyer tax credit.
We're having a tremendous spring said a broker. Her survey tracks the District of Columbia, Fairfax County, Arlington and Alexandria, Va., and Montgomery County, Md.
While the area remains a buyer's market, anecdotal evidence suggests the tables are slowly turning, especially for properties in the city and inner suburbs.
One couple had to make five offers before they finally got a house under contract in the Burke area of Fairfax County, Va. One was a multiple-offer situation. The one they took had an escalation clause. They didn't even think people were doing those anymore. Such clauses raise a buyer's offer automatically in case of higher competing offers.
Some of the frenzy can be chalked up to the couples must-haves. Married for a year and a half, the couple had been renting and wanted a house with space to grow a family, within an hour's commute of downtown, in a good school district—all for under $500,000. In other words, they wanted what many young families in the area want.
The nation's capital has often been called a recession-proof town. But the latest economic downturn didn't leave it unscathed. Unemployment peaked in January 2010 at 6.9%. The Labor Department reported Wednesday that unemployment decreased in April to 5.4%. The area also has had its share of foreclosures, notably in Maryland's Prince George's County and Virginia's Prince William County.
Area home prices had ticked downward for seven months in a row, but that streak was snapped with Tuesday's data showing prices rose 1.1% in March from the previous month. The declines, however, weren't as steep as those affecting much of the country.
The city and inner suburbs have been the first to rebound, with prices in some areas at or above peak levels.

The farther out you go, the slower the uptick. But the prices are better in Woodbridge, Va. With gas prices, buyers are weighing those options though. The District of Columbia and close-in suburbs haven't experienced as high a rate of foreclosures as other areas, which has allowed pricing to remain more stable. In April, one in every 985 homes in the Washington metro area was in some stage of foreclosure, compared with one in every 593 nationally.
Perhaps more importantly, economists say, the region continues to both attract and keep those house hunters still missing in many areas: first-time, move-up and downsizing buyers, as opposed to luxury or investment buyers.

02 June 2011


The housing market recovery is still a long ways away especially for Apex Homes, and proof is in April’s numbers. Housing sales - http://www.blogger.com/img/blank.gifmeasured by signed contracts - dropped in April to a staggering low. The National Association of Realtors says its index of sales agreements for previously occupied homes sank 11.6% last month to a reading of 81.9.
A reading of 100 would be considered healthy. The last time the index reached at least 100 was in April 2010. That was the final month when people could qualify for a home-buying tax credit of up to $8,000 that was greatly used by Cary Homes buyers.
Signings are still nearly 8% above June's reading of 75.9, the lowest figure since the housing bust.
Contract signings are considered a reliable indicator of the housing market's direction especially for Chapel Hill Homes. That's because there's usually a one to two month lag between a sales contract and a completed deal.
But the Realtors group has noted a larger than usual number of contract cancellations in recent months. Some buyers have canceled purchases after appraisals showed that the homes were worth less than the buyers' initial bids. A sale isn't final until a mortgage is closed on Clayton Homes.
The trade group said Friday's report implies a slower than expected market recoverhttp://www.blogger.com/img/blank.gify in upcoming months, in light of rising oil prices, severe weather across the Midwest and South and a rise in applications for unemployment benefits.
The index of contract signings was uneven across the country: It rose 1.7% in the Northeast but dropped 8.9% in the West, 10.4% in the Midwest and 17.2% in the South with a large drop on Durham Homes.
High unemployment, tighter credit and a lingering fear that home prices have yet to hit bottom are preventing many Americans from buying homes.
That's true despite super low mortgage rates and home prices that are falling in some areas, like on Fuquay Varina Homes, to their lowest points in a decade.
Overhanging the entire housing sector are waves of foreclosures. They are forcing down home prices and holding back a potential recovery.
Economists say it could be several years before the nation's housing market recovers especially on Garner Homes. Sales of previously occupied homes fell last year to their lowest level in 13 years.
Home purchases numbers are just below half of the number that was in 1963. This is a hard number to comprehend since in the United States there are 120 million more people. This difficult home market will continue to affect sales on Holly Springs Homes.


After years as being a runner up in the best-beach rankings, Sarasota's Siesta Beach is finally number one.
The wide slice of brilliant white sand and warm, emerald water on Florida's southwest Gulf coast was named the best beach in the United States Friday in an annual survey by Florida International University.
Siesta Beach, 40 acres of almost pure quartz crystal sand on the Siesta Key barrier island, was runner-up in rankings the past two years and was third in 2008.
The sand is often compared to sugar because it is so soft and super fine. This beach claims to have the finest, whitest sand in the world.
San Diego's Coronado Beach was runner-up. Rounding out the top 10 were:
• No. 3, Kahanamoku Beach in Waikiki, Honolulu, Hawaii
• No. 4, Main Beach, East Hampton, N.Y.
• No. 5, Cape Hatteras in North Carolina
• No. 6, St. George Island State Park, Florida Panhandle
• No. 7, Beachwalker Park, Kiawah Island, S.C.
• No. 8, Coast Guard Beach, Cape Cod, Mass.
• No. 9, Waimanalo Bay Beach Park, Oahu, Hawaii
• No. 10, Cape Florida State Park near Miami
The beaches are ranked on 50 criteria, including the look and feel of the sand, water quality, weather, facilities and crowds. A top score is 250. Siesta Beach came in the 230s, losing minor points because the vista is heavy on condos to the north and south of the county park. Once a beach reaches the pinnacle of the list, it is retired from consideration for future rankings.
A number 1 spot on the popular list annual typically brings a 15 to 20 percent boost in visitors for the beach destinations.
Siesta Beach got big points for shallow water and gentle currents. Most days you measure waves over there in inches, not feet.
Repeat visitors are not surprised by the beach’s ranking. Many enjoy the powdered sugar sand, calm waters, cleanliness and nearby bathrooms. One visitor commented that the beach is pretty pristine and praised that it is kept in pretty good shape. Another commented that is has got the best sand of any beach and it can be crowded and not seem like it's crowded just because it is so wide and long.
Parking at the public beach is free, but regulars say that by late morning it can be challenging to find a spot in the 800-space lot.
The report touted Gulf Coast destinations Siesta Beach and St. George Island State Park despite last year's BP oil spill, which soiled parts of the western Florida Panhandle coastline. Siesta Beach and other strands on the state's west coast remained untouched by crude, but BP crews are still scouring places that were affected for scattered tar balls, even though the vast majority of damage has by now been cleaned up. St. George Island, in the eastern part of the Panhandle southwest of Tallahassee, didn't get any oil, but it was off last year's list because it was in the line of fire before the gusher was capped.
Even then, when the oil spill occurred, researches said oil was not going to get to the Sarasota beaches and southwest Florida. A big loop current trapped the oil 100 miles offshore, and the oil just spun and spun in the Gulf. And, in fact, right now one can hardly find any of it, even in the areas which did have oil and tar on the beaches in the Panhandle.
Separate from the top 10 list, which is in its 21st year, Florida International University leadership has a project called the National Healthy Beaches Campaign. Campaign member beaches pay $800 a year to be evaluated monthly on 60 self-reported criteria and receive advice on maintaining environmental quality through proactive management. It is emphasized that beaches do not pay to be evaluated for the top 10 best beaches list, and that all top 10 candidates are visited incognito to collect sand and water samples for study.
Eliminating each year's national winner from consideration in future surveys hasn't diluted the quality of the annual rankings. Researchers insist that the United States has hundreds of beautiful beaches in which to choose from for their rankings.

01 June 2011


Renting was never as good as it is now with luxury Philadelphia apartments. Due to a glut of glitzy condo towers and the need to appease skittish lenders some developers have found a new use for the gilded, clubby preserves once meant for buyers who could afford the seven-figure price tags. They're renting them out and offering all of the perks normally reserved for the elite. The hand-watered grass roofs and outdoor movie theaters. The heated, valet-attended porte-cocheres. The pet spas offering canine cardio and play dates for your puppy.
And developers have found that renters -reluctant to buy in a still-unsteady market- are embracing them. One marketing banner flapping against a ritzy, new rental building in New York says it best: "Repent. Rent. Repeat."
Frank Gehry's crumpled, stainless-steel skyscraper in Manhattan--the tallest residential tower in the world--was originally supposed to include 200 sprawling condos along with 700 rentals. Now all of the critically-acclaimed building's apartments are for rent. The units, whose rents start at $2,630 for a 600-square-foot studio, are even rent-stabilized --meaning rents are regulated so tenants will only see small annual increases. There's even an option to pay extra for d├ęcor hand-picked by Gehry, including Capellini's Rive Droite armchair, Jonathan Adler's Claude Drawers and Blu Dot's Swept Sofa.
People like the fact that they don't have to commit to a mortgage and a large dollar amount to live here.
The upgrades aren't limited to New York buildings. Luxury Chicago apartments that are 547-square foot studio in the Jeanne Gang-designed Aqua, with its liquid, undulating glass skin and curving balconies, can be had for $1,571. In late April at Silicon Valley's Three Sixty Residences, the sales office re-opened as a rental office. Since 2007, not one of the building's sleek condos, with their Bosch appliances and Del Tango cabinetry, had made it out of escrow and into a final sale, despite the fact that the plush residence sits in the middle of Silicon Valley, one of the U.S.'s top 10 millionaire hotspots. This is good news for those wanting to rent a luxury St. Paul apartments.
During the credit bubble, the 651 units in New York's MiMA might have easily gone into bidding wars, as similar properties had. Instead the developer put 500 of the apartments on the market as rentals. Since rentals in the Hell's Kitchen building became available in mid-March, 70 percent of the rentals have been leased. For $3,390 a month you will get quartz countertops, Italian cabinetry and 44,000-square-feet of hand crafted party space. There's also a subsidized 24-hour Equinox gym.
One man looked at an apartment at MiMA because of the buzz the development had generated. He took one look at the brushed-oak floors and floor-to-ceiling windows and filled out an application. In May, he moved into a 1,200-square-foot two bedroom. He pays $6,400 a month for an apartment he says he could never afford to buy - and wouldn't want to if he could. He feels so many people are in debt with real estate that he doesn’t want to put a lot of his money into a purchase.
That's a departure from the attitude of the housing boom years. Renting used to be thought of as lower class among young, executive-class strivers, a sure sign that you couldn't come up with the money for a down payment. Now, even among the rich, leasing luxury West Chester apartments and being untethered is chic.
Would-be homeowners in some parts of the U.S. should look elsewhere for long-term investment returns. It's sobering to think, but some people shouldn't be thinking of their home as an asset.
Conflicting signals about the market have only added to the allure of renting for those who might otherwise buy. Prices and interest rates are low. But lending standards are strict. Supply is abundant. But so are the forecasts that the U.S. could be in for a lost decade of sideways house prices. It's led to a resurgence in people taking advantage of the renter's subsidy, the idea that while real estate prices are stuck or moving lower, it's better and cheaper to rent premium real estate than it is to buy.
There is a lot of people who can afford to buy, but who won't buy. The statistics on renting luxury Pittsburgh Apartments and owning reflect that sentiment. One-third of U.S. homeowners now owe more on their homes than they are worth. Since the financial crash, nearly 3 million households have gone from owning to renting. Another 3 million are expected to do the same by 2015. That has led to higher rents; the average price of a two bedroom residence is nearly $1,000, a 50 percent increase since 2001. Still, in nearly three quarters of cities, it is cheaper to rent than to own.
These factors have helped push home ownership rates to a 10-year low; 66.4 percent of Americans own their homes, down from a record 69.2 percent in 2004.