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MBA Advocacy Update
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Last week, President Obama unveiled the administration?s recommendations for overhauling the regulatory framework of the nation?s financial system.
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Tax Credit for Home Purchase Could Rise
USA Today (06/22/09) Armour, Stephanie
A first-time home buyer tax credit of up to $8,000 has helped to move housing inventory during an otherwise sluggish real estate cycle, and now legislators and the business community both are hoping to build on the incentive's success by expanding it. A number of bills have been introduced in the House and the Senate that lobby for such changes as setting a new cap of $15,000; extending the tax break into mid-2010; making the benefit available to all home buyers, not just first-timers; and offering a separate tax credit to $3,000 for borrowers who refinance.
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Dallas Fed Proposes Realty Restriction
American Banker (06/22/09) P. 9
Jeffery Gunther, an assistant vice president at the Federal Reserve Bank of Dallas, says regulating loan-to-value ratios offers an easy solution to preventing future mortgage crises, but regulators--not the central bank--would have to institute such a change. "A simple, effective reform would involve restricting a loan's amount to no more than a specified percentage of the underlying real estate's appraised value," he explains. "[Doing this] would create a cushion of borrower equity [which would be] available to lenders in the event of default."
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Housing Eludes Recovery as Job Losses, Foreclosures Climb
Bloomberg (06/22/09) Louis, Brian
A new report by Harvard University's Joint Center for Housing Studies says home buyers are having a difficult time due to rising unemployment rates and high consumer debt levels. "Although new federal efforts may prevent millions of families from losing their homes, mounting job losses will likely keep foreclosures at elevated levels," according to the report. The researchers predict the housing recovery will be fueled by "echo boomers," or the children of the baby boomers, and immigrants, with 73 percent of household growth tied to minorities from 2010 to 2020.
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Changes Urged to Rules on Condo Loans
Wall Street Journal (06/22/09) P. A4; Timiraos, Nick
New underwriting standards for mortgages on condominiums have raised concern that developers will not be able to sell units and the housing recovery will be slowed. Fannie Mae said in March that it would no longer guarantee mortgages on condos in buildings where fewer than 70 percent of units have been sold or purchase mortgages in buildings where 15 percent of owners are delinquent on condo association dues or where one owner has more than 10 percent of the unit. Freddie Mac plans to adopt similar rules in July. Reps. Barney Frank, D-Mass., and Anthony Weiner, D-N.Y., have written a letter to the CEOs of Fannie Mae and Freddie Mac, asking them to relax the recently tightened standards for condo loans.
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Bernanke Must Reassure 'Confused' Market About Rate Strategy
Bloomberg (06/22/09) Miller, Rich; McKee, Michael
Wall Street is concerned that the Federal Reserve's plan to jump-start growth by buying assets and keeping interest rates low could lead to an inflationary bubble. Treasury bond yields are increasing, which has fostered a rise in long-term interest rates; and the jump could make borrowing costs more expensive for both homeowners and buyers and hurt the economic recovery. When central bank officials convene this week for their policymaking session, they may use their post-meeting statement to squash speculation that they're gearing up to raise interest rates this year. In light of that, investors and analysts say it is critical for the Fed to spell out how it will cut its balance sheet and keep inflation from ballooning.
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Land Deals Help Builders Stay Alive
Wall Street Journal (06/22/09) P. A1; Corkery, Michael
America's biggest home builders have largely managed to survive the economic downturn, due to a combination of favorable land deals, loan agreements and tax strategies. The worst may be behind for the big players, as evidenced by the stocks of several major builders bouncing back from fourth-quarter 2008 lows and new-home sales showing signs of bottoming out. Miami-based Lennar is one such company that has entered into joint ventures to purchase land, reducing its risk by not guaranteeing most of the $5 billion borrowed by the ventures--a move that could come back to bite the builder in the event that lenders and partners sue to recover losses from failed projects. Big builders are also benefiting from the high number of small and midsize developers that have gone under as a result of the housing bust.
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New NY Mortgage Fraud Unit Opens More Than 80 Cases
Fox 44 (Buffalo) (06/22/09)
In New York, a new mortgage and real estate fraud unit has opened more than 80 cases since March, resulting in seven indictments since then. The 10-member body, which includes investigators and lawyers, is supported with $875,000 in funding from the federal government.
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MBA, Warehouse Lenders Push for GSE Participation
The Mortgage Bankers Association and Warehouse Lending Project sent a letter Friday to the Treasury Department and the Federal Housing Finance Authority proposing Fannie Mae and Freddie Mac's purchase participation on GSE-eligible mortgages from warehouse lenders.
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Marching toward Stability
The May housing start report provided further evidence that, after plummeting by 80 percent from its peak in January 2006 to the record low reached in January of this year, single-family home building activity is stabilizing at low levels.
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The Week Ahead
The Federal Open Market Committee meets on Tuesday and Wednesday to decide what to do, if anything, about current key interest rates.
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Commercial/Multifamily News |
Unpaid Balance Increases 'Unprecedented' in Special Servicing
Delinquencies in commercial mortgage-backed securities increased for the ninth consecutive month in May, up $1.63 billion to $18.78 billion or 2.275 percent of total CMBS loans, said Realpoint LLC, a credit ratings agency in Horsham, Pa.
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Franzetti: In Future CMBS, Lenders Retain Risk
In part two of a two-part series, Joe Franzetti, managing director of debt advisory services at Cohen Financial, Chicago, discusses the present and future status of commercial real estate and the commercial mortgage-backed securities industry.
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DealMaker of the Day
Holliday Fenoglio Fowler arranged nearly $25 million for Golf Brook and Sabal Park Apartments, multifamily communities in Longwood, Fla.
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