Mortgage Industry Faces Looming Concerns

Heading into the 4th Quarter of this tumultuous economic year, the mortgage industry faces growing problems ahead. While news of Obama’s HAMP program reaching its 500,000 goal of helping homeowners faster than expected is promising, concerns on possible bailouts and underperforming programs continues to threaten the vision of recovery in the housing market. Mortgage Assistance Programs are needed to curtail these concerns before problems become “too big to fail.” We must always remember that Real estate is Cyclical Seasonal and Emotional.

Will the FHA Need a Taxpayer Bailout?

The question about a possible Federal Housing Administration bailout in the near future is the story circulating news desks today. F.H.A. commissioner David H. Stevens sought to dispel concerns about the mortgage giant’s looming problems.

“Absent any catastrophic home price decline, F.H.A. will not need to ask Congress and the American taxpayer for extraordinary assistance – we will not need a bailout,” Mr. Stevens said in a prepared testimony on Capitol Hill Thursday.

Providing lenders with protection against losses as the result of homeowners defaulting on their mortgage loans, the FHA now insures more than 25% of mortgages in the country, up from 3% in 2006. Critics argue that a future FHA bailout is almost inevitable, as the agency’s capital is dangerously close to dipping below the mandated level of 2%. Independent financial consultant Edward Pinto concurs,

“It appears destined for a taxpayer bailout in the next 24 to 36 months,” Edward said. He estimates that the agency faces losses of $70 billion on loans it has already made, short of its current reserves by $40 billion.

Fed Preparing for Commercial Real Estate Mortgage Crisis?

An unpublished Federal Reserve Report leaked in a recent Wall Street Journal article reporting rising defaults in the commercial real estate sector. The unpublished report concludes that U.S. banks are slow to take losses on their commercial real estate loans. Specific servicers reported having only 11 cents in reserves for every $1 in bad loans in the second quarter.

The NuWire Investor had this to say; “I don’t know what’s worse, the banks skimping on reserves and holding off on reporting losses in hope of revival or the Fed for knowing about the problem and trying to keep it a secret. Someone at the Fed must feel the same way because the report somehow found its way to the media.”

TARP Oversight Group Says Treasury Mortgage Plan Not Effective

The TARP group indicates that the government needs to increase its efforts to help struggling homeowners in this article. There is doubt that the $50 billion loan-modification program will provide the necessary relief to all homeowners it intended at the start of the program. With rising factors of unemployment, and decreasing property values the task becomes more daunting.

Manhattan Apartment Market's Quick Rebound

It’s good to see industry analysts confirming what we predicted roughly two months ago. A recent MSNBC articleindicates a surprisingly quick rebound in the Manhattan apartment market as of late. As consumer confidence builds, stability strengthens in the market as stated in our August Manhattan Condo Report and NYC Square Footage and Median Price Differentials report.

In our August report, we projected a sales activity and property values increase in the months of July, August and September.

The recent MSNBC article indicated a sales increase of apartments and co-ops between 46 and 69 percent from the second to the third quarter, with the number of New York’s unsold apartments falling from the peaks of April. Our projections of a 4th Quarter level of stability are appearing to be valid. In the real estate market there are few trusted sources and AccuriZ has been proven to be an authoritative source consistently.

For more statistical reports on property data from public records and property valuations click here.

Are You on Active Rain?

If you are a real estate agent, broker, insurance agent or anyone in between, you should be on the ActiveRain network. With over 160,000 members (and counting) ActiveRain is a hub for real estate professionals looking to engage, interact and communicate with one another, just check out my profile. I've received some great responses from some of the articles I've produced. It has certainly helped grow my network.

'The rain' has many useful features. Members can host a blog, create a group, acquire 'associations,' and is great for getting referrals. The more 'active' you are on ActiveRain, the most points you acquire, pushing you to the top of pack in your specific area. Most blog post - if directed at a particular local market - could get you to the top of Google searches as well.

But most of all, ActiveRain is a great place to meet great people and share interesting ideas. And it's FREE. So sign up today and get active!

Housing Market News: Still Cyclical, Seasonal and Emotional

There are conflicting reports on the housing market today. According to news sources and public reocrds, the median sales price nationwide is down close to 16% from a year ago, to $174,100. Simultaneously, there are reports about existing home sales being up close to 4% from the last quarter. All the while, foreclosures are up 7% from the last quarter. But there is one fact about the housing market that arises out of all of these reports: Real Esate is Cyclical, Seasonal and Emotional.

Cyclical Cycles: Run about 15 years in length with the current cycle beginning in late 2006.
Seasonal Changes: Occur every year and follow a fairly consistent pattern.
Emotional Changes: Fear of the unknown is the worst element of any financial market. That is what we’ve experienced for the past nine months.

For property data, real estate reports and market trends, CLICK HERE.