The FBI is preparing to arrest hundreds of people across the country as early as next week for offenses including:
- encouraging borrowers to falsify income on mortgage applications
- misleading home owners about foreclosure rescue programs
- inflating home appraisals.
The FBI is scheduled to release its 2009 mortgage report on June 17.
Let's see if any of Hoboken's finest transactions have brought any notoriety to the party.
Friday, June 11, 2010
Sunday, June 6, 2010
FICO Survey: Credit Supply Unlikely to Meet Consumer Demand
FICO Survey Indicates Credit Supply Unlikely to Meet Consumer Demand
The survey, conducted in March 2010 found that while bankers generally expected consumers to pursue more new credit as well as spend more against their existing credit lines, most lenders are likely to keep a close eye on risk management.
Of the 127 bank risk professionals surveyed, 92 percent said they don’t expect to see an easing of lending standards in this quarter, 95 percent expected interest rates for consumer credit to stay at current levels or move higher, and 83 percent expected the average credit limit for new credit cards to be lower than in the past.
Why is this especially important in a property market like Hoboken and the new "core" category?
Because there is a total mismatch between local annual incomes (typically around $100,000) and property prices (current median around $750,000).
Single family homes which are typically $1 million+ are completely out of this realm.
Cash buyers are the only qualifiers in such a mispriced situation, but that makes them the next hit from depreciation regardless.
Hoboken's adjustments in price are not yet reflecting the mispricings of the past despite adjustments already underway in Manhattan. The bottom line: prices are simply declining at a slower pace over what will be a longer and more protracted time --> another 20% over the next four years.
The survey, conducted in March 2010 found that while bankers generally expected consumers to pursue more new credit as well as spend more against their existing credit lines, most lenders are likely to keep a close eye on risk management.
Of the 127 bank risk professionals surveyed, 92 percent said they don’t expect to see an easing of lending standards in this quarter, 95 percent expected interest rates for consumer credit to stay at current levels or move higher, and 83 percent expected the average credit limit for new credit cards to be lower than in the past.
Why is this especially important in a property market like Hoboken and the new "core" category?
Because there is a total mismatch between local annual incomes (typically around $100,000) and property prices (current median around $750,000).
Single family homes which are typically $1 million+ are completely out of this realm.
Cash buyers are the only qualifiers in such a mispriced situation, but that makes them the next hit from depreciation regardless.
Hoboken's adjustments in price are not yet reflecting the mispricings of the past despite adjustments already underway in Manhattan. The bottom line: prices are simply declining at a slower pace over what will be a longer and more protracted time --> another 20% over the next four years.
Saturday, May 22, 2010
Which ONE Of These Buys Hoboken Real Estate?
One in every 10 Americans missed a mortgage payment in the first quarter of this year, a new record.
One in 10 Americans' credit-card usage is being written off, also a new record.
One in six Americans are either unemployed or underemployed.
Over four in 10 of those jobless Americans have been out of work for at least six months and there are five unemployed workers competing for every job opening.
One in four Americans with a mortgage have negative equity in their homes.
One in eight Americans feel the current government policy is actually helping the economy.
Only one in 50 Americans plan to buy a home in the next six months.
One in 10 Americans' credit-card usage is being written off, also a new record.
One in six Americans are either unemployed or underemployed.
Over four in 10 of those jobless Americans have been out of work for at least six months and there are five unemployed workers competing for every job opening.
One in four Americans with a mortgage have negative equity in their homes.
One in eight Americans feel the current government policy is actually helping the economy.
Only one in 50 Americans plan to buy a home in the next six months.
Thursday, May 20, 2010
Yes, It's Still A House Of Cards
The trend has barely budged, so this is getting repetitious.
Nationally, mortgage purchase applications plummet:
The Refinance Index increased 14.5 percent from the previous week and the seasonally adjusted Purchase Index decreased 27.1 percent from one week earlier. This is the lowest Purchase Index observed in the survey since May of 1997. The unadjusted Purchase Index decreased 27.0 percent compared with the previous week and was 24.1 percent lower than the same week one year ago.
Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009. Refinance borrowers did react to these lower rates, with refi applications up almost 15 percent, hitting their highest level in nine weeks.
What this means is that there is very little holding this market up. The tax credit has stolen future sales which will result in a serious drop in sales. More disturbing is that this is happening as mortgage rates are 4.83%, or historically very low.
There is a lot of data to suggest that the shadow inventory, homes that are in or close to default, will continue to depress home prices, especially without the tax credit. The MBA also reported that mortgage delinquencies increased to a seasonally adjusted rate of 10.06 percent of all loans outstanding as of the end of the first quarter of 2010, an increase of 59 basis points from the fourth quarter of 2009, and up 94 basis points from one year ago .
The percentage of loans in the foreclosure process at the end of the first quarter was 4.63 percent, an increase of five basis points from the fourth quarter of 2009 and 78 basis points from one year ago. This represents another record high.
Nationally, mortgage purchase applications plummet:
The Refinance Index increased 14.5 percent from the previous week and the seasonally adjusted Purchase Index decreased 27.1 percent from one week earlier. This is the lowest Purchase Index observed in the survey since May of 1997. The unadjusted Purchase Index decreased 27.0 percent compared with the previous week and was 24.1 percent lower than the same week one year ago.
Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009. Refinance borrowers did react to these lower rates, with refi applications up almost 15 percent, hitting their highest level in nine weeks.
What this means is that there is very little holding this market up. The tax credit has stolen future sales which will result in a serious drop in sales. More disturbing is that this is happening as mortgage rates are 4.83%, or historically very low.
There is a lot of data to suggest that the shadow inventory, homes that are in or close to default, will continue to depress home prices, especially without the tax credit. The MBA also reported that mortgage delinquencies increased to a seasonally adjusted rate of 10.06 percent of all loans outstanding as of the end of the first quarter of 2010, an increase of 59 basis points from the fourth quarter of 2009, and up 94 basis points from one year ago .
The percentage of loans in the foreclosure process at the end of the first quarter was 4.63 percent, an increase of five basis points from the fourth quarter of 2009 and 78 basis points from one year ago. This represents another record high.
Friday, April 23, 2010
Existing Home Sales Report: March 2010
It’s important when reflecting on the sales results to consider that over 71.2% of all sales were for properties priced below $250,000 while just over 7.3% were priced at or above $500,000.
The results indicate that the government’s tax gimmick (second and final expiration is upon us) is driving a surge of phony demand and bringing a renewal of speculative animal spirits but the effect will likely be temporary.
Such stimulus is far more relevant to property prices of low level than those in areas like Hoboken where shadow inventory is bulging and buyers have completely disappeared.
The results indicate that the government’s tax gimmick (second and final expiration is upon us) is driving a surge of phony demand and bringing a renewal of speculative animal spirits but the effect will likely be temporary.
Such stimulus is far more relevant to property prices of low level than those in areas like Hoboken where shadow inventory is bulging and buyers have completely disappeared.
Friday, April 16, 2010
Without Wall Street employment, where is Hoboken RE.ality?
Wall Street Work Force Falls to 16-Year Low
Reuters - Apr 16, 2010
NEW YORK - Wall Street shed 1,200 jobs in March, in a third straight month of job cuts that pushed employment in New York City's key banking and investment industry to its lowest level since October 1993, the New York state Department of Labor said on Thursday.
The city's jobless rate managed to edge down in March, easing 0.02 percentage point to 10 percent, while the state's jobless rate fell the same amount to 8.6 percent, the Labor Department said.
Total employment on Wall Street, New York City's most important industry, fell to 156,000 in March from February, James Brown, an analyst with the state's Department of Labor, said by telephone. Employment in the city's banking and securities industry in October 1993 had been at 155,000.
Wall Street employment had peaked in December 2000 at 200,300 jobs.
Wall Street is the bedrock industry for both New York City and New York state.
Securities and commodities companies generate about 12 percent of the city's taxes. Those companies account for 15 percent of the state's tax collections, down from 20 percent before the credit crunch, state officials say.
Brown said the three-month string of declines may reflect the end of severance payments, because workers are not counted as unemployed until their severance runs out.
"It's reasonable to assume that at least some of it is people coming off severance," Brown said, noting companies often time layoffs for the end or beginning of a year.
In the previous downturn, Wall Street bottomed out with a headcount of 159,000 in April 2003, Brown said.
Despite the job losses on Wall Street, banks and credit intermediation companies added 500 jobs, perhaps driven by the rise in refinancings and debt work-outs, Brown said. (Reporting by Joan Gralla; Editing by Leslie Adler)
Copyright 2010 by Reuters. All rights reserved.
Reuters - Apr 16, 2010
NEW YORK - Wall Street shed 1,200 jobs in March, in a third straight month of job cuts that pushed employment in New York City's key banking and investment industry to its lowest level since October 1993, the New York state Department of Labor said on Thursday.
The city's jobless rate managed to edge down in March, easing 0.02 percentage point to 10 percent, while the state's jobless rate fell the same amount to 8.6 percent, the Labor Department said.
Total employment on Wall Street, New York City's most important industry, fell to 156,000 in March from February, James Brown, an analyst with the state's Department of Labor, said by telephone. Employment in the city's banking and securities industry in October 1993 had been at 155,000.
Wall Street employment had peaked in December 2000 at 200,300 jobs.
Wall Street is the bedrock industry for both New York City and New York state.
Securities and commodities companies generate about 12 percent of the city's taxes. Those companies account for 15 percent of the state's tax collections, down from 20 percent before the credit crunch, state officials say.
Brown said the three-month string of declines may reflect the end of severance payments, because workers are not counted as unemployed until their severance runs out.
"It's reasonable to assume that at least some of it is people coming off severance," Brown said, noting companies often time layoffs for the end or beginning of a year.
In the previous downturn, Wall Street bottomed out with a headcount of 159,000 in April 2003, Brown said.
Despite the job losses on Wall Street, banks and credit intermediation companies added 500 jobs, perhaps driven by the rise in refinancings and debt work-outs, Brown said. (Reporting by Joan Gralla; Editing by Leslie Adler)
Copyright 2010 by Reuters. All rights reserved.
Friday, April 9, 2010
The Richer Can Only Delay Longer - Not Avoid!
If Wall Street delayed the foreclosure process in Greenwich, Hartsdale and Short Hills, somebody forgot to tell the owners of those stately real estate properties.
The argument that the well-to-do continue doing well just doesn't hold a lot of water. They are about to file bankruptcies en masse.
Meanwhile, we have rose-colored RE professionals who vouch that Hoboken is on much sturdier footing with state support that has all but disappeared, schools being shut down for "renovation," property taxes that have yet to be standardized and a rent-to-buy ratio that continues to drop.
I want a front row seat in state court when they are pulled into one of the largest lawsuits to hit the NRA... oops, that should read NAR. Maybe there's little difference between the two!
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