MBA - multifamily lending up
In 2010, 2,548 different multifamily lenders provided a total of
$68.8 billion in mortgage financing for apartment buildings with
five or more units, according to a report from the Mortgage
Bankers Association (MBA). The 2010 dollar volume represents a
31% increase from 2009 levels. Just one% of the lenders accounted
for 51% of the dollar volume, while three-quarters of the lenders
made five or fewer loans over the course of the year. In terms
of total dollar volume, the top five multifamily lenders in 2010
were Wells Fargo Bank N.A., CBRE Capital Markets, Inc., Berkadia
Commercial Mortgage LLC, PNC Real Estate and Prudential Mortgage
Capital Company. “The multifamily lending market grew 31% in
2010, with credit extended by a broad range of lenders to a broad
range of properties,” said Jamie Woodwell, MBA’s Vice
President of Commercial Real Estate Research.
The report is based on data from the MBA 2010 Commercial
Multifamily Annual Origination Volume Rankings and the Home
Mortgage Disclosure Act (HMDA). The MBA survey targets
specialized commercial/multifamily originators and covered $119
billion in commercial and multifamily loans in 2010. The HMDA
data adds multifamily loans from banks, thrifts and other
institutions that meet certain single-family origination
thresholds. When combined, the two datasets provide the most
comprehensive assessment of the multifamily mortgage market
available.
Click Here!
Jobless claims slightly down
Initial claims for state unemployment benefits slipped 6,000 to a
seasonally adjusted 403,000, the Labor Department said, from an
upwardly revised 409,000 the prior week. Economists polled by
Reuters had forecast claims falling to 400,000 from the
previously reported 404,000. The claims data covered the survey
week for the government's closely watched nonfarm payrolls count
for October. First-time applications for jobless aid fell 25,000
between the September and October survey periods, suggesting a
step-up in nonfarm employment after payrolls increased 103,000
last month.
Olick - rising rates threaten refis
"One weekly report does not a trend make, but today's mortgage
application survey should serve up a good dose of reality to all
of those state attorneys general and Obama administration
officials touting a grand new refinance program for underwater
borrowers. Rates dropped to record lows a month ago, and while
more borrowers went to refinance, the volumes were still very
low. Then, more recently, we see basically a quarter point rise,
and refinances fall off a cliff. The goal of the refinance
proposals (which I discussed in yesterday's blog) is to get the
allegedly 3/4 of underwater borrowers with above-market mortgage
rates (about 8.9 million according to CoreLogic) a break on their
monthly payments. This would supposedly lessen the threat of
default as well as add much-needed spending power back into the
economy. But with mortgage rates rising again, how much of a
bang for the buck will banks and the administration get out of
these refi programs?
Click Here!
Well let's look at what's pushing rates up: 'First, Europe’s
alleged debt bomb solution is pulling dollars out of Treasuries
resulting in rising Treasury rates .. and mortgage rates,' says
Dr. Anthony Sanders, Professor of Finance at George Mason
University. 'Second, FHFA [Fannie and Freddie's regulator] is
increasing Guarantee Fees for Fannie and Freddie loan
purchases/insurance which adds to the mortgage rate. Third,
mortgage rates have a risk premium component that follows the VIX
(CBOE Volatility Index on the S&P500). And under just recently,
the VIX has been rising.' That basically means that any benefit
of these so-called 'streamlined' refis by Fannie and Freddie or
by a bank/AG settlement, 'will have small impact and less
desirability for the consumer,' adds Sanders. That is if those
borrowers can actually qualify. On the other hand, Guy Cecala of
Inside Mortgage Finance, argues that the bulk of the borrowers
targeted by these refi plans have interest rates between 6 and 7%
now. 'I think the idea is that the group of borrowers the
administration/AGs are looking at haven’t been able to refi for
several years and would greatly benefit even if they 'only' got a
FRM at 5%. So relatively small changes in rates don’t impact
the overall goal.'
I realize that the weekly refinance applications numbers from the
Mortgage Bankers Association largely chart borrowers who are not
underwater on their current loans, and the refi programs target
those who are underwater. Still, rates have every reason to
climb, especially with new lower conforming loan limits and the
potential for more risk retention by lenders coming down the
pike. The resulting refis could end up offering savings of less
than $100 a month, given the likely loan sizes that will
qualify...which leads me back to my original premise: The
administration's refi proposal is more politics than substance,
and this latest AG/bank settlement proposal is just plain
baffling, because what does refinancing current borrowers have to
do with justice and restitution for borrowers whose foreclosure
paperwork was mishandled?"
Click Here!
Misery index highest since 1983
The misery index — which is simply the sum of the country's
inflation and unemployment rates — rose to 13.0, pushed up by
higher price data the government reported yesterday. The data
underscores the extent that Americans continue to suffer even two
years after a deep recession ended, with a weak economic recovery
imperiling President Barack Obama's hopes of winning reelection
next year. With gasoline prices high, consumers have less to
spend on other things. Moreover, a rise in overall prices saps
economic growth, which is typically measured in
inflation-adjusted terms. The last time the misery index was at
current levels was in 1983. But in 1984 an improving economy
probably helped President Ronald Reagan win reelection. This
year, the index has risen more than 2 points.
While the misery index rose in September, many economists expect
some respite in coming months, driven by softer inflation.
Wednesday's price data showed inflation outside food and energy
rose at the slowest pace in six months in September. Weakness in
the jobs markets also accounts for some factors that could push
inflation lower in coming months, economists say. "With
households facing weak wage growth and tight budgets, it is
difficult to see a sustained, broad-based increase in prices,"
said Bank of America Merrill Lynch economist Neil Dutta. He said
Wednesday's data showed that businesses' ability to raise prices
on clothing, movies and toys was "hitting a wall." Weak incomes
also will make it harder for building owners to raise rents,
further dampening inflation, Dutta said.
Click Here!
Indeed, inflation could slow to below 2% by mid-2012, said
Capital Economics economist Paul Ashworth. But a decline in the
misery index declines due to softer inflation might not help
Obama's reelection chances much. "Any lowering of inflation
isn't going to have much effect. People are just focused like a
laser on unemployment," said independent political analyst Stuart
Rothenberg. Analysts polled by Reuters last week saw the jobless
rate — currently stuck at 9.1% — barely ticking down to 8.9%
by the end of next year. With the election in November 2012, the
expected decline looks unlikely to help Obama's job prospects
much.
20,000 foreclosures took 4 years to sell
More than 23,200 foreclosures in 2006 sat unsold until the second
quarter of 2010 – more than four years later, according to a
study from the data analytics firm CoreLogic. Analysts studied
the destinations of more 355,000 properties that hit foreclosure
auctions in 2006. Investors bought about one-third of them at the
courthouse steps, and the remaining 233,000 went back onto
lenders' books as real estate owned. Of those, 90%, or 210,000
homes, sold as REO to third-party buyers. Of these, half took six
months to sell and 21% took more than one year to unload. But
23,200 sat unsold for four years, CoreLogic found. These are
properties that entered the foreclosure process before the system
surpassed its maximum capacity in many states. REO sales have yet
to peak, meaning the time banks and the US government will have
to hold these homes could go even longer.
Click Here!
"It is well known that foreclosure and liquidation timelines have
risen dramatically over the last few years. What is less known is
how REO persistence, or REOs remaining unsold for extended
periods of time, has changed over time," CoreLogic said. What is
known is that the longer the property sits, the more cash buyers
end up with the property, often for steep discounts. For the 2006
REO that resold more the one year later, 55% went to cash
investors, compared to 40% for the entire foreclosure stock that
year. More than 11,000 of the REO sales were resold three times
over the next five years, and 70% were resold through cash
transactions. CoreLogic said the dominance of cash for these
so-called "churned" properties is consistent in later auctions.
For the 2006 REO sold to buyers who took out a mortgage, only 2%
fell back into REO in the five years since. "This indicates that
REO recidivism is not as significant a concern as previously
thought," CoreLogic said.
Click Here!
Such stagnant pools of inventory have crippled any recovery in
home prices. Most analysts predict even more depreciation in
2012. Billions in government initiatives such as the Neighborhood
Stabilization Program and the Hardest Hit Fund went to help
states and nonprofits resell vacant and abandoned foreclosures
even as Republicans in the House moved to cut these programs.
But until the overall economy and employment improves, the
inventory overhang will only widen. "In 2006 and 2007, 10% of
properties that entered the REO stock at the foreclosure auction
were still in REO as of mid-2010," CoreLogic said. "In other
words, these properties have been in REO continuously since
2006."
Click Here!
See you at the top!
Martin Crawford
In 2010, 2,548 different multifamily lenders provided a total of
$68.8 billion in mortgage financing for apartment buildings with
five or more units, according to a report from the Mortgage
Bankers Association (MBA). The 2010 dollar volume represents a
31% increase from 2009 levels. Just one% of the lenders accounted
for 51% of the dollar volume, while three-quarters of the lenders
made five or fewer loans over the course of the year. In terms
of total dollar volume, the top five multifamily lenders in 2010
were Wells Fargo Bank N.A., CBRE Capital Markets, Inc., Berkadia
Commercial Mortgage LLC, PNC Real Estate and Prudential Mortgage
Capital Company. “The multifamily lending market grew 31% in
2010, with credit extended by a broad range of lenders to a broad
range of properties,” said Jamie Woodwell, MBA’s Vice
President of Commercial Real Estate Research.
The report is based on data from the MBA 2010 Commercial
Multifamily Annual Origination Volume Rankings and the Home
Mortgage Disclosure Act (HMDA). The MBA survey targets
specialized commercial/multifamily originators and covered $119
billion in commercial and multifamily loans in 2010. The HMDA
data adds multifamily loans from banks, thrifts and other
institutions that meet certain single-family origination
thresholds. When combined, the two datasets provide the most
comprehensive assessment of the multifamily mortgage market
available.
Click Here!
Jobless claims slightly down
Initial claims for state unemployment benefits slipped 6,000 to a
seasonally adjusted 403,000, the Labor Department said, from an
upwardly revised 409,000 the prior week. Economists polled by
Reuters had forecast claims falling to 400,000 from the
previously reported 404,000. The claims data covered the survey
week for the government's closely watched nonfarm payrolls count
for October. First-time applications for jobless aid fell 25,000
between the September and October survey periods, suggesting a
step-up in nonfarm employment after payrolls increased 103,000
last month.
Olick - rising rates threaten refis
"One weekly report does not a trend make, but today's mortgage
application survey should serve up a good dose of reality to all
of those state attorneys general and Obama administration
officials touting a grand new refinance program for underwater
borrowers. Rates dropped to record lows a month ago, and while
more borrowers went to refinance, the volumes were still very
low. Then, more recently, we see basically a quarter point rise,
and refinances fall off a cliff. The goal of the refinance
proposals (which I discussed in yesterday's blog) is to get the
allegedly 3/4 of underwater borrowers with above-market mortgage
rates (about 8.9 million according to CoreLogic) a break on their
monthly payments. This would supposedly lessen the threat of
default as well as add much-needed spending power back into the
economy. But with mortgage rates rising again, how much of a
bang for the buck will banks and the administration get out of
these refi programs?
Click Here!
Well let's look at what's pushing rates up: 'First, Europe’s
alleged debt bomb solution is pulling dollars out of Treasuries
resulting in rising Treasury rates .. and mortgage rates,' says
Dr. Anthony Sanders, Professor of Finance at George Mason
University. 'Second, FHFA [Fannie and Freddie's regulator] is
increasing Guarantee Fees for Fannie and Freddie loan
purchases/insurance which adds to the mortgage rate. Third,
mortgage rates have a risk premium component that follows the VIX
(CBOE Volatility Index on the S&P500). And under just recently,
the VIX has been rising.' That basically means that any benefit
of these so-called 'streamlined' refis by Fannie and Freddie or
by a bank/AG settlement, 'will have small impact and less
desirability for the consumer,' adds Sanders. That is if those
borrowers can actually qualify. On the other hand, Guy Cecala of
Inside Mortgage Finance, argues that the bulk of the borrowers
targeted by these refi plans have interest rates between 6 and 7%
now. 'I think the idea is that the group of borrowers the
administration/AGs are looking at haven’t been able to refi for
several years and would greatly benefit even if they 'only' got a
FRM at 5%. So relatively small changes in rates don’t impact
the overall goal.'
I realize that the weekly refinance applications numbers from the
Mortgage Bankers Association largely chart borrowers who are not
underwater on their current loans, and the refi programs target
those who are underwater. Still, rates have every reason to
climb, especially with new lower conforming loan limits and the
potential for more risk retention by lenders coming down the
pike. The resulting refis could end up offering savings of less
than $100 a month, given the likely loan sizes that will
qualify...which leads me back to my original premise: The
administration's refi proposal is more politics than substance,
and this latest AG/bank settlement proposal is just plain
baffling, because what does refinancing current borrowers have to
do with justice and restitution for borrowers whose foreclosure
paperwork was mishandled?"
Click Here!
Misery index highest since 1983
The misery index — which is simply the sum of the country's
inflation and unemployment rates — rose to 13.0, pushed up by
higher price data the government reported yesterday. The data
underscores the extent that Americans continue to suffer even two
years after a deep recession ended, with a weak economic recovery
imperiling President Barack Obama's hopes of winning reelection
next year. With gasoline prices high, consumers have less to
spend on other things. Moreover, a rise in overall prices saps
economic growth, which is typically measured in
inflation-adjusted terms. The last time the misery index was at
current levels was in 1983. But in 1984 an improving economy
probably helped President Ronald Reagan win reelection. This
year, the index has risen more than 2 points.
While the misery index rose in September, many economists expect
some respite in coming months, driven by softer inflation.
Wednesday's price data showed inflation outside food and energy
rose at the slowest pace in six months in September. Weakness in
the jobs markets also accounts for some factors that could push
inflation lower in coming months, economists say. "With
households facing weak wage growth and tight budgets, it is
difficult to see a sustained, broad-based increase in prices,"
said Bank of America Merrill Lynch economist Neil Dutta. He said
Wednesday's data showed that businesses' ability to raise prices
on clothing, movies and toys was "hitting a wall." Weak incomes
also will make it harder for building owners to raise rents,
further dampening inflation, Dutta said.
Click Here!
Indeed, inflation could slow to below 2% by mid-2012, said
Capital Economics economist Paul Ashworth. But a decline in the
misery index declines due to softer inflation might not help
Obama's reelection chances much. "Any lowering of inflation
isn't going to have much effect. People are just focused like a
laser on unemployment," said independent political analyst Stuart
Rothenberg. Analysts polled by Reuters last week saw the jobless
rate — currently stuck at 9.1% — barely ticking down to 8.9%
by the end of next year. With the election in November 2012, the
expected decline looks unlikely to help Obama's job prospects
much.
20,000 foreclosures took 4 years to sell
More than 23,200 foreclosures in 2006 sat unsold until the second
quarter of 2010 – more than four years later, according to a
study from the data analytics firm CoreLogic. Analysts studied
the destinations of more 355,000 properties that hit foreclosure
auctions in 2006. Investors bought about one-third of them at the
courthouse steps, and the remaining 233,000 went back onto
lenders' books as real estate owned. Of those, 90%, or 210,000
homes, sold as REO to third-party buyers. Of these, half took six
months to sell and 21% took more than one year to unload. But
23,200 sat unsold for four years, CoreLogic found. These are
properties that entered the foreclosure process before the system
surpassed its maximum capacity in many states. REO sales have yet
to peak, meaning the time banks and the US government will have
to hold these homes could go even longer.
Click Here!
"It is well known that foreclosure and liquidation timelines have
risen dramatically over the last few years. What is less known is
how REO persistence, or REOs remaining unsold for extended
periods of time, has changed over time," CoreLogic said. What is
known is that the longer the property sits, the more cash buyers
end up with the property, often for steep discounts. For the 2006
REO that resold more the one year later, 55% went to cash
investors, compared to 40% for the entire foreclosure stock that
year. More than 11,000 of the REO sales were resold three times
over the next five years, and 70% were resold through cash
transactions. CoreLogic said the dominance of cash for these
so-called "churned" properties is consistent in later auctions.
For the 2006 REO sold to buyers who took out a mortgage, only 2%
fell back into REO in the five years since. "This indicates that
REO recidivism is not as significant a concern as previously
thought," CoreLogic said.
Click Here!
Such stagnant pools of inventory have crippled any recovery in
home prices. Most analysts predict even more depreciation in
2012. Billions in government initiatives such as the Neighborhood
Stabilization Program and the Hardest Hit Fund went to help
states and nonprofits resell vacant and abandoned foreclosures
even as Republicans in the House moved to cut these programs.
But until the overall economy and employment improves, the
inventory overhang will only widen. "In 2006 and 2007, 10% of
properties that entered the REO stock at the foreclosure auction
were still in REO as of mid-2010," CoreLogic said. "In other
words, these properties have been in REO continuously since
2006."
Click Here!
See you at the top!
Martin Crawford
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