<?phpxml version="1.0" encoding="iso-8859-1"?>
<rss version="2.0" 
     xmlns:content="http://purl.org/rss/1.0/modules/content/"
     xmlns:wfw="http://wellformedweb.org/CommentAPI/"
     xmlns:dc="http://purl.org/dc/elements/1.1/"
 >
<channel>
	<title>pligg - published</title>
	<link>http://www.housebubble.org</link>
	<description>Pligg Web 2.0 Content Management System</description>
	<pubDate>Wed, 31 Oct 2007 09:28:33 MDT</pubDate>
	<language>en</language>
	<item>
		<title><![CDATA[Outdoor Sauna.Infrared Outdoor Saunas]]></title>
		<link>http://www.housebubble.org/story.php?title=Outdoor-SaunaInfrared-Outdoor-Saunas</link>
		<comments>http://www.housebubble.org/story.php?title=Outdoor-SaunaInfrared-Outdoor-Saunas</comments>
		<pubDate>Wed, 31 Oct 2007 09:28:33 MDT</pubDate>
		<dc:creator>HOME-SPA</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Outdoor-SaunaInfrared-Outdoor-Saunas</guid>
		<description><![CDATA[Outdoor Saunas &nbsp;&#187;&nbsp;<a href='http://www.wccomfort.com/new-style-outdoor-infrared-saunas/'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[The Coming "Bloodbath"]]></title>
		<link>http://www.housebubble.org/story.php?title=Coming-Bloodbath</link>
		<comments>http://www.housebubble.org/story.php?title=Coming-Bloodbath</comments>
		<pubDate>Wed, 20 Jun 2007 06:19:23 MDT</pubDate>
		<dc:creator>god</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Coming-Bloodbath</guid>
		<description><![CDATA[``It's not just a housing recession anymore, it looks more and more like an economic recession,'' said Nouriel Roubini, a Clinton administration Treasury Department director and economic adviser who now runs Roubini Global Economics in New York. &nbsp;&#187;&nbsp;<a href='http://www.bloomberg.com/apps/news?pid=20601103'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA["Do Not Expect a Quick Rebound" in Prices]]></title>
		<link>http://www.housebubble.org/story.php?title=Do-Not-Expect-Quick-Rebound-in-Prices</link>
		<comments>http://www.housebubble.org/story.php?title=Do-Not-Expect-Quick-Rebound-in-Prices</comments>
		<pubDate>Wed, 14 Mar 2007 09:47:54 MDT</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>David Lereah</category>
		<guid>http://www.housebubble.org/story.php?title=Do-Not-Expect-Quick-Rebound-in-Prices</guid>
		<description><![CDATA[CNN Money has this warning to mainstream America, &amp;quot;Don't Expect a Quick Rebound&amp;quot;.  &amp;quot;Is the housing slump really that bad? After all, the S&amp;amp;P 500 last week fell more in a single day (3.5 percent) than home prices have fallen in the past year nationally (3.1 percent).Still, it could be years before home prices regain the peaks seen before the current stumble - and even that's optimistic.&amp;quot;I expect prices and sales to be modestly growing by June in most of the country,&amp;quot; said David Lereah, the chief economist for the National Association of Realtors and perhaps the most bullish housing economist. &amp;quot;But we'll have to go into 2008, maybe even 2009 before we get even close to the peaks we saw in late 2005 or early 2006.&amp;quot;Two big factors could prolong the slump: the glut of homes on the market after a record building boom, and the fact that prices saw unprecedented gains during the white-hot real estate market of the first half of the decade.Another worry is rising mortgage defaults, especially in the subprime sector, that could lead lenders and regulators to choke off the credit that fed the previous booms.Celia Chen, director of housing economics for Moody's Economy.com, says she thinks it will take until 2009 for prices nationally to reach the peaks hit in 2005. Take inflation into account, she said, and a full recovery could take more than 7 years.Hugh Moore, a partner with money manager Guerite Advisors who has been studying home prices, thinks over-supply is the biggest problem.New homes completed and available for sale reached a record high of 175,000 in January, up 47 percent from a year earlier, according to the Census Bureau. The Realtors' trade group reports existing homes for sale was up 23 percent to 3.5 million.The glut of new homes has hurt major U.S. builders. New Jersey builder Hovnanian Enterprises (Charts) became the latest to report a loss late Thursday, following operating losses at Pulte Home (Charts), KB Home (Charts) and Centex (Charts).Don Tomnitz, CEO of No. 1 builder D.R. Horton (Charts), which has stayed in the black, said earlier this week he doesn't expect 2008 to be a great year and added, &amp;quot;'07 is going to suck.&amp;quot;Moore also points to the latest quarterly Census report showing a record 2.1 million empty homes on the market available for sale. That's a jump of 34 percent from a year earlier and the sixth straight quarter of record vacant homes.&amp;quot;That's a huge run-up in the numbers, that says there's a very big overhang of inventory,&amp;quot; Moore said.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://finance.yahoo.com/loans/article/102597/Home-Prices:-No-Quick-Rebound'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Late Mortgage Payments Reach New High!]]></title>
		<link>http://www.housebubble.org/story.php?title=Late-Mortgage-Payments-Reach-New-High</link>
		<comments>http://www.housebubble.org/story.php?title=Late-Mortgage-Payments-Reach-New-High</comments>
		<pubDate>Tue, 13 Mar 2007 12:25:58 MDT</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>the economy</category>
		<guid>http://www.housebubble.org/story.php?title=Late-Mortgage-Payments-Reach-New-High</guid>
		<description><![CDATA[The Associated Press reports that &amp;quot;Late Mortgage Payments Jump to 3 1/2 Year High, New Foreclosures Hit All-Time HighWASHINGTON (AP) -- Late mortgage payments shot up to a 3 1/2-year high in the final quarter of last year and new foreclosures surged to a record high as borrowers with tarnished credit histories had trouble keeping up with their monthly payments....Concerns about risky mortgages are making investors jittery. Those fears also contributed to a worldwide stock meltdown on Feb. 27, where the Dow Jones industrials suffered a 416-point plunge.Worried about defaults on high-risk mortgages, federal bank regulators earlier this month called on lenders to use caution in making subprime loans and strictly evaluate borrowers' ability to repay them.New Century Financial Corp., which was the nation's second-largest subprime mortgage maker, is scrambling to stay afloat after all its bank lenders cut off funding or informed the company of their intent to do so because of its failure to make payments. The Irvine, Calif.-based company already has stopped accepting all new loan applications.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://biz.yahoo.com/ap/070313/late_mortgages.html?.v=8'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA["Your Home Isn't the Investment You Think It Is"]]></title>
		<link>http://www.housebubble.org/story.php?title=Your-Home-Isnt-Investment-You-Think-It-Is</link>
		<comments>http://www.housebubble.org/story.php?title=Your-Home-Isnt-Investment-You-Think-It-Is</comments>
		<pubDate>Mon, 12 Mar 2007 22:48:12 MDT</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>stupid people</category>
		<guid>http://www.housebubble.org/story.php?title=Your-Home-Isnt-Investment-You-Think-It-Is</guid>
		<description><![CDATA[The Wall Street Journal writes this warning to those planning to live off home equity in their retirement: &amp;quot;Planning your retirement? Don't bet the house on it.Your home means a lot of things to you, most of them good. Your home gives comfort and protection to you and your family, and it could well embody all your material hopes and dreams.But houses have become much more than just places to live. Your home is probably your biggest asset, and the price you could ask for it today is almost certainly much higher than what you paid for it back whenever.As a result, houses have become substitute credit cards, as profligate owners borrow their equity to finance everything from cars to vacations. Among thriftier owners, the equity they have built up in the family home has become a vital part of retirement planning -- a &amp;quot;fourth leg&amp;quot; of the now-unstable &amp;quot;company pension/personal savings/Social Security&amp;quot; stool that was long the model for a financially secure old age.Unfortunately for both groups, however, houses are not very good investments. For the grasshoppers, there's nothing quite as stupid as paying off your 2002 trip to Orlando in 2032, when you finally settle up your refinanced &amp;quot;cash out&amp;quot; 30-year mortgage. And for the ants, economic studies have demonstrated over and over that houses (1) cost more than most people make when they sell and (2) rarely match the long-term returns of stocks or other investments.And that's doubly true today, with much of the U.S. well into a real-estate recession.&amp;quot;Full Article at wsj.com &nbsp;&#187;&nbsp;<a href='http://online.wsj.com/article/SB117329581356629863.html?mod=mostpop'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[A Crisis Looms in Mortgages]]></title>
		<link>http://www.housebubble.org/story.php?title=Crisis-Looms-in-Mortgages</link>
		<comments>http://www.housebubble.org/story.php?title=Crisis-Looms-in-Mortgages</comments>
		<pubDate>Sat, 10 Mar 2007 10:48:36 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Crisis-Looms-in-Mortgages</guid>
		<description><![CDATA[The New York Times reports that: &amp;quot;On March 1, a Wall Street analyst at Bear Stearns wrote a surprisingly upbeat report on a company that specializes in making mortgages to cash-poor homebuyers. The company, New Century Financial, had already disclosed that a growing number of borrowers were defaulting, and its stock, at around $15, had lost half its value in three weeks.What happened next seems all too familiar to investors who bought technology stocks in 2000 at the breathless urging of Wall Street analysts. Last week, New Century said it would stop making loans and needed emergency financing to survive. The stock collapsed to $3.21.The analyst's untimely call, coupled with a failure among other Wall Street institutions to identify problems in the home mortgage market, isn't the only familiar ring to investors who watched the technology stock bubble burst precisely seven years ago.Now, as then, Wall Street firms and entrepreneurs made fortunes issuing questionable securities, in this case pools of home loans taken out by risky borrowers. Now, as then, bullish stock and credit analysts for some of those same Wall Street firms, which profited in the underwriting and rating of those investments, lulled investors with upbeat pronouncements even as loan defaults ballooned. Now, as then, regulators stood by as the mania churned, fed by lax standards and anything-goes lending.Investment manias are nothing new, of course. But the demise of this one has been broadly viewed as troubling, as it involves the nation's $6.5 trillion mortgage securities market, which is larger even than the United States treasury market.Hanging in the balance is the nation's housing market, which has been a big driver of the economy. Fewer lenders means many potential homebuyers will find it more difficult to get credit, while hundreds of thousands of homes will go up for sale as borrowers default, further swamping a stalled market.&amp;quot;The regulators are trying to figure out how to work around it, but the Hill is going to be in for one big surprise,&amp;quot; said Josh Rosner, a managing director at Graham-Fisher &amp;amp; Company, an independent investment research firm in New York, and an expert on mortgage securities. &amp;quot;This is far more dramatic than what led to Sarbanes-Oxley,&amp;quot; he added, referring to the legislation that followed the WorldCom and Enron scandals, &amp;quot;both in conflicts and in terms of absolute economic impact.&amp;quot;While real estate prices were rising, the market for home loans operated like a well-oiled machine, providing ready money to borrowers and high returns to investors like pension funds, insurance companies, hedge funds and other institutions. Now this enormous and important machine is sputtering, and the effects are reverberating throughout Main Street, Wall Street and Washington.&amp;quot;http://www.nytimes.com/2007/03/11/business/11mortgage.html?_r=1&amp;amp;hp&amp;amp;oref=slogin &nbsp;&#187;&nbsp;<a href='http://www.nytimes.com/2007/03/11/business/11mortgage.html?_r=1'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[The Mortgage "Mess" is Spreading]]></title>
		<link>http://www.housebubble.org/story.php?title=Mortgage-Mess-is-Spreading</link>
		<comments>http://www.housebubble.org/story.php?title=Mortgage-Mess-is-Spreading</comments>
		<pubDate>Thu, 08 Mar 2007 11:27:59 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>mortgages</category>
		<guid>http://www.housebubble.org/story.php?title=Mortgage-Mess-is-Spreading</guid>
		<description><![CDATA[BusinessWeek has this report on defaults on mortgage loans having a broad impact on the financial services industry: &amp;quot;The canaries in the coal mine are keeling over fast. After years of easy profits, the $1.3 trillion subprime mortgage industry has taken a violent turn: At least 25 subprime lenders, which issue mortgages to borrowers with poor credit histories, have exited the business, declared bankruptcy, announced significant losses, or put themselves up for sale. And that's just in the past few months.Now there's evidence that the pain is spreading to a broad swath of hedge funds, commercial banks, and investment banks that buy, sell, repackage, and invest in risky subprime loans. According to Jim Grant of Grant's Interest Rate Observer, the market is starting to wake up to the magnitude of the problem, entering what he calls the &amp;quot;recognition stage.&amp;quot; Says Terry Wakefield, head of the Wakefield Co., a mortgage industry consulting firm: &amp;quot;This is going to be a meltdown of unparalleled proportions. Billions will be lost.&amp;quot;Hedge funds, those freewheeling, lightly regulated investment pools, seem particularly vulnerable. BusinessWeek has learned that $700 million Carrington Capital and $3 billion Greenlight Capital may have gotten badly burned because of their intricate dealings with New Century Financial, a major subprime lender whose stock has plunged 84% in four weeks amid a Justice Dept. investigations into its accounting. Magnetar Capital, a $4 billion fund formed two years ago, may be on shaky ground, too. The question is, how many others may be suffering? &amp;quot;This is a very opaque industry, so no one really knows,&amp;quot; says Mark M. Zandi, chief economist and co-founder of Moody's Economy.com (MCO) &amp;quot;My guess is that if you look at the top hedge funds, they're bearing most of the risk.&amp;quot; ...The biggest fear is that the trouble will move up the food chain. The same questionable lending practices that were used for subprime mortgages during the boom were also used for regular, or &amp;quot;prime,&amp;quot; mortgages-among them low or zero downpayments, loose loan-to-value ratios, and exotic mortgages with low up-front payments that balloon later.While subprime loans accounted for 20% of mortgages originated last year, David Liu of UBS estimates that fully 40% of last year's loans are &amp;quot;showing a lot of signs of stress.&amp;quot; Says Nouriel Roubini, economics professor at New York University's Stern School of Business: &amp;quot;The risk that prime borrowers will start to feel financial stress in 2007 cannot be underestimated.&amp;quot; &amp;quot;Full article at: http://www.businessweek.com/investor/content/mar2007/pi20070307_505304_page_2.htm &nbsp;&#187;&nbsp;<a href='http://www.businessweek.com/investor/content/mar2007/pi20070307_505304.htm'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Nation's Subprime Industry is in a State of "Full Meltdown"]]></title>
		<link>http://www.housebubble.org/story.php?title=Nations-Subprime-Industry-is-in-State-Full-Meltdown</link>
		<comments>http://www.housebubble.org/story.php?title=Nations-Subprime-Industry-is-in-State-Full-Meltdown</comments>
		<pubDate>Wed, 07 Mar 2007 11:56:27 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Nations-Subprime-Industry-is-in-State-Full-Meltdown</guid>
		<description><![CDATA[The Boston Herald reports that the subprime industry is creating a perilous situation for the banking industry itself: &amp;quot;The nation's subprime lending industry is now in full &amp;quot;meltdown&amp;quot; and its woes are far from over, experts warned yesterday.    But economists differed on whether the industry's problems will spill over into the commercial-banking sector or harm the overall economy.    Dozens of smaller subprime companies are now out of business - and some of the larger ones, such as Fremont General and New Century, are teetering as foreclosures rise becausemany homeowners can't keep up with mortgage payments.    &amp;quot;It's a total meltdown,&amp;quot; said Ernest Napier, an analyst with Standard &amp;amp; Poor's. &amp;quot;Everyone had anticipated that the music would stop (on these type of high-risk mortgages). Well, it has.&amp;quot;    The result is calls for more regulations and tougher standards for higher-risk lending. Some major commercial banks are also planning to pull back from subprime lending, which provides high-interest mortgages to customers who have bad or less-than-stellar credit ratings.    A number of large banks have seen their stocks pounded in recent days, due to fears by investors that their direct or indirect subprime businesses will end up harming them, too.    &amp;quot;I think we're just seeing the tip of the iceberg,&amp;quot; said Lee Forker, president of Boston's New England Research and Management. &amp;quot;This is serious stuff. . . . It's not time to be putting your head in the sand.&amp;quot;&amp;quot; &nbsp;&#187;&nbsp;<a href='http://business.bostonherald.com/realestateNews/view.bg?articleid=186805'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[US Housing Crash to Result in Second Great Depression]]></title>
		<link>http://www.housebubble.org/story.php?title=US-Housing-Crash-to-Result-in-Second-Great-Depression</link>
		<comments>http://www.housebubble.org/story.php?title=US-Housing-Crash-to-Result-in-Second-Great-Depression</comments>
		<pubDate>Tue, 06 Mar 2007 08:04:59 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=US-Housing-Crash-to-Result-in-Second-Great-Depression</guid>
		<description><![CDATA[The Market Oracle has a must-read, terrifying analysis on the current state of the US Housing meltdown: &amp;quot;This week's data on the sagging real estate market leaves no doubt that the housing bubble is quickly crashing to earth and that hard times are on the way. &amp;quot;The slump in home prices from the end of 2005 to the end of 2006 was the biggest year over year drop since the National Association of Realtors started keeping track in 1982.&amp;quot; (New York Times) The Commerce Dept announced that the construction of new homes fell in January by a whopping 14.3%. Prices fell in half of the nation's major markets and &amp;quot;existing home sales declined in 40 states&amp;quot;. Arizona, Florida, California, and Virginia have seen precipitous drops in sales.The Commerce Department also reported that &amp;quot;the number of vacant homes increased by 34% in 2006 to 2.1 million at the end of the year, nearly double the long-term vacancy rate.&amp;quot; (Marketwatch)...he bottom line is that inventories are up, sales are down, profits are eroding, and the building industry is facing a steady downturn well into the foreseeable future.The ripple effects of the housing crash will be felt throughout the overall economy; shrinking GDP, slowing consumer spending and putting more workers in the growing unemployment lines.Congress is now looking into the shabby lending practices that shoehorned millions of people into homes that they clearly cannot afford. But their efforts will have no affect on the loans that are already in place. $1 trillion in ARMs (Adjustable Rate Mortgages) are due to reset in 2007 which guarantees that millions of over-leveraged homeowners will default on their mortgages putting pressure on the banks and sending the economy into a tailspin. We are at the beginning of a major shake-up and there's going to be a lot more blood on the tracks before things settle down.The banks and mortgage lenders are scrambling for creative ways to keep people in their homes but the subprime market is already teetering and foreclosures are on the rise.There's no doubt now, that Fed chairman Alan Greenspan's plan to pump zillions of dollars into the system via &amp;quot;low interest rates&amp;quot; has created the biggest monster-bubble of all time and set the stage for a deep economic retrenchment. Greenspan's inflationary policies were designed to expand the &amp;quot;wealth gap&amp;quot; and create greater economic polarization between the classes. By the time the housing bubble deflates, millions of working class Americans will be left to pay off loans that are considerably higher than the current value of their home. This will inevitably create deeper societal divisions and, very likely, a permanent underclass of mortgage-slaves.&amp;quot;Full article at: http://www.marketoracle.co.uk/Article383.html &nbsp;&#187;&nbsp;<a href='http://www.marketoracle.co.uk/Article383.html'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Stocks of Subprime Lenders "Melt Down"]]></title>
		<link>http://www.housebubble.org/story.php?title=Stocks-Subprime-Lenders-Melt-Down</link>
		<comments>http://www.housebubble.org/story.php?title=Stocks-Subprime-Lenders-Melt-Down</comments>
		<pubDate>Tue, 06 Mar 2007 07:58:22 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>the economy</category>
		<guid>http://www.housebubble.org/story.php?title=Stocks-Subprime-Lenders-Melt-Down</guid>
		<description><![CDATA[The St. Petersburg Times reports that more subprime lenders are seeing their chickens come home to roost: &amp;quot;As the stocks of subprime mortgage lenders melted down Monday on Wall Street, one struggling bank put several hundred of its Tampa employees on ice.Fremont Investment &amp;amp; Loan, the country's eighth-biggest subprime lender, told most of its Tampa staff to stay home Monday on paid leave. The move followed news that Fremont General Corp., its California-based parent company, had decided to quit lending money to home buyers who have bad credit and to try to sell that business line. Tampa staff were told to expect an update on their status Wednesday. Their future will depend in part on whether the residential mortgage business is sold, and to whom.&amp;quot;As far as how individual offices will be affected by this, it's really too early to say,&amp;quot; said Dan Hilley, a company spokesman.Fremont's stock, which began the year at $16.21 per share, dropped 32 percent Monday to close at $5.89. It had plenty of company. New Century Financial Corp., ranked No. 2 on National Mortgage News' list of the largest subprime mortgage lenders, saw its stock fall 69 percent to $4.56 amid fears it might file for bankruptcy protection. Higher-than-expected default rates are causing most of the hand-wringing.Other subprime lenders - those who cater to borrowers with below-average credit - with significant bay area operations include third-ranked Countrywide Financial Corp., for which Tampa is one of four regional hubs, and New Century. Local economic development officials helped attract thousands of financial-service jobs in recent years while the industry enjoyed a growth spurt.Because it markets its loans to mortgage brokers rather than directly to consumers, Fremont is less well-known than some of its competitors. But the company issued $3.9-billion worth of residential loans to Florida homebuyers in 2005, more than any other state but California and New York.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.sptimes.com/2007/03/06/Business/Subprime_lender_halts.shtml'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[New Century Mortgage REIT drops a whopping 60% in one day!]]></title>
		<link>http://www.housebubble.org/story.php?title=New-Century-Mortgage-REIT-drops-whopping-60-in-one-day</link>
		<comments>http://www.housebubble.org/story.php?title=New-Century-Mortgage-REIT-drops-whopping-60-in-one-day</comments>
		<pubDate>Mon, 05 Mar 2007 10:43:08 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>mortgages</category>
		<guid>http://www.housebubble.org/story.php?title=New-Century-Mortgage-REIT-drops-whopping-60-in-one-day</guid>
		<description><![CDATA[Reuters reports on a mortgage banking stock that just dropped a whopping 60+%!  If this is any indication of things to come, the entire banking industry itself could be in grave danger: &amp;quot;ew Century Financial Inc. (NEW.N: Quote, Profile, Research) shares fell more than 60 percent in early Monday trading, leading a broad decline among subprime mortgage lenders as the crisis in the sector escalates.The decline came after the largest independent U.S. subprime lender late Friday said federal prosecutors and securities regulators are examining accounting errors and stock trading.&amp;quot;We think there is further downside risk, possibly to $0,&amp;quot; wrote Merrill Lynch &amp;amp; Co. analyst Kenneth Bruce. &amp;quot;Bankruptcy seems a likely course of action.&amp;quot;&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.reuters.com/article/hotStocksNews/idUSN0525703220070305'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Off the Charts:  US House Pain is Just Starting]]></title>
		<link>http://www.housebubble.org/story.php?title=Off-Charts-US-House-Pain-is-Just-Starting</link>
		<comments>http://www.housebubble.org/story.php?title=Off-Charts-US-House-Pain-is-Just-Starting</comments>
		<pubDate>Mon, 05 Mar 2007 09:21:33 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Off-Charts-US-House-Pain-is-Just-Starting</guid>
		<description><![CDATA[The International Herald Tribune tells it like it is in this statistical look at just how bad the US housing bubble is going to get: &amp;quot;In the autumn of 2005, the biggest boom in home prices in the United States was in Phoenix. People stood in line just to get on lists to buy new homes. It was possible to make lots of money selling a place on a list well before the house was actually built.At the peak of momentum in that market, according to the Standard &amp;amp; Poor's/Case-Shiller home prices index, house prices in Phoenix rose 49 percent in one 12-month period.That was then. When S&amp;amp;P issued its final 2006 price numbers this week, it reported that Phoenix home prices rose just 0.3 percent in 2006. And it said that home prices peaked in June and fell 2.6 percent in the final six months of the year.Home prices are notoriously difficult to compare. Every house is different from every other, in location if not in construction. The government compiles national averages, but it is hard to determine what they mean, since regional differences are huge.The S&amp;amp;P indexes, which now cover 20 regions of the United States, try to deal with that by recording all sales in an area, and then comparing the price to the same price that house fetched the last time it changed hands. They include only single-family homes, not condominium or cooperative apartments, which can distort the picture in areas where such apartments form a major part of the housing market....Home sales are falling, which is bad news for builders, but for those who already own homes the really important issue is price. So far, prices are not very far below peak levels in most markets, but continued weakness could change that, and create pain for those who must sell, or who need to refinance their mortgages.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.iht.com/articles/2007/03/02/business/wbmarket03.php'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Subprime Loans Lead Goldman and Merril to Junk Status]]></title>
		<link>http://www.housebubble.org/story.php?title=Subprime-Loans-Lead-Goldman-Merril-to-Junk-Status</link>
		<comments>http://www.housebubble.org/story.php?title=Subprime-Loans-Lead-Goldman-Merril-to-Junk-Status</comments>
		<pubDate>Fri, 02 Mar 2007 15:58:26 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>the economy</category>
		<guid>http://www.housebubble.org/story.php?title=Subprime-Loans-Lead-Goldman-Merril-to-Junk-Status</guid>
		<description><![CDATA[Bloomberg has this interesting piece on the massive exposure of major banks to the subprime loans.  It seems after years of windfall profits, their chickens may be coming home to roost: &amp;quot;Goldman Sachs Group Inc., Merrill Lynch &amp;amp; Co. and Morgan Stanley, which earned a record $24.5 billion in 2006, suddenly have become so speculative that their own traders are valuing the three biggest securities firms as barely more creditworthy than junk bonds.Prices for credit-default swaps linked to the bonds of the New York investment banks this week traded at levels that equate to debt ratings of Baa2, according to Moody's Investors Service. For Goldman, Morgan Stanley and Merrill that's five levels below the actual Aa3 rating on their senior unsecured notes and two steps above non-investment grade, or junk.Traders of credit derivatives are more alarmed than stock and bond investors that a slowdown in housing and the global equity market rout have hurt the firms. Merrill since 2005 has financed two mortgage lenders that subsequently failed and bought a third, First Franklin Financial Corp., for $1.3 billion.``These guys have made a lot of money securitizing mortgages over the years in a mortgage boom time,'' said Richard Hofmann, an analyst at bond research firm CreditSights Inc. in New York. ``The question now is what is the exposure to credit risk and what are the potential revenue headwinds if they're not able to keep that securitization machine humming along.''Credit-default swaps on the debt of Goldman, the world's biggest securities firm, have risen to $32,775 per $10 million in bonds, up from $21,500 at the start of the year, according to prices compiled by London-based CMA Datavision. The price touched $35,000 on Feb. 28, the highest since June 2005.Spokesmen and spokeswomen for Goldman, Lehman, Merrill and Morgan Stanley declined to comment. A spokeswoman for Bear Stearns didn't immediately return calls for comment. ... At least 20 lenders have shut down, scaled back or been sold this year. Countrywide Financial Corp., the biggest U.S. mortgage lender, yesterday said borrowers were at least 30 days past due at the end of last year on almost a fifth of the subprime loans that it serviced for others.``There's been a little bit of a reappraisal of the financial sector, with a strong desire to get away from subprime exposure,'' said Scott MacDonald, director of research at Aladdin Capital Management LLC in Stamford, Connecticut, which manages $16.5 billion in assets.Merrill equity analysts two days ago cut their recommendations on Goldman, Lehman and Bear Stearns shares as well as that of European banks Deutsche Bank and Credit Suisse Group to ``neutral'' from ``buy'' because they said earnings will probably decline next month as investors become wary.Bear Stearns's stake in non-investment grade retained mortgage securities, or what its keeps from packaging loans into bonds, represents about 13 percent of the firm's ``tangible'' equity, according to CreditSights.For Lehman, it's 11 percent. Goldman, Morgan Stanley and Merrill don't disclose how much of their total retained securities are rated below investment grade, or junk. Overall, their exposure is in ``the low- to mid-teens,'' CreditSights said. &amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.bloomberg.com/apps/news?pid=20601087&amp;sid=azrxhCZbHMLk&amp;refer=home'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Mortgage Defaults Spread]]></title>
		<link>http://www.housebubble.org/story.php?title=Mortgage-Defaults-Spread</link>
		<comments>http://www.housebubble.org/story.php?title=Mortgage-Defaults-Spread</comments>
		<pubDate>Thu, 01 Mar 2007 01:03:33 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>mortgages</category>
		<guid>http://www.housebubble.org/story.php?title=Mortgage-Defaults-Spread</guid>
		<description><![CDATA[The Wall Street Journal has an interesting report on bad mortgages spreading up from the subprime market into the &amp;quot;prime&amp;quot; market: &amp;quot;The mortgage market has been roiled by a sharp increase in bad loans made to borrowers with weak credit. Now there are signs that the pain is spreading upward.At issue are mortgages made to people who fall in the gray area between &amp;quot;prime&amp;quot; (borrowers considered the best credit risks) and &amp;quot;subprime&amp;quot; (borrowers considered the greatest credit risks). A record $400 billion of these midlevel loans -- which are known in the industry as &amp;quot;Alt-A&amp;quot; mortgages -- were originated last year, up from $85 billion in 2003, according to Inside Mortgage Finance, a trade publication. Alt-A loans accounted for roughly 16% of mortgage originations last year and subprime loans an additional 24%....Data from UBS AG show that the default rate for Alt-A mortgages has doubled in the past 14 months. &amp;quot;The credit deterioration has been almost parallel to what's been happening in the subprime market,&amp;quot; says UBS mortgage analyst David Liu. The UBS report contrasts with testimony Federal Reserve Board Chairman Ben Bernanke gave to Congress yesterday. &amp;quot;Our assessment is that there's not much indication that subprime issues have spread into the broader mortgage market,&amp;quot; Mr. Bernanke said.To be sure, defaults have remained very low in the prime market -- and despite the uptick in bad loans, the problems in the Alt-A sector aren't as severe as those that have roiled the subprime market. Some 2.4% of Alt-A loans are at least 60 days past due, according to UBS, which looked at mortgages that were packaged into securities and sold to investors. That is well below the 10.5% delinquency rate for subprime mortgages. (During the housing boom, delinquencies were low for all types of loans because borrowers who wound up in trouble could refinance or sell.)...Some borrowers who took out Alt-A loans in recent years are starting to feel the strain. Johnny and Shirley Johnson, retirees in Cleveland, took out an option ARM when they refinanced their $92,700 mortgage in July 2005. The loan carried a 3.5% introductory rate that began moving upward a few months later. The couple, who live on a fixed income, are currently making the minimum payment on their loan. But they are afraid they won't be able to keep up with their loan and other debts once their monthly mortgage payment adjusts upward later this year.&amp;quot;We don't want to lose our home,&amp;quot; says Ms. Johnson. The couple is working with Acorn Housing Corp., a nonprofit group that provides housing counseling, in an effort to refinance into a 30-year fixed-rate mortgage. Though the monthly payment would be higher, the new loan would protect them against future increases.Housing counselors and bankruptcy attorneys say they are seeing an increase in troubled borrowers who previously had good credit. &amp;quot;We have clients with 720-plus credit scores, and they are in awful products,&amp;quot; says Jennifer Harris, executive director of the Home Loan Counseling Center in Sacramento, Calif. Some of these borrowers took out option ARMs with low introductory rates and are likely to fall behind when their monthly payment resets at a higher level, she says.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://online.wsj.com/article/SB117271866822722900.html?mod=home_whats_news_us'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA["An unprecedented market.  ...One that California has never seen"]]></title>
		<link>http://www.housebubble.org/story.php?title=-unprecedented-market-One-that-California-has-never-seen-1</link>
		<comments>http://www.housebubble.org/story.php?title=-unprecedented-market-One-that-California-has-never-seen-1</comments>
		<pubDate>Tue, 13 Feb 2007 22:58:08 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>local news</category>
		<guid>http://www.housebubble.org/story.php?title=-unprecedented-market-One-that-California-has-never-seen-1</guid>
		<description><![CDATA[The L.A. Times has this grim report on the bubble bursting in California's 'Inland Empire': &amp;quot;HERE'S what Dave Hennigan knows about the four-bedroom house tucked away on a tranquil Corona street: The owner is a woman, and she's $8,155 behind on her mortgage payments.Maybe she had a messy divorce or expensive illness. Maybe she has been spending too much and saving too little. Hennigan, a 45-year-old Riverside County real estate agent, doesn't plan to ask....n this queasy market, sales are slumping. Sellers remember the boom and want more money than they can get, while buyers feel they have unlimited time to make a decision. An agent's best prospect for a sale is someone who must act now - a homeowner told by a lender to pay up or get out.These owners are in crisis. They need to refinance if they can or sell and move into something affordable. If they had an easier option, they wouldn't be behind in their payments in the first place....Smart agents could make a good living finding buyers for these houses, which often went for 30% under market value. That was how the two executives running Home Center got their start. Bosch, 31, grew up in Victorville and was an apprentice loan officer at 17. Barnard, 55, is the son of real estate agents in Whittier who began by buying and rehabbing foreclosures for a profit.Despite working side by side the last few years, they have sharply different views about where the market is going.Barnard, who bought five houses around the county as investments shortly before the market peaked, is the optimist. His argument: Population continues to rise, which means demand won't slacken. Builders have switched to making smaller homes, which are more affordable.&amp;quot;A lot of people are sitting on the sidelines,&amp;quot; Barnard says, &amp;quot;but in the middle of summer they'll come back.&amp;quot;Unless they don't, which is why he's encouraging his agents to learn everything they can about foreclosures.Bosch, on the other hand, thinks the residential real estate market will soon revisit the horrible days of the mid-'90s - and then get worse.&amp;quot;I have no doubt that we are entering the next phase of an unprecedented market,&amp;quot; he says. &amp;quot;One that Southern California has never seen.&amp;quot;Sure, there's been employment growth in the area. But much of it, Bosch argues, was related to real estate: construction, lending, appraising, title search, termite inspection, pool building, etc. This was a boom that fed upon itself.The biggest problem, Bosch believes, was created by the lenders. They used to be cautious. They'd want the borrower's tax returns, pay stubs and bank statements, and it would all have to match up. The borrower would make three times his monthly payment. He'd have to scrape together a down payment.Sub-prime loans changed all this. Originally these high-interest loans for credit-challenged buyers were a small segment of the market. But as houses got more expensive, fewer buyers qualified under the traditional guidelines, so they went sub-prime.Lenders would take their word on income. They no longer needed down payments. They didn't worry that their loans would soon reset to higher interest payments.Nobody cared too much as long as prices went up, although many people in the business knew the day of reckoning wasn't canceled but merely postponed. &nbsp;&#187;&nbsp;<a href='http://www.latimes.com/news/printedition/la-fi-foreclose13feb13,0,2786288,full.story'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Realtor: "Prices will drop another 30% this year"]]></title>
		<link>http://www.housebubble.org/story.php?title=Realtor-Prices-will-drop-another-30-this-year-1</link>
		<comments>http://www.housebubble.org/story.php?title=Realtor-Prices-will-drop-another-30-this-year-1</comments>
		<pubDate>Mon, 12 Feb 2007 22:04:10 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>local news</category>
		<guid>http://www.housebubble.org/story.php?title=Realtor-Prices-will-drop-another-30-this-year-1</guid>
		<description><![CDATA[The Detroit News reports that &amp;quot;Obviously, it isn't a good time to buy a house for a lot of Metro Detroiters.Those who have been laid off or worry they could be soon, who have taken auto buyouts and aren't sure what their next career move will be, who aren't willing to sell their house for a lot less than they think it's worth and those who are living paycheck to paycheck aren't typically good candidates, no matter how good the deal.Even if you are a candidate, University of Michigan senior research specialist Don Grimes urges some caution and realistic expectations.Buyers can get a bargain right now, Grimes said, but he questions whether southeast Michigan's housing market will ever rebound to what it was a decade ago. He cautions buyers against expecting big gains in home values over the next several years.&amp;quot;I have no doubt there are deals to be had,&amp;quot; Grimes said. &amp;quot;But don't go into it expecting appreciation except at the rate of inflation.&amp;quot;But buying a home is a good option for many, Grimes said. &amp;quot;If it's a good situation for you, then do it. If it's not, then wait.&amp;quot;A Glut of Homes has Created the Ultimate Buyers Market:  With buyers in control, they are in no hurry to make an offer and they shouldn't be, Realtors said. House hunters should take their time, look at many homes, research mortgage programs and know their options before making a decision.John Kurczak, a Realtor with Keller Williams Central in Sterling Heights, said his clients are on the lookout for the best deal. Many buyers won't even look at a property unless they can practically steal it, he said.That is why Kurczak warns home sellers against holding onto a house for too long. He advises considering any offer and working with the buyer.&amp;quot;There's an old saying in the real estate businesses that goes: 'Your first offer is your best offer,'a€‚&amp;quot; Kurczak said. &amp;quot;Don't get upset if the offer is too low. Sellers need to understand the buyers' anxieties and work with the buyer; you have to give and take.&amp;quot;Even if the seller has to take a loss, he or she can make up for it by buying another home in the region for less than it is worth, Kurczak pointed out.Experts predict Metro Detroit's housing market will favor buyers for at least another year.Prices will drop another 10 percent to 30 percent in 2007 and begin to stabilize in 2008, said Kurczak, who has seen this up-down cycle many times in his 16-year career. &amp;quot;This is the storm we're going through right now,&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.detnews.com/apps/pbcs.dll/article?AID=/20070212/BIZ03/702120370'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[HSBC "Humiliated" in mortgage backed securities.  Is Merril Next?]]></title>
		<link>http://www.housebubble.org/story.php?title=HSBC-Humiliated-in-mortgage-backed-securities-Is-Merril-Next</link>
		<comments>http://www.housebubble.org/story.php?title=HSBC-Humiliated-in-mortgage-backed-securities-Is-Merril-Next</comments>
		<pubDate>Mon, 12 Feb 2007 13:33:36 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>mortgages</category>
		<guid>http://www.housebubble.org/story.php?title=HSBC-Humiliated-in-mortgage-backed-securities-Is-Merril-Next</guid>
		<description><![CDATA[Bloomberg reports that &amp;quot;Merrill Lynch &amp;amp; Co. Chief Executive Officer Stanley O'Neal was willing to lose $230 million to catch Bear Stearns Cos. and the shakeout is just beginning.That's because Merrill is determined to capture a dominant share of trading in bonds backed by home loans, the fastest- growing debt market since 1995 and this year's most troubled. O'Neal's enthusiasm for mortgages to potentially delinquent borrowers coincides with the highest default rate in more than six years, a record contraction in demand for so-called subprime loans and descending bond prices.Merrill already has bankrolled two home lenders that subsequently failed and purchased a third, First Franklin Financial Corp., for $1.3 billion, just before HSBC Holdings Plc disclosed that its bad-loan provisions increased 20 percent because of the unraveling U.S. subprime market.``You've got to remember'' that New York-based Bear Stearns, the perennial leader in mortgage bonds with only a quarter of Merrill's 56,000 headcount, ``got into this business at the height of the boom, when you could not lose,'' Angelo Mozilo, Countrywide Financial Corp.'s CEO, said in a telephone interview from his office in Calabasas, California.``The real test will come for these new players in how they do in this new cycle,'' Mozilo said. ``A couple may do fine and a couple won't do fine. Just because it's Wall Street and they've got into the origination business doesn't mean they automatically win.''Fees TripledNew York-based Merrill, the third-largest securities firm by market value, isn't the only challenger to No. 1 Bear Stearns. Deutsche Bank AG, Morgan Stanley and Barclays Plc have bought or agreed to buy subprime lenders in the past six months, betting that a bigger presence in mortgages will produce more revenue from packaging the loans into bonds.Fees from securitizing debts including mortgages, auto loans, aircraft leases and credit-card receivables have almost tripled in the past five years to $5.6 billion, Bank of America Corp. analyst Michael Hecht estimates.Bear Stearns was the top seller of mortgage bonds in 2006, its third year in first place, followed by Royal Bank of Scotland Plc's RBS Greenwich Capital Markets and Lehman Brothers Holdings Inc., according to data compiled by Bloomberg. The rankings don't include subprime deals.Merrill is counting on securitization to dispose of risky mortgages and avoid the headaches now plaguing HSBC, the world's third-largest bank. The London-based company on Feb. 7 increased the amount set aside for bad loans in 2006 to almost $10.6 billion, 20 percent more than analysts estimated, and shook up management in the U.S.Subprime TimeThe same day, New Century Financial Corp., the Irvine, California-based rival to HSBC in subprime mortgages, said the market has deteriorated so much that it expects to report a quarterly loss for the first time since 2001.``The best time to get in is when things are horrible,'' said Anthony Sanders, former director of mortgage-bond research at Deutsche Bank, who now is a finance professor at Ohio State University in Columbus. ``If you can get in at a discount and clean up the underwriting, that could be a big moneymaker when the housing market comes back.''O'Neal, 55, agreed to buy First Franklin from Cleveland- based National City Corp. in September. Since then, home loans to borrowers with erratic credit records or burgeoning debt burdens have defaulted at a faster rate than during the U.S. recession in 2001, according to Arlington, Virginia-based Friedman Billings Ramsey Group Inc. ... Eroding StandardsAt the time, home prices across the U.S. were surging as the growth in adjustable-rate, interest-only and so-called jumbo mortgages, and some of the lowest borrowing costs in 40 years, fueled buying. Lenders provided $640 billion in subprime mortgages last year, an increase of almost fivefold from 2000, according to Inside B&amp;amp;C Lending, an industry publication.With more than 8,500 financial institutions competing for mortgages, many began extending them to borrowers who might not have qualified previously.``Too many firms got involved in making loans probably motivated in part by fees,'' Federal Reserve Bank of St. Louis President William Poole told reporters after a speech last week. ``They thought they could lay off the credit risk by securitizing and selling these off in the market.'' &amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.bloomberg.com/apps/news?pid=20601087&amp;sid=aqTiIkTKqgzo&amp;refer=home'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[New York City Foreclosures Jump 18%]]></title>
		<link>http://www.housebubble.org/story.php?title=New-York-City-Foreclosures-Jump-18</link>
		<comments>http://www.housebubble.org/story.php?title=New-York-City-Foreclosures-Jump-18</comments>
		<pubDate>Mon, 12 Feb 2007 07:20:33 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>foreclosures</category>
		<guid>http://www.housebubble.org/story.php?title=New-York-City-Foreclosures-Jump-18</guid>
		<description><![CDATA[The New York Daily News has a report on foreclosure increases, that while lower than national increases, is surprising to see in the city that 'never goes down in value': &amp;quot;The number of city foreclosures jumped 18% in the last half of 2006 - with as many as 100 homes going on the block each week in both Brooklyn and Queens, according to Crain's New York Business.&amp;quot;The last time I saw it this bad was in the early 1990s,&amp;quot; Jessica David, president of Profiles Publications, which tracks foreclosure figures, told Crain's for today's edition.New York City numbers pale in comparison with the nationwide surge in foreclosures, which are up 45% from the corresponding period of 2005. But the filings here are accelerating and show New York may be catching up with the rest of the country, the report found.Experts charge lenders lure naive borrowers into taking on unmanageable debt by extending loans with rates that start out low but quickly rise.&amp;quot;The [lending] industry is exploiting customers' ignorance and seizing the opportunities offered by the skyrocketing real estate market,&amp;quot; said Sarah Gerecke, chief executive of Neighborhood Housing Services of New York City.Interest-only loans and piggyback loans that let people borrow with no money down also help coax wanna-be homeowners to go out on a financial limb.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.nydailynews.com/front/story/496871p-418665c.html'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Stocks of Home Lenders Plunge as Mortgages Sour]]></title>
		<link>http://www.housebubble.org/story.php?title=Stocks-Home-Lenders-Plunge-as-Mortgages-Sour</link>
		<comments>http://www.housebubble.org/story.php?title=Stocks-Home-Lenders-Plunge-as-Mortgages-Sour</comments>
		<pubDate>Sat, 10 Feb 2007 12:24:15 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>mortgages</category>
		<guid>http://www.housebubble.org/story.php?title=Stocks-Home-Lenders-Plunge-as-Mortgages-Sour</guid>
		<description><![CDATA[Bloomberg reports that shares of mortgage lenders are tanking as loads of subprime mortgages enter default: &amp;quot;Shares of U.S. mortgage lenders plunged after New Century Financial Corp. and HSBC Holdings Plc said losses from bad home loans are piling up faster than they expected.The stock of Irvine, California-based New Century fell $10.92, or 36 percent, to $19.24 in New York Stock Exchange composite trading, the biggest decline since October 1998. Accredited Home Lenders Holding Co. lost 6 percent to $27.25, Novastar Financial Inc. tumbled 11 percent to $18.31 and American Home Mortgage Investment Corp. slid 8.1 percent to $33.06.Both New Century and HSBC blamed rising defaults on so- called subprime loans they made to borrowers who had little credit history or heavy debt loads. Defaults on subprime loans increased nationwide last year as competition and a slower housing market prompted lenders to lower their standards and give mortgages to borrowers who couldn't make their monthly payments.``It's kind of a watershed moment where the magnitude of the problems really is starting to come to the surface,'' said Brian Horey, general partner at Aurelian Partners LP in New York, which has sold short shares of New Century. ``If you could fog a mirror, you could get a loan.''New Century, the second-largest subprime lender, said late yesterday it probably lost money in the last quarter and will need to restate 2006 earnings, and the company won't make as many loans this year as it had previously forecast. ... Among subprime loans, delinquencies of more than 90 days plus foreclosures and seized properties are at their highest level in at least six years, according to a Friedman Billings Ramsey Group report.Goldman Sees Trouble``That is the one area across all businesses in all firms that is actually in a bit of trouble now,'' David Viniar, chief financial officer of New York-based Goldman Sachs Group Inc., said today about subprime lending. ``That market's going to get worse before it gets better.'' Viniar spoke at an investor conference in Naples, Florida.Cooling demand for the mortgages spurred lenders including Wachovia Corp. and KeyCorp to shut or sell home-loan units in the past year. National City Corp. sold its First Franklin mortgage unit to get some of the riskiest loans off its books.``There's a lot of camouflaging going on in credit quality,'' said analyst David Hendler at CreditSights Inc. in an interview late last month. ``We're getting the sense in this shop that this is more than normal deterioration, that it speaks to deeper difficulties.'' &amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.bloomberg.com/apps/news?pid=20601087&amp;sid=a2RKPr.UwE4A&amp;refer=home'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA["Stagnant Sales, Lower Prices, More Builder Incentives"]]></title>
		<link>http://www.housebubble.org/story.php?title=Stagnant-Sales-Lower-Prices-More-Builder-Incentives</link>
		<comments>http://www.housebubble.org/story.php?title=Stagnant-Sales-Lower-Prices-More-Builder-Incentives</comments>
		<pubDate>Thu, 08 Feb 2007 07:55:20 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>local news</category>
		<guid>http://www.housebubble.org/story.php?title=Stagnant-Sales-Lower-Prices-More-Builder-Incentives</guid>
		<description><![CDATA[Florida Today reports from the International Builders Show in Orlando with the following news: &amp;quot;Stagnant sales. Lower prices. More builder giveaways and incentives.Those are a few things to watch for in the first half of this year, three of the nation's leading housing economists said Wednesday at the 2007 International Builders' Show in Orlando.The economists -- from the National Association of Home Builders, Fannie Mae and Freddie Mac -- agreed that, after the real estate market reached a peak in the third quarter of 2005, it mostly has been a downhill ride ever since for many markets in the United States.The economists predicted some leveling out, and possible improvement, toward the end of the year. But it could be 18 months to two years before anyone sees a consistent and noticeable trend upward.&amp;quot;We don't think we've seen the bottom,&amp;quot; said David Berson, a chief economist and mortgage market analyst with Fannie Mae, the Federal National Mortgage Association.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.floridatoday.com/apps/pbcs.dll/article?AID=/20070208/BUSINESS/702080328/1003'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Exurbs Hit Hardest in Housing Crash]]></title>
		<link>http://www.housebubble.org/story.php?title=Exurbs-Hit-Hardest-in-Housing-Crash</link>
		<comments>http://www.housebubble.org/story.php?title=Exurbs-Hit-Hardest-in-Housing-Crash</comments>
		<pubDate>Wed, 07 Feb 2007 07:10:42 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Exurbs-Hit-Hardest-in-Housing-Crash</guid>
		<description><![CDATA[CNN Money Reports that the distant suburbs of cities are the areas being hardest hit: &amp;quot;While the U.S. housing downturn has depressed once-thriving real estate markets around the nation, far-flung suburbs of major cities have suffered the most abrupt market correction.Home construction in these distant exurbs has slowed and prices and sales have fallen more than those of close-in suburban neighbors since a five-year U.S. housing boom ended in the summer of 2005.Average home prices in Loudon County, Virginia, 35 miles outside of Washington, D.C., fell roughly 11 percent in 2006, according to the Northern Virginia Association of Realtors. By contrast, Virginia's Arlington County, which hugs the nation's capital, saw a price decline of only about 2 percent.&amp;quot;It's been hard for sellers to comprehend, and I'm usually the bearer of bad news,&amp;quot; said Mike Wagner, a real estate broker who works in Loudon. &amp;quot;The news is: Your home is worth $100,000 less than it was a year and a half ago.&amp;quot;And it's not just prices that have suffered.The average Loudon County home sold in December spent 101 days on the market, according to the Realtor group. In Arlington, the average was 72 days.Wagner and other local real estate agents say the area's soft market is a hangover, in part, from a building spree and a buying binge among investors priced out of other areas.The same holds true for California, where exurban housing markets have softened more than those close to urban centers.Home prices in Los Angeles rose a relatively modest 5.8 percent in December from a year earlier, while sales were down 14.5 percent, the California Association of Realtors said.Riverside and San Bernardino counties, which are on the eastern edge of Los Angeles' suburban frontier, saw a more modest 3.9 percent increase in prices, while sales volume plummeted 40.6 percent. High Desert, about 80 miles from downtown Los Angeles, saw just a 1.3 percent increase in sales price and a 39 percent drop in the number of sales.Some observers blame the sales stall in the Los Angeles area on home builders who for years gobbled up available land in exurban tracts and overbuilt. Areas closer to the city are already built out and have not faced a big injection of new homes, said Leslie Appleton, an economist with the California Association of Realtors.Now, real estate agents in the exurbs trying to sell a glut of new homes, along with the inventory of previously owned houses.&amp;quot;There is intense competition in the inland areas of the state between the existing stock and new homes,&amp;quot; said Appleton. &amp;quot;The absorption of this new product is going to take some time.&amp;quot;And while new buyers are needed to sop up the housing stock, many investor-owners are losing their properties through bankruptcy, said Jesse Ramirez, a real estate agent in Riverside. &nbsp;&#187;&nbsp;<a href='http://money.cnn.com/2007/02/06/real_estate/exurbs_housing.reut/index.htm?cnn=yes'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Texas Leads US in Foreclosures]]></title>
		<link>http://www.housebubble.org/story.php?title=Texas-Leads-US-in-Foreclosures</link>
		<comments>http://www.housebubble.org/story.php?title=Texas-Leads-US-in-Foreclosures</comments>
		<pubDate>Tue, 06 Feb 2007 09:14:42 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>local news</category>
		<guid>http://www.housebubble.org/story.php?title=Texas-Leads-US-in-Foreclosures</guid>
		<description><![CDATA[The Austin Business Journal has news on a recently released study which gives Texas the dubious honor of leading the nation in foreclosures: &amp;quot; The state and national foreclosure numbers are in, and they're not pretty.Texas finished 2006 with a total of 156,876 foreclosure filings -- the highest aggregate total of any state, according to a year-end report by foreclosure source RealtyTrac Inc.Texas' total filings equates to a rate of one foreclosure filing for every 51 households -- making it the state with the fourth highest foreclosure rate.Colorado posted the highest foreclosure rate of any state, according to the latest RealtyTrac study -- one filing for every 33 households. Over the course of 2006, Colorado reported a total of 54,747 filings.RealtyTrac also ranked the nation's 100 largest MSAs (metropolitan statistical areas) by its foreclosure rate. The Detroit/Livonia/Dearborn MSA ranked No. 1 at a foreclosure rate of one filing for every 21 households, per the year-end report. A total of 40,219 foreclosures were filed over the course of 2006 in this metropolitan area.So how did San Antonio fare? It was ranked No. 12, with a foreclosure rate of one filing for every 37 households. A total of 14,754 filings were reported in the city over the course of 2006, according to the company.On the national level, more than 1.2 million foreclosure filings were reported nationwide over the course of 2006. That figure represents a 42 percent jump from the number of filings in 2005, and equates to a rate of one foreclosure filling for every 92 U.S. households, the report says.&amp;quot;A 42 percent, year-over-year increase is certainly noteworthy,&amp;quot; RealtyTrac CEO James J. Saccacio says.He attributes the 2006 foreclosure rate to the general slowdown in housing sales.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://milwaukee.bizjournals.com/austin/stories/2007/01/22/daily47.html'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Vacancy Rates:  "Housing may be poised for another downturn"]]></title>
		<link>http://www.housebubble.org/story.php?title=Vacancy-Rates-Housing-may-be-poised-another-downturn</link>
		<comments>http://www.housebubble.org/story.php?title=Vacancy-Rates-Housing-may-be-poised-another-downturn</comments>
		<pubDate>Mon, 05 Feb 2007 13:05:45 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Vacancy-Rates-Housing-may-be-poised-another-downturn</guid>
		<description><![CDATA[Reuters is reporting on a new statistic which spells trouble for housing prices: &amp;quot;A glut of vacant homes suggests that the U.S. housing market has not yet stabilized and may be poised for another downturn, Merrill Lynch said in a research note released on Monday.&amp;quot;Now that oil prices and mortgage rates have stopped falling, we will be back lamenting the downturn in the housing market and its spreading effects on the economy in the second quarter, much as we were in the summer and fall 2006,&amp;quot; Merrill Lynch economist David Rosenberg wrote.&amp;quot;Looking at the inventory backlog and still-stretched affordability levels, this story is far from over.&amp;quot;...That suggests a glut of almost 1 million homes sitting vacant, which will likely pressure selling prices for an extended period, Rosenberg said....&amp;quot;By itself, this would point to a fairly enormous supply overhang and little prospect of a bottom any time soon,&amp;quot; Hatzius wrote in a research note.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://today.reuters.com/news/articlebusiness.aspx?type=ousiv'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[A Mideast Housing Bubble?]]></title>
		<link>http://www.housebubble.org/story.php?title=Mideast-Housing-Bubble</link>
		<comments>http://www.housebubble.org/story.php?title=Mideast-Housing-Bubble</comments>
		<pubDate>Mon, 05 Feb 2007 12:50:40 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>international news</category>
		<guid>http://www.housebubble.org/story.php?title=Mideast-Housing-Bubble</guid>
		<description><![CDATA[MarketWatch has this unusual report on the housing bubble in the Middle East.  Scary to see how the bubble is as global as it is: &amp;quot; Cheap credit has fueled a construction boom in the Persian Gulf, but the supply of luxury buildings so mismatches the demand that eventually the real estate market will crash, dragging down the equity markets as well.That's the thesis of Gabriel Stein, analyst at U.K.-based Lombard Street Research.&amp;quot;Low interest rates are driving a credit boom, which primarily is then used to fuel stock prices and real estate speculation,&amp;quot; said Stein. &amp;quot;But the real estate sector is also strangely skewed.&amp;quot;In most of the Gulf Cooperation Council states - which include Kuwait, Saudi Arabia, Bahrain, Oman, Qatar and the United Arab Emirates -- there is substantial demand for low-cost affordable housing, but the majority of new construction is high-cost luxury residences, Stein said.&amp;quot;The big risk for the GCC regions - in addition to the vagaries of oil and natural gas prices - is therefore the likelihood of a real estate crash,&amp;quot; Stein said. &amp;quot;Because GCC pockets are deep, it may take longer to happen. And when it comes, it will be bad news for stock markets dominated by the finance and real estate/construction sectors.&amp;quot;The GCC stock markets have generally recovered from last year's crash, but the overheating of the real estate sector might spell fresh troubleA look at various indexes that track market performance in the region shows the clear downward trend of the last 12 months. ... &amp;quot;A lot of investors had woken up to equities,&amp;quot; Hollis said. &amp;quot;There was a day-trading frenzy like the one we saw in the West in the dotcom boom. Towards the beginning of 2006, you had some companies valued at 66 times their earnings.&amp;quot;Banks were providing easy credit to the retail market. And after the events of September 11, 2001, some private Middle Eastern funds moved billions of dollars in assets back to the Gulf region.The weakness on the GCC markets over the last year is also related to the structure of those markets, said Rochdi A. Younsi, an analyst at the Eurasia Group.The Royal families that reign in the Gulf countries have generally encouraged their subjects to participate in the stock markets in order to keep them busy and discourage them from making demands for democratization, Younsi said. As a result, many inexperienced traders have jumped into stock trading, losing a lot of money in the process.To complicate matters, investors in those countries often have little information about the companies they're investing in as disclosure requirements are nowhere near as advanced as they are in Western markets.&amp;quot;Throughout the Gulf region, you have traders trading in the stock market based on rumors, with very little information,&amp;quot; Younsi said. &amp;quot;The slightest rumor causes a lot of panic.&amp;quot; &amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.marketwatch.com/news/story/middle-east-markets-face-real/story.aspx?guid={0BB6A3DE-F47C-456B-B21E-52BF65F485DC}'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA["There's Going to be Blood in the Streets"]]></title>
		<link>http://www.housebubble.org/story.php?title=Theres-Going-to-be-Blood-in-Streets-1</link>
		<comments>http://www.housebubble.org/story.php?title=Theres-Going-to-be-Blood-in-Streets-1</comments>
		<pubDate>Mon, 05 Feb 2007 03:37:35 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Theres-Going-to-be-Blood-in-Streets-1</guid>
		<description><![CDATA[The North County Times has this grim news from the current state of the California real estate collapse: &amp;quot;In his 37 years in the mortgage business, Bert Morrison has never seen anything like it. The owner of Quality Funding Group in Rancho Bernardo said that scores of customers have come to his office wanting out of their adjustable-rate mortgages, called ARMs, and into a loan with more stable payments, such as a fixed-rate mortgage.Adjustable mortgages have interest rates that adjust periodically with current rates, so that monthly mortgage payments can rise and fall. They became increasingly popular in the early part of the decade, when interest rates were at record lows.Borrowers who took out adjustables before interest rates began to climb in mid-2004 are now feeling the squeeze.Consider a hypothetical North County home buyer, Karl, who purchased a $550,000 home in 2004, with 10 percent down and a $500,000 adjustable-rate mortgage. With an initial interest rate of 4 percent, his monthly payment was $2,387. But as rates marched upward, his mortgage interest rate has risen to 6 percent, or $2,998 per month, an increase of 25 percent.Karl, unfortunately, is not alone.The popularity of adjustable-rate mortgages has increased dramatically. In 2001, ARMs represented about 12 percent of all mortgages, according to national mortgage buyer Freddie Mac. But in 2004, the figure had risen to 33 percent. Last year, it dropped to 28 percent.In California, borrowers flocked to them. In 2005, roughly 60 percent of all the mortgages taken out in the state were ARMs, according to research from First American Real Estate Solutions, a real estate research company.That means that millions of homeowners are facing increased monthly mortgage payments.As much as $1.5 trillion in adjustable-rate loans nationwide could &amp;quot;reset,&amp;quot; or readjust, this year, according to the Mortgage Brokers Association in Washington, D.C. Of that figure, the association said as much as $800 billion will reset into higher payments. Other borrowers could sell or refinance.In San Diego County, borrowers took out 173,033 adjustable-rate loans worth more than $75 billion to buy or refinance their homes between 2004 and mid-2006, according to Christopher Cagan, director of research and analytics for First American Real Estate.Cagan's research has led him to paint a dire picture. Of the above loans, he said, 66,726 are at a risk of resetting to a monthly mortgage payment that the borrower can't afford. And almost half, or 30,209 loans, are at risk of default and foreclosure, costing lenders more than $5 billion.&amp;quot;A default occurs when a borrower falls behind in payments. A foreclosure is when the lender takes the property back from a borrower who has defaulted.&amp;quot;It takes months for people to get in trouble,&amp;quot; Cagan said. &amp;quot;It takes months or years for them to lose the house.&amp;quot;There's no telling how many borrowers will default. However, Morrison, from Quality Funding Group, said that the situation will likely get much worse before it gets better.&amp;quot;There is going to be a lot of blood in the streets,&amp;quot; he said. &amp;quot;You ain't seen nothing yet.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.nctimes.com/articles/2007/02/04/business/news/14_08_092_3_07.txt'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Mortgage Defaults Rise to Worst Level Since 2001]]></title>
		<link>http://www.housebubble.org/story.php?title=Mortgage-Defaults-Rise-to-Worst-Level-Since-2001</link>
		<comments>http://www.housebubble.org/story.php?title=Mortgage-Defaults-Rise-to-Worst-Level-Since-2001</comments>
		<pubDate>Fri, 02 Feb 2007 12:46:56 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>mortgages</category>
		<guid>http://www.housebubble.org/story.php?title=Mortgage-Defaults-Rise-to-Worst-Level-Since-2001</guid>
		<description><![CDATA[Bloomberg reports: &amp;quot;Defaults on mortgages to people with poor credit histories or large debt burdens rose in November above their worst levels during the last recession six years ago, according to Friedman Billings Ramsey Group Inc.The percentage of subprime mortgages packaged into bonds and delinquent by 90 days or more, in foreclosure or already turned into seized properties climbed to 10.09 percent from 9.08 percent in October, analysts led by Michael D. Youngblood at the Arlington, Virginia-based firm said in a report today. The default rate fell to 5.37 percent in May 2005 from 10.05 percent in November 2001, when economic growth resumed.Defaults on subprime loans have surged as rates on ones made in 2002, 2003 and 2004 adjust higher as their fixed-rate periods end following an increase in short-term interest rates from the lowest in 45 years. Subprime mortgages made in 2005 and 2006 are suffering from slumping home prices and looser lending standards.``These borrowers are very leveraged and have little skin in the game'' because they took out loans with small, or no, down payments and many of them haven't seen their properties appreciate, Debashish Chatterjee, an analyst at Moody's Investors Service in New York, said in an interview Jan. 26.Friedman Billings didn't say whether the default rate was the highest ever. Youngblood, who used data from San Francisco- based First American Corp.'s LoanPerformance unit, wasn't available for comment.U.S. economic growth rose to a 3.5 percent pace in the fourth quarter, the Commerce Department said Jan. 31. The economy shrank at a 1.4 percent annual rate in the third quarter of 2001, amid the terrorist attacks of Sept. 11 and stock-price declines, the biggest contraction since the first quarter of 1991. &amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.bloomberg.com/apps/news?pid=20601087'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Who's to Blame for Rampant Foreclosures?]]></title>
		<link>http://www.housebubble.org/story.php?title=Whos-to-Blame-Rampant-Foreclosures</link>
		<comments>http://www.housebubble.org/story.php?title=Whos-to-Blame-Rampant-Foreclosures</comments>
		<pubDate>Fri, 02 Feb 2007 09:32:02 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>foreclosures</category>
		<guid>http://www.housebubble.org/story.php?title=Whos-to-Blame-Rampant-Foreclosures</guid>
		<description><![CDATA[The Denver Post reports on local efforts to criminalize mortgage fraud:&amp;quot;Stricter enforcement of existing laws alone won't resolve the state's rising tide of foreclosures, according to testimony provided to state legislators Monday.&amp;quot;You will not eliminate our foreclosure problem in Colorado by eliminating mortgage fraud,&amp;quot; Colorado Attorney General John Suthers testified before a joint hearing of the House Business Affairs and Labor and the Senate Business, Labor and Technology committees.Legislators should consider implementing &amp;quot;suitability&amp;quot; rules for mortgage providers so they offer borrowers loans that are appropriate to their situation, Suthers advised.Stockbrokers and insurance agents already fall under such requirements. Suthers also encouraged simplifying the mortgage process, eliminating misleading mortgage ads and increasing homebuyer education.Democratic Rep. Rosemary Marshall and State Senate President Pro Tem Peter Groff are crafting legislation to address the state's high number of foreclosures.Suthers' office, meanwhile, is backing legislation that would make pressuring an appraiser or submitting a false appraisal a serious crime.The Denver metro area posted a record number of foreclosures in 2006. The Denver Post analyzed the foreclosure wave in a 10-part series, &amp;quot;Foreclosing on the American Dream.&amp;quot;Mortgage brokers said at Monday's hearing that consumers should shoulder their share of blame for foreclosures.Rising foreclosures reflect higher rates of homeownership and consumers' desire for instant gratification, argued Bill Kidwell, president-elect of the Colorado Association of Mortgage Brokers.&amp;quot;As we increase homeownership, we will increase the number of foreclosures,&amp;quot; he said.Many borrowers no longer wait until they save enough money for a down payment before buying a home, Kidwell said.Americans should be willing to accept a &amp;quot;baseline&amp;quot; rate of foreclosures, like the country is willing to accept a certain level of unemployment, he said.His recommendation: Create a blue-ribbon panel to study the foreclosure issue before crafting legislative remedies.Marshall conceded that solid data on the causes of foreclosure are hard to come by, but she said consumer complaints against mortgage providers are on the rise.&amp;quot;We have information that there is a lot of unscrupulous behavior in the business,&amp;quot; she said.Proving fraud is hard when consumers sign a foot-thick stack of documents they don't read, much less understand, consumer advocates testified.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.denverpost.com/headlines/ci_5064344'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA["There's a Monster Beneath the Surface of Financial Markets"]]></title>
		<link>http://www.housebubble.org/story.php?title=Theres-Monster-Beneath-Surface-Financial-Markets</link>
		<comments>http://www.housebubble.org/story.php?title=Theres-Monster-Beneath-Surface-Financial-Markets</comments>
		<pubDate>Thu, 01 Feb 2007 10:03:32 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Theres-Monster-Beneath-Surface-Financial-Markets</guid>
		<description><![CDATA[Bloomberg reports that tightening lending standards may contribute to the collapse of the housing markets: &amp;quot; ``As the Fed tries to tighten credit standards, some borrowers who planned to roll over a mortgage into a better product are going to get caught in the corridor and may end up in default,'' said Joseph Stiglitz, the 2001 Nobel laureate in economics who teaches at Columbia University in New York.Sub-prime mortgages, home loans with rates at least 2 or 3 percentage points above the safest, so-called prime loans, are given to people with poor or limited credit histories, or high debt burdens relative to their incomes. Such loans made up about a fifth of all new mortgages last year, according to the Mortgage Bankers Association in Washington.The pool of money available to borrowers like Jones who don't have the highest, or prime, credit ratings is shrinking as investors in mortgage-backed securities shy away from riskier sub-prime loans. More restrictive lending standards makes it more difficult for people to purchase houses, said Angelo Mozilo, chairman and chief executive officer of Calabasas, California- based Countrywide Financial Corp., the U.S.'s largest mortgage lender.`Chain Reaction'``If you get too restrictive on that, it could have a material effect not only on people's lives, but it's a chain reaction,'' Mozilo said in a Dec. 5 interview. ``If people can't buy the used home, then the people who are in that home can't buy a new one.''U.S. foreclosures begun on sub-prime adjustable-rate mortgages, or ARMs, rose to a four-year high of 2.19 percent in the third quarter as borrowers struggled to pay mortgage bills while interest rates increased, the Mortgage Bankers Association reported. During the five-year boom in housing prices, homeowners who fell behind on mortgage payments could sell their homes and pay off their loans or get better refinancing terms based on the higher value of their property. ... `Monster Beneath'Underwriting standards for sub-prime loans have been too low for at least a year, resulting in loans being issued to borrowers who have little chance of paying them back, Shaughnessy said. That will hurt the insurance companies, pension funds and asset- management firms that are holding some of the U.S.'s $6 trillion of mortgage-backed securities in their portfolios, he said.``There's a monster beneath the surface of the financial markets,'' Shaughnessy said. ``No one knows when or where the credit crisis is going to rear its ugly head.''Typical sub-prime loans have rates that are below the levels they will adjust to even if the Fed doesn't raise rates. The ability of the so-called teaser rate to rise quickly causes some consumer protection groups to call the loans ``exploding ARMs.'' ..The percentage of borrowers as of September who had fallen at least two months behind on sub-prime mortgages taken out last year was the highest ever, twice the average, according to data compiled by Zurich-based UBS AG. Credit-rating companies Standard &amp;amp; Poor's, Moody's Investors Service and Fitch Ratings have grown more skeptical about how the riskier loans will perform.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.bloomberg.com/apps/news?pid=20601103&amp;sid=aNoc4LFUSOKw&amp;refer=us'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[The Mother of All Bubbles]]></title>
		<link>http://www.housebubble.org/story.php?title=Mother-All-Bubbles-1</link>
		<comments>http://www.housebubble.org/story.php?title=Mother-All-Bubbles-1</comments>
		<pubDate>Wed, 31 Jan 2007 11:23:48 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>the economy</category>
		<guid>http://www.housebubble.org/story.php?title=Mother-All-Bubbles-1</guid>
		<description><![CDATA[The Atlantic Free Press has an excellent (and long) read on the macro-picture of the current bubble: &amp;quot;The hoopla over the &amp;quot;rise in new homes sales&amp;quot; ignores the &amp;quot;real&amp;quot;story which appears in many of the same articles; that is, &amp;quot;In 2006 existing home sales declined by 8.4%, the biggest drop in 17 years, and new homes sales fell by a whopping 17.3%, the largest in 16 years&amp;quot;. This is the real scoop although it is predictably hidden in the fine print. It signals the beginning of a long, downward spiral which will increase unemployment, shrink GDP, and send millions of homeowners into foreclosure and out onto the streets....Some of Wall Street's heavy-hitters know that trouble is brewing and are finally putting out the red flags. 2 weeks ago Goldman Sachs indicated that &amp;quot;the US Federal Reserve will need to slash rates 3 times this year as the housing slump goes from bad to worse and the American consumer begins to buckle&amp;quot;. (Ambrose Evans-Pritchard &amp;quot;US Housing Bust getting worse&amp;quot;)&amp;quot;We believe that housing will soon become the a€˜straw that breaks the camels back', said David Kostin, the investment bank's strategist. Goldman Sachs said homeowners had treated windfall gains from rising house prices as if they were a€˜recurring income' using home equity withdrawals to subsidize over-stretched lifestyles. This artificial boost to spending has already dropped from 7% to 4% of GDP over the last year, and is likely to halve again in 2007. Mortgage equity withdrawal will fall from 13% of a€˜discretionary household cash flow' in 2006 to 7% this year, causing spending power to contract for the first time since the dotcom bust&amp;quot;.Clearly, the wiz-kids at G-Sachs are not taken in by the 4.8% jump in new homes sales in December. They see the dark clouds forming on the horizon and are anticipating the approaching recession.The mainstream media are starting to be more forthright, too. CNN Money reported last week:&amp;quot;Americans continue having difficulties paying their mortgage obligations, with December foreclosure rates above the 100,000 mark for the 5th straight month. The number of homeowners entering some stage of foreclosure process in December was 109,000 a€¦up 35% from December 2005 according to Realty Trac&amp;quot;. It sounds grim, but the worst is yet to come.Jim Willie at the goldenjackass.com provided this bleak look at the current housing market:&amp;quot;Beazer Homes stuck a hot poker in the heart of the dimwitted optimists who believe the housing market has stabilized. Their spokesman said, a€˜We have yet to see any meaningful evidence of a sustained recovery in the housing market'. To back that statement up, they reported new orders were down 55% from a year ago, and their cancellations are running at a horrendous 43% rate. People might sign contracts based on hearing the media news, and cancel those same contracts on a contrast with reality checks. The Dec. existing homes sales came in at minus0.8%, the largest decline in 24 years dating back to 1982. The official data contained a contraction which went overlooked on the shallow voices on CNBC. The data claims that inventory levels fell by 7.9% at the same time that sales fell in a big way. Well, perhaps the inventory levels do not factor in the cancellations. (They do not) Bear in mind that 3 large homebuilders in recent weeks announced a collective $1.2 billion in land option losses. The pain has not nearly ended for housing.&amp;quot;The signs of a major economic downturn are everywhere for those who chose to look beyond the cheery predictions in the real estate section of the news.Next year, an estimated $1 trillion of ARMs (Adjustable Rate Mortgages) are due to &amp;quot;reset&amp;quot; which will cause stiff increases in monthly mortgage payments. We're bound to see a steady rise in defaults as well as a boost in new claims for personal bankruptcy.This downward cycle is just beginning. In 2006, a mere $300 billion in ARMs reset pushing overleveraged homeowners to the brink of insolvency. Imagine what will happen in 2007 when $1 trillion of these explosive loans comes due. And, of course, as more people are unable to hang on and their homes go into foreclosure; inventory will continue to skyrocket. Peter Schiff of europac.net summarized the situation this way:&amp;quot;The recent jump in bond rates suggests that things are about to get much worse for the housing market. Since January 5th interest rates have risen by over 30 basis points and gold has risen over $40 per ouncea€¦My guess is that rather than a bottom of the housing market, bond investors around the world are beginning to appreciate the inflationary implications of a real estate crisis. &amp;quot;..... full story at:http://www.atlatnticfreepress.com/content/view/848/81 &nbsp;&#187;&nbsp;<a href='http://www.atlanticfreepress.com/content/view/848/81/'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Massachusetts Foreclosures Soar]]></title>
		<link>http://www.housebubble.org/story.php?title=Massachusetts-Foreclosures-Soar-1</link>
		<comments>http://www.housebubble.org/story.php?title=Massachusetts-Foreclosures-Soar-1</comments>
		<pubDate>Wed, 31 Jan 2007 11:18:05 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>local news</category>
		<guid>http://www.housebubble.org/story.php?title=Massachusetts-Foreclosures-Soar-1</guid>
		<description><![CDATA[The Massachusetts &amp;quot;Republican&amp;quot; is a brief editorial which paints a bleak picture of the real estate market in New England: &amp;quot;Real estate is considered a somewhat reliable investment: homeowners expect to buy low and sell higher, but the equation isn't foolproof.Consider, for example, the fate of homeowners who are forced to sell a house purchased in the midst of a real estate boom that later went bust. They're faced with the predicament of having bought high - and being forced to sell for lower than the balance on their loan. It's a phenomenon that seems to occur every decade or so - and, for many Massachusetts homeowners, the time is now.Foreclosure petitions soared nearly 70 percent in the Bay State in 2006, capping the end of the worst year for the state's housing market in over a decade, according to figures compiled by The Warren Group, a Boston-based publisher of Banker &amp;amp; Tradesman and regional real estate data. And foreclosures are expected to climb again in 2007.Compared to the statewide increase in foreclosure petitions, the situation isn't quite as dire in Western Massachusetts. Foreclosure petitions in Hampshire County jumped 40.1 percent to 213 in 2006; petitions in Franklin County rose 52.4 percent to 192, while petitions rose 54.2 percent in Hampden County to 1,803. Still, nothing to write home about.With the median price of a single-family home increasing annually for 12 years, many people who were priced out of the market were enticed in with attractive loan offers including adjustable-rate and interest-only mortgages. Unfortunately, for many it was a ticket to a foreclosure auction. Hampshire County was the only county in the state where the number of foreclosures that actually went to auction declined in 2006, slipping 4.3 percent to 89, according to the report.Foreclosure auctions are bad news for everyone involved. The homeowner loses the house, the bank loses a customer and gets stuck with a property it doesn't want and the community loses a committed taxpayer.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.masslive.com/editorials/republican/index.ssf?/base/news-1/1170238242263820.xml'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Weakening Demand for Home Loans]]></title>
		<link>http://www.housebubble.org/story.php?title=Weakening-Demand-Home-Loans-1</link>
		<comments>http://www.housebubble.org/story.php?title=Weakening-Demand-Home-Loans-1</comments>
		<pubDate>Tue, 30 Jan 2007 14:06:02 MST</pubDate>
		<dc:creator>god</dc:creator>
		<category>the housing bubble</category>
		<guid>http://www.housebubble.org/story.php?title=Weakening-Demand-Home-Loans-1</guid>
		<description><![CDATA[The Wall Street Journal is reporting on the weakining demand for home loans which is hurting major mortage lenders and forcing massive layoffs: &amp;quot;Countrywide Financial Corp. said fourth-quarter net income fell 3% on slower loan volumes, and management at the largest U.S. mortgage lender expects to see continued profit pressure this year.The entire mortgage industry is feeling the pinch from slowing home sales, intensifying competition, rising delinquencies, and a persistent &amp;quot;inverted yield curve&amp;quot; -- in which short-term interest rates are higher than long-term ones, shrinking lenders' profit margins. Many large mortgage lenders, including those owned by banks such as Washington Mutual Inc. and the independent ones such as IndyMac Bancorp, recently also offered downbeat forecasts for 2007.The outlook from Countrywide likely will trigger more concerns about the financial health of the nation's homeowners, as many investors and analysts look to the Calabasas, Calif., company as the benchmark for the home-loan industry. Countrywide is &amp;quot;preparing for increased borrower delinquencies and continued credit deterioration,&amp;quot; Chairman and Chief Executive Angelo R. Mozilo said. Meanwhile, reiterating a statement he made in the third quarter, Mozilo said that &amp;quot;2007 will likely be the trough year of the current housing cycle and that 2008 should represent the beginning of upward trends associated with the next cycle.&amp;quot;...Countrywide officials said in October that the company would cut 2,500 jobs as part of its effort to realize annual cost savings of about $500 million. Weakening demand for home loans already has pushed many lenders, including Washington Mutual, to cut costs. Expenses increased 12% to $1.77 billion in the fourth quarter. &nbsp;&#187;&nbsp;<a href='http://online.wsj.com/article/SB117016917990792358.html?mod=googlenews_wsj'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Another Interest Rate Hike?]]></title>
		<link>http://www.housebubble.org/story.php?title=Another-Interest-Rate-Hike</link>
		<comments>http://www.housebubble.org/story.php?title=Another-Interest-Rate-Hike</comments>
		<pubDate>Mon, 29 Jan 2007 11:05:37 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>the economy</category>
		<guid>http://www.housebubble.org/story.php?title=Another-Interest-Rate-Hike</guid>
		<description><![CDATA[The Federal Reserve thinks the economy is doing just fine, and is considering another rate increase according to CBS News:&amp;quot;The Federal Reserve is meeting again this week, and fed watchers are not expecting another rate cut. In fact, some say a rate hike would not be a surprise. One of those who are thinking along those lines is Ray Hennessey, editor of SmartMoney.com.The Federal Reserve is currently faced with an economy that hasn't slowed down, which may force them to raise interest rates. That comes into play if you're trying to buy or sell your home. Hennessey believes the Federal Reserve has misread the housing market. &amp;quot;They've overestimated the impact of the housing slow-down,&amp;quot; says Hennessey. &amp;quot;It wasn't this bubble bursting... And it hasn't been catastrophic.&amp;quot; Because the change wasn't as dramatic as the Federal Reserve assumed it would be, the economy is still doing well.Another reason for a possible rate hike? Employment is still very tight, according to Hennessey. &amp;quot;What you want for a slowing economy is a higher unemployment. We still have... Near full employment,&amp;quot; he says. It works out well for those of us who are part of the work force, but it can be a hindrance for the Federal Reserve if they're trying to keep the economy in check.A rate increase would affect investors as well. &amp;quot;You want to be able to borrow money at a cheap rate so you can then reinvest in your business,&amp;quot; says Hennessey. &amp;quot;Markets like a lower interest rate environment.&amp;quot;Higher inflation is also a worry. According to Hennessey, &amp;quot;Prices are still going up even as energy costs have come down.&amp;quot; In Hennessey's opinion, the Federal Reserve has misread inflation rates the most.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.cbsnews.com/stories/2007/01/29/hennessey/main2406212.shtml'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Keeping Tabs on David Lereah]]></title>
		<link>http://www.housebubble.org/story.php?title=Keeping-Tabs-on-David-Lereah</link>
		<comments>http://www.housebubble.org/story.php?title=Keeping-Tabs-on-David-Lereah</comments>
		<pubDate>Mon, 29 Jan 2007 00:39:25 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>lies, lies, lies</category>
		<guid>http://www.housebubble.org/story.php?title=Keeping-Tabs-on-David-Lereah</guid>
		<description><![CDATA[MarketWatch has this very amusing account of the Bagdad Bob of Real Estate: &amp;quot;There are two universal truths at the National Association of Realtors: 1) It's always a good time to buy or sell a home; and 2) We've seen the worst of the housing market correction.The second truth was in the script used throughout 2006 by David Lereah, chief economist for the NAR, even as sales plunged by 8.4%, the fastest decline in 17 years. See full story.With annual sales of 6.48 million, 2006 was the third best ever, but after five years of steady increases, it was a rough year for the industry. Through it all, Lereah never stopped smiling.At the beginning of 2006, Lereah was projecting home sales would fall about 4.4% to 6.79 million. In the end, however, the decline was about double what he'd projected. For 2007, Lereah is currently projecting a decline of about 0.9% to 6.42 million.Here's what Lereah was saying throughout 2006 and into 2007, and what the market was doing.January 2006Lereah's forecast: &amp;quot;The market is in the process of normalization.&amp;quot;Actual sales: Fourth-quarter sales fell at an annual rate of 12.6% to 6.94 million annualized.Lereah's post-mortem: &amp;quot;The level of home sales activity is now at a sustainable level, and is likely to pick up a bit in the months ahead.&amp;quot;April 2006Lereah's forecast: &amp;quot;Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau.&amp;quot;Actual sales: First-quarter sales fell at an annual rate of 8.6% to 6.79 million.Lereah's post-mortem: &amp;quot;This is additional evidence that we're experiencing a soft landing.&amp;quot;July 2006Lereah's forecast: &amp;quot;The market should even out just below present levels.&amp;quot;Actual sales: Second-quarter sales fell at an annual rate of 6% to 6.69 million.Lereah's post-mortem: &amp;quot;The market is stabilizing.&amp;quot;October 2006Lereah's forecast: &amp;quot;We expect sales activity to pick up early next year.&amp;quot;Actual sales: Third-quarter sales fell at an annual rate of 22.2% to 6.28 million. &amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.marketwatch.com/news/story/commentary-realtors-economist-stayed-sunny/story.aspx?guid={EBC34E29-49EE-4925-A69A-52807DBE0C1E}'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA["Customers miss mortgage payments in record numbers"]]></title>
		<link>http://www.housebubble.org/story.php?title=Customers-miss-mortgage-payments-in-record-numbers</link>
		<comments>http://www.housebubble.org/story.php?title=Customers-miss-mortgage-payments-in-record-numbers</comments>
		<pubDate>Sun, 28 Jan 2007 15:07:15 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>foreclosures</category>
		<guid>http://www.housebubble.org/story.php?title=Customers-miss-mortgage-payments-in-record-numbers</guid>
		<description><![CDATA[Many of Orange County's boldest lenders are struggling to stay in the black - and in some cases to stay in business - as their customers miss mortgage payments in record numbers.These lenders, experts say, exercised poor judgment in a bid to maintain loan volume last year. They lent money to borrowers with spotty credit, known as the subprime market, without proper regard to their ability to repay, experts say.&amp;quot;What's become clear is a whole bunch of people signed up for loans or were sold a loan they really couldn't afford,&amp;quot; said Richard Eckert, an analyst with Roth Capital Partners in Newport Beach.Sluggish home prices, rising interest rates and lax underwriting spurred defaults on subprime loans made just last year to the highest level in six years.Perhaps most troubling, loans made by Orange County companies in 2006 were among the quickest to see defaults, data show.And many of those subprime companies - which tend to cluster here in Orange County - are in trouble.H&amp;amp;R Block's Option One in Irvine is up for sale. So is Ameriquest Mortgage in Orange. ECC Capital of Irvine is selling its loan-making operations to New York's Bear Stearns Cos., although the sale has been delayed.UBS Investment Bank, the London-based unit of Switzerland's largest bank, UBS AG, analyzed subprime mortgages made in 2006 and found that borrowers were missing payments on loans made that same year at the highest rate since 2000.In fact, UBS found subprime loans made in 2006 are on track to be the worst-performing loans ever issued.Brea-based Fremont Investment &amp;amp; Loan, a unit of Santa Monica's Fremont General Corp.,topped UBS' list of poor performing loans. By late last year, 7.26 percent of Fremont's subprime loans made that same year were 60 days or more delinquent.Argent, a unit of ACC Capital in Orange, which also owns Ameriquest, scored high on the list with a delinquency rate of 5.86 percent.Option One landed closer to the middle with a 4.54 percent delinquency rate, and Irvine's New Century Financial Corp. had a 4.33 percent default rate.So what went wrong, exactly?Lenders made two mistakes, according to UBS and other analysts.They didn't scrutinize borrowers' incomes, and they allowed subprime borrowers, who by definition have had past problems with their credit, to take on lots of risk.Borrowers took advantage of &amp;quot;stated income&amp;quot; loan programs, where they simply tell lenders what they earn, said David Liu, director of UBS' mortgage strategy group.And many first-time homebuyers made a small down payment or none at all. Often they took out simultaneous second mortgages to avoid paying mortgage insurance.Borrowers gambled on rising home prices to bail them out of trouble, analysts said. Consumers thought home prices would keep climbing, which would enable them to sell or refinance if they got into a jam, analysts said. &nbsp;&#187;&nbsp;<a href='http://www.ocregister.com/ocregister/money/homepage/article_1556536.php'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Wall Street Afraid of Mortgage Defaults]]></title>
		<link>http://www.housebubble.org/story.php?title=Wall-Street-Afraid-Mortgage-Defaults-1</link>
		<comments>http://www.housebubble.org/story.php?title=Wall-Street-Afraid-Mortgage-Defaults-1</comments>
		<pubDate>Sun, 28 Jan 2007 12:13:00 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>mortgages</category>
		<guid>http://www.housebubble.org/story.php?title=Wall-Street-Afraid-Mortgage-Defaults-1</guid>
		<description><![CDATA[The Wall Street Journal (subscription required) reports &amp;quot;The bond market is signaling heightened fears about the ability of America's more financially stretched borrowers to keep up their mortgage payments.The weak U.S. housing market has cut the value of some homes to below the amount the owners owe on their mortgages, making them prone to default. The risk is showing up in the subprime-mortgage market, which serves borrowers with the worst credit histories. Default rates in this market are rising. Meanwhile, hopes that the Federal Reserve would cut interest rates soon, easing pressure on borrowers, have faded in recent days.Wall Street's worry about mortgage defaults is showing up in a set of indexes called ABX-HE, administered by Markit Group Ltd. These indexes track the cost of using financial contracts known as credit default swaps to buy insurance against defaults on securities backed by subprime mortgages....[the] decline signals that sellers of these insurance contracts are demanding larger payments to compensate for what they see as a higher risk of mortgage defaults, which would reduce the value of mortgage securities.The turmoil is notable because credit markets otherwise look stable. Treasury bond yields remain low and capital is abundant for corporate borrowers.Mark Adelson, head of structured-finance research at Nomura Securities International Inc. in New York, said the market is &amp;quot;worried about the potential of an approaching storm.&amp;quot; He said weak home-sales numbers reported Thursday were one immediate cause of the latest downward lurch in the ABX indexes....Hedge funds are believed to have been among the big buyers of this protection, a way of betting that defaults will increase.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://online.wsj.com/article/SB116982724866589094.html?mod=hpp_us_at_glance_most_pop'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Los Angeles' Economy Cannot Survive High Home Prices]]></title>
		<link>http://www.housebubble.org/story.php?title=Los-Angeles-Economy-Cannot-Survive-High-Home-Prices</link>
		<comments>http://www.housebubble.org/story.php?title=Los-Angeles-Economy-Cannot-Survive-High-Home-Prices</comments>
		<pubDate>Sun, 28 Jan 2007 11:19:25 MST</pubDate>
		<dc:creator>Asder</dc:creator>
		<category>local news</category>
		<guid>http://www.housebubble.org/story.php?title=Los-Angeles-Economy-Cannot-Survive-High-Home-Prices</guid>
		<description><![CDATA[THe Los Angeles Times reports &amp;quot;FOR THE LAST five years, speculators, big developers and homeowners have gorged on Los Angeles real estate. The huge run-up in prices - more than 135% from 2001 to 2006 - has greatly increased the spending power of property owners. Yet there has been a worrisome consequence: Working and middle-class families are moving out - and failing to move in - because they cannot afford a house here. Long term, that's not good for the local economy. As perverse as it sounds, what L.A. needs now is a real estate bust.Recent history is illustrative here. The big and rapid declines in property values in the early 1990s, after the last real estate bubble popped, helped open the door to homeownership for a new generation, many of them immigrants. New owners of delinquent or moribund commercial properties, especially downtown, fueled a spike in business activity, much of it stemming from immigrant and minority entrepreneurship.This time, the L.A. real estate bubble is more likely to deflate gradually than burst. Unlike in the early 1990s, the local economy is not tanking. Since 2000, job creation and income growth have kept pace with the national averages. But home prices have clearly shot up faster than the economy would justify. They have surged 20% higher here than in such economically booming cities as Las Vegas, Phoenix and Reno. L.A. housing costs have risen twice as high as in Portland, Ore., and Seattle and four times as high as in Dallas, Houston and Atlanta.The biggest losers have been middle-class families looking to buy a house in greater L.A.. By last year, less than 15% of L.A. families could afford to buy a median-priced home of about $500,000 - compared with about 50% for home buyers in the rest of the country. Not surprisingly, this has accelerated the movement of working and middle-class families to more affordable regions.One indication of middle-class flight is the rate at which people with bachelor's degrees and higher are leaving Los Angeles. According to the most recent community survey from the U.S. census, such people are moving out at a higher rate than in the late 1990s. From 1995 to 2000, for instance, a net 28,000 people with bachelor's degrees and higher moved out of Los Angeles and Orange counties. In 2004-05, the rate of exodus was almost twice as high....But high-end buyers and elite workers alone cannot sustain large-scale economies. Most companies require a broad range of workers, from highly skilled tradespeople to technicians and middle managers. These are the workers, especially if they live elsewhere or don't own a home here, whom executives frequently complain are difficult to recruit or retain in Southern California.When executives find their employees cannot afford houses in an area, they often move their companies to where they can. Nissan and Countrywide, for instance, have announced plans to shift operations or expand in less-expensive areas.Until the last few years, the Inland Empire offered a viable alternative for workers seeking to buy a home and executives looking to build a workforce. In the early 2000s, the area enjoyed steady growth in such higher-wage sectors as business and professional services, averaging about 5% annually. More upwardly mobile families were moving in than out. By contrast, growth in these high-wage sectors was barely 1% in more expensive Los Angeles and Orange counties combined.By 2005, however, rising home prices in the Inland Empire threatened even this middle-class bastion. Since then, prices have begun to drop and home inventories to swell, two positive developments that may make the region more affordable for middle- and working-class home buyers....A real estate bust or severe price correction could also rescue L.A.'s inner-city revival, including downtown. Contrary to the hype of the condo market, a new study from the Research Institute for Housing America shows that only a small percentage of baby boomers are moving back to the city. Many more either stay in the suburbs or move farther into the hinterland. These were the people, along with foreign buyers and speculators, who were supposed to be the bulk of buyers in the high-end urban condo market.This helps explain why between 10 to 14 condo developments downtown - and similar projects in other cities - have been mothballed or downsized. Yet here too, the bad news may prove to be good news. Lower condo prices might renew the attraction of the inner city for those - singles, young childless couples and artists - who started the back-to-downtown movement.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.latimes.com/news/printedition/opinion/la-op-kotkin28jan28,1,3730157.story?coll=la-news-comment'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA["It's Going to Get Bloody Down Here"]]></title>
		<link>http://www.housebubble.org/story.php?title=Its-Going-to-Get-Bloody-Down-Here</link>
		<comments>http://www.housebubble.org/story.php?title=Its-Going-to-Get-Bloody-Down-Here</comments>
		<pubDate>Sat, 27 Jan 2007 11:55:07 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>local news</category>
		<guid>http://www.housebubble.org/story.php?title=Its-Going-to-Get-Bloody-Down-Here</guid>
		<description><![CDATA[The Wall Street Journal Reports: &amp;quot;Amid a continuing glut of homes for sale in most of the country, buyers should have plenty of choices and lots of bargaining power in the spring selling season - typically the busiest time of the year.Many builders and real-estate brokers, for their part, hope the housing market will start recovering this year as buyers respond to price cuts and other sweeteners offered by increasingly nervous sellers. In some markets, agents say, buyer traffic has picked up in the last month or two.But any recovery is likely to be gradual. Donald Tomnitz, chief executive officer of D.R. Horton Inc., a home builder, told investors this week that the market, which began slumping in 2005, may bottom out by mid-2007, but that &amp;quot;we don't see any rapid improvement thereafter.&amp;quot;advertisement 	Given all that, sellers should expect buyers to take their time and be tougher negotiators. David Lee, who recently moved to Wenham, Mass., to take up a post as an associate professor of physics at Gordon College, has rented a home for his family and says they plan to be &amp;quot;quite picky and choosy&amp;quot; as they look for a home to buy. Dr. Lee doesn't feel any pressure to decide quickly because he figures prices won't rise in the near term and could fall further.A quarterly survey of housing conditions in 28 major metropolitan areas by the Wall Street Journal showed that the inventory of unsold homes at the end of 2006 was up substantially in nearly all of the markets from the already plentiful level of a year earlier. The biggest increases were in the metro areas of Miami-Fort Lauderdale, Orlando, Tampa and Jacksonville, Fla.; Phoenix; and Portland, Ore. (Unlike the other cities, Portland had a lean supply of homes a year before.)...In Miami-Dade, the number of existing condos on the market is enough to last 27 months at the current sales rate, says Jack McCabe, a real-estate consultant in Deerfield Beach, Fla. The oversupply will grow, he says, as about 8,000 condos are expected to be completed this year and 12,000 in 2008.&amp;quot;It's going to get bloody down here,&amp;quot; Mr. McCabe says. He estimates that condo prices in Miami-Dade fell between 8 percent and 10 percent last year and will drop 20 percent in 2007. Eventually, he predicts, hedge funds and other investors will step in to buy surplus condos in bulk at huge discounts.In California's San Diego County, developers have more than 10,000 condos available for sale in new buildings, projects under construction or properties being converted from rentals, says Peter Dennehy, a senior vice president at Sullivan Group Real Estate Advisors, a consulting firm based there. He says that supply is enough to last more than 20 months at the current sales rate. That number excludes several thousand condos being offered for resale by speculators and others.Mr. Dennehy estimates that condo prices have fallen at least 15 percent to 20 percent in the county over the past year, though it's hard to measure price changes because sellers often give incentives such as free upgrades or help with closing costs that aren't reflected in the price.In the Boston area, lower-priced homes in blue-chip neighborhoods are moving pretty quickly. But ones that are overpriced or located on main streets are languishing, says Sam Schneiderman, broker-owner of Greater Boston Home Team. &amp;quot;It's got to be a really good deal,&amp;quot; he says. &amp;quot;An OK deal doesn't quite cut it. Buyers are holding out.&amp;quot;The glut in inventories is likely to increase in some markets as sellers try to take advantage of what they hope will be a stronger selling season. Some sellers pulled their homes off the market late last year, intending to relist them in the spring.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.azcentral.com/news/articles/0125wsj-housing-glut25-ON.html'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Mortgage defaults in Ventura County Soar 204 percent]]></title>
		<link>http://www.housebubble.org/story.php?title=Mortgage-defaults-in-Ventura-County-Soar-204-percent</link>
		<comments>http://www.housebubble.org/story.php?title=Mortgage-defaults-in-Ventura-County-Soar-204-percent</comments>
		<pubDate>Fri, 26 Jan 2007 14:39:55 MST</pubDate>
		<dc:creator>elliotw</dc:creator>
		<category>local news</category>
		<guid>http://www.housebubble.org/story.php?title=Mortgage-defaults-in-Ventura-County-Soar-204-percent</guid>
		<description><![CDATA[The Ventura County Star reports that: &amp;quot;Mortgage defaults in Ventura County soared 204.2 percent on an annual basis in the fourth quarter of 2006, shooting past a historical average to the highest level in eight years.Serving as the first step in a lengthy process toward foreclosure, notices of default were issued to 794 homeowners in the October-December period, up from 261 the previous year, according to DataQuick Information Systems.	Similar increases were reported this week in nearly all regions surveyed in California, with the overall leap listed at 145.3 percent.In all, 37,273 default notices were sent to homeowners statewide, up from 15,196 in the fourth quarter of 2005.Still, the majority of people do not lose their homes. About 32 percent of homeowners statewide - most of whom took out loans from January 2005 to February 2006 - lost their homes to foreclosure in the fourth quarter. The most susceptible people were identified as homeowners in Merced, Riverside and Tulare counties.Andrew LePage, a spokesman for DataQuick, described the market as &amp;quot;climbing back to normal.&amp;quot;Ventura County's fourth-quarter defaults were the highest since it hit 923 in the first quarter of 1998, but well off the record 1,286 in the second quarter of 1996.The average quarterly total over the past 14 years is 684, indicating the previous year's mark of 261 was unusually low, LePage said Wednesday.&amp;quot;It may be simply that lenders are sending out notices with a lot more zeal because of the weak real estate climate,&amp;quot; said Mark Schniepp, who tracks real estate through the California Economic Forecast Project in Goleta.&amp;quot;It's slightly surprising they ran up this fast,&amp;quot; he said, but added that &amp;quot;we don't see intended problems.&amp;quot; ...Another kink that has added to the rise of defaults are the rise in &amp;quot;inventive&amp;quot; loans made over the last few years, said Marshall Prentice, president of DataQuick.&amp;quot;We're in the midst of an adjusting market right now,&amp;quot; he said, &amp;quot;and we won't know until spring or summer if this is ominous or not.&amp;quot;&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.venturacountystar.com/vcs/business/article/0,1375,VCS_128_5302982,00.html'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[Wall Street Sours on Risky Mortgages]]></title>
		<link>http://www.housebubble.org/story.php?title=Wall-Street-Sours-on-Risky-Mortgages-1</link>
		<comments>http://www.housebubble.org/story.php?title=Wall-Street-Sours-on-Risky-Mortgages-1</comments>
		<pubDate>Fri, 26 Jan 2007 09:46:13 MST</pubDate>
		<dc:creator>chippy</dc:creator>
		<category>mortgages</category>
		<guid>http://www.housebubble.org/story.php?title=Wall-Street-Sours-on-Risky-Mortgages-1</guid>
		<description><![CDATA[The New York Times reports that &amp;quot;Wall Street's big bet on risky mortgages may be souring a lot faster than had been previously thought.The once booming market for home loans to people with weak credit - known as subprime mortgages and made largely to minorities, the poor and first-time buyers stretching to afford a home - is coming under greater pressure. The evidence can be seen in rising default rates, increasingly strained finances at mortgage lenders and growing doubts among investors....Across the industry, 2.6 percent of the subprime loans securitized in the second quarter of 2006 had been foreclosed on or repossessed within six months. That is up from 1 percent for loans securitized in the second quarter of 2005, according to Moody's Investors Service, the ratings agency.Joseph Rocco, an analyst with Moody's, noted that foreclosure rates typically rise as loans get older.The grim statistics reflect the sharp slowdown in housing. Home prices, for instance, in many previously hot markets on the coasts and in the Southwest, are falling as sales have slackened, making it harder for homeowners to sell their properties.They also indicate that mortgage lenders became more generous last year, giving 100 percent financing and allowing borrowers to state their incomes with little or no documentation in an effort to bolster volume, according to industry experts.&amp;quot;Now, Wall Street firms, which had helped fuel the growth in the market by bankrolling and investing in subprime mortgage lenders, have begun to pinch off the money spigot.Several mortgage lenders have recently collapsed. While the failures so far are small in number, some industry officials are concerned that they could be the first in a wave. The subprime sector, which produced loans worth more than $500 billion in the first nine months of last year, could shrink significantly.A sharp contraction in subprime mortgages would have ripple effects, reducing consumers' access to credit and affecting investors like foreign central banks, pensions and mutual funds that have been big buyers of mortgage-backed securities.The recent bankruptcy of Ownit Mortgage Solutions, a lender based in Agoura Hills, Calif., provides a cautionary tale. Even as its revenue grew by more than a third in the first nine months of 2006, to $8.3 billion, the company was losing money. It shut down after its financial backers, which included Merrill Lynch &amp;amp; Company and JPMorgan Chase, could not come up with a deal to save it.In addition to Ownit, Sebring Capital Partners, based outside Dallas, closed in December, and Mortgage Lenders Network of Middletown, Conn., has stopped making loans through brokers. It also laid off more than 800 employees and is under investigation by state regulators.&amp;quot;Pick a company - small, medium or large - they all have the same problem: capital,&amp;quot; said Marc A. Geredes, who runs a small mortgage company, LownHome Financial, in San Jose, Calif. &amp;quot;The economics of the business do not make sense right now.&amp;quot;Wall Street firms were attracted to such lenders because they helped feed a pipeline of securities backed by the mortgages, a market bigger than the one for United States Treasury bonds and notes. Merrill Lynch, for example, securitized $67.8 billion in residential mortgages in the first nine months of 2006, up 58.4 percent from the period a year earlier.But an increasing number of borrowers are defaulting on subprime loans earlier now than they did a year ago, often within six months of having taken the loan out, shaking Wall Street's confidence in its subprime partners.In one indication that investors are losing their taste for mortgages, hedge funds that specialize in mortgage-backed securities had an outflow of $1.8 billion in 2006, down from an inflow of $1.8 billion in 2005, according to Hedge Fund Research. It was the only category of hedge funds to have a negative flow for the year. &nbsp;&#187;&nbsp;<a href='http://www.nytimes.com/2007/01/26/business/26mortgage.html?_r=2'>original news</a>]]></description>
	</item>

	<item>
		<title><![CDATA[California Mortgage Defaults Spike]]></title>
		<link>http://www.housebubble.org/story.php?title=California-Mortgage-Defaults-Spike</link>
		<comments>http://www.housebubble.org/story.php?title=California-Mortgage-Defaults-Spike</comments>
		<pubDate>Thu, 25 Jan 2007 16:31:23 MST</pubDate>
		<dc:creator>god</dc:creator>
		<category>foreclosures</category>
		<guid>http://www.housebubble.org/story.php?title=California-Mortgage-Defaults-Spike</guid>
		<description><![CDATA[The Santa Cruz Sentinal reports: &amp;quot;Mortgage defaults in Santa Cruz County jumped 36 percent last year, part of a statewide trend coinciding with a slowdown in sales and lagging home appreciation.Last year, 452 default notices were sent to homeowners, compared to 333 in 2005. In neighboring Monterey County, default notices have doubled.&amp;quot;It's crazy out there,&amp;quot; said Liese Varenkamp, publisher of the Santa Cruz Record, who supplied the data Wednesday. Her weekly publication tracks housing statistics.The notices serve as an early indicator of possible foreclosures. When home appreciation slows, it makes it harder for homeowners who fall behind on their mortgage payments to sell their homes.The number of foreclosure sales also is up, Varenkamp said, noting 151 sales in 2006 compared to 39 in 2005. Those figures include Santa Cruz and Monterey counties; she did not have a breakdown by county.Other statistics indicate more shakeout in the housing market.In the first two weeks of the new year, 16 foreclosures have already taken place, up from two last year.&amp;quot;Look at that difference,&amp;quot; Varenkamp said, adding the 80 percent of the homes go back to the bank that made the loan.It appears the trend is continuing.This year, 29 default notices have been mailed to Santa Cruz County homeowners compared to 20 at this time last year.The San Diego-based DataQuick Information Systems said Wednesday that default notices statewide more than doubled on an annual basis in the last quarter of 2006. Most of the troubled loans were taken out by homeowners within the last two years, the firm said.The 37,273 default notices mailed between October and December was up 145 percent compared to 15,196 in the same period in 2005. The number of defaults last quarter marked a 37 percent increase compared to the third quarter of 2006, and was the highest for any quarter since the third quarter of 1998, the firm said.&amp;quot; &nbsp;&#187;&nbsp;<a href='http://www.santacruzsentinel.com/archive/2007/January/25/biz/stories/01biz.htm'>original news</a>]]></description>
	</item>

</channel>
</rss>
