Implode-Explode Heavy Industries news feed

Foreclosures Plunge to Five-Year Low in U.S. Recovery: Mortgages

Thu, 17 May 2012 12:59:02 GMT

Foreclosure filings in the U.S. fell to a five-year low last month as lenders sought to avoid seizing property and a housing recovery showed signs of taking hold.
The number of default, auction and seizure notices sent to homeowners in April totaled 188,780, down 14 percent from a year earlier and 5 percent from the previous month, according to RealtyTrac Inc. It was the lowest tally since July 2007, before the onset of the biggest housing crash in seven decades, the Irvine, California-based data seller said today in a report.

The Better Business Bureau, the State Bar, Loan Mods & Lawyers in California

Thu, 17 May 2012 12:55:46 GMT

And, at this point in the foreclosure crisis, the fact that I can say that about the chances of a homeowner getting ripped off by a scammer, or wrongfully made homeless by a servicer, is both an unthinkable tragedy and a shameful testament to the failure of our state and federal regulators to protect homeowners from predatory servicers and unscrupulous operators of various foreclosure avoidance schemes.

JPMorgan's Trading Loss Is Said to Rise at Least 50%

Thu, 17 May 2012 12:53:38 GMT

When Jamie Dimon, JPMorgan's chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan's distress, fueling faster deterioration in the underlying credit market positions held by the bank.

Housing and Mortgages Fueled by Euro Zone Troubles

Wed, 16 May 2012 23:11:54 GMT

Once again, Europe is making global headlines as Greeks, uncertain of the future, are withdrawing their money from banks. After the talks to form a coalition government fell apart and a new vote was set for June, there is increased fear that Greece will exit the European Union and its common currency. These events are having a positive affect on U.S. housing and mortgages which are being fueled by Euro zone troubles.

The National Association of Realtors Quarterly Housing Affordability Index showed that for the first time the index has climbed above 200 since 1970 when record keeping began. The index hit 205.9 with the first time home buyers index at a record 135.8%. The purchasing power of a household is measured by median home price, median family income and the average mortgage rates. While market conditions are favorable for home buyers, good credit is still necessary to obtain a mortgage. As mortgage rates have continued to fall, single family home starts were also up 2.3% in April according to the Commerce Department and the Department of Housing and Urban Development. Although this is a small percentage and does not represent what would be considered a healthy housing market, it is definitely a start in the right direction. The National Association of Builders reported that the Housing Market Index, which measures home builder confidence based on potential buyer traffic and sales, rose 5 points and hit its highest reading since April 2007.

As mortgage rates continue to fall, mortgage application activity increased especially with mortgage refinances. For the week ending May 11th, mortgage refinance activity rose 13.0% from the previous week and represented 74.9% of all applications. While government refinances were only 4%, conventional mortgage refinances were up 14%. Right now, most FHA borrowers are waiting for the updated FHA streamline refinance with no cash out which goes into effect June 11th. This program will be offering lower upfront and annual mortgage insurance premiums to existing FHA borrowers who have loans that were endorsed prior to June 1, 2009. The increase in conventional mortgage applications often happens whenever mortgage rates decrease. In many cases, a slight decrease in mortgage rates can make a borrower eligible for approval because a lower rate will reduce the corresponding debt to income ratios to an acceptable level.

HARP refinance applications fell to 28% after being just above 30 percent in April. Many borrowers are still not aware that they do not need to use their original lender or servicer in order to refinance with HARP. In many cases, those who have not received an approval from their lender go on to be approved by another lender. While many borrowers know of and understand the details of HARP, there are many more who are not even aware of its existence. Since this program was expanded for underwater borrowers, it will continue through 2013 so that everyone can be reached and given the opportunity to refinance to lower mortgage rates. Continuing efforts are being made to get the word out to homeowners giving them the opportunity to submit online inquiries for HARP without too much effort or information. This has become a very successful means for borrowers to receive what they are looking for, as well as an approval.

Europe's financial problems may continue to be an ongoing event not only with Greece, but also with Spain, Italy, Portugal and other countries that are part of the Euro zone. Just in case, the Federal Reserve policy makers suggested that they are ready to further stimulate the U.S. economy if growth stalls or other risks or threats increase, which was stated at the central bank's April 24/25 meeting. In the meantime, while Europe struggles through their problems, investors tend to reduce their risk which will keep mortgage rates low or even push them lower. At the same time, energy prices have fallen giving consumers more money to spend in other areas of the economy including housing. All of these event will help keep mortgage rates down and the housing market moving, even if at a slow pace.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.

Chart(s) Of The Day: Follow Where The Money Was, Is, And Will (Not) Be

Wed, 16 May 2012 19:58:52 GMT

``So summing up - Where has the cash come from? Central Banks. Where has it gone? Bank reserves and non-financial corporate balance sheet 'war-chests'. Where is it going? Nowhere into the real economy.''

Young Americans delay purchase of homes

Wed, 16 May 2012 19:35:14 GMT

First-time buyers, usually between the ages of 25 and 34, are an important source of incremental housing demand, as they are at the start of a chain of housing transactions. The reduction in demand for "starter homes" has left existing homeowners who want to move on to bigger, more expensive properties in a bind as the pool of people willing to buy their homes has shrunk.
...
Many, like Andrea and James, have moved back home. Almost 6m Americans between 25 and 34 lived with their parents in 2011, up from 4.7m when the recession began in 2007, the Census Bureau said.

Brad Doremus, senior analyst at Reis, the commercial real estate research group, said first-time buyers are particularly hurt by tighter mortgage requirements that are even harder to meet with growing student debt burdens.
...

Roshell Schenck, 28, from Erie, Pennsylvania, has a PhD in pharmacy and earns $125,000 a year -- but yet she is unable to own a home.

"Between undergraduate and doctorate schooling and interest, I now have approximately $120,000 in loans," she said. "Although I make a very good salary, there is no government help for housing programmes because of the amount of money I make and there is no one willing to give me a loan because of the amount of student loan debt I have."

Wells Fargo gives $22,000 to Suicide Hotline... A gift the bank can use too

Wed, 16 May 2012 18:46:06 GMT

``I'm going to remember Wells Fargo's $22,000 gift to establish a suicide hotline forever, and I hope that not only will you remember it too, but that you'll also keep forwarding the story of Norm Rousseau to others for years to come, so they can remember what happened too. Because although I only spoke to Norm for an hour or so... I know for sure that wherever you believe he is right now, he'll smile through eternity if his battle and his death produced that kind of result.''

Soros, PIMCO, Paulson, Texas Teacher Retirement Fund Buy Gold in Q1 | ZeroHedge

Wed, 16 May 2012 16:11:39 GMT

Will this get as much coverage as every time Soros has sold gold? Doubtful.

Prudent money with an understanding of gold's long term diversification benefits continues to accumulate gold as seen in the latest SEC filings.

Billionaire investor George Soros significantly increased his shares in the SPDR Gold Trust in the first quarter. Soros Fund Management nearly quadrupled its investment in the largest exchange-traded gold fund (GLD) to 319,550 shares - compared with 85,450 shares at the end of the fourth quarter.

John Paulson maintained his large stake, the ETF's largest stake and other large and respected institutional buyers were PIMCO and the Teacher Retirement System of Texas.

If the Feds Won't Stop the TSA, the States Should

Wed, 16 May 2012 16:07:30 GMT

``If we truly want to end TSA tyranny, it will have to come down to the states... The Tenth Amendment Center wrote model legislation called the Travel Freedom Act that protects the rights and dignity of the people. Contact your lawmakers and urge them to file this legislation. Then work to get it passed in your state. If one state takes the lead, others will follow. And if enough states simply say, "No! We will not permit this." The policies will change.''

JPM Chase Chairman, Jamie Dimon, the Whale Man, and Glass-Steagall - Thoughts - Nomi Prins

Wed, 16 May 2012 16:06:18 GMT

It's more than ironic, that JPM Chase, the bank still entangled with MF Global customer money, took the same bet, albeit with different credits and is trying to pawn it off as an ‘egregious' mistake, a blip on the radar of an otherwise pristinely risk-managed bank. It's also supremely annoying that Dimon is right about something, that the Volcker Rule wouldn't necessarily apply to this ‘hedge.' There's nothing particularly wrong with the Volcker Rule; it will mitigate some fraction of risk, though given the SEC and Fed's inability to understand what risk is, it's unlikely they'll take the mental leap to segment trades as mitigating it, or not. Yet, the Volcker Rule will not change one fundamental pillar of global systemic risk -- as long as banks are not segregated ala Glass Steagall along deposit-taking / loan-making vs. speculation lines, they will have access to capital to burn. And burn it they will.

Herman Cain, Now No Longer A Contender, Calls For Gold Standard

Wed, 16 May 2012 16:04:20 GMT

Quite a change of tack from defending Fed secrecy while he was running -- `` Call for a return to the gold standard, and "the Washington establishment goes ballistic," writes Herman Cain in the Wall Street Journal. "Gold is kryptonite to big-spending politicians," because a return to the gold standard would mean the government could no longer manipulate the economy, Cain argues. In order to grow economically, the country needs "low tax rates and sound money." Cain, not surprisingly, thinks his 9-9-9 tax plan addresses the first ingredient, while the gold standard addresses the second. It's not perfect, but it's the best alternative we have to fix the economy.''

Obama: Head Over Heels for Jamie Dimon and JP Morgan Chase

Wed, 16 May 2012 16:00:43 GMT

Now that Obama's financial disclosure forms show that he has a "JPMorgan Chase Private Client Asset Management" checking account with a million bucks in it, maybe a few of the star-struck lefties will look for a fearless leader who isn't connected to Wall Street.
I said maybe.

New U.S. Housing Construction in April Exceeds Forecasts

Wed, 16 May 2012 14:45:31 GMT

Starts rose 2.6 percent to a 717,000 annual rate from March's revised 699,000 pace that was stronger than previously reported, Commerce Department figures showed today in Washington. The median estimate of 80 economists surveyed by Bloomberg News called for a rise to 685,000. Building permits, a proxy for future construction, fell from a more than three-year hig

Foreclosure Victims Make Surprising Return To Homeownership

Wed, 16 May 2012 14:44:39 GMT

Data is not available, but interviews with more than 30 lenders, builders, Realtors and consumers suggest that a growing number of Americans are getting back into the housing market, even though they went through a foreclosure, bankruptcy or short sale in recent years.

Mortgage Principal Reductions Weighed for Fannie, Freddie

Wed, 16 May 2012 14:43:04 GMT

The conservator of Fannie Mae (FNMA) and Freddie Mac may let servicers forgive debt on a limited number of mortgages owned or guaranteed by the taxpayer-owned companies, according to a person with direct knowledge of the discussions.
The model could be a new California effort that will pay for writedowns using federal dollars set aside for regions that have seen the worst housing-market declines, the person said. Because the government will bear the full costs of the California program, mortgages backed by the two government- sponsored enterprises will be eligible for the first time.

Accidentally Released - and Incredibly Embarrassing - Documents Show How Goldman et al Engaged in 'Naked Short Selling'

Wed, 16 May 2012 14:41:47 GMT

The lawyers for Goldman and Bank of America/Merrill Lynch have been involved in a legal battle for some time -- primarily with the retail giant Overstock.com, but also with Rolling Stone, the Economist, Bloomberg, and the New York Times. The banks have been fighting us to keep sealed certain documents that surfaced in the discovery process of an ultimately unsuccessful lawsuit filed by Overstock against the banks.
Last week, in response to an Overstock.com motion to unseal certain documents, the banks' lawyers, apparently accidentally, filed an unredacted version of Overstock's motion as an exhibit in their declaration of opposition to that motion. In doing so, they inadvertently entered into the public record a sort of greatest-hits selection of the very material they've been fighting for years to keep sealed.

Needy States Use Housing Aid Cash to Plug Budgets

Wed, 16 May 2012 14:20:57 GMT

Hundreds of millions of dollars meant to provide a little relief to the nation's struggling homeowners is being diverted to plug state budget gaps.

"What Scares Me Isn't $2 Billion Loss JP Morgan Made, What Scares Me is the Record $19 Billion in Profits"

Wed, 16 May 2012 14:15:51 GMT

Bhide takes issue with Dimon's description of the funds that the Chief Investment Office (part of the bank's treasury function) as "deposits" but rather as market funds. He also contends that no one can be running a major risk-taking trading operation along with a huge, sprawling international bank. A major trading operation requires that senior management be on top of position risks, and the organizational and operational demands of running a super big bank make that impossible. Finally, he argues that the risks JPM and other banks are taking are much greater than is commonly recognized, and JP Morgan's profit level in the face of unfavorable conditions for financial firm is proof of unduly high risk levels.

Real Deal on Retail- Even Worse Than They Said

Wed, 16 May 2012 14:07:56 GMT

An underlying "situation," which no one was talking about, was that the market had to settle $35 billion in net new Treasury paper today. That sucked cash out of the accounts of Primary Dealers and others who had bought that paper. The Fed was probably quickly funding that, if it hadn't already greased the skids to counter the Greece skid. The Fed normally settles all of its monthly forward MBS purchases, usually around $30 billion worth, with the Primary Dealers around mid month. It may have sent the cash out on Monday for this round, as suggested by Monday's big drop in Treasury yields.
Source: Wall Street Examiner (http://s.tt/1bVP2)

Greece Heads For The Euro Exit: Seven And A Half Things To Know

Wed, 16 May 2012 14:00:33 GMT

Greeks Walk, Don't Run, From Banks: It's not exactly a panic or a full-blown bank run yet, but it looks like Greece is starting to speed-walk away from its banks -- and maybe the euro.
Greeks pulled nearly $900 million out of their banks on Monday and seemed to be withdrawing money at a similar pace on Tuesday