Banks and lenders are easing back on lending, putting more drag on the economy, according to The Wall Street Journal.
The decline in lending follows lenders uncertainty about rising health-care costs, fear of another economic downturn and a brutal winter in the Midwest that delayed new investment, the article says.
The Federal Housing Administration will likely need a $943 million taxpayer bailout in the next fiscal year to cover losses stemming from defaults on loans made both during and after the housing boom, according to a 2014 budget proposal released by the Obama administration today.
If required, the bailout would be the first in the federal agency’s 79-year history. The FHA has been hard-hit by defaults from housing bubble-era loans made from 2005 through 2008, with future losses estimated at $70 billion for loans made in 2007, 2008 and 2009 alone.
The agency has until Sept. 30 to decide whether it will need a cash subsidy from the U.S. Treasury. FHA Commissioner Carol Galante said the agency still might be able to avoid taking the bailout, Reuters reported.
“FHA, while still under stress from legacy loans, has made significant progress and is on a sound fiscal path forward,” Galante said.
In its last annual report, released in November, the U.S. Department of Housing and Urban Development (HUD), of which FHA is a part, reported a $16.3 billion deficit for the agency, raising the specter of a taxpayer bailout. Since then, the agency has taken several steps to bolster its capital reserves, including tightening underwriting standards, raising insurance premiums, and shuttering FHA’s standard reverse mortgage program.
In testifying today before the U.S. House Financial Services Subcommittee on Insurance, Housing and Community Opportunity, National Association of Realtors President Gary Thomas applauded the FHA for taking steps to improve its financial stability.
The process of deciding whether to refinance a mortgage in order to lower costs involves four steps:
- Step one: Select the preferred type of new mortgage.
- Step two: Find the best available price on that mortgage.
- Step three: Determine whether the cost of the new mortgage will be lower than the cost of retaining the current mortgage.
- Step four: Find a way to prevent being overcharged after committing to the transaction.
Because borrowers navigating these steps must access multiple sources of information, many of which are unreliable if not biased, it is hardly surprising that many bad decisions are made.
The most important of the bad decisions are those not to refinance by many who would profit from doing so. I have written about this several times, most recently in “4 refinance myths debunked.” Among those who do refinance, the most common mistakes are in selecting the wrong type of new mortgage and then overpaying for it.
Common approaches to step one: Borrowers usually select the type of new mortgage they prefer from among the multiple versions of fixed- and adjustable-rate products that are available, before the refinance process begins; for example, they decide they want to replace their current 30-year fixed-rate mortgage (FRM) with another 30-year FRM. This means that their selection ignores price relationships between the different mortgage types. Sometimes this approach makes sense, but all too often it doesn’t.
Continuing an encouraging trend, the number of Bay Area homes that wound up in foreclosure and were sold as a result fell in December, according to report Tuesday by a company that tracks the trend.
The decline, which mirrored the situation statewide, reflects the growing governmental pressure on banks to forgo foreclosure in favor of loan modifications or other less painful remedies for homeowners who are behind on their payments, some experts said. But advocates for those finding it tough to keep up with their mortgage obligations say many homeowners remain in deep financial trouble.
“It’s good that the foreclosure rate is down,” said Kevin Stein, associate director of the California Reinvestment Coalition, which monitors nonprofit groups that counsel people at risk of losing their homes. But he cautioned that, “by no means are we done with foreclosures that are severely impacting families and neighborhoods.”
Stein added that he has continued to hear reports of struggling homeowners being shuttled from one bank official to another, and being shoved by banks into foreclosure even as they seek a loan modification. Both practices are outlawed under the California Homeowner Bill of Rights, which took effect on Jan. 1.
Notices of default — the first step in the foreclosure process — were down 17 percent overall from November in four East Bay and Silicon Valley counties, falling from 1,237 to 1,025, according to ForeclosureRadar.
AdvertisementThe rate dropped about 3 percent in Contra Costa County, 10 percent in Santa Clara County, 14 percent in Alameda County and 62 percent in San Mateo County.
Sales of foreclosed homes in those four counties to third parties or to banks decreased nearly 12 percent from 582 in November to 515 in December. The number dropped from 102 to 96 in Santa Clara County, 53 to 47 in San Mateo County, 177 to 152 in Alameda County and 250 to 220 in Contra Costa County.
Madeline Schnapp,
ForeclosureRadar’s director of economic research, said the continuing plunge in the foreclosure rate reflects more than a dozen laws or related programs that are intended to delay or eliminate the likelihood of someone losing their home.
“It’s been great for homeowners,” she said. But she added that “there are two million homeowners in California that are still under water,” meaning they owe more on their houses than the residences are worth, adding that those people remain “trapped in a prison of debt.”
Schnapp said the number of foreclosed homes sold to third parties has increased in recent months as more investors — including hedge funds — have found it profitably to buy such properties. Looking ahead, she predicted the foreclosure rate would continue to decline and eventually return to what it had been before the housing market collapsed in 2008.
“We think you’ll probably get back to normal, if nothing happens to disrupt the recovery, in probably another two to three years,” she said.
Bedford Hills NY 2012 sales drop 3.8% – Prices fall 12% | RobReportBlog
Bedford Hills NY Sales 2012 2011 25 Sales 26 3.80% DOWN $565,000.00 Median Price $642,500.00 12.00% DOWN $263,000.00 Low Price $291,500.00 $3,995,000.00 High Price $6,250,000.00 3176 Ave. Size 3464 $288.00 Ave. Price/foot $333.00 186 Ave. DOM 176 92.68% Ave. Sold/Ask 93.47% $1,083,327.00 Ave. Sold Price $1,250,932.00
Happy 2013! If 2012 was any indication on where online video is going, then 2013 is set to be a major year again for several parts of the industry. As we watch it unfold it’s always nice to see what’s going on in areas that we don’t quite cover here at ReelSEO, including, daily news.
It was both a short week and a fairly quiet one with the holiday and the tech industry practically holding its breath waiting for CES next week. So hang in there for now. Next week we’ll see what the TV makers will be pushing this year. I have to believe it will be a lot of connected TV and multi-device options.
Washington Post Political Video Channel In Works
The Washington Post is set to offer around 30 hours of online video for a dedicated political channel by summer 2013.
Source: Washington Post
Sony Looking to Become Virtual MSO Provider?
Variety reports that Sony is set to create its own multichannel TV service, which would most likely send content to its line of Bravia TVs and Playstation consoles most likely.
“The Japanese conglomerate is in active negotiations with at least two major content companies about licensing their channels for a package that could roll out in the U.S. later this year, according to sources.”
YouTube Expanding Content Beaming to More Devices and Players
We all know Google and Apple have been going at it on a variety of fronts with the latest being remote playback of content, or beaming content from one device to another.
YouTube’s take on AirPlay allows users to browse videos with the YouTube Android app for phones and tablets, and then initiate playback on the TV screen with the click of a single button. Device discovery is facilitated automatically as long as the devices are in the same network. Previous iterations of YouTube second-screen control functionality required users to first manually pair their devices.
Source: GigaOm
Rovi Selling VOD Venture
Rovi has announced that it will sell its CinemaNow, which powers Best Buy, but will retain the rights to the DivX codec.
In announcing the decision, Rovi president and CEO Tom Carson said the company is aligning “primarily around delivering enabling solutions for our service provider customers and using those efforts to also generate growth with our consumer electronics and other customers.”
Source: Multichannel News
Samsung Upgrading Smart TVs
A new year, a new CES, an upgraded Smart TV from Samsung. It makes sense.
The company’s Evolution Kit, announced a year ago, attaches into the back of select 2012 Samsung Smart TV models. The module provides additional processing and memory to provide faster Internet browsing speeds, enhanced voice and motion controls, and app multitasking while watching TV, according to Samsung.
Source: Multichannel News
Intel Stumbles on its Virtual MSO Service
With so many trying to get into the game, is it any surprise they’re having content licensing issues as well as hardware?
One person familiar with Intel’s thinking on Monday predicted the company would launch its offering by mid-2013. Another person said a service might not arrive until as late as the fourth quarter, citing delays in reaching content-licensing agreements with entertainment companies that own major TV channels.
Source: WSJ
