Housing - Feb 17
Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Another high-risk lender goes under
B Keoun & J Shenn, Bloomberg
NEW YORK -- ResMAE Mortgage Corp., a U.S. home lender to people with bad credit, filed for bankruptcy protection and said Switzerland's Credit Suisse Group agreed to buy most of its assets for $19.1-million (U.S.).
"The subprime mortgage market has recently been crippled," ResMAE said in its Chapter 11 filing yesterday. The company didn't have enough reserves to cope with an "enormous" surge in loan defaults, it said.
Closely held ResMAE is at least the 20th mortgage company to be sold or closed as delinquencies rise and the market for home loans to risky borrowers contracts at the fastest pace ever, according to a Bloomberg tally of company announcements. Credit Suisse rivals Merrill Lynch & Co. Inc., Morgan Stanley and Barclays PLC are swooping in, buying home lenders to produce more revenue from packaging the loans into bonds. ..
(14 Feb 2007)
Contributor CP writes: These events were forecast with remarkable precision by a number of writers and observers frequently cited in EB. In my books, their credibility regarding the aftermath of peak oil has just gone up a notch.
Housing Sales Drop in 40 States
M Crutsinger and N Metzler, Associated Press
The slump in housing deepened in the final three months of last year with sales falling in 40 states and median home prices dropping in nearly half the metropolitan areas surveyed. Formerly red-hot areas were among the hardest hit as the five-year housing boom cooled considerably in 2006.
While some economists said they believed the worst may be over for housing, others predicted more price declines to come until near- record levels of unsold homes are reduced.
.. Mark Zandi, chief economist for Moody's, predicted that home prices in many parts of the country would continue to be under pressure for the rest of this year as the market works through still large inventories of unsold homes.
He said this process will be made more difficult with banks raising lending standards because of concerns about rising mortgage default rates.
"The price declines we are seeing are extraordinarily broad-based and just symbolize how significant a price correction we are in," Zandi said.
"We are seeing the declines concentrated in the industrial Midwest, where the job market is a mess due to the layoffs in the auto industry, and in markets such as Florida and California" where a heavy influx of speculators had bid up prices, Zandi said.
(15 Feb 2007)
Australian dream just a recession away
B Schneiders and R Millar, The Age (Aus)
recession, not more land, would be the quickest way to ease Australia's housing affordability crisis.
With apologies to former prime minister Paul Keating, it is a recession Australia's battlers may need if they are to get back in the race for the increasingly elusive Australian dream.
Economists from both the ANZ and Macquarie Bank this week rejected claims by Prime Minister John Howard and international researchers Demographia that state attempts to slow urban sprawl in capital cities were to blame for record low housing affordability.
They say a decade of low interest rates is the main reason affordability is as bad now in Melbourne as it was in the early 1990s when rates hit 17 per cent. Other factors fuelling demand were cuts to capital gains tax in 1999 and strong levels of immigration over the past decade.
Research by Macquarie Bank interest rate strategist Rory Robertson, a former Reserve Bank staff member, has found that poor housing affordability was largely the result of heightened demand, not a lack of land. ..
(17 Feb 2007)
What do you think? Leave a comment below.
Sign up for regular Resilience bulletins direct to your email.
This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.