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September 30, 2007

Borrower woes and hidden housing discounts

The New York Times, in a story focused primarily on Countrywide Financial Corp., reports today that borrowers in trouble aren't getting much help from their lenders -- despite the common wisdom that mortgage companies want to avoid the costs of foreclosing if at all possible:
Lenders, government officials and loan servicers, who take in borrowers’ monthly mortgage payments, contend that troubled borrowers everywhere are being helped to stay in their homes by those overseeing their loans. But neither data nor anecdotal evidence supports this view. A recent survey of 16 top subprime loan servicers by Moody’s Investors Service found that for the first six months of 2007, an average of only 1 percent of loans experiencing an interest rate adjustment, or reset, had been modified.


I have a story today about the ripple effect of all the incentives -- such as thousands in closing-cost help -- that sellers are offering to buyers:
These discounts are so widespread that some economists think that prices in the Baltimore area -- up about 2 percent so far this year, according to official numbers -- have really declined. "They've probably been falling since late last year or early this year," said Mark Zandi, chief economist at Moody's

That's because a seller giveback doesn't affect the reported contract price of a home. If the buyer paid $300,000 but got $10,000 of his closing costs covered by the seller, that doesn't show up in the records as a $290,000 deal.

I've been mentioning the incentive trend in stories for a while, but it finally felt like the time to do a story about the broader economic impact. As one Baltimore seller said in the article, "Everyone is offering incentives."

Posted by Jamie Smith Hopkins at 7:01 AM | | Comments (0)

September 28, 2007

American Home Mortgage ... again

I thought it was over, I really did, but there's more news on the situation that started when American Home Mortgage Investment Corp. bounced some checks meant for homeowners' property taxes. (In the last episode, the lender said about 500 checks were "dishonored" because of a bank error. In the second to last episode -- pre-blog -- it sent certified checks to local jurisdictions to make good.)

Today, Sarah Bloom Raskin, Maryland's commissioner of financial regulation, told me the number of checks the lender bounced in the state was 564. That would suggest the problem was here only. (The company did not return a Sun call seeking answers.)

Bloom Raskin said the lender, which filed for bankruptcy in August, told her the account used for the payments was mistakenly frozen by a bank and has since been unfrozen. But she said she counted 36 checks for properties in Baltimore County and Prince George's County that still needed to be made good, at least as of Wednesday. Baltimore County said today that AHM already replaced all the bounced checks with certified funds.

Property taxes are due Sept. 30.

The other jurisdictions originally affected, according to Bloom Raskin: Baltimore City, the town of Bel Air, Frederick County, the city of Hagerstown, Queen Anne's County, Washington County and Wicomico County.

Bloom Raskin said the state would continue to investigate. "This is not an example where customers are to blame," she said.

Posted by Jamie Smith Hopkins at 5:28 PM | | Comments (0)

Housing wonk humor

Mark Gilbert of Bloomberg has a hilarious -- for wonks -- list of ways Chuck Norris (of "Walker, Texas Ranger" fame) interacts with the financial markets.

Chuck Norris jokes, which cast him as the most powerful and merciless being on earth, tend to go, say: "Chuck Norris has two speeds. Walk and kill."

Gilbert's housing-related additions include: "Chuck Norris doesn't target inflation. He roundhouse-kicks it until it begs for mercy."

And: "The tears of Chuck Norris would supply enough liquidity to solve the credit crisis. Too bad he never cries."

And let's not forget: "Chuck Norris subprime collateralized debt obligations still trade at 100 percent of face value."

Thanks to InmanBlog for pointing it out. There's just too few jokes involving collateralized debt obligations, I've always said.

Posted by Jamie Smith Hopkins at 2:13 PM | | Comments (0)
Categories: Housing humor

Searching for foreclosure homes?

The Maryland Attorney General’s Office and the owner of several Annapolis-based websites have reached a settlement after the agency accused him of not delivering on a promise of free searches for foreclosure properties, the state said today.

The press release lists the various websites and details of the settlement, which includes $150,000 in penalties and fees.

Posted by Jamie Smith Hopkins at 2:04 PM | | Comments (0)
Categories: Foreclosure help

Home sales over the years

Out of professional interest and innate curiosity, I pulled home sales numbers from Metropolitan Regional Information Systems Inc. to see how the first half of this year stacks up with history. (History being a relative term: MRIS, which runs the multiple listing service, has data for the Baltimore metro area only back to March 1999.)

You can really see why sellers are feeling the pinch.

Here's one of the graphs I worked up:


But perhaps even more telling is what happened to the unsold home numbers.

Listings of homes in the Baltimore metro area soared:


And here's one last graph. (Well, not the last ever, just for the moment.) This puts the two together to show the number of unsold homes for every home sale in an average month.



I'm using the MRIS definition of the Baltimore area, by the way. That's Anne Arundel County, Baltimore City, Baltimore County, Carroll County, Harford County and Howard County.

Not enough stats for you? You can look at the numbers directly at MRIS


Posted by Jamie Smith Hopkins at 1:06 PM | | Comments (0)
Categories: Number-crunching

September 27, 2007

Downward ho

New home sales in August plummeted 21 percent nationwide from a year earlier, the Commerce Department estimated today. That's a seven-year low, though it might be somewhat better or much worse because the estimated drop has a heck of a margin of error: plus or minus 9 percent.

Average prices for single-family homes fell 8 percent  the biggest drop since August 1990.

But The Washington Post reports today that Montgomery County prices zoomed the opposite direction in the first quarter of the year, topping $1 million on median price. (Yes, that means half the new homes are even more expensive.)

Posted by Jamie Smith Hopkins at 12:04 PM | | Comments (0)
Categories: Number-crunching

Going, going ...

Check out Stephen Kiehl's story today about the fate of the city's $59 million affordable housing fund. This is what he found:

An affordable housing fund that was created two years ago to provide homes for the poor and the working class in Baltimore is instead being used to demolish old public housing units before there are firm plans to replace them.

The Housing Authority of Baltimore City is using a "significant majority" of the $59 million fund to tear down 15 public housing sites across the city, said Housing Commissioner Paul T. Graziano.

Posted by Jamie Smith Hopkins at 11:58 AM | | Comments (0)

September 26, 2007

News round-up

Maryland's jobs picture looked better than expected last month in the face of national economic and housing turmoil. (Economists warn that some of the good performance could be more about statistics than reality, though.) Here's a snippet from my story today:

The jobless rate fell to 3.7 percent, from 4 percent in July, the U.S. Labor Department said yesterday. That's significantly lower than the national rate, which remained at 4.6 percent last month.

Employment grew last month by about 3,300 jobs, according to preliminary estimates adjusted for seasonal variations. Nationally, employers cut 4,000 jobs - the first drop in four years, when the country was still suffering from the effects of the 2001 recession.

Meanwhile, the AP reports about the Senate Committee on Banking, Housing and Urban Affairs grilling executives from the major credit-rating agencies:

The biggest rating agencies — Standard & Poor's, Moody's Investors Service and Fitch Ratings — are under fire from critics who say they failed to give investors adequate warning of the risks associated with mortgage-backed securities. Those securities are now plummeting in value as home-loan defaults soar, particularly among "subprime" borrowers with weak credit histories.

Democratic and Republican senators said they are particularly concerned with a key aspect of the agencies' business models: they get paid by the companies whose bonds they rate.

Posted by Jamie Smith Hopkins at 7:53 PM | | Comments (0)

September 25, 2007

National gloom and doom

Two depressing information dumps today: The National Association of Realtors reported that U.S. home sales in August dropped to their lowest level in five years, while the S&P/Case-Shiller index which tracks repeat sales of single-family homes found sizable price losses in major metro areas in July.

The NAR numbers also showed the months' supply of unsold homes rising to its highest level in 18 years.

The Case-Shiller index doesn't track Baltimore, but it does include the Washington metro area. Prices there dropped about 7 percent in July compared with the same month last year, according to the index. Overall, prices in the 20 metro areas Case-Shiller follows fell nearly 4 percent, with the worst drops in Detroit, Tampa and San Diego.

Posted by Jamie Smith Hopkins at 7:01 PM | | Comments (0)
Categories: Number-crunching

American Home Mortgage speaks!

If you've been paying close attention (and at least two of you have, because I've heard from you), then you know that American Home Mortgage Investment Corp. has had a little problem with some checks it wrote for homeowners' property taxes. Specifically, they bounced.

The company didn't say where, but at least several dozen Maryland homeowners were affected. Last week, American Home Mortgage sent certified checks to Baltimore City, Baltimore County and Frederick County to take care of the problem. But neither the jurisdictions nor The Sun could get the company  which filed for bankruptcy in August  to explain what had happened.

Today, the lender released a statement that blamed it on bank error. (Scroll to the bottom of the press release for the information.)

Here's a quote: "In early August, due to confusion on the part of an outside financial institution regarding accounts affected by the American Home bankruptcy, approximately 500 property tax checks were mistakenly dishonored. This misunderstanding has been corrected."

Posted by Jamie Smith Hopkins at 6:25 PM | | Comments (0)

In Which I Confess I am a Wonk

I’m interested in the housing market. That’s a safe confession, right? Who isn’t, nowadays? But I admit that I’ve been interested before it was quite so obviously interesting — before the slump, before the boom, back in the days when things seemed more or less normal and hardly worth talking about at parties.

OK, I’m a wonk, but I swear there is method to my wonkishness. Buying a home, selling a home, choosing a place to rent: These are major life decisions. They tell us about ourselves and our community. What are we buying? What are we trying to sell? Where are we moving and why? That’s always worth looking into.

The housing market also happens to be a not insignificant part of the local and national economy, as the housing downturn has made clear.

So: Herein you’ll find information about the Baltimore metro area housing market, plus other news that affects us. Stay tuned.

Posted by Jamie Smith Hopkins at 4:11 PM | | Comments (0)
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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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