It's Going to be Hard to Get a Mortgage

HARTFORD, Conn. (AP) -- Homeowners with troubled credit histories are finding it harder to get mortgages or refinance homes because softening in the housing market is making lenders less likely to handle riskier loans.

Several lenders of subprime mortgages - used primarily for home equity loans and for people with spotty credit - have shown signs of trouble after the housing bubble popped and more homeowners began defaulting high-interest mortgages.

On Wednesday, shares of Kansas City, Mo.-based Novastar Financial Inc. plunged more than 42 percent to $10.10 per share after the subprime lender posted fourth quarter losses of $14.4 million. Company officials set aside $45 million in anticipation of defaulting mortgages and said they were unsure Novastar would turn a profit in the next five years.

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Bubble Info Here

Since my blogging has been slow lately, it probably worth taking a look at the Seeking Alpha Website for relevant housing bubble commentary. Here is the link to Seeking Alpha


"Judy Weil submits: Here's our summary of articles and data points on the housing market. It's part of Seeking Alpha's coverage of the real estate market and homebuilder stocks. Like all other topics and stock coverage from Seeking Alpha, you can get this sent to your Blackberry or desktop email by signing up for our no-spam free email subscription service."

No More Credit; No More Price Gains

"America's riskiest mortgages are set to pop. Where will the shrapnel land?"

The Economist

"LAST March, ResMAE, a mortgage lender catering to risky borrowers, cut the ribbon on its new headquarters in Brea, California. The sprawling, 135,000-square-foot building dwarfed the company's 458 local employees. But it fitted the firm's outsized ambitions. Less than a year later the company, rather than its ribbon, was facing the chop. This week it said it had filed for bankruptcy and was selling its assets for a diminutive $19m."

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Housing Construction Plunges

WASHINGTON — Housing construction plunged to the lowest level in nearly a decade last month as the housing industry continued to struggle with a severe slowdown.

Meanwhile, wholesale prices dropped by 0.6 percent in January, the biggest amount in three months, providing fresh evidence that inflation pressures are easing.

Construction of new homes and apartments plunged by 14.3 percent in January, pushing total activity down to a seasonally adjusted annual rate of 1.408 million units, the Commerce Department reported Friday. Construction starts were up only in the Northeast, a gain of 8.9 percent.

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3928 Houses on the MLS

Inventories are probably going to hit the 4000 mark in a week or two. Anecdotally, it sounds like houses are moving faster now than they were a few months ago. I would attribute this to sellers finally lowering their prices. I've seen some meaningful price reductions since the start of the year and I'm getting more "price change" notifications in my e-mail.

Too Many Banks

This article is only marginally real estate related, however, it brings up some good points. The article points out the proliferation of bank branches in many downtown areas of NJ. I've noticed this is Red Bank, Chatham, Hoboken, and other "downtown" areas in the state. While I believe banks have the right to put branches anywhere they want in commercial areas, it is frustrating to see them drive out businesses that people actually come downtown to visit. What's the point of having a downtown shopping district if the only things to shop for is mortgages or CD rates?

"To stand at Fort Lee's Main and Schlosser streets is to be in the middle of a gold rush.

Banks from near and far have flocked to that corner in recent years for a share of northern New Jersey's wealth of deposits. One can turn around in a circle and spot branches of national banks, such as Bank of America Corp. and J.P. Morgan Chase, regional players North Fork Bank and 1st Constitution and local start-ups that include Bank of New Jersey and North Jersey Community Bank."

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More Sub Prime Problems

Feb. 8 (Bloomberg) -- 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.

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It's Not Over Yet

WASHINGTON — Housing is proving to be one of the biggest wild cards in the economy in 2007 as analysts are deeply divided about whether the worst in the downturn is over or there is much more pain to go.

Only 9% of economists say the housing decline ended in 2006, according to a USA TODAY survey of 55 economists taken Jan. 18-24. Another 42% said the downturn will end in the first half of the year, and 45% said housing will bottom out in the second half.

"This is one of those hot-button issues," says Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi. He estimates the downturn ended last year. "I don't know why people are so pessimistic."

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"Spring Thaw"

"It's the dead of winter -- a slower-than-slow time in the real estate world.

But a recent open house in the tony hamlet of Short Hills drew so many people that even the listing agent, Howard Bunn of Keller Williams Realty in Summit, was left scratching his head.

"I've never seen this many people at an open house ever, and I've been doing this for 10 years," he said.

The house, a vacant, five-bedroom fixer-upper built in 1923, was listed at $999,000. An elderly couple that lived there for decades had died within one year of each other. Sitting on a half acre of land, the colonial needed a complete makeover of the slate roof, the kitchen, bathrooms and a paint job. And it needs a homeowner with a lot of spare cash and patience.

Still, surrounded by $1.6 million dollar homes, house hunters were all thinking the same thing: Bargain.

The next day, the house received 11 offers -- all but one of them at list price or higher, Bunn said."

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"Average increase in value for setting taxes was 209 percent"

LONG BRANCH — City property owners this week finished receiving their new assessments, all of which are increasing as a result of the city's "vibrant" real estate market, said an official who oversaw the municipal property review.

"Long Branch did very well in the last few years with the redevelopment," said Neil Rubenstein, manager of Realty Appraisal Co., which last year received a $300,000 contract to reassess city properties. "The real estate market is vibrant."

But maybe Long Branch did a little too well. Mayor Adam Schneider said he is in the process of researching what authority he has to revisit the company's findings, noting some assessments have tripled or quadrupled.

Although the average increase was 209 percent, many property owners in the Elberon section saw their assessments triple, said Schneider, who lives in that section.

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