Sunday, February 25, 2007

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.

Full article...

25 Comments:

Anonymous Anonymous said...

You mean lenders are staring to actually exercise judgment and put some thought into the process? Wow, what a far cry from the "pick a card, any card" system of the past few years.

Sunday, February 25, 2007 3:57:00 PM  
Anonymous Anonymous said...

what have a pulse get a loan standard is no longer in affect?
oh no.

Monday, February 26, 2007 12:34:00 PM  
Anonymous rbyzell said...

just a reminder to everyone. please! go to www.belmar.com then municipal then municipal directory and tell the powers that be to keep djais open! djais has been a favorite spot of the middle and working class to dance a little and just enjoy the ocean view! the powers that be in belmar want it closed and want to put mcmansions there and turn the town into spring lake! please call, email them! and not just the mayor. please email and call the council memebers also. the jersey shore is not just for the rich, the real estate developers and lawyers! look at what they have done to the shore during this real estate boom! once again - www.belmar.com municipal then municipal directory. tell them you want djais kept open! thanks!!!

Monday, February 26, 2007 3:23:00 PM  
Anonymous rbyzell said...

oh yeah. djais has been in belmar for over 51 years! 51 years! who "are" these few people who want to shut it down at the expense of the rest of us? it's a crime! you can stop it!

Monday, February 26, 2007 3:25:00 PM  
Anonymous Jb said...

I live on 6 th ave ,we don't want honkey tonk bars in belmar anymore! lets move on look at all the beautiful homes along Ocean ave ,cmon' give us a break d jais MUST GO !

Monday, February 26, 2007 4:50:00 PM  
Anonymous Anonymous said...

which was there first?????

Monday, February 26, 2007 7:09:00 PM  
Anonymous Anonymous said...

I'm guessing DJais was open when you bought your house right? If it bothered you that much maybe Spring Lake would have been a better choice for you.

Monday, February 26, 2007 7:11:00 PM  
Anonymous rbyzell said...

oh jb. djais a honkey tonk bar? i don't think so. now the tropical pub is a honky tonk bar and the town backed off of them. djais is much more upscale. yes, the town did a good job of putting up new housing but for christ's sake, enough is enough already! can't the regular people have a nice place to go with an ocean view? to sit back and have a drink and dance? why take that away from thousands of people so that some rich couple who doesn't know crap about the community can sit there in some mcmansion for a few weedends a year!? give me a break!

Tuesday, February 27, 2007 4:38:00 PM  
Anonymous Anonymous said...

Kass correctly argues that many prime loans made during the housing run-up were made on the very same risky ground that the sub-prime loans are now collapsing under.

watch: http://www.paperdinero.com/BNN.aspx?id=90

Wednesday, February 28, 2007 10:55:00 AM  
Anonymous Anonymous said...

lots of sleepless nights around the state.

Wednesday, February 28, 2007 2:24:00 PM  
Anonymous Anonymous said...

Fremont Delays Report; Shares Tumble
Wednesday February 28, 3:56 pm ET
Fremont General Shares Drop More Than 20 Percent After Company Delays 4Q Earnings Report

NEW YORK (AP) -- Shares of Fremont General Corp. fell sharply Wednesday to hit a new 52-week low after the mortgage lender said late Tuesday it will delay reporting financial results for the fourth quarter.
Fremont, one of the largest providers of mortgage loans through brokers and lenders to people with poor credit histories, saw its shares tank $2.66, or 22.8 percent, to $8.99 in afternoon trading on the New York Stock Exchange. The stock traded as low as $8.95 earlier in the session, far below its previous 52-week low of $11.65.

Fremont also said it will not file its 2006 annual report by the March 1 regulatory deadline.

The company said it would give an explanation for the delay in a regulatory filing. The Securities and Exchange Commission had not received any such filing by mid-afternoon.

A company spokesman was not immediately available for comment.

The "subprime" mortgage industry, or the sector of mortgage banking targeting people with blemished credit, is in upheaval. A handful of companies said more borrowers are missing payments on their mortgages, hurting the value of these companies' loan portfolios.

The slowing housing market has put further pressure on the lenders since the value of the collateral backing the loans is deteriorating at the same time the loans themselves are becoming riskier.

http://biz.yahoo.com/ap/070228/fremont_general_mover.html?.v=1

Thursday, March 01, 2007 4:49:00 AM  
Anonymous Anonymous said...

We need some more posts man, this blog is getting really stale.....

Thursday, March 01, 2007 10:25:00 AM  
Anonymous Anonymous said...

As a blog site you can't specialize in one builder and be a success. For the most part Kara is a dead deal as far as a daily subject matter. Can we try tagging onto other builders around the state who are in trouble for a change? Thanks.

Thursday, March 01, 2007 4:01:00 PM  
Anonymous Anonymous said...

JUst when you think the Kara story is over look whats pops up on the APP

I guess annonymous @ 4:01 is pretty clueless

Bankruptcy judge approves loan to finish homes in one Kara development
Posted by the Asbury Park Press on 03/1/07
BY DAVID P. WILLIS
BUSINESS WRITER

Post Comment
Workers will finish building homes, including those that have contracts, at Kara Homes Inc.'s Kara at Mount Arlington development in Morris County after a judge approved a loan to pay for it this morning.

Bankruptcy Court Judge Michael Kaplan today approved a $2.85 million loan from WCP Real Estate Strategies Fund, a lender who took over $21.6 million owed by Kara to North Fork Bank, which financed the Mount Arlington project.

Kara Homes is seeking an additional $700,000 from WCP for other work at Mount Arlington, said Warren Usatine, a lawyer for the committee of unsecured creditors in the case.

The $2.85 million loan will complete construction for all the units for which there are
contracts, as well as several other unsold units that are partially complete, Usatine said.

According to a budget filed in court papers, there are nine single-family homes under contract that are not finished as well as six single-family homes under contract where construction has not started.

"It is a very good development,'' Usatine said of the loan. "It is going to send a great
message to the pool of buyers out there that Kara is back in business.''

East Brunswick-based Kara filed for Chapter 11 bankruptcy Oct. 5, saying the real-estate market downturn prevented it from paying its debts. The company reported $350 million in assets and $227 million in liabilities.

David P. Willis: dwillis@app.com or (732) 643-4039

Thursday, March 01, 2007 6:49:00 PM  
Anonymous Anonymous said...

re: Thursday, March 01, 2007 4:01:35 PM

What other builder is in the same position as Kara? As far as I know, Kara Homes is the only NJ builder forced into Chap.11 by "the market". They're the only one that's incapable of supporting themselves.

Friday, March 02, 2007 1:19:00 PM  
Anonymous Anonymous said...

Get this: while hundreds of people are waiting forever for Kara Homes to get their shit together, Kara is handing out RAISES this week. Not only did they get the judge to OK their "back pay", but they're getting raises now too! This is what is going on up there, there is zero concern about anything else. We're ALL being fleeced, and badly.

Friday, March 02, 2007 4:08:00 PM  
Anonymous Anonymous said...

Robert Toll, CEO of high-end home builder Toll Brothers, told the New York Times in 2005 that his company, which had enjoyed astonishing growth for more than a decade, would grow by 20 percent annually in 2006 and 2007, and then go for 15 percent annual growth. Yet in virtually every quarter since the article appeared, Toll has lowered expectations, called a bottom—and then lowered expectations again. In February 2006, Toll Brothers projected it would deliver between 9,200 and 9,900 McMansions for the fiscal year ending October 2006, down from the previous projection of 9,500 to 10,200. But Toll reduced its expected deliveries in May and again in August and wound up delivering 8,787 for the whole year. But bitter experience hasn't made Toll any better at calling the bottom. In November 2006, the company said it expected to deliver between 6,300 and 7,300 homes for fiscal 2007, down from the prior prediction of 7,000 to 8,000 deliveries. By February, Toll said it expected to deliver only 6,000 to 7,000 homes. And it's doubtful Toll has successfully called the bottom now. The Census Bureau data on new housing sales for January, released earlier this week, showed a whopping fall of 20 percent from the year-ago level, and down 16.6 percent from December.

read more: http://www.slate.com/id/2160973/

Monday, March 05, 2007 1:06:00 AM  
Anonymous Anonymous said...

HAHAHAHA

toxic loans have gone bust.
i wonder how it feels to have one of these toxic loans readjusting upwards?

no more crib to call your own. u could not afford it in the first place.
House prices are trending odwn soon to be tumbling down.

Monday, March 05, 2007 6:44:00 PM  
Anonymous Anonymous said...

Current info from my investment advisor I thought was interesting:

Adjustable Rate Resets Will Cause Problems for All Home Builders -

To effectively run a home building company today, executives need to be well-versed in complicated economic and financial issues because these issues impact the decisions you need to make today.

Subprime is a Leading Indicator for Prime - Do not downplay the risk to your business of the front page news in the subprime market. The real reason for the stress in subprime has to do with flat home prices and rising adjustable interest rates, which are impacting all home buyers who have bought in the last 24 months. The stress is currently most obvious in subprime because those loans tend to reset after 2 years, versus 3+ years for other loans, and those borrowers are more likely to default. The primary housing market will have significantly more stress 12 months from now than it has today unless mortgage rates fall dramatically or home price appreciation returns. Why? Because an adjustable-rate loan made in early 2005 will result in a 30%+ increase in the borrower's mortgage payment, and the value of their home may have declined since they bought the home.

Subprime 101 - This week's collapse in the subprime lending market is indicative of the credit crunch that has been occurring over the last several months, which is making it considerably more difficult for home builders to sell homes to buyers with marginal credit histories. We believe the builders who are getting hurt the most today are the ones who were primarily selling entry-level homes on the outskirts of metropolitan areas. Even if this represents a small percentage of your sales, please keep in mind that the submarket you are in is likely to be full of these types of borrowers. The investor issues over the last several years are an excellent analogy. You may have been doing a better job keeping investors out than others, but have you been impacted by the departure of investors?

The ABX.HE index, as shown in the graph below, illustrates the risk of insuring bonds backed by subprime loans – in this example, the lowest-rated BBB-. The rapid decline in the index in recent months illustrates investors' expectations that the value of subprime mortgage bonds will fall, which is indicative of the increased risk associated with these loans. Increased risk means that subprime interest rates will rise significantly. An informal survey we conducted 2 weeks ago at an event that primarily involved small builders on the outskirts of Southern California led us to conclude that borrowers with very poor credit can no longer get a loan, and those with marginal credit are finding interest rates have risen 50 basis points since last Fall.




Economic Growth........................C
The U.S. economy continues to expand at a moderate pace. Fourth-quarter real GDP was revised downward to 2.2% versus the advance estimate of 3.5%, and many believe current growth is even lower. Greenspan indicated that a recession could be less than 12 months away. Year-over-year retail sales and personal income growth declined during the month, while core CPI inflation increased slightly to 2.7% in January from 2.6% in December. Core inflation is currently above the Fed's expectations.

Leading Indicators...........C-
Interest rates decreased slightly this month, and the yield curve remains inverted for the eighth consecutive month, which is usually a sure sign of a looming recession. At month-end, the 10-year Treasury rate was 13 basis points lower than the 2-year rate. A large selloff in China sparked the biggest single-day decline in U.S. stock market indices in more than 5 years. After six consecutive months of improvement, the S&P Super Homebuilding Index reversed course this month, dropping to 24% below its year-ago value. Oil prices have begun to creep up, closing at $59.26 at the end of February.

Mortgage Rates.............B
The 30-year fixed mortgage rate remained at 6.22% in February, while one-year adjustable rates increased marginally to 5.49%. Adjustable-rate loans continue to decrease as a percentage of total loans. In the last week of February, ARMs fell to 21.1% of total loan activity. We have added the ABX index, which tracks the performance of subprime mortgage bonds, as one of the metrics we are tracking. Rising delinquencies in the subprime mortgage market have caused the index to drop precipitously, which is resulting in a lack of capital available for low-credit home buyers. This will have a significant impact on those communities relying on subprime capital, which are generally the entry-level homes on the outskirts of metro areas that have seen substantial price appreciation, such as Phoenix, Tampa and Riverside – San Bernardino.

Consumer Behavior.........B-
Consumer Confidence improved in February and now stands at its highest level since August 2001. Recent increases in gasoline prices, the precipitous stock market decline on February 27th, as well as the subprime dilemma may mitigate further improvement next month.

Existing Home Market........C+
Home sales increased to 6.46 million annualized units in January, and inventory appears to have stabilized for the time being, with supply remaining unchanged at 6.6 months in January. Prices continue to depreciate, with the median single-family home price currently 3.5% lower, year-over-year.

New Home Market.........C-
New home sales in January declined 17% sequentially and 20% year-over-year to an annual rate of 937,000, the steepest one-month drop since January 1994. This figure overstates true sales because it includes sales that were later cancelled. Supply of new homes remains high, rising from 5.7 months in December to 6.8 in January. Median new home prices were down 2.1% year-over-year in January. Pricing data does not reflect the rampant incentive discounting that is now very common.

Housing Supply........D+
Builders are cutting back, gradually reducing the glut of inventory currently on the market. During the month of January, home builders began construction on the fewest homes since January 1997. Housing starts dropped 14.3% sequentially and 38% year-over-year, to a seasonally adjusted annual rate of 1.41 million. Building permits, which are a leading indicator for housing, declined 2.8% sequentially, 28.6% year-over-year, to a seasonally adjusted annual rate of 1.57 million in January.

U.S. HOUSING MARKET STATISTICS
Data Current Through February 28, 2007

Grade*
Overall Grade C

Statistic Grade*
Economic Growth C
These are the best indicators of how the economy is currently performing.
Real GDP (annual rate) 2.2% C
Employment Growth (1-year Change)- Non-ag Payroll, NSA 2,140,000 C
Employment Growth Rate- Non-ag Payroll, NSA 1.6% C
Unemployment Rate 4.6% B-
Productivity 1.6% C
Retail Sales 2.3% D
Inflation (core CPI) 2.7% B
Personal Income Growth, nominal 5.3% D+
Federal Deficit (last 12 mos., $mil curr.) -$194,622 C


Statistic Grade*
Leading Indicators C-
These have all proven to be predictable early indicators of the direction of economic growth.
Leading Indicators Annual Growth Rate over Last Six Months
Leading Econ. Index 1.5% C
ECRI Leading Index 4.7% C
Manpower Net Employment Outlook 19% C+
Corporate Profits (pre-tax) 30.6% B
Interest Rate Spread
10-year Treasury 4.70%
2-year Treasury 4.83%
Interest Rate Spread -0.13% D+
Stock Market (Return over last 12 months)
Dow Jones 12% C
S&P 500 10% C
NASDAQ 6% C
Wilshire 5000 10% C
S&P Super Homebuilding -24% D-
Crude Oil Price (Current $) $59.26 D
Inst. of Supply Managers Index 52.3 C


Statistic Grade*
Mortgage Rates B
These statistics are probably the most important indicators of short-term housing market performance.
Conforming Mortgage Rates (contract rate; an additional 0.6 - 1.0 points are also paid up front by the borrower)
Mortgage Rates, fixed 6.22% A-
Mortgage Rates, adjustable 5.49% B-
Fixed/Adjustable Spread 0.73% F
Fixed/10-year Spread 1.52% C
Fed Funds Rate 5.25%
Percentage of Adjust. Loans 21.1% C-
Subprime Index (ABX.HE.BBB-.06-02) 66.2 F


Statistic Grade*
Consumer Behavior B-
Consumer attitudes correlate well with short-term housing sales performance. Consumer income growth, debt levels and job prospects affect the long-term outlook for housing sales.
Consumer Confidence Index 112.5 B-
Consumer Sentiment Index 91.3 C
Consumer Comfort Index -1 C+
Equity/Owned Home (2003$) $145,137 A+
Median Household Income $46,326
- Growth Rate, nominal 4.5% C
Revolving Cons. Credit per Household $7,540
- Growth Rate 4.8% B


Statistic Grade*
Existing Home Market C+
Sales volumes correlate well with the Housing Cycle calculations, and boost the trade up New Home sales market.
NAR Median Home Price $209,200 A
NAR Annual Price Appreciation -3.5% F
Freddie Mac Annual Price Appreciation 6.1% C
Annual Sales Volume, SA 6,460,000 A-
Months Supply of Unsold Homes, SA 6.6 C
Purchase Mort. App. Index, SA 401.3 B
Pending Home Sales Index, SA 108.7 C
Homeownership Rate 68.9% A+


Statistic Grade*
New Home Market C-
High appreciation and low inventory would mean an excellent short-term outlook for the new home industry.
Housing Market Index 40 D
Median Price, NSA $239,800 A
Annual Appreciation Rate -2.1% D
Sales Volume, SA 937,000 B-
Months Supply of Unsold Homes, SA 6.8 C-
Months of Homes Completed, SA 2.2 C-
Months of Homes Under Const., SA 3.5 C
Months of Homes Not Started, SA 1.1 C-


Statistic Grade*
Housing Supply D+
High construction levels are good for the economy. However, if new supply exceeds demand, prices could fall.
Housing Starts, SA 1,408,000 C-
Single-family Permits, SA 1,121,000 C+
Multifamily Permits, SA 447,000 C-
Total Permits, SA 1,568,000 C
Manuf. Housing Placements, SA 97,000 F
Total Supply, SA 1,665,000 C

Friday, March 09, 2007 12:02:00 AM  
Anonymous Anonymous said...

Hey everyone, since there hasn't been any Kara news I thought I would relay a funny thing I did.

I feel bad that Zudi is not getting any advertising so what I did was collected 12 of those Kara Homes burgandy jackets and donated them to the Ocean County Homeless project in Stafford. So you should start seeing alot of homeless people wearing the Kara jackets. This should give Kara some free advertising. Does anyone think Robbie Schultz will take the jackets away from the homeless if she sees them. Anyone who has a Kara jacket (there should be about 250 of them out there) start donating them to homeless shelters and jacket drives. We can put a new face on Kara Homes!!!!! If you have any shirts you should donate them also!!!!!

Sunday, March 11, 2007 10:53:00 PM  
Anonymous Anonymous said...

I threw all of my Kara krap in one of those collection boxes the day after they canned me. I also sold my cell phone to some Mexican dude for 20 bucks, after I ordered about 2000 ringtones & apps on Kara's dime.

Monday, March 12, 2007 3:51:00 PM  
Anonymous Anonymous said...

I've been trying to get a construction loan since October. My credit score is excellent and my finances are up/debts low. Yet no one wants to loan me 100k to build my dream home. They would love to give me 500k to go buy some shitty house though. Bleh. NJ sucks

Tuesday, March 13, 2007 8:45:00 PM  
Anonymous Anonymous said...

Borrow 500K, spend the 100K and pay back the other 400K ASAP. I do not see the issue

Wednesday, March 14, 2007 4:00:00 PM  
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