News

With the dawning of a new year comes the sense of starting fresh and leaving the previous year's baggage behind. A number of mortgage lenders are applying this same adage to their loan portfolios as the close of 2010 nears, and selling off blocks of nonperforming mortgage assets to clean up their balance sheets for a new year of business. It's a common trend for banks to get their house in order during the fourth quarter of a fiscal year, but this year, it seems there's a larger pool of eager buyers for soured real estate assets.

Despite a bounce in home prices during the first half of 2010, Fiserv Inc. says it expects property values nationally to fall another 7.1 percent over the next 12 months before beginning to stabilize at the end of 2011. The company sees double-dip territory ahead for many major markets, particularly those that saw the strongest appreciation during the spring and summer months of this year. The analysts at Standard & Poor's have released a similar forecast for the path of home prices. They anticipate an additional 7 percent to 10 percent drop through 2011.

Fixed-rate mortgages have become the dominant choice among borrowers looking to refinance their home loans, with more applicants gravitating toward shorter loan terms. A study by Freddie Mac on loan transition trends found that in the third quarter, more than 95 percent of homeowners who refinanced chose fixed-rate loans, regardless of whether their original loan was an adjustable- or fixed-rate mortgage. Borrowers who previously held shorter-term mortgages also showed a stronger preference for staying with a 15-year or 20-year loan.

According to the Texas Quarterly Housing Report released earlier this month, real estate sales in the Lone Star State decreased 20 percent in the third quarter of 2010 compared to a year earlier, but were essentially flat year-to-date. The Texas Association of Realtors attributes the statistics to an early peak in the market due to the federal homebuyer tax credits. The median home price in Texas remained virtually unchanged at $152,000.

Three community-based lenders were shut down by their regulators over the weekend - two in Georgia and one in Arizona. The number of institutions on the FDIC's failed bank list has hit 146 for the 2010 calendar year. The annual tally has already surpassed the 140 failures seen through the full 12 months of 2009. FDIC Chairman Sheila Bair has said she expects the number of bank collapses to peak in 2010.

Embrace Home Loans, a direct lender for Fannie Mae and Freddie Mac, has met the licensing requirements of the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act. The company said it has been preparing for the SAFE Act for more than a year and consequently has invested thousands of man-hours and millions of dollars in resources to ensure all of its loan officers are ready to meet the requirements of the SAFE Act for originating loans in multiple states.

Jones Lang LaSalle recently hired Jon Goldstein as SVP of the firm's real estate investment banking practice in Washington, D.C. The company says a marked increase in the level of liquidity and record low interest rates has resulted in a surge of financing activity in the D.C. market. Goldstein brings more than 17 years' experience in the financial services industry to the firm, and will be responsible for debt and equity placement for all commercial property types.

President Obama said Friday that he intends to nominate North Carolina Banking Commissioner Joseph A. Smith, Jr. to head the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac. If confirmed by the Senate, Smith will replace Edward DeMarco, who has served as acting director of the agency since September 2009. The timing of Smith's appointment would put him at the center of the administration's efforts to reform the nation's housing finance system and decide the future of the GSEs.

Third-quarter delinquency rates for both residential and commercial mortgages will increase, particularly among smaller lenders, according to preliminary estimates released by Foresight Analytics. Final figures for the third quarter 2010 are not due out until late November, but based on earnings reports and call report filings from many smaller banks, Foresight Analytics offers its advance estimates of what we'll see in the final mortgage delinquency numbers for the July to September time period.

The board of directors of the Securities Industry and Financial Markets Association (SIFMA) has elected John G. Taft, CEO of RBC Wealth Management, as the association's 2011 chairman. The organization also elected 17 new board members, including representatives from such financial market bastions as Bank of America Merrill Lynch, Credit Suisse Securities, and PIMCO.