News

The earnings season for big banks is starting off in positive territory, and well above analysts' expectations. JPMorgan Chase & Co. reported last week that it brought in net income of $3.3 billion during the first quarter of 2010, or $0.74 per share. The market was expecting earnings of $0.65 a share. The numbers represent a 55 percent improvement over a year ago, largely due to big gains in its investment banking business. JPMorgan's consumer credit portfolios didn't fare as well, but the bank's chief did indicate that loan quality is improving and delinquencies are beginning to stabilize.

A federal investigation into Wall Street and the economic crisis has honed in on Washington Mutual, making the bank that was absorbed by JPMorgan Chase in 2008 the poster child for what went wrong with the nation's financial system. After two days of hearings, the Senate Permanent Subcommittee on Investigations has concluded that federal banking regulators failed to step in and curtail shoddy lending practices and ignored excessive risk-taking at what was once the sixth largest U.S. bank.

Encore Equities, a subsidiary of Dallas-based Encore Enterprises, Inc., recently appointed Mark Cypert as SVP of institutional equities. In his new role, Cypert will focus on raising institutional investor equity and managing Encore's research and underwriting program to help identify projects meeting Encore's commercial real estate investment criteria in the retail, multifamily, and hospitality sectors.

The housing market is tightening up in San Francisco, according to the most recent Market Focus Report released Friday by the Rosen Consulting Group and the San Francisco Association of Realtors. The report found that completed home sales in March 2010 increased 58 percent from the same month a year ago, absorbing much of the excess inventory in the market and intensifying competition among buyers for desirable properties.

RE/MAX International, a global real estate company based in Denver, recently announced that it was ranked in two national brokerage surveys. In the 2010 Power Broker Report produced by RIS Media, sales associates affiliated with RE/MAX brokerages averaged an impressive 15.1 transaction sides per agent, an 18% increase over their position in last year's survey. As a result, the survey ranked 69 RE/MAX brokerages among the top 300, representing 23 percent of all ranked brokerages. And in the REAL Trends 500 survey, 122 of the company's brokerages earned a ranking, giving RE/MAX 24 percent of the rankings.

Fannie Mae has updated several policies regarding borrowers' future eligibility to obtain a new mortgage loan after experiencing a pre-foreclosure event, including a deed-in-lieu or short sale. The waiting period for a new loan will now be based on the loan-to-value ratio, occupancy of the property, and whether extenuating circumstances played a part in the borrower's inability to make mortgage payments. The GSE says the updated policies will further support overall market stability and reinforce the importance of borrowers working with their servicers.

The performance of subprime loans made during the real estate boom continues to worsen, putting investors on an even bigger hook. This week, Moody's Investors Service downgraded its ratings on a total of $42.2 billion of residential mortgage-backed securities (RMBS) made up of subprime home loans. The agency said the downgrades are a result of ""continued performance deterioration in subprime pools,"" which is likely to worsen further as still-falling home prices and high unemployment trigger more defaults.

On Friday, Goldman Sachs and one of its VPs were charged by the Securities and Exchange Commission for defrauding investors by misstating key facts about a collateralized debt obligation (CDO) tied to subprime mortgages. The SEC said as the U.S. housing market was beginning to falter, Goldman Sachs collaborated with hedge fund Paulson & Co. to cherry-pick loan pools for the CDO that the companies were betting would default. Investors are said to have lost more than $1 billion.

Posting back-to-back losses in the third and fourth quarters of 2009, the second half of last year was, to say the least, rough for Bank of America. But a new year marks new beginnings, and things seem to be turning around for the nation's biggest bank. According to the company's earnings report released Friday, Bank of America earned $3.2 billion in the first quarter of 2010. That's a huge improvement compared to the net loss of $194 million reported in the fourth quarter of 2009.

The end of the housing correction is looking closer, as the job market finally turns the corner, investors step up home purchases, and the Obama administration revamps its foreclosure mitigation efforts, according to Moody's Investors Service. The credit ratings agency says it has lifted its outlook for home prices, and with the wide-ranging changes to the Home Affordable Modification Program, the foreclosure crisis just might end earlier than anticipated.