Over the next two years 50,000 New York homeowners may lose their homes as a result of “predatory” mortgage lender institutions who target minorities and middle-class families, state Senate Democrats said Monday.
The Westchester County, N.Y., housing market showed signs of resilience in the first quarter amid a national slowdown and indications of continued weakness elsewhere in the Lower Hudson Valley.
New York mortgage demand has declined in 2006 and into 2007. So it’s not a huge surprise that When it comes to the housing market, the hottest town in Orange County, N.Y., last year was “none of the above.”
Luxury home prices slid in New York’s Long Island and Queens in the first quarter as more property came onto the market and took longer to sell, appraiser Miller Samuel Inc. and home mortgage broker Prudential Douglas Elliman Real Estate said.
The first day of spring has come and gone, and with it, the opening bell of the busiest time of year for the Western New York mortgage market.
New York Mortgage Trust Inc. said Tuesday that its fourth-quarter loss was wider than reported earlier, due to a bigger than expected increase in home loan loss reserves.
The reserves were associated with the New York mortgage provider’s home loans that were made (originated) in 2006 and repurchased in February and March 2007.
The actual net loss for the quarter after the correction was $9.6 million, or 53 cents a share, the residential mortgage company, which was exploring strategic options, said in a statement.
The mortgage lender had on March 15 reported a loss of $8.8 million, or 49 cents a share. Analysts had expected a loss of 3 cents per share, before special items, according to Reuters Estimates.
Shares of the mortgage company, which has struggled in the past fiscal year like so many others, had fallen over 13 percent in March following its weak results.
The company had in March said it was planning to exit its mortgage lending business to which it had attributed its already sizable fourth-quarter loss.
Also Tuesday, the company said it completed its $13.5 million asset sale of its New York mortgage lender subsidiary, New York Mortgage Co., to IndyMac Bank, unit of IndyMac Bancorp Inc.
Indymac has filled most branch employees and loan officer positions, as well as a majority of employees at the subsidiary’s headquarters.
It also assumed a portion of the retention and severance expenses associated with the transaction, the home mortgage company’s officials stated.
SOURCE: Reuters
California, New York and Florida.
It’s no big surprise that this luxury-home trifecta topped the list of states with the most homes valued at $1 million or more in 2005.
The rich may get richer and the homes pricier, but the lineup of the biggest luxury real estate markets changes little from year to year.
What makes these states perennial winners in the jumbo mortgage category? The obvious answers, year in and year out: lifestyle and jobs.
Earthquakes, fires, and smog have done little to deter wealthy home sales in the Golden State, powered by California’s mild weather and striking coastline, and the technology and entertainment industry hubs that are the major cities. Nothing beats New York for cultural offerings and opportunities in the financial world, or Florida for miles of prime vacation land.
Having a lot of homes in general also may give the top three an edge over other states, where standard home loan costs are more typical. California has the highest population in the U.S. (36 million), followed by Texas (23.5 million), New York (19 million), and Florida (18 million).
In 2005, California had 619,170 $1 million-plus housing units, or 8.76 percent of its total homes. New York had 165,641, or 4.21 percent, and Florida had 102,010 or 2.08 percent.
But the California housing market also has the highest percentage of total homes valued at $1 million or above, followed by Washington, D.C. (7.67 percent), Hawaii (6.64 percent), and Connecticut (4.41 percent).
The other states rounding out the top 10 largest luxury home markets are New Jersey, Massachusetts, Illinois, Connecticut, Virginia, Maryland, and Washington — all states with or near major U.S. cities, and almost all, with the exception of Illinois, along the coast.
“There was the expectation here a few years ago that the coast had seen most of their increase in home prices, and estimates were that the middle part of the U.S. was going to catch up a bit,” says John Karevoll, an analyst at real estate research firm DataQuick.
“That hasn’t happened yet, and it’s surprised a lot of analysts.”
In fact, the finite amount of waterfront space in coastal states has pushed prices up at the ultra-luxury end. The Institute for Luxury Home Marketing estimates that home sales at the $5 million-and-above price rose 11 percent in 2006, compared to a 8.4% decline in overall housing market sales.
Between 1999 and 2005, when low mortgage rates fueled a record-shattering home-buying boom, the Institute says sales of homes for more than $1 million skyrocketed over 500 percent.
The most expensive home sold in 2006 was a 63-acre estate with a 10,000 square-foot mansion in Alpine, N.J., purchased by Advanced Photonix CEO Richard Kurtz for $58 million. Chances are good no mortgage was involved in this particular purchase.
If Wall Street’s streak continues, New York could even steal California’s first-place spot in the next few years. From 2000-2005, New York saw home sales at the $1 million-plus level rise 531.7 percent, the greatest jump among the U.S. states.
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Denouncing what he called “rogue” mortgage lenders and “liar” loans, New York Sen. Charles Schumer Wednesday called for the national regulation of mortgage brokers and a ban on riskier, controversial loan products.
According to the Buffalo News, the state’s senior senator said the collapse of the home loan market for borrowers with bad credit shows the need to protect consumers from practices he calls unscrupulous.
The Democrat also said the market for so-called “subprime” (bad credit mortgage loans) has operated with too little federal or state oversight, aside from simple registration of mortgage brokers in some states.
And he said federal scrutiny is needed to rein in non-traditional mortgage products, high rates and fees, and reckless mortgage lender practices that threaten the ability of many to own a home.
The National Association of Mortgage Brokers Tuesday criticized a proposal by two groups of regulators, who called for a national registry of brokers.
The mortgage broker group said the proposal, while admirable in theory, does not go far enough, as it wouldn’t include all lenders.
However, one Western New York mortgage lender said regulation is clearly necessary to weed out bad actors. She even supports some of Schumer’s recommendations, although she hopes Congress doesn’t overreact.
“As usual, the government is reacting far too late to abuses,” said Linda Mallia, president of Devere Mortgage Corp. “I just hope now that they don’t do what they usually do. I hope what is done is reasonable and realistic.”
The bad credit New York mortgage industry is being hammered as higher rates and falling home prices are leaving borrowers unable to make payments or refinance. Losses have risen precipitously.
Nationally, more than 1.2 million homes were foreclosed in 2006, while the number of homeowners who were in some stage of foreclosure in December 2006 was up 35 percent from a year earlier.
The Federal Deposit Insurance Corp. projects about 1.8 million Americans could eventually lose their homes because they can’t afford new payments after mortgage rates tick up.
That includes more than 50,000 in Upstate New York and nearly 10,000 in the eight-county area of Western New York. And Schumer noted the state numbers are probably low because New York’s foreclosure rate is higher than the U.S. as a whole.
“This subprime problem is turning into a foreclosure nightmare and thousands of New Yorkers are likely to be left in the wake,” he said. “The first step is to make sure the borrowers are taken care of.”
To that end, Schumer said he would try to convene a state foreclosure prevention task force — consisting of private mortgage lenders, government officials, and non-profit representatives — as well as a rescue fund to help residents who may be facing foreclosure.
He’s in the process of talking to state and federal regulators, the U.S. Department of Housing and Urban Development, and mortgage finance firms Fannie Mae and Freddie Mac.
The goal would be to help homeowners qualify for a fast mortgage refinance on unaffordable loans, allow them to put off payments temporarily, and help them sell distressed homes if necessary.
Follow the link to continue reading in the Buffalo News …
Home prices and the number of sales were mostly flat in the Albany housing market and surrounding region in February, according to data released by the Greater Capital Association of Realtors Inc.
The data, which was compiled by the Capital Region Multiple Listing Service Inc., found that the number of single-family home sales during the month was 571. This is down 1 percent from the 575 recorded in February 2006.
The median price, the point at which half of the sales are for more and half are for less, fell 7 percent to $175,000 - giving home to potential New York mortgage seekers hoping costs will come down.
“At some time the market must adjust and that is what it is doing now,” said James Ader, CEO of the association, who said that the high rate of appreciation in recent years could not be sustained.
While the New York housing market as a whole fluctuates widely, given the diverse nature of the state’s real estate markets, Upstate New York has generally maintained its affordable status.
For the year so far, the number of total closed sales was steady at 1,154, and the median price also held at $185,000, while home loan rates remained steady.
Albany County managed to buck the trend in February with the number of closed sales rising 13 percent to 137, and the median price rising by 6 percent to $185,000.
In Rensselaer County, closed sales fell 16 percent to 77 and the median price fell 9 percent to $159,000. In Saratoga County, closing totals fell 6 percent to 148 and the median price rose 1 percent to $260,000.
While bad credit New York mortgage lending has become a problem (at least 91,000 residents face serious foreclosure risk), the Albany area is not a hotspot for delinquency. Hopefully, the market continues on a steady path.
SOURCE: Albany Business Journal
Sen. Charles Schumer warns that 91,000 New York families are at risk of losing their homes when the rates of their bad credit mortgages increase, and said more federal oversight is needed in the subprime lending market.
“The subprime market is the wild west of mortgage loans, and it’s time we bring a sheriff into town,” Schumer said. “The first step is making sure that borrowers are protected from these usurious lenders.”
Subprime lenders peddle mortgage products that often require no money down and are made at a “teaser” initial interest rate that soon rises.
They target marginal borrowers with weak credit or questionable incomes who previously might not have gotten a home loan at all.
Schumer said an analysis by his office found that around 1.8 million American families, including 91,325 in New York State, are at risk of foreclosure when the rates are reset within two years.
He said more federal regulation is needed to protect home buyers from unscrupulous home loan lending practices.
Schumer said his plan would create a national regulatory system for New York mortgage broker groups and loan officers, including individuals at non-bank companies.
In addition, Schumer said his bill would establish a suitability standard for borrowers so that a New York mortgage lender won’t be able to issue a loan that the borrower cannot afford.
Schumer also proposed setting up a New York state Foreclosure Prevention Task Force, including non-profit groups that focus on housing issues such as ACORN.
“The bottom line here is that the [bad credit mortgage] bust is leading us right into a foreclosure boom, and thousands of people will be left in the lurch,” Schumer said.
“We are staring straight into the barrel of the biggest foreclosure crisis ever, and unless action is taken, economic forces will have no choice but to pull the trigger.”
SOURCE: Newsday