<![CDATA[Hedgehogs.net: '' related content]]> http://www.hedgehogs.net/tag/subprime+mortgage+crisis?view=rss http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357424/moodys-tamps-down-concerns-about-surge-in-auto-loans Wed, 13 Aug 2014 00:31:41 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357424/moodys-tamps-down-concerns-about-surge-in-auto-loans <![CDATA[Moodyâs Tamps Down Concerns About Surge in Auto Loans]]> 11357424 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357305/fannie-and-freddie-results-in-q2-reo-inventory-declines-modest-increase-in-reo-prices Wed, 13 Aug 2014 00:02:42 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357305/fannie-and-freddie-results-in-q2-reo-inventory-declines-modest-increase-in-reo-prices <![CDATA[Fannie and Freddie Results in Q2: REO inventory declines, "modest increase in REO prices"]]> From Fannie Mae:
• Fannie Mae reported net income of $3.7 billion and comprehensive income of $3.7 billion for the second quarter of 2014.
• Fannie Mae expects to pay Treasury $3.7 billion in dividends in September 2014. With the expected September dividend payment, Fannie Mae will have paid a total of $130.5 billion in dividends to Treasury in comparison to $116.1 billion in draw requests since 2008. Dividend payments do not offset prior Treasury draws.
...
Foreclosed property income decreased in the second quarter and first half of 2014 compared with the second quarter and first half of 2013 due to a decrease in gains recognized on dispositions of our REO properties. During the second quarter and first half of 2014, we experienced a modest increase in REO prices compared with a significant increase in REO prices in the second quarter and first half of 2013.
emphasis added
From Freddie Mac:
• Net income was $1.4 billion – the company’s eleventh consecutive quarter of positive earnings, compared to $4.0 billion in first quarter of 2014
• Based on June 30, 2014 net worth of $4.3 billion, the company’s September 2014 dividend obligation will be $1.9 billion, bringing total cash dividends paid to Treasury to $88.2 billion.
Fannie and Freddie REO Click on graph for larger image.

Here is a graph of Fannie and Freddie Real Estate Owned (REO).

REO inventory decreased in Q2 for both Fannie and Freddie.

Delinquencies are falling, but there are still a large number of properties in the foreclosure process with long time lines in judicial foreclosure states.

Fannie noted there was only a "modest increase in REO prices" in Q2.

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http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357303/comments-on-q2-national-delinquency-survey-about-2-years-until-normal-levels Wed, 13 Aug 2014 00:02:38 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357303/comments-on-q2-national-delinquency-survey-about-2-years-until-normal-levels <![CDATA[Comments on Q2 National Delinquency Survey: About 2 Years until Normal Levels]]> Earlier today the MBA released their Q2 National Delinquency Survey: Delinquency and Foreclosure Rates Decrease in Second Quarter

One of the key questions for housing is when will delinquencies and foreclosures be back to normal?

As Joel Kan, MBA’s Director of Economic Forecasting, said this morning:
“Some states hardest hit by the crisis, for example California and Arizona, now have foreclosure inventory rates that are both back to pre-crisis levels and less than half the current national rate. On the other hand, despite declines last quarter, states with slower-moving judicial foreclosure regimes, like New Jersey, Florida and New York, have foreclosure inventory rates two to three times the national average."
So the answer about when delinquencies and foreclosures will be back to normal depends on the state and foreclosure process.  Some states have already recovered and others are lagging behind.

A key point to remember is that most of the problem loans were originated in 2007 or earlier (a long time ago), and the lenders are just working through the backlog.  From the MBA:
... 75 percent of seriously delinquent loans were originated in 2007 and earlier. Loans with vintages started in 2011 and later only accounted for six percent of all seriously delinquent loans.
MBA Delinquency by PeriodClick on graph for larger image.

This graph shows the percent of loans delinquent by days past due.

The percent of loans 30 days and 60 days delinquent are back to normal levels.


The 90 day bucket peaked in Q1 2010, and is about two-thirds of the way back to normal.

The percent of loans in the foreclosure process also peaked in 2010 and is close to two-thirds of the way back to normal.

So it has taken about 4 years to reduce the backlog by two-thirds, so a rough guess is that delinquencies and foreclosures will be back to normal in about 2 years.

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http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357299/mba-delinquency-and-foreclosure-rates-decrease-in-second-quarter Wed, 13 Aug 2014 00:02:33 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357299/mba-delinquency-and-foreclosure-rates-decrease-in-second-quarter <![CDATA[MBA: Delinquency and Foreclosure Rates Decrease in Second Quarter]]> From the MBA: Delinquency and Foreclosure Rates Decrease in Second Quarter
The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 6.04 percent of all loans outstanding at the end of the second quarter of 2014. The delinquency rate decreased for the fifth consecutive quarter and reached the lowest level since the fourth quarter of 2007. The delinquency rate decreased seven basis points from the previous quarter, and 92 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter was 2.49 percent, down 16 basis points from the first quarter and 84 basis points lower than one year ago. This was the lowest foreclosure inventory rate seen since the first quarter of 2008.

The percentage of loans on which foreclosure actions were started during the second quarter fell to 0.40 percent from 0.45 percent, a decrease of five basis points, and reached the lowest level since the second quarter of 2006.

The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 4.80 percent, a decrease of 24 basis points from last quarter, and a decrease of 108 basis points from the second quarter of last year. Similar to the previous quarter, 75 percent of seriously delinquent loans were originated in 2007 and earlier. Loans with vintages started in 2011 and later only accounted for six percent of all seriously delinquent loans.

“Delinquency and foreclosure rates fell to their lowest levels in more than six years, and the rate of new foreclosure starts is at its lowest level since 2006,” said Mike Fratantoni, MBA’s Chief Economist. “Strong job growth and continued increases in home prices in most markets have been the main contributors to these steady improvements in mortgage performance.

“We have returned to more typical seasonal patterns with respect to mortgage delinquency, with 30-day and 60-day delinquency rates increasing from the first to the second quarter on an unadjusted basis. Adjusting for the seasonal pattern, we estimate that delinquencies were down for the quarter, and are down almost a full percentage point from last year.

“Nationally, the seriously delinquent rate fell by 24 basis points last quarter and has dropped 108 basis points over the past year. The loans that are seriously delinquent, either 90+ days late or in the foreclosure process, were primarily made prior to the downturn, with 75 percent of them originated in 2007 or earlier. Loans made in recent years continue to perform extremely well due to the improving market and tight credit conditions.
...
The declining trend in later stage delinquencies and foreclosure measures is clearly continuing at the national level,” added Joel Kan, MBA’s Director of Economic Forecasting. “Some states hardest hit by the crisis, for example California and Arizona, now have foreclosure inventory rates that are both back to pre-crisis levels and less than half the current national rate. On the other hand, despite declines last quarter, states with slower-moving judicial foreclosure regimes, like New Jersey, Florida and New York, have foreclosure inventory rates two to three times the national average. There were 18 states with a higher foreclosure inventory rate than the national average, and 15 of those were judicial states. Judicial states are also starting to see more foreclosure starts than non-judicial states, whereas there used to be no clear tendency for either foreclosure regime in the past quarters.
emphasis added
CR Notes: This survey has shown steady improvement in delinquency and foreclosure rates, but it will take a few more years to work through the backlog - especially in judicial foreclosure states.

Most of the remaining problems are with loans made in 2007 or earlier: "75 percent of seriously delinquent loans were originated in 2007 and earlier" and are in judicial foreclosure states.

This survey includes all mortgage loans (including terrible lending via Wall Street).  The total serious delinquency rate is 4.80% compared to less than 2.1% for Fannie and Freddie.

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11357299
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357172/fannie-and-freddie-results-in-q2-reo-inventory-declines-modest-increase-in-reo-prices Tue, 12 Aug 2014 07:20:55 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357172/fannie-and-freddie-results-in-q2-reo-inventory-declines-modest-increase-in-reo-prices <![CDATA[Fannie and Freddie Results in Q2: REO inventory declines, "modest increase in REO prices"]]> From Fannie Mae:
• Fannie Mae reported net income of $3.7 billion and comprehensive income of $3.7 billion for the second quarter of 2014.
• Fannie Mae expects to pay Treasury $3.7 billion in dividends in September 2014. With the expected September dividend payment, Fannie Mae will have paid a total of $130.5 billion in dividends to Treasury in comparison to $116.1 billion in draw requests since 2008. Dividend payments do not offset prior Treasury draws.
...
Foreclosed property income decreased in the second quarter and first half of 2014 compared with the second quarter and first half of 2013 due to a decrease in gains recognized on dispositions of our REO properties. During the second quarter and first half of 2014, we experienced a modest increase in REO prices compared with a significant increase in REO prices in the second quarter and first half of 2013.
emphasis added
From Freddie Mac:
• Net income was $1.4 billion – the company’s eleventh consecutive quarter of positive earnings, compared to $4.0 billion in first quarter of 2014
• Based on June 30, 2014 net worth of $4.3 billion, the company’s September 2014 dividend obligation will be $1.9 billion, bringing total cash dividends paid to Treasury to $88.2 billion.
Fannie and Freddie REO Click on graph for larger image.

Here is a graph of Fannie and Freddie Real Estate Owned (REO).

REO inventory decreased in Q2 for both Fannie and Freddie.

Delinquencies are falling, but there are still a large number of properties in the foreclosure process with long time lines in judicial foreclosure states.

Fannie noted there was only a "modest increase in REO prices" in Q2.

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http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357170/comments-on-q2-national-delinquency-survey-about-2-years-until-normal-levels Tue, 12 Aug 2014 07:20:52 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357170/comments-on-q2-national-delinquency-survey-about-2-years-until-normal-levels <![CDATA[Comments on Q2 National Delinquency Survey: About 2 Years until Normal Levels]]> Earlier today the MBA released their Q2 National Delinquency Survey: Delinquency and Foreclosure Rates Decrease in Second Quarter

One of the key questions for housing is when will delinquencies and foreclosures be back to normal?

As Joel Kan, MBA’s Director of Economic Forecasting, said this morning:
“Some states hardest hit by the crisis, for example California and Arizona, now have foreclosure inventory rates that are both back to pre-crisis levels and less than half the current national rate. On the other hand, despite declines last quarter, states with slower-moving judicial foreclosure regimes, like New Jersey, Florida and New York, have foreclosure inventory rates two to three times the national average."
So the answer about when delinquencies and foreclosures will be back to normal depends on the state and foreclosure process.  Some states have already recovered and others are lagging behind.

A key point to remember is that most of the problem loans were originated in 2007 or earlier (a long time ago), and the lenders are just working through the backlog.  From the MBA:
... 75 percent of seriously delinquent loans were originated in 2007 and earlier. Loans with vintages started in 2011 and later only accounted for six percent of all seriously delinquent loans.
MBA Delinquency by PeriodClick on graph for larger image.

This graph shows the percent of loans delinquent by days past due.

The percent of loans 30 days and 60 days delinquent are back to normal levels.


The 90 day bucket peaked in Q1 2010, and is about two-thirds of the way back to normal.

The percent of loans in the foreclosure process also peaked in 2010 and is close to two-thirds of the way back to normal.

So it has taken about 4 years to reduce the backlog by two-thirds, so a rough guess is that delinquencies and foreclosures will be back to normal in about 2 years.

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11357170
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357166/mba-delinquency-and-foreclosure-rates-decrease-in-second-quarter Tue, 12 Aug 2014 07:20:46 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11357166/mba-delinquency-and-foreclosure-rates-decrease-in-second-quarter <![CDATA[MBA: Delinquency and Foreclosure Rates Decrease in Second Quarter]]> From the MBA: Delinquency and Foreclosure Rates Decrease in Second Quarter
The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 6.04 percent of all loans outstanding at the end of the second quarter of 2014. The delinquency rate decreased for the fifth consecutive quarter and reached the lowest level since the fourth quarter of 2007. The delinquency rate decreased seven basis points from the previous quarter, and 92 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter was 2.49 percent, down 16 basis points from the first quarter and 84 basis points lower than one year ago. This was the lowest foreclosure inventory rate seen since the first quarter of 2008.

The percentage of loans on which foreclosure actions were started during the second quarter fell to 0.40 percent from 0.45 percent, a decrease of five basis points, and reached the lowest level since the second quarter of 2006.

The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 4.80 percent, a decrease of 24 basis points from last quarter, and a decrease of 108 basis points from the second quarter of last year. Similar to the previous quarter, 75 percent of seriously delinquent loans were originated in 2007 and earlier. Loans with vintages started in 2011 and later only accounted for six percent of all seriously delinquent loans.

“Delinquency and foreclosure rates fell to their lowest levels in more than six years, and the rate of new foreclosure starts is at its lowest level since 2006,” said Mike Fratantoni, MBA’s Chief Economist. “Strong job growth and continued increases in home prices in most markets have been the main contributors to these steady improvements in mortgage performance.

“We have returned to more typical seasonal patterns with respect to mortgage delinquency, with 30-day and 60-day delinquency rates increasing from the first to the second quarter on an unadjusted basis. Adjusting for the seasonal pattern, we estimate that delinquencies were down for the quarter, and are down almost a full percentage point from last year.

“Nationally, the seriously delinquent rate fell by 24 basis points last quarter and has dropped 108 basis points over the past year. The loans that are seriously delinquent, either 90+ days late or in the foreclosure process, were primarily made prior to the downturn, with 75 percent of them originated in 2007 or earlier. Loans made in recent years continue to perform extremely well due to the improving market and tight credit conditions.
...
The declining trend in later stage delinquencies and foreclosure measures is clearly continuing at the national level,” added Joel Kan, MBA’s Director of Economic Forecasting. “Some states hardest hit by the crisis, for example California and Arizona, now have foreclosure inventory rates that are both back to pre-crisis levels and less than half the current national rate. On the other hand, despite declines last quarter, states with slower-moving judicial foreclosure regimes, like New Jersey, Florida and New York, have foreclosure inventory rates two to three times the national average. There were 18 states with a higher foreclosure inventory rate than the national average, and 15 of those were judicial states. Judicial states are also starting to see more foreclosure starts than non-judicial states, whereas there used to be no clear tendency for either foreclosure regime in the past quarters.
emphasis added
CR Notes: This survey has shown steady improvement in delinquency and foreclosure rates, but it will take a few more years to work through the backlog - especially in judicial foreclosure states.

Most of the remaining problems are with loans made in 2007 or earlier: "75 percent of seriously delinquent loans were originated in 2007 and earlier" and are in judicial foreclosure states.

This survey includes all mortgage loans (including terrible lending via Wall Street).  The total serious delinquency rate is 4.80% compared to less than 2.1% for Fannie and Freddie.

]]>
11357166
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11356826/ukraine-us-subprime-and-the-erosion-of-us-financial-hegemony Sun, 10 Aug 2014 18:10:16 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11356826/ukraine-us-subprime-and-the-erosion-of-us-financial-hegemony <![CDATA[Ukraine, US subprime and the erosion of US financial hegemony]]>

Today is not going to be a themed post but a news flow analysis post like I generally write on Friday’s. But because I didn’t write on last Friday and because there is so much news flow, I am doing it today. Note that I will be out starting August 6 and unlike during prior holidays, I will not be posting (at the request of Mrs. Harrison!!) Now, on to the analysis.

read more...

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http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11356612/watching-londons-real-estate-crack-up-in-realtime Sun, 10 Aug 2014 15:30:23 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11356612/watching-londons-real-estate-crack-up-in-realtime <![CDATA[Watching Londonâs Real Estate Crack Up In Realtime]]> There are many people who believe the massive bubbles within the system cannot collapse with so many people “aware” of them.   Sort of like the old idiom ‘a watched pot never boils’.  This position relies exclusively on sentiment as its gauge.   This belief relies on tops being created with mass exuberance and wild speculation.   That certainly is happening within small constructs of society that can still afford to loot and speculate with other people’s money but what happens when sentiment of the mob that has looted society becomes fearful at the very top?   That may be developing in some bubbles including London real estate according to the Telegraph.  That is also what happened in 2008.  At the time, there was substantial panic developing at a major asset market peak.  I had written before that collapse on numerous occasions that sentiment would fail as an indicator.   And I have written incessantly since that with the reflation of assets, those who owned them would find that they are stuck with them.  That the remaining players were in the process of trading all of the counterparties out of markets.  

read more...

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http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11356598/the-fed-swift-market-moves-and-geopolitical-issues-are-testing-market-confidence Sun, 10 Aug 2014 15:29:51 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11356598/the-fed-swift-market-moves-and-geopolitical-issues-are-testing-market-confidence <![CDATA[The Fed, Swift Market Moves, and Geopolitical Issues are Testing Market Confidence]]> Before we jump into a discussion about market confidence, let's make one thing clear: The market was not only fed liquidity by the Federal Reserve over the past 5-6 years, but it was also given a major shot of confidence.

read more...

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