Wednesday, February 8, 2012

Job opening increases? Check

Source: Calculated Risk



From the BLS: Job Openings and Labor Turnover Summary


There were 3.4 million job openings on the last business day of December, up from 3.1 million in November, the U.S. Bureau of Labor Statistics reported today.

...

Although the number of job openings remained below the 4.4 million openings when the recession began in December 2007, the number of job openings has increased 39 percent since the end of the recession in June 2009.

The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.



This is a new series and only started in December 2000.



Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for December, the most recent employment report was for January.



Job Openings and Labor Turnover Survey Click on graph for larger image.



Notice that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.



Jobs openings increased in December, and the number of job openings (yellow) has generally been trending up, and are up about 15% year-over-year compared to December 2010.



Quits declined slightly in December, but have mostly been trending up - quits are now up about 5% year-over-year. These are voluntary separations and more quits might indicate some improvement in the labor market. (see light blue columns at bottom of graph for trend for "quits").


URL to original article: http://www.builderonline.com/builder-pulse/job-opening-increases--check.aspx?cid=BP:020812:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Tuesday, February 7, 2012

One is the loneliest number ... in more new ways

Source: New York Times

The rich are different from you and me: they’re more likely to get married.

A new report, by Michael Greenstone and Adam Looney of the Hamilton Project, looked at the decline in marriage rates over the last 50 years and found a strong connection to income. Dwindling marriage rates are concentrated among the poor — the very people whose living standards would be most improved by having a second household income.

The trend is especially pronounced among men.

Forty years ago, about nine of 10 American men between the ages of 30 and 50 were married, and the most highly paid men were just slightly more likely to wed than those paid least. Since then, earnings for men in the top tenth of the income distribution have risen and their marriage rates have fallen slightly, from 95 percent in 1970 to 83 percent today.

For men further down the income ladder, however, both earnings and their chances of connubial bliss have plummeted.

In inflation-adjusted terms, the median earnings for men in that age group have fallen about 28 percent since 1970. In the same period, their marriage rates have fallen to 64 percent, from 91 percent.

The poorest men have had even sharper financial and romantic declines: men in the bottom quartile of earnings have had a wage cut of 60 percent, and a contemporaneous drop in marriage rates to about 50 percent, from 86 percent.

The decline in the share of men at all ages who are married is partly a result of higher divorce rates, but primarily because they never got married to begin with.

Economically, the last four decades have been a very different story for women. More women have entered the work force, and those in the work force have gotten raises. In 1970, the median annual earnings for female workers 30 to 50 were $19,000; in 2010 the corresponding figure reached about $30,000.

Marriage rates have also fallen for women in that age group on most, though not all, rungs of the income ladder. As with men, the declines are biggest among the poorest workers.

For the bottom 70 percent of middle-aged working women — the women who, a generation earlier, would have needed a husband to support them — marriage rates declined by more than 15 percentage points in the last 40 years. But marriage rates for the top 10 percent of female earners either held steady or rose.

It’s not clear why marriage rates for the top-earning women rose. Perhaps the highest-paid female workers in the 1970s achieved that status by forgoing a personal life. And perhaps today it’s more socially acceptable for well-paid women to hire nannies and other household help so that they can maintain a family life, making marriage a more practical possibility.

Whatever the case, the concentration of marriage among the richest Americans is amplifying the increase in income inequality.

Rich men are marrying rich women, creating doubly rich households for them and their children. And the poor are staying poor and alone.

URL to original article: http://www.builderonline.com/builder-pulse/one-is-the-loneliest-number-----in-more-new-ways.aspx?cid=BP:020712:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Number of improved housing markets rises for February

Source: Housingwire

The list of housing markets showing measurable improvement grew by 29 in February, bringing the total to 98 entries on the National Association of Home Builders/First American Improving Markets Index, released Monday.

"The number of improving housing markets has risen for six consecutive months, and 36 states now have at least one metropolitan area on the list," noted NAHB Chairman Bob Nielsen, a homebuilder from Reno, Nev.

Nielsen said "despite the many challenges that continue to drag on a housing recovery,” the numbers are an indication that improving conditions are “slowly but surely” spreading from housing market to housing market.

David Crowe, NAHB chief economist, said while many of the housing markets on the most recent IMI are “far fom fully recovered,” employment, home prices and housing production are no longer retreating and “have held above their lowest recession troughs for six months or more.”

"This is a sign that a large cross section of the country is starting to turn the corner as local economic conditions stabilize,” he said.

The increase in February follows a massive jump in January, in which housing markets showing measurable improvement nearly doubled with the addition of 40 new metropolitan areas to the index, coming to a total of 76 improving markets – up from 41 in December.

Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, said that the subsequent jump in February “shows that the momentum is building for a housing recovery and that more buyers and sellers are starting to feel confident enough to return to the market.”

URL to original article: http://www.housingwire.com/article/number-improved-housing-markets-rises-february

For further information on Fresno Real Estate check: http://www.londonproperties.com

Monday, February 6, 2012

Top 20 metros of misery

Source: Forbes

America's Most Miserable Cities

Miami is a playground for the rich and famous. Celebrities flock to parties at South Beach clubs and then return to their $10 million mansions in Miami Beach and Key Biscayne. It’s a leading city in culture, finance and international trade. But away from the glitz and glamor, many ordinary Miamians are struggling.

A crippling housing crisis has cost multitudes of residents their homes and jobs. The metro area has one of the highest violent crime rates in the country and workers face lengthy daily commutes. Add it all up and Miami takes the top spot in our ranking of America’s Most Miserable Cities.

The most famous way to gauge misery is the Misery Index developed by economist Arthur Okun in the 1960s, which combines unemployment and inflation. Our take on misery is based on the things that people complain about on a regular basis.

We looked at 10 factors for the 200 largest metro areas and divisions in the U.S. Some are serious, like violent crime, unemployment rates, foreclosures, taxes (income and property), home prices and political corruption. Other factors we included are less weighty, like commute times, weather and how the area’s pro sports teams did. While sports, commuting and weather can be considered trivial by many, they can be the determining factor in the level of misery for a significant number of people. One tweak to this year’s list: we swapped out sales tax rates for property tax rates. Miami would have finished No. 1 under the old methodology as well (click here for more details about the criteria for the list).

In Miami there is a growing divide between the top 1% and the rest of the metro area. Life is good for the likes of LeBron James and Latin pop crooner Enrique Iglesias, who’s building a $20 million compound on a private island with girlfriend Anna Kournikova, but if you’re among the 75% of households with an annual income under $75,000, it can be a hard place. The median home price is down 41% the past three years, sixth worst in the country, to $169,000. It’s great news for first-time homebuyers; not so great for the 47% of homeowners in Miami sitting on underwater mortgages.

A whopping 364,000 properties in the Miami area have entered the foreclosure process since 2008, according to RealtyTrac. The number of foreclosure filings slowed in Miami and across the country last year, but the housing market is far from a comeback.

Miami voters are fed up. Last year 88% voted to throw Miami-Dade County Mayor Carlos Alvarez out of office in the biggest recall ever of a municipal government official. They were dissatisfied with property tax hikes he pushed though during Miami’s real estate meltdown, while doling out raises to staffers at the same time. Miami residents were further outraged by the city and county covering 80% of the cost of the Florida Marlins $634 million stadium set to open in April despite the Marlins turning fat profits in recent years.

To replace Alvarez, Miamians selected retired firefighter Carlos Gimenez in an election that featured Luther Campbell of 2 Live Crew fame, who famously was brought up on public obscenity charges for performing songs from his album “As Nasty As They Wanna Be.” The controversial rapper, who promoted an exotic dancer tax during his mayoral campaign, finished fourth with 11% of the vote. Consider: 11% of voters thought “Uncle Luke” would be the best choice to run the eighth most populous county in the U.S.

Full List: America’s Most Miserable Cities
Gimenez’s office took issue with Forbes’ use of some data from 2010 for our ranking. “We’ve completed a number of initiatives and infrastructure projects during the past two years, which if used in the measurement criteria for your report, would dramatically change its result towards a much more positive position for Miami-Dade county,” the mayor’s office said in a statement. “In addition, our crime rate has been moving downward steadily, our property taxes were dramatically reduced last year by over $200 million, and our unemployment rate has been reduced by around 30% since last summer and continues to move downward.”

Miami has local company in misery on our list: the West Palm Beach metropolitan division ranks fourth and Fort Lauderdale is seventh. Both areas have been hit hard by the housing crises.

South Florida politics have long been stained by corruption, which we factor into our list based on data from the Public Integrity Section of the U.S. Department of Justice on the number of politicians convicted of crimes. Southern Florida has had 354 public officials convicted of crimes over the past decade, which is one of the highest rates in the country on a per capita basis.

The latest trouble in the West Palm Beach area involves the mayor of Boynton Beach, Jose Rodriguez, who was suspended from his office last month by Gov. Rick Scott after Rodriguez was arrested for allegedly using his position to obstruct a child abuse probe involving his wife’s estranged daughter.

The Miami Heat brought Florida sports fans much joy when it paired James and Dwyane Wade in 2010 and the duo led the Heat to the NBA Finals. The rest of the Miami pro sports scene is pure misery, with the Miami Dolphins, Miami Marlins and Florida Panthers all among the worst teams in their respective sports last year (the Panthers have rebounded this season).

Michigan’s troubled duo of Detroit and Flint clock in at No. 2 and No. 3 among the most miserable cities. The cities have been reeling for decades due to the decline of the U.S. auto industry and in recent years have been demolishing houses to change their city landscapes. Detroit has closed schools and cut wages for government employees, while Michigan appointed an emergency manager last year to take over Flint’s budget and operations. Detroit and Flint rank No. 1 and No. 3 when it comes to violent crime, and unemployment over the past three years in both communities has also been among the worst in the U.S.

Last year’s most miserable city, Stockton, ranks No. 11 this year. Stockton got a boost as housing prices have stabilized to some degree after a 45% drop between 2006 and 2008. They also benefited from our replacement of sales tax rates with property taxes in the methodology (Stockton would have finished No. 6 under the old methodology). Stockton still has plenty of problems, though. It ranks among the country’s six worst when it comes to unemployment, foreclosures and violent crime.

URL to original article: http://www.builderonline.com/builder-pulse/top-20-metros-of-misery.aspx?cid=BP:020612:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Solo living's the way more people want to go

Source: New York Times

MORE people live alone than at any other time in history. In prosperous American cities — Atlanta, Denver, Seattle, San Francisco and Minneapolis — 40 percent or more of all households contain a single occupant. In Manhattan and in Washington, nearly one in two households are occupied by a single person.

By international standards, these numbers are surprising — surprisingly low. In Paris, the city of lovers, more than half of all households contain single people, and in socialist Stockholm, the rate tops 60 percent.

The decision to live alone is common in diverse cultures whenever it is economically feasible. Although Americans pride themselves on their self-reliance and culture of individualism, Germany, France and Britain have a greater proportion of one-person households than the United States, as does Japan. Three of the nations with the fastest-growing populations of single people — China, India and Brazil — are also among those with the fastest growing economies.

The mere thought of living alone once sparked anxiety, dread and visions of loneliness. But those images are dated. Now the most privileged people on earth use their resources to separate from one another, to buy privacy and personal space.

Living alone comports with modern values. It promotes freedom, personal control and self-realization — all prized aspects of contemporary life.

It is less feared, too, for the crucial reason that living alone no longer suggests an isolated or less-social life. After interviewing more than 300 singletons (my term for people who live alone) during nearly a decade of research, I’ve concluded that living alone seems to encourage more, not less, social interaction.

Paradoxically, our species, so long defined by groups and by the nuclear family, has been able to embark on this experiment in solo living because global societies have become so interdependent. Dynamic markets, flourishing cities and open communications systems make modern autonomy more appealing; they give us the capacity to live alone but to engage with others when and how we want to and on our own terms.

In fact, living alone can make it easier to be social, because single people have more free time, absent family obligations, to engage in social activities.

Compared with their married counterparts, single people are more likely to spend time with friends and neighbors, go to restaurants and attend art classes and lectures. There is much research suggesting that single people get out more — and not only the younger ones. Erin Cornwell, a sociologist at Cornell, analyzed results from the General Social Survey (which draws on a nationally representative sample of the United States population) from 2000 to 2008 and found that single people 35 and older were more likely than those who lived with a spouse or a romantic partner to spend a social evening with neighbors or friends. In 2008, her husband, Benjamin Cornwell (also a sociologist at Cornell), was lead author of “The Social Connectedness of Older Adults,” a paper in the American Sociological Review that showed that single seniors had the same number of friends and core discussion partners as their married peers and were more likely to socialize with friends and neighbors.

SURVEYS, some by market research companies that study behavior for clients developing products and services, also indicate that married people with children are more likely than single people to hunker down at home. Those in large suburban homes often splinter into private rooms to be alone. The image of a modern family in a room together, each plugged into a separate reality, be it a smartphone, computer, video game or TV show has become a cultural cliché.

New communications technologies make living alone a social experience, so being home alone does not feel involuntary or like solitary confinement. The person alone at home can digitally navigate through a world of people, information and ideas. Internet use does not seem to cut people off from real friendships and connections.

The Pew Internet Personal Networks and Community Survey — a nationally representative survey of 2,512 American adults conducted in 2008 that was the first to examine how the Internet and cellphones affect our core social networks — shows that Web use can lead to more social life, rather than to less. “Social Isolation and New Technology,” written by the Rutgers University communications scholar Keith Hampton, reveals that heavy users are more likely than others to have large and diverse social networks; more likely to visit parks, cafes and restaurants; and more likely to meet diverse people with different perspectives and beliefs.

Today five million people in the United States between ages 18 and 34 live alone, 10 times more than in 1950. But the largest number of single people are middle-aged; 15 million people between ages 35 and 64 live alone. Those who decide to live alone following a breakup or a divorce could choose to move in with roommates or family. But many of those I interviewed said they chose to live alone because they had found there was nothing worse than living with the wrong person.

In my interviews, older single people expressed a clear preference for living alone, which allowed them to retain their feelings of independence and integrity, and a clear aversion to moving in with friends or family or into a nursing home.

According to research by the Rutgers sociologist Deborah Carr, at 18 months after the death of a spouse, only one in four elderly men and one in six elderly women say they are interested in remarrying; one in three men and one in seven women are interested in dating someday; and only one in four men and one in 11 women are interested in dating immediately.

Most older widows, widowers and divorced people remake their lives as single people. A century ago, nearly 70 percent of elderly American widows lived with a child; today — thanks to Social Security, private pensions and wealth generated in the market — just 20 percent do. According to the U.C.L.A. economist Kathleen McGarry: “When they have more income and they have a choice of how to live, they choose to live alone. They buy their independence.”

Some unhealthy old people do become dangerously isolated, as I learned when I researched my book about the hundreds of people who died alone in the 1995 Chicago heat wave, and they deserve more attention and support than we give them today. But the rise of aging alone is also a social achievement. The sustained health, wealth and vitality that so many people over age 65 enjoy allow them to maintain domestic independence far longer than previous generations did. What’s new today is that the great majority of older widows, widowers and divorced people prefer living alone to their other options, and they’re willing to spend more on housing and domestic help for the privilege. Some pundits predicted that rates of living alone would plummet because of the challenged economy: young people would move into their parents’ basements; middle-aged adults would put off divorce or separation for financial reasons; the elderly would move in with their children rather than hold on to places of their own.

Thus far, however, there’s little evidence that this has happened. True, more young adults have moved in with their parents because they cannot find good jobs; but the proportion of those between 20 and 29 who live alone went down only slightly, from 11.97 percent in 2007 to 10.94 percent in 2011. In the general population, living alone has become more common — in absolute and proportional terms. The latest census report estimates that more than 32 million Americans live alone today, up from 27.2 million in 2000 and 31 million in 2010.

All signs suggest that living alone will become even more common in the future, at every stage of adulthood and in every place where people can afford a place of their own.

URL to original article: http://www.builderonline.com/builder-pulse/solo-living-s-the-way-more-people-want-to-go.aspx?cid=BP:020612:JUMP

For further information on Fresno Real Estate check: http://www.londonproperties.com

Friday, February 3, 2012

Appraisers: Fed rule has hurt our pay, borrowers

Written by Lily Leung

A trade group of home appraisers is digging into a federal rule it says has driven down the quality of home valuations, negatively affecting appraiser wages along with borrowers trying to get mortgages or refinances.

In-depth: 'Middleman' appraisers spur concerns

The American Guild of Appraisers recently requested key documents from the Federal Reserve on regulations that dictate what is "customary and reasonable" pay for appraisers. The paperwork was requested by the group’s law firm, Garvey Schubert Barer, under the Freedom of Information Act, essentially a federal open-records law.

The trade organization says the compensation rules allow appraiser management companies, who are middlemen, to call the shots on how much appraisers get paid, leading to reduced wages for the same amount of work, or more, even though homeowners are paying the same, or sometimes more, for home appraisals.

Lenders, instead of requesting their own appraisals, now typically go through these middleman firms, who contact the appraisers to do the work, manage the case and deliver the finished products to lenders. Lenders and appraisal management companies maintain the process is easier to outsource, and it reduces the chances of collusion.

“It is clear that appraisal management companies have interpreted rules issued by the Fed as permitting practices that result in real estate appraisers being compensated at levels that are far below ‘reasonable and customary fees’ as required in the Dodd Frank Law,” said Guild President Peter Vidi. “We want to learn whether the Fed intended this result and if so why."

What do the Fed's rules say exactly?

Appraiser pay is "reasonable and customary" if it’s:

• In line with what’s seen in the "geographic market of the property" but can be adjusted based on several factors, including the appraiser experience and property type.

• Based on lender-approved information, such as studies and fee schedules from "third parties" that include appraisal management companies.

The appraisers' guild has told the U-T San Diego it would prefer using pricing already set by agencies such as the U.S. Department of Veterans Affairs fee panel, which has state breakdowns, said Vidi in the fall.

The guild, which has been weighing legal action against the Fed since November, says the request for documents will cement their legal approach, if any. It maintains the compensation rules are in violation of the Dodd–Frank Act, a 2010 overhaul of the country’s financial rules.

“We are hopeful that these documents will allow us to better understand the seriousness with which these issues have been considered and the potential for future corrective action," Vidi said in a statement.

Appraisal fees vary across the U.S. The typical rate for borrowers in San Diego County is $400 to $550. About half of that usually goes to the appraiser, while the rest goes to an appraisal management company. In the past, appraisers routinely were paid the full fee.

One local appraiser, Don Lowe, told me in the fall he makes between $250 to $375 for what he calls “standard, noncomplex” orders that are below $1 million. Before appraiser managers proliferated, he earned between $350 to $500 per order.

Other appraisers across the U.S. have told the U-T that giving appraisal management companies the authority to set pricing has led to an increase of industry novices who are willing to travel longer distances to fulfill orders and likely cram more into their schedules to make up for lower rates.

In a November interview with the U-T, William Fall — whose company, the William Fall Group, owns an appraisal management company based outside Houston — said the middlemen are worth it because they oversee the quality, timeliness and management of appraisals from an objective position.

The length of time it takes for the U.S. government to reply to a records request varies, depending on the amount of documents it yields and other factors.

URL to original article: http://www.utsandiego.com/news/2012/jan/26/appraisers-say-feds-rule-has-hurt-their-pay-homeow/?page=1#article

For further information on Fresno Real Estate check: http://www.londonproperties.com

Thursday, February 2, 2012

Obama refi plan nothing more than political theater

Posted by Jessica Huseman on 2/1/12 at 5:22pm

Obama’s mortgage refinance plan, announced Wednesday, is unlikely to produce the benefits the president anticipates as it probably will never get off the ground.

The plan requires congressional approval, which is essentially an impossible task in the turbulent political environment. If that wasn’t enough, the administration can’t even get the FHFA to bend to its will – and it doesn’t require congressional approval to act.

Congressional Republicans are already reacting negatively to the proposal, and for several reasons.

First, the proposal places risk squarely on the FHA, which already has an enormous share of the mortgage market and may not be prepared to take on more risk.

Second, the program won’t have a major effect on default rates, since it’s targeted at homeowners least likely to default.

“[Those that would qualify] are all current on their payments, presumably employed, and are no more than 40% upside down,” said Rick Sharga, executive vice president of Carrington Mortgage Holdings. “The program will do nothing to stimulate more home buying activity, nor will it have any impact on deteriorating home prices.”

Third, and probably most salient, is that Obama has proposed paying for the plan (which will run anywhere from $5 to $10 billion) with a new tax on major lenders, which the GOP will certainly not approve.

The tax would cover closing fees for borrowers who refinance into a loan with a 20 year or shorter term with a comparable mortgage payment, and would cover the risk taken on by the FHA. And while new taxes are already guaranteed a big “no” from congressional Republicans, Barclays Capital research points out that most homeowners won’t even take advantage of the paid-for closing costs.

"While on the margin some seasoned borrowers will find it advantageous to do so, in general we expect few to adopt it as payment reduction is usually more attractive, in our opinion," they say.

All things considered, Sharga said he believes the refinance program to be nothing more than “political theater,” and I tend to agree. It’s difficult to imagine that the president actually believes this can pass through Congress. This may just be a political strategy to make it seem like the administration is fighting for homeowners instead of an actual attempt at remedying the floundering housing market.

URL to orginal article: http://www.housingwire.com/blog/obama-refi-plan-nothing-more-political-theater

For further information on Fresno Real Estate check: http://www.londonproperties.com

Investors may pre-qualify for FHFA REO initiative

Source: The Federal Housing Finance Agency

The Federal Housing Finance Agency (FHFA) today announced the first step of a Real-Estate Owned (REO) Initiative targeted at the hardest-hit metropolitan areas announced in August 2011. Investors interested in participating may “pre-qualify” to establish eligibility to bid on transactions in the initial pilot phase as well as subsequent phases.
The REO Initiative will allow qualified investors to purchase pools of foreclosed properties with the requirement to rent the purchased properties for a specified number of years. This rental period could provide relief for local housing markets that continue to be depressed by the volume of foreclosed properties, and provide additional rental options to certain markets. Prequalification ensures investors will have the financial capacity and operational expertise to manage properties in a way that is conducive to the stabilization of communities hard hit by the housing downturn.
During the pilot phase, Fannie Mae will offer for sale pools of various types of assets including rental properties, vacant properties and non-performing loans with a focus on the hardest-hit areas. The first transaction will be announced in the near-term.
California’s housing market is unique. California has an extremely low REO inventory where REO sales are getting top dollar in multiple offer situations. On average, REOs are sold are sold in less than 60 days. Bulk sales in California not only would have a negative impact on home prices, but would also push down home values for existing homeowners in those communities. C.A.R. is asking that the Federal Housing Finance Agency, Dept. of Treasury, and Dept. of Housing and Urban Development consider this program only in areas where REO inventory is abundant and selling in bulk makes sense.
The pre-qualification will require those interested in receiving information regarding specific pilot transactions to meet certain minimum criteria including, but not limited to, (a) financial wherewithal to acquire the assets; (b) sufficient experience and knowledge in financial and business matters to analyze and bear the risks of the investment opportunity; and (c) agreement to keep certain information about the REO and related matters confidential. Interested investors can register at FHFA’s REO Initiative page to pre-qualify.
FHFA is also looking at ways to improve REO sales to homeowners and small investors, enhancing the existing retail sales strategy at Fannie Mae and Freddie Mac. Both companies sell the majority of their REO properties to owner-occupants at close to market value. The purpose of the pilot phase will be to examine investor interest in various types of assets, including the location, size, and composition of pools of assets; the ways in which investors maximize the participation of experienced local firms and organizations that can provide the types of services and support needed to ensure community stabilization; the types of structures and/or financing that improve returns to the sellers as well as home values in impacted markets; and the process by which investors are qualified to and ultimately participate in the sales transactions.

URL to original article: http://www.fhfa.gov/webfiles/23196/REO2112F.pdf

For further information on Fresno Real Estate check: http;//www.londonproperties.com

Wednesday, February 1, 2012

Reaction mixed on Obama housing fix

By Jon Prior

The housing industry and market analysts gave mixed reactions to the mortgage refinance plan announced Wednesday by the Obama administration.

Meanwhile top Republicans say the plan is essentially "dead on arrival" in the House, meaning underwater borrowers of non-GSE loans will likely have to hang on until after the November elections. Investors in securities backed by high-interest mortgages should be relieved of any massive prepayment wave until then as well.

Department of Housing and Urban Development Secretary Shaun Donovan said the bill would essentially shift the decisionmaking almost entirely to the homeowner when it comes to refinancing.

"In the end, what the president wants to do is give families the choice, to give them the power to make the decision. The bank will have no ability to say no to homeowners if we get this bill passed and get this program established," Donovan said.

Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee claims the program would unnecessarily shift risk to the Federal Housing Administration.

However, Donovan and the White House said lenders will be required to reduce the principal on mortgages with loan-to-value ratios above 140% before the new loan is refinanced into an FHA one. And the plan sets up a separate FHA fund for the program that would not impact its overall capital ratio, which slid to 0.2% last year.

Still, Bachus said the program doesn't do enough.

"This is not a serious plan to help the nation's housing market. This is just more of the same from an administration that offers expensive program after expensive program, none of which have worked to help struggling homeowners," Bachus said. "President Obama is proposing to get out of the hole we're in by digging deeper."

The pilot program to begin selling government-owned REO in bulk is gaining more approval. Sen. Jack Reed, D-R.I., said it hopefully will begin moving faster in the months ahead.

"Instead of letting these homes sit vacant and drag down neighboring property values, lets give families the chance to move in, pay rent and be good neighbors," Reed said.

Mortgage Bankers Association CEO David Stevens, meanwhile, backed the new initiatives, especially the "homeowner bill of rights," which could translate into a national mortgage servicing standard.

"MBA agrees that a single national set of standards can help provide confidence and certainty in the real estate market for borrowers, lenders and servicers alike," Stevens said. "I want to commend the administration for recognizing that more can be done get our housing market on track. The programs announced today will give lenders and other stakeholders additional tools to help borrowers and foster a renewed confidence in our real estate finance system."

But Anthony Sanders, an economist at George Mason University, said like other refinancing programs before it, the result simply shifts the savings to borrowers from MBS investors.

"So, will a wealth redistribution of $5 billion to $10 billion revive the housing market? It is highly doubtful," Sanders said. "Will it lower defaults? It will not lower defaults in any meaningful way. To be sure, the borrowers that receive the lower interest rates will be happy, but they should ask their neighbors if they want to pay for it."

Jaret Seiberg, an analyst at Guggenheim Partners in Washington, said by mitigating risks for the FHA, the program becomes too complicated to be effective.

"The plan is getting more complicated and harder to implement," Seiberg said. "That means that it would produce fewer refinancings than we previously thought and offer less benefit to the economy and to the banks."

Donovan said the proposed program expands the universe of eligible borrowers from the 11 million underwater borrowers potentially eligible for the updated Home Affordable Refinanced Program by 3.5 million.

Banking analysts at JPMorgan Chase ($37.84 0.54%) pointed out the administration did not mention changes to mortgage insurance premiums on the new FHA loan. If there are no changes, then investors in higher-rate Ginnie Mae securities — which contain FHA loans — could be spared if there are not changes to the structure.

"We had anticipated changes to the FHA program, though we thought that perhaps the MIPs would be grandfathered for seasoned borrowers who currently pay a lower MIP (e.g. borrowers pre-October 2010 pay a MIP of only 55bp, but would have to pay roughly 110bp if they refinanced.)," the Chase analysts said.

Still, the refinancing proposal lands squarely in the debate that has Washington in a gridlock. Can the government induce a recovery in housing? Donovan said Congress "should not sit on its hands" if there something it can do especially for borrowers who have remained responsible this long.

Sanders said, in the end, the market itself will eventually have to find its own solution and that forcing banks to pay for such a program will only transfer that payment to other borrowers.

"The bank tax will simply get passed through to consumers in the form of higher fees," Sanders said. "Like in Jurassic Park, 'Markets will find a way' to pass the additional costs on to consumers."

Brian Montgomery, chairman of the financial advisory firm the Collingwood Group and former FHA commissioner, said the plan "appears to be the right and proper thing to do. However it remains to be seen the level of participation (and degree of congressional acceptance) and ultimately what cost, if any, to the taxpayers — most of which have grown weary of the nagging housing crisis."

URL to original article: http://www.housingwire.com/article/reaction-mixed-obama-housing-fix

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Unemployment rates drop in 329 of 372 metros

By Kerry Curry

Jobless rates were lower in December than they were a year earlier in 329 of the nation's 372 metro areas, according to new statistics released Wednesday from the Bureau of Labor Statistics. Unemployment rose in 36 areas, and was unchanged in seven areas, the BLS reported.

Ten areas recorded jobless rates higher than 15%, while 24 areas registered rates of less than 5%. The BLS said 239 metros reported increases in nonfarm payroll employment during 2011, 127 reported decreases, and six had no change.

The national unemployment rate in December was 8.3%, not seasonally adjusted, down from 9.1% a year earlier.

El Centro, Calif., and Yuma, Ariz., recorded the highest unemployment rates in December 2011, 26.8% and 23.1%, respectively. Seven of the other eight areas with jobless rates above 15% were located in California.

Bismarck, N.D., registered the lowest unemployment rate, 3.2%.

The largest over-the-year unemployment rate decreases in December were registered in Steubenville-Weirton, Ohio-W.Va. (-2.8 percentage points), and Redding, Calif. (-2.7 points). Twenty-seven other areas recorded rate declines of 2.0 percentage points or more.

Of the 49 metropolitan areas with a Census 2000 population of 1 million or more, the highest unemployment rates in December were registered in Las Vegas-Paradise, Nev., 12.7%, and Riverside-San Bernardino-Ontario, Calif., 12.2%.

URL to original article: http://www.housingwire.com/article/unemployment-rates-drop-329-372-metros

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