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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Travis_Bickle who wrote (91374)	10/5/2007 8:18:42 AM
From: Wowzer	Read Replies (3) \| Respond to of 306849

Convert Loans To Fixed Rates, FDIC Head Says By DAMIAN PALETTA October 5, 2007; Page A12 A top bank regulator urged loan servicers to consider wholesale conversions of certain adjustable-rate subprime loans into fixed-rate products to prevent major housing problems from escalating. "We don't have a lot of good options here," Federal Deposit Insurance Corp. Chairman Sheila Bair said in an interview after addressing an investors conference in New York. "And just to foreclose on all of these properties is not a good option for anybody." Such rate changes are difficult, though, because many of these subprime mortgages were securitized and packaged into trusts. As the loan quality has deteriorated major, Wall Street banks have experienced sizable losses. Nevertheless, her comments reflect the heightened pressure policymakers are trying to convey to a fragmented and slow-moving mortgage industry. Moody's Investor Service released a study last month that showed that most servicers had modified only 1% of a sample of loans that reset into higher monthly payments this year. It also found that subprime servicers weren't reaching out to borrowers to rework loan terms. Subprime adjustable-rate mortgages valued at close to $600 billion are expected to reset into higher monthly payments by the end of next year. Ms. Bair recommended making the wholesale adjustments for owner-occupied mortgages where borrowers are current on the loans. This would exclude homes bought by speculators. Her suggestion would most likely affect loans that have a low starter rate for two or three years and reset to much higher rates. Many of those loans are adjusting now and have helped push a record number of homeowners into the foreclosure process. "Keep it at the starter rate," Ms. Bair said at the Clayton Annual Investor Conference. "Convert it into a fixed rate. Make it permanent. And get on with it." Ms. Bair and other federal regulators likely couldn't force servicers to make these changes, but her message might be interpreted as a warning to loan servicers about potential legislation, said Howard Glaser, an industry consultant based in Washington. Congress is responding in other areas. The House approved legislation providing tax relief to homeowners facing foreclosure. The bill, approved 386-27, would let a homeowner exclude from income the value of debt forgiven if the owner reworks the terms of a mortgage with his or her lender. Currently, forgiven debt is treated as income and subject to tax. The bill was backed by business groups but received measured support from the White House, which objects to making the tax break permanent. President Bush is pushing an alternative that would protect homeowners from the debt-forgiveness tax for three years. Write to Damian Paletta at damian.paletta@dowjones.com

To: Travis_Bickle who wrote (91374)	10/5/2007 10:23:50 AM
From: John Vosilla	Read Replies (2) \| Respond to of 306849

'In September 2005, Standard Pacific division Westbrooke Homes paid $18 million for 54 acres just south of Belvedere Road along Florida's Turnpike. Two years later, the builder has sold the property for $14.25 million, a loss of $3.75 million. The price cut provides another indication of how far the housing market has fallen since its 2005 peak. Then, speculators were lining up to buy every house that builders put on the market. Now, sales volumes have plummeted, and Palm Beach County builders have laid off hundreds of workers. Standard Pacific hoped to build 266 homes on the property along the turnpike. The new owner, West Palm Beach developer Steve McCraney, has much different plans. He wants to build 600,000 square feet of industrial space.' Anyone in our fair state should consider themselves very lucky to get out at only 20% loss on residential land purchases from the summer of 2005. Only continued demand for industrial use saved SPF.. I've got a large industrial future land use parcel in Central Florida. I'd be tickled pink at $50k an acre