This article doesn’t mention it, but it seems to me that a logical next step would have Toyota entering into the modular home arena. Obviously, their car factories are set up for mass production, so I could see a day when you buy a Toyota house, which, like other modular housing, arrives in mass-produced components, and is then assembled on site by Toyota-certified technicians. Modular housing is a topic for another post, but pre-fabricated housing is a sector which is growing and will probably replace full on-site (stick-built) construction in the near future. ----
By Nobuyuki Kojima and Satoshi Nakagawa
RISMEDIA, November 19, 2010—(MCT)—In what promises to be a fascinating contest between industry leaders in relatively unfamiliar territory, two of Japan’s manufacturing giants, Toyota Motor Corp. and Panasonic Corp., are attempting strong advances in the housing sector.
Both firms believe there are huge opportunities ahead for energy-saving technologies, with the introduction of the so-called smart grid—a next-generation power network that will optimize supply to residential and other properties—likely to accelerate demand for such products.
Toyota and Panasonic have been pushing their subsidiaries to do more to exploit the growing preference for environmentally friendly homes.
Toyota has integrated certain operations with subsidiary Toyota Home, with a view to adapting automobile-manufacturing techniques to the housing sector.
At a news conference on Oct. 5, Toyota announced a new design concept for homes that include recharging facilities for plug-in hybrid vehicles. "At long last, the integration of automobiles and homes has arrived," said Senta Morioka, president of Toyota Home.
The design makes use of Toyota's electric battery technology to maximize the power efficiency of both the building and the vehicle, the firm said.
Panasonic, meanwhile, combined its most advanced technologies in an experimental "eco home" built by its PanaHome Corp. subsidiary in Higashi-Omi, Shiga Prefecture, Japan, in July.
Hoping to put the eco-home on the market in fiscal 2011, PanaHome said its employees have been researching the eco home's performance by actually living in the experimental structure.
PanaHome's goal is for the home to produce zero carbon dioxide emissions.
Features of the design include a roof completely covered by solar cells, an interior lighting system based on organic electroluminescent devices and walls equipped with vacuum insulation, as used in refrigerators, the company said.
Such innovation by Panasonic and Toyota reflects both firms' long-term approach to the housing industry.
Toyota has long held a "strong interest" in the field, Toyota President Akio Toyoda said.
During Japan's period of economic and social turmoil immediately after World War II, Toyota founder Kiichiro Toyoda began a prefabricated home business, which his son Shoichiro Toyoda, currently honorary chairman of Toyota, continued by setting up a housing business department in 1975.
PanaHome is the housing industry's fifth-biggest firm in terms of sales. It reported sales of 260.3 billion yen in fiscal 2009 — less than one-fifth the sales of the industry's largest player, Daiwa House Industry Co.
With the resources of the wider Panasonic group behind it, PanaHome is "determined to soon become one of the top three" firms in the industry, PanaHome President Yasuteru Fujii has said.
Hidetaka Yoneyama, a senior researcher at private consulting firm Fujitsu Research Institute, said, "In the housing business, it's getting hard to satisfy consumers without offering wide-ranging, environment-friendly technology.
"While companies like Toyota and Panasonic can address these challenges on their own, many others will need to form partnerships that cross the boundaries between industries like housing, car manufacturing and electrical appliance manufacturing," Yoneyama said.
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
Wednesday, November 24, 2010
A Living Roof: More Expensive but Worth the Cost
I don’t know if we have any green roofs in Savannah, but if there’s a roofing contractor in the area who is capable of installing one correctly, it’s certainly something I’d like to explore on a future project.----
By Kathleen Lynn
RISMEDIA, November 19, 2010—(MCT)—When Scott Harris and Sarah Jack did a major renovation of their 1925 Teaneck, N.J., colonial in the summer of 2009, they kept the environment in mind—for example, choosing kitchen counters made of cement and recycled glass.
They thought about solar roof panels, but rejected that idea when they were told that they'd have to chop down a towering tree that shades their back yard and house.
Instead, they installed a green, or living, roof. The greenery absorbs and filters rainwater, as well as adding insulation, which cuts heating and cooling costs.
For most homeowners, the biggest environmental impact of a roof is simply that it keeps the environment out. But there are innovations that aim to make the roof over your head an important tool in the effort to save energy and reverse global warming. And we're not just talking about solar panels.
There are cool roofs that reflect, instead of absorb, the sun's rays; roofs made with recycled material; and green or "living" roofs, like the one on the Harris-Jack house.
While the number of energy-saving options is growing fast, these roofs tend to be significantly more expensive than the traditional asphalt shingle roof. As a result, homeowners have been slow to adopt them.
But Harris, a graphic designer, and Jack, a publishing executive, made the leap—choosing a green roof, partly for energy savings, and partly for aesthetics.
"We wanted to do something to see if we could save on energy bills," said Harris. "But it's nice just to look out at it. Now when people come to visit, we have to bring them to the bathroom upstairs to look at the roof."
Their green installation, on a flat section of roof at the rear of their house, consists of shallow trays holding a light, rocky soil and a mix of sedums, a drought-resistant, low-maintenance plant.
The cost of green roofs ranges from $15 to $35 a square foot—significantly more than a simple asphalt roof. The roofs require a structure strong enough to hold the plants and soil, even when the soil is saturated after a rainstorm. And some homeowners worry that if such a roof develops a leak, it would be more difficult to fix—though using trays lessens that concern.
But green roofs tend to last much longer, because the vegetation protects the roof structure from drastic changes in temperature, according to Jennifer Souder, a research manager at the Center for Green Building at Rutgers University.
"They can be a hard sell, because this is money you have to pay now," she said. "But over the long period, they can be cost-effective."
Green roofs also can help the environment by reducing storm water runoff, which washes pollutants into the state's waterways. And they can dramatically reduce the so-called urban heat island effect—the tendency of built-up, paved areas to be hotter than rural, natural areas. Souder said a test on roofs in Queens found that on a hot day, the air above a black roof registered 170 degrees; above a white roof, 115 degrees; and above a green roof, 85 degrees.
Though green roofs are still unusual, the industry grew 16 percent in 2009, according to the organization Green Roofs for Healthy Cities. They've been used on a number of public buildings, including Chicago City Hall.
Environmental concerns also are giving a boost to metal roofs, which make up an estimated 11 percent of the residential re-roofing market, up from about 4 percent a decade ago, according to the Metal Roofing Alliance, a trade group.
Metal roofs cost two to three times what an asphalt shingle roof costs, according to the alliance. But the group points out that metal roofs are lighter than asphalt shingles, and last decades longer.
They typically include at least 28 percent recycled material, and can be recycled at the end of their useful lives. In addition, the roofs can be coated or painted to reflect sunlight, which reduces the home's air conditioning costs. Some are Energy Star-rated, which entitles homeowners to a federal tax credit of up to $1,500 (which expires at the end of the year).
Bob LeSauvage had a very simple reason for choosing a metal roof on his Mahwah, N.J., home: "I'll never have to think about doing a roof again—and the next guy (who owns the house) probably won't, either," he said.
The steel roof LeSauvage had installed on his 1930s-vintage home last summer has a 50-year warranty.
So far, he's very happy with it. There's a layer of insulation between the wood and the metal, which muffles the sound of rain — though he said the acorns falling from a nearby tree do seem to make more noise than they did on the old roof.
Metal is not the only material that is recycled for roofs; roofs can be made out of recycled rubber and plastic, including old tires, carpet and bottles, and made to look like slate or wood shakes.
Even asphalt shingles, the workhorse of the roofing world, are getting an energy-saving twist. Asphalt roofs are the lowest-cost option, typically running $80 to $100 per "square"—a roofing industry measure that's equal to 100 square feet. That comes to about $1,000 to $1,200 for a 1,200-square-foot roof on a Cape Cod (not including installation charges). Larger houses, of course, cost more.
Because the asphalt shingles are affordable, they cover eight of every 10 homes in the U.S., according to the Asphalt Roofing Manufacturers Association.
But there are some new developments here, too—notably energy-saving "cool" roofs, which incorporate reflective granules to reduce the heat that comes into the attic.
GAF Materials Corp. of Wayne, N.J., the nation's largest manufacturer of roofing materials, estimates that such roofs can cut homeowners' cooling costs by 7 to 15 percent.
By Kathleen Lynn
RISMEDIA, November 19, 2010—(MCT)—When Scott Harris and Sarah Jack did a major renovation of their 1925 Teaneck, N.J., colonial in the summer of 2009, they kept the environment in mind—for example, choosing kitchen counters made of cement and recycled glass.
They thought about solar roof panels, but rejected that idea when they were told that they'd have to chop down a towering tree that shades their back yard and house.
Instead, they installed a green, or living, roof. The greenery absorbs and filters rainwater, as well as adding insulation, which cuts heating and cooling costs.
For most homeowners, the biggest environmental impact of a roof is simply that it keeps the environment out. But there are innovations that aim to make the roof over your head an important tool in the effort to save energy and reverse global warming. And we're not just talking about solar panels.
There are cool roofs that reflect, instead of absorb, the sun's rays; roofs made with recycled material; and green or "living" roofs, like the one on the Harris-Jack house.
While the number of energy-saving options is growing fast, these roofs tend to be significantly more expensive than the traditional asphalt shingle roof. As a result, homeowners have been slow to adopt them.But Harris, a graphic designer, and Jack, a publishing executive, made the leap—choosing a green roof, partly for energy savings, and partly for aesthetics.
"We wanted to do something to see if we could save on energy bills," said Harris. "But it's nice just to look out at it. Now when people come to visit, we have to bring them to the bathroom upstairs to look at the roof."
Their green installation, on a flat section of roof at the rear of their house, consists of shallow trays holding a light, rocky soil and a mix of sedums, a drought-resistant, low-maintenance plant.
The cost of green roofs ranges from $15 to $35 a square foot—significantly more than a simple asphalt roof. The roofs require a structure strong enough to hold the plants and soil, even when the soil is saturated after a rainstorm. And some homeowners worry that if such a roof develops a leak, it would be more difficult to fix—though using trays lessens that concern.
But green roofs tend to last much longer, because the vegetation protects the roof structure from drastic changes in temperature, according to Jennifer Souder, a research manager at the Center for Green Building at Rutgers University.
"They can be a hard sell, because this is money you have to pay now," she said. "But over the long period, they can be cost-effective."
Green roofs also can help the environment by reducing storm water runoff, which washes pollutants into the state's waterways. And they can dramatically reduce the so-called urban heat island effect—the tendency of built-up, paved areas to be hotter than rural, natural areas. Souder said a test on roofs in Queens found that on a hot day, the air above a black roof registered 170 degrees; above a white roof, 115 degrees; and above a green roof, 85 degrees.
Though green roofs are still unusual, the industry grew 16 percent in 2009, according to the organization Green Roofs for Healthy Cities. They've been used on a number of public buildings, including Chicago City Hall.
Environmental concerns also are giving a boost to metal roofs, which make up an estimated 11 percent of the residential re-roofing market, up from about 4 percent a decade ago, according to the Metal Roofing Alliance, a trade group.
Metal roofs cost two to three times what an asphalt shingle roof costs, according to the alliance. But the group points out that metal roofs are lighter than asphalt shingles, and last decades longer.
They typically include at least 28 percent recycled material, and can be recycled at the end of their useful lives. In addition, the roofs can be coated or painted to reflect sunlight, which reduces the home's air conditioning costs. Some are Energy Star-rated, which entitles homeowners to a federal tax credit of up to $1,500 (which expires at the end of the year).
Bob LeSauvage had a very simple reason for choosing a metal roof on his Mahwah, N.J., home: "I'll never have to think about doing a roof again—and the next guy (who owns the house) probably won't, either," he said.
The steel roof LeSauvage had installed on his 1930s-vintage home last summer has a 50-year warranty.
So far, he's very happy with it. There's a layer of insulation between the wood and the metal, which muffles the sound of rain — though he said the acorns falling from a nearby tree do seem to make more noise than they did on the old roof.
Metal is not the only material that is recycled for roofs; roofs can be made out of recycled rubber and plastic, including old tires, carpet and bottles, and made to look like slate or wood shakes.
Even asphalt shingles, the workhorse of the roofing world, are getting an energy-saving twist. Asphalt roofs are the lowest-cost option, typically running $80 to $100 per "square"—a roofing industry measure that's equal to 100 square feet. That comes to about $1,000 to $1,200 for a 1,200-square-foot roof on a Cape Cod (not including installation charges). Larger houses, of course, cost more.
Because the asphalt shingles are affordable, they cover eight of every 10 homes in the U.S., according to the Asphalt Roofing Manufacturers Association.
But there are some new developments here, too—notably energy-saving "cool" roofs, which incorporate reflective granules to reduce the heat that comes into the attic.
GAF Materials Corp. of Wayne, N.J., the nation's largest manufacturer of roofing materials, estimates that such roofs can cut homeowners' cooling costs by 7 to 15 percent.
Friday, November 19, 2010
October Housing Starts Down
Housing starts are down. What does this actually mean? The seasonably adjusted number of new construction homes based on permit applications has decreased. Clearly the two new home construction permits my investors and I are applying for next week were not taken into consideration. So a recovery might be on its way. Seriously, though, all the numbers are extremely difficult to use for personal purposes. We're talking about national numbers, and we know that all markets are different, and if there's one thing anyone following this blog should have learned in the past six months, it's that no one really seems to know what's happening. You can sit on the sideline, read your data, wonder where prices are going, wonder where interest rates are going, wonder how many permits were pulled, or you can find a house that makes sense for you now, lock in a historically low interest rate, and stop hiding under the covers. And remember, a rise in interest rates from 4.25% to 5.25% will more than negate any monthly savings you might have in your mortgage payment if you wait for prices to drop 10%. If prices don't drop and interest rates go up, which most observers think they must, you'll be kicking yourself for not locking in at a ridiculously low rate now. And now on to those inscrutable statistics.
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RISMEDIA, November 18, 2010—Nationwide housing starts declined 11.7 percent to a seasonally adjusted annual rate of 519,000 units in October, according to figures released by the U.S. Commerce Department. The decline was primarily registered in the more volatile multifamily sector, where starts retreated 43.5 percent to an 83,000-unit rate, while single-family starts posted a more modest 1.1 percent decline to 436,000 units.
"Home builders continue to be very cautious about starting new projects at this time," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "That said, in markets where consumer demand for new homes is reviving, builders are finding it almost impossible to obtain construction financing, and this frustrating situation is producing an unnecessary drag on both new home production and economic growth."
"October single-family starts and permitting activity remained essentially in line with the third quarter's trend," noted NAHB Chief Economist David Crowe. "What this tells us is that the market is running at a steady, but slow, rate following the downturn that took place upon expiration of the home buyer tax credit program and the economic slowdown this summer. Today, builders are just starting to report some improvement in buyer demand, which should gradually translate into more sales activity, and more starts, as the economy strengthens. The great concern is that this positive momentum will be stifled due to builders' inability to obtain financing for new construction at a time when inventories of completed new homes are very thin."
A report to be released by NAHB later today will highlight the extent to which much of the U.S. single-family housing market is underbuilt following the severe decline in production that has taken place since 2006. This finding underscores the concern that demand for new homes could quickly overwhelm supplies as economic conditions improve.
Starts activity was mixed across the nation in October, with gains of 12.9 percent and 1 percent reported in the Northeast and Midwest, respectively, and declines of 13.4 percent and 30.5 percent reported in the South and West, respectively.
Permit issuance, which can be an indicator of future building activity, showed virtually no change in October, with a 0.5 percent gain to a seasonally adjusted annual rate of 550,000 units. This lack of movement was reflected in both the single-family and multifamily sectors, with a 1.0 percent gain recorded in the former and a 0.7 percent decline registered in the latter.
Regionally, permit activity showed no change in the Northeast, a 14.3 percent gain in the Midwest, a 3.4 percent decline in the South, and a 0.9 percent decline in the West.
View original article: http://rismedia.com/lowes/8355/11190
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
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RISMEDIA, November 18, 2010—Nationwide housing starts declined 11.7 percent to a seasonally adjusted annual rate of 519,000 units in October, according to figures released by the U.S. Commerce Department. The decline was primarily registered in the more volatile multifamily sector, where starts retreated 43.5 percent to an 83,000-unit rate, while single-family starts posted a more modest 1.1 percent decline to 436,000 units.
"Home builders continue to be very cautious about starting new projects at this time," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "That said, in markets where consumer demand for new homes is reviving, builders are finding it almost impossible to obtain construction financing, and this frustrating situation is producing an unnecessary drag on both new home production and economic growth."
"October single-family starts and permitting activity remained essentially in line with the third quarter's trend," noted NAHB Chief Economist David Crowe. "What this tells us is that the market is running at a steady, but slow, rate following the downturn that took place upon expiration of the home buyer tax credit program and the economic slowdown this summer. Today, builders are just starting to report some improvement in buyer demand, which should gradually translate into more sales activity, and more starts, as the economy strengthens. The great concern is that this positive momentum will be stifled due to builders' inability to obtain financing for new construction at a time when inventories of completed new homes are very thin."
A report to be released by NAHB later today will highlight the extent to which much of the U.S. single-family housing market is underbuilt following the severe decline in production that has taken place since 2006. This finding underscores the concern that demand for new homes could quickly overwhelm supplies as economic conditions improve.
Starts activity was mixed across the nation in October, with gains of 12.9 percent and 1 percent reported in the Northeast and Midwest, respectively, and declines of 13.4 percent and 30.5 percent reported in the South and West, respectively.
Permit issuance, which can be an indicator of future building activity, showed virtually no change in October, with a 0.5 percent gain to a seasonally adjusted annual rate of 550,000 units. This lack of movement was reflected in both the single-family and multifamily sectors, with a 1.0 percent gain recorded in the former and a 0.7 percent decline registered in the latter.
Regionally, permit activity showed no change in the Northeast, a 14.3 percent gain in the Midwest, a 3.4 percent decline in the South, and a 0.9 percent decline in the West.
View original article: http://rismedia.com/lowes/8355/11190
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
Thursday, November 18, 2010
Renovations That Give You a Return on Your Investment
This Old House magazine always has some interesting online content. I’m often asked what improvements are worthwhile considering, in terms of home resale. My own take, of course, being a renovator, is that everything is worthwhile, since so many houses on the market are not upgraded, or if they are, the work is shoddy. We all have to live in the real world, as far as budgets, though, so this article is good reading:
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By: Carl Vogel, This Old House magazine
It's the fundamental question facing anyone who has ever embarked on a home renovation: How likely am I to get the money back when I sell my house?
There's no easy answer, because what a buyer might be willing to pay depends on many factors — everything from the choice of project to the materials you use to the value of other homes in your neighborhood. But it's important to have some idea of what your improvements might be worth.
Continue reading at http://www.thisoldhouse.com/toh/article/0,,408045,00.html
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
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By: Carl Vogel, This Old House magazine
It's the fundamental question facing anyone who has ever embarked on a home renovation: How likely am I to get the money back when I sell my house?
There's no easy answer, because what a buyer might be willing to pay depends on many factors — everything from the choice of project to the materials you use to the value of other homes in your neighborhood. But it's important to have some idea of what your improvements might be worth.
Continue reading at http://www.thisoldhouse.com/toh/article/0,,408045,00.html
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
Wednesday, November 17, 2010
Foreclosure mess prompts call for stress tests
As everyone knows, I’ve given up making predictions on the near-term future of real estate, and am continuing to make purchases that make sense for my own purposes, as well as advising clients to do the same. My investors and I have three projects in the works—the next two skinny lot Victorian District new construction projects I’ve been discussing, and a small cottage in the Landmark Historic District that we just put under contract and plan to renovate. More on that later. Anyway, we’ve been successful, but maybe news like the following will ultimately make us look like idiots. Or, maybe we’ll continuing being successful while others sit on the sidelines.
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By Ben Rooney, staff reporter
November 16, 2010: 8:20 AM ET
NEW YORK (CNNMoney.com) -- A Congressional watchdog group said Tuesday that U.S. banks should undergo stress tests to determine whether or not they have enough money to absorb losses that could stem from investigations into their foreclosure processes.
The Congressional Oversight Panel, created by Congress in 2008 to review the Treasury Department's response to the financial crisis, issued a 125-page report detailing recent allegations that banks and loan servicers filed thousands of inaccurate documents in foreclosure cases across the country.
While the report acknowledged that the scope and the consequences of controversy remain unknown, the panel warned that the financial system could be at risk if the allegations of "robo-signing" are proven to be true.
"If documentation problems prove to be pervasive and, more importantly, throw into doubt the ownership of not only foreclosed properties but also pooled mortgages, the consequences could be severe," the report said.
The worry is that banks will be forced to buy back mortgages that had been bundled and sold in the $7.6 trillion market for Residential Mortgage Backed Securities, or RMBS. That could result in severe losses for the banks and destabilize the still-fragile financial system, according to the report.
Bank of America has already come under fire from some big institutional investors, including the Pacific Investment Management Company and the Federal Reserve Bank of New York, which have accused the bank of mishandling $47 billion in home loans.
In addition, attorneys general from all 50 states have launched investigations into banks' foreclosure practices.
Still, the report noted that concerns about robo-signing could be overblown, and the panel's chairman told reporters Monday that he doesn't yet know the full impact of the problem.
"It could turn out to be nothing, or it could turn out to be a big deal," said Senator Ted Kaufman, D-Del. "We're not at the stage yet were we have all the info we need to determine how bad it's going to be," he added.
To assess banks' vulnerability, the panel called on regulators to subject banks to stress tests to gauge whether their financial health is sound enough to withstand losses that could result from the controversy under a worst-case scenario.
The Federal Reserve and the Treasury Department conducted stress tests on banks in 2009 amid the financial crisis. But those tests offer "limited reassurance that major banks could survive further shocks in the months and years to come," the report said.
The panel also took issue with statements from the Treasury Department suggesting that the robo-signing problem does not currently pose a threat to the financial system, saying such assertions "appear premature."
In response, a Treasury official said in a statement that the agency is working closely with 11 other federal regulators to investigate the issue, but "they have not found evidence to date of a systemic threat to the broader financial system."
"We strongly believe that the reported behavior within the mortgage servicer industry is simply unacceptable, and servicers who have failed to follow the law must be held accountable," said Treasury spokesman Mark Paustenbach.
The report also raised concerns that the controversy could undermine the Treasury's main foreclosure prevention program, the Home Affordable Modification Program, or HAMP. Panel members are concerned that some servicers dealing with Treasury may have no legal right to initiate foreclosures, which may call into question their ability to grant modifications or to demand payments from homeowners.
However, the Treasury noted that HAMP is intended to help eligible homeowners before they enter the foreclosure process.
View original article: http://money.cnn.com/2010/11/16/real_estate/congressional_oversight_panel_bank_foreclosures/index.htm
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
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By Ben Rooney, staff reporter
November 16, 2010: 8:20 AM ET
NEW YORK (CNNMoney.com) -- A Congressional watchdog group said Tuesday that U.S. banks should undergo stress tests to determine whether or not they have enough money to absorb losses that could stem from investigations into their foreclosure processes.
The Congressional Oversight Panel, created by Congress in 2008 to review the Treasury Department's response to the financial crisis, issued a 125-page report detailing recent allegations that banks and loan servicers filed thousands of inaccurate documents in foreclosure cases across the country.
While the report acknowledged that the scope and the consequences of controversy remain unknown, the panel warned that the financial system could be at risk if the allegations of "robo-signing" are proven to be true.
"If documentation problems prove to be pervasive and, more importantly, throw into doubt the ownership of not only foreclosed properties but also pooled mortgages, the consequences could be severe," the report said.
The worry is that banks will be forced to buy back mortgages that had been bundled and sold in the $7.6 trillion market for Residential Mortgage Backed Securities, or RMBS. That could result in severe losses for the banks and destabilize the still-fragile financial system, according to the report.
Bank of America has already come under fire from some big institutional investors, including the Pacific Investment Management Company and the Federal Reserve Bank of New York, which have accused the bank of mishandling $47 billion in home loans.
In addition, attorneys general from all 50 states have launched investigations into banks' foreclosure practices.
Still, the report noted that concerns about robo-signing could be overblown, and the panel's chairman told reporters Monday that he doesn't yet know the full impact of the problem.
"It could turn out to be nothing, or it could turn out to be a big deal," said Senator Ted Kaufman, D-Del. "We're not at the stage yet were we have all the info we need to determine how bad it's going to be," he added.
To assess banks' vulnerability, the panel called on regulators to subject banks to stress tests to gauge whether their financial health is sound enough to withstand losses that could result from the controversy under a worst-case scenario.
The Federal Reserve and the Treasury Department conducted stress tests on banks in 2009 amid the financial crisis. But those tests offer "limited reassurance that major banks could survive further shocks in the months and years to come," the report said.
The panel also took issue with statements from the Treasury Department suggesting that the robo-signing problem does not currently pose a threat to the financial system, saying such assertions "appear premature."
In response, a Treasury official said in a statement that the agency is working closely with 11 other federal regulators to investigate the issue, but "they have not found evidence to date of a systemic threat to the broader financial system."
"We strongly believe that the reported behavior within the mortgage servicer industry is simply unacceptable, and servicers who have failed to follow the law must be held accountable," said Treasury spokesman Mark Paustenbach.
The report also raised concerns that the controversy could undermine the Treasury's main foreclosure prevention program, the Home Affordable Modification Program, or HAMP. Panel members are concerned that some servicers dealing with Treasury may have no legal right to initiate foreclosures, which may call into question their ability to grant modifications or to demand payments from homeowners.
However, the Treasury noted that HAMP is intended to help eligible homeowners before they enter the foreclosure process.
View original article: http://money.cnn.com/2010/11/16/real_estate/congressional_oversight_panel_bank_foreclosures/index.htm
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
322 East Oglethorpe Ave. is Under Contract
Well, they say price is everything and my clients at 322 East Oglethorpe were willing to take the price plunge to $599,000. Three days later, we were under contract. We’re looking at a clean, 30-day closing, so I will keep you posted. The buyers are planning to restore the building, so even after it’s sold, I’ll probably take some photos for update purposes.
Here's a link to my earlier post about when SCAD's Building Assessment Strategies II class did a study on 322 E. Oglethorpe. Pretty interesting stuff.
Friday, November 12, 2010
The New Economy Home
I’m always looking for good plans for the infill lots my investors and I are working on in Historic Downtown Savannah. Marianne Cusato designed what have become known as the “Katrina Cottages,” small, economical homes meant to act as replacements for the housing lost in Hurricane Katrina. Her latest project is “The New Economy Home,” designed to be “right-sized,” energy efficient, and expandable at a future time when homeowners have more disposable income. At 26 feet wide, it could fit on most urban lots, although it will be a bit too wide for our next projects, at 313 East Park and 528 East Duffy. But we have a couple lots on the radar where the house could fit. I have a couple quibbles with the home—I don’t watch too much TV, but even I wouldn’t want my TV where the rendering shows. But all in all, speaking as someone who has faced the challenges of fitting all the features of today’s homes into sub-2000 square foot spaces, I think it’s a very cool plan.
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
Thursday, November 11, 2010
Bankrate: Mortgage Rates Return to Record Low Territory
Seems like I’ve posted a version of this article hundreds of times since starting this blog…
Bankrate: Mortgage Rates Return to Record Low Territory
RISMEDIA, November 9, 2010--Mortgage rates revisited record lows this week, with the average rate on the benchmark conforming 30-year fixed mortgage rate returning to 4.42 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.37 discount and origination points.
To see mortgage rates in your area, go to http://www.bankrate.com/
The average 15-year fixed mortgage hit a new low of 3.81 percent, and the larger jumbo 30-year fixed rate did as well, sinking to 5.04 percent. Adjustable rate mortgages were mostly lower, with the average 5-year ARM falling to 3.57 percent and the average 7-year ARM retreating to 3.87 percent.
Mortgage rates fell back into record low territory this week. The Federal Reserve has announced another injection of $600 billion over the next 8 months, but it remains to be seen if this is enough to push Treasury yields and mortgage rates lower, and if so, by how much. Even if the Fed is successful in pushing rates lower, it doesn't alter the fact that many would-be borrowers are upside-down, living on a reduced income, or concerned about a lack of job security.
The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.42 percent, the monthly payment for the same size loan would be $1,003.89, a savings of $238 per month for a homeowner refinancing now.
SURVEY RESULTS
- 30-year fixed: 4.42% -- down from 4.51% last week (avg. points: 0.37)
- 15-year fixed: 3.81% -- down from 3.90% last week (avg. points: 0.28)
- 5/1 ARM: 3.57% -- down from 3.67% last week (avg. points: 0.34)
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
Friday, November 5, 2010
What the election means for foreclosures and robo-signing
Tuesday's elections could bring changes on the foreclosure front in a number of ways. First, it could impact future legislation and stimulus money targeting the housing market. It can also, as this article discusses, cause some hiccups in the prosecution of state cases currently in progress since certain attorneys general involved in those cases lost their elections. The Fed also announced this week that they will be pumping more money into the economy. That could be a good thing, or it could be a bad thing. I guess what we've learned the last couple years is not to make predictions. In the meantime, I continue to look for a house for my family. It just seems like a good time to buy with prices and mortgage rates being so attractive.
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By Charles Riley, staff reporter
November 5, 2010: 5:50 AM ET
NEW YORK (CNNMoney.com) -- The state attorneys general have been pressing the banks hard over the past month, questioning them over foreclosures and falsified legal paperwork. But Tuesday's election could impact that effort.
All 50 state attorneys general agreed to jointly pursue the issue, but half of their 12-member executive committee now find themselves in their last months of service. Arizona, California, Connecticut, Florida, New York and Ohio will all have new attorneys general come January.
Most prominent in that group is Ohio Attorney General Richard Cordray, who had filed suit against Ally Financial, alleging that the bank and its employees had signed and filed false affidavits in foreclosure cases, a practice commonly known as robo-signing.
Cordray lost his reelection bid to Republican Mike DeWine, who has not yet declared whether he intends to pursue the issue.
"After [Iowa Attorney General Tom Miller], Cordray was the single most visible attorney general in this effort," said Peter Swire, a law professor at Ohio State and former special assistant for economic policy at the White House.
Robo-signing: Just the start of bigger problems
Despite the loss of Cordray and other AGs, Iowa Attorney General Tom Miller said the investigation will continue.
"While some members of the multistate group, including a few executive committee members, will change political leadership in January, these changes do not affect the work we are now doing at the staff and leadership levels," Miller said in a statement. "This is a bipartisan and united effort with a clear mandate to put a stop to improper mortgage practices."
Miller added that it is his job to conduct the investigation "methodically and quickly," but it is unclear how much the group can accomplish in the next two months with membership in flux and the new AGs trying to get briefed on all aspects of their new jobs.
Cordray, however, expects the new group will continue moving forward.
"It will change in the sense that new people will replace former people," Cordray said. "But I would be surprised if that changed anything material. We already had 50 [attorneys general] signed on across the aisle, and every last one merited it important."
James Tierney, director of the National State Attorneys General Program at Columbia University, agrees.
"It means nothing. AGs come and go all the time," Tierney said. "That's just the nature of the beast. ... If a new attorney general says 'I'd rather go after meth labs, and not foreclosures,' that's O.K."
But it may make Miller's role more pronounced. "Miller will be a key decision maker. He has already been convening meetings with lenders," said Swire. "He is still in office, and with the other changes to the executive committee, he is the center of attention."
View original article: http://money.cnn.com/2010/11/04/real_estate/ohio_attorney_general/index.htm
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
---
By Charles Riley, staff reporter
November 5, 2010: 5:50 AM ET
NEW YORK (CNNMoney.com) -- The state attorneys general have been pressing the banks hard over the past month, questioning them over foreclosures and falsified legal paperwork. But Tuesday's election could impact that effort.
All 50 state attorneys general agreed to jointly pursue the issue, but half of their 12-member executive committee now find themselves in their last months of service. Arizona, California, Connecticut, Florida, New York and Ohio will all have new attorneys general come January.
Most prominent in that group is Ohio Attorney General Richard Cordray, who had filed suit against Ally Financial, alleging that the bank and its employees had signed and filed false affidavits in foreclosure cases, a practice commonly known as robo-signing.
Cordray lost his reelection bid to Republican Mike DeWine, who has not yet declared whether he intends to pursue the issue.
"After [Iowa Attorney General Tom Miller], Cordray was the single most visible attorney general in this effort," said Peter Swire, a law professor at Ohio State and former special assistant for economic policy at the White House.
Robo-signing: Just the start of bigger problems
Despite the loss of Cordray and other AGs, Iowa Attorney General Tom Miller said the investigation will continue.
"While some members of the multistate group, including a few executive committee members, will change political leadership in January, these changes do not affect the work we are now doing at the staff and leadership levels," Miller said in a statement. "This is a bipartisan and united effort with a clear mandate to put a stop to improper mortgage practices."
Miller added that it is his job to conduct the investigation "methodically and quickly," but it is unclear how much the group can accomplish in the next two months with membership in flux and the new AGs trying to get briefed on all aspects of their new jobs.
Cordray, however, expects the new group will continue moving forward.
"It will change in the sense that new people will replace former people," Cordray said. "But I would be surprised if that changed anything material. We already had 50 [attorneys general] signed on across the aisle, and every last one merited it important."
James Tierney, director of the National State Attorneys General Program at Columbia University, agrees.
"It means nothing. AGs come and go all the time," Tierney said. "That's just the nature of the beast. ... If a new attorney general says 'I'd rather go after meth labs, and not foreclosures,' that's O.K."
But it may make Miller's role more pronounced. "Miller will be a key decision maker. He has already been convening meetings with lenders," said Swire. "He is still in office, and with the other changes to the executive committee, he is the center of attention."
View original article: http://money.cnn.com/2010/11/04/real_estate/ohio_attorney_general/index.htm
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
Thursday, November 4, 2010
One Reason for Housing Glut: Fewer New Households
By Alan J. Heavens
RISMEDIA, November 4, 2010--(MCT)--U.S. household formations are at their lowest since 1947, data from the Census Bureau show. And that's helping to keep the supply of unsold homes at near-record levels nationwide, even though relatively few houses are being added to the inventory.
Between March 2009 and March 2010, the number of households rose just 357,000, according to the census data. In the previous 12 months, the number increased only 398,000, the third-smallest increase on record since World War II.
Between 2002 and 2007, before the economy started on its downward trajectory, household formations averaged 1.3 million a year, U.S. census data show.
"That's the consequence of the consumer fear of what's happening with the economy and with the job market," said Lucien Salvant, a spokesman for the National Association of Realtors.
"When people are afraid of losing their jobs or not being able to get into the job market, they are not thinking about buying a home," Salvant said. "Many opt to stay at home with parents, or to share rentals with friends."
The nation's gross vacancy rate — the proportion of housing units that are vacant — stood at 14.5 percent at the end of the second quarter of 2010, census data show.
In a well-functioning economy, household formations "would be closer to 1.25 million," said Mark Zandi, chief economist of Moody's Analytics in West Chester, Pa.
During normal times, builders need to add about 1.7 million houses a year to meet underlying demand stemming from, among other things, the need for replacement homes and the desire for second homes, as well as conversions from nonresidential to residential uses and increases in the number of households.
For example, about 250,000 new homes are needed per year to replace houses that are destroyed by fires and natural disasters or that wear out from neglect or old age. Demand for second homes combined with other miscellaneous factors accounts for 50,000 to 100,000 new houses a year.
Household growth typically requires 1.3 million to 1.4 million units.
"The sharp drop in household formation largely explains why the housing glut remains stubbornly high, despite the plunge in housing starts in recent years," said housing economist Patrick Newport, of IHS Global Insight in Lexington, Mass.
Two major sources of household formation — immigration and marriage — remain well below the averages of recent years.
The National Center for Health Statistics reports that the number of marriages per thousand population fell from 8.2 in 2000 to 6.8 in 2009. Divorces per thousand population fell from 4.0 in 2000 to 3.4 in 2009.
There are no hard data on "doubling up" — young people sharing rentals or moving in with their parents in a tight job market — though anecdotal evidence indicates the latter has become more commonplace in recent years.
During the late 1990s and in the first years of this decade, the housing industry banked on immigration for a good part of its growth.
Between 1990 and 2000, the U.S. population grew by nearly 33 million, with almost half of that gain attributable to immigration, according to data provided in 2003 by James Johnson Jr., a professor at the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill.
In the 1990s, census data show, immigrants accounted for 250,000 household formations a year. Immigrants typically rent for their first few years in this country, housing economists say. Then, after becoming established, they become a major factor in the for-sale marketplace.
Newport believes that a drop in immigration might have played a greater role early in the recession than it did later on. In 2009, census data show, households headed by the native-born under age 35 fell by 338,000, indicating that doubling up was the larger contributor.
The number of households headed by those ages 15 to 24 fell 124,000 (students moving back in with parents), while households with six or more people rose 355,000, an 8 percent increase.
A common misconception, Newport said, is that foreclosures account for the oversupply of houses.
"A foreclosure or a bank taking possession of a home," he said, "does not by itself add to the housing glut."
If a household vacates a home and moves into a rental unit, the housing supply is unchanged. Supply increases, however, if one household moves in with another, Newport said, or if its members become homeless.
(c) 2010, The Philadelphia Inquirer.
RISMEDIA, November 4, 2010--(MCT)--U.S. household formations are at their lowest since 1947, data from the Census Bureau show. And that's helping to keep the supply of unsold homes at near-record levels nationwide, even though relatively few houses are being added to the inventory.
Between March 2009 and March 2010, the number of households rose just 357,000, according to the census data. In the previous 12 months, the number increased only 398,000, the third-smallest increase on record since World War II.
Between 2002 and 2007, before the economy started on its downward trajectory, household formations averaged 1.3 million a year, U.S. census data show.
"That's the consequence of the consumer fear of what's happening with the economy and with the job market," said Lucien Salvant, a spokesman for the National Association of Realtors.
"When people are afraid of losing their jobs or not being able to get into the job market, they are not thinking about buying a home," Salvant said. "Many opt to stay at home with parents, or to share rentals with friends."
The nation's gross vacancy rate — the proportion of housing units that are vacant — stood at 14.5 percent at the end of the second quarter of 2010, census data show.
In a well-functioning economy, household formations "would be closer to 1.25 million," said Mark Zandi, chief economist of Moody's Analytics in West Chester, Pa.
During normal times, builders need to add about 1.7 million houses a year to meet underlying demand stemming from, among other things, the need for replacement homes and the desire for second homes, as well as conversions from nonresidential to residential uses and increases in the number of households.
For example, about 250,000 new homes are needed per year to replace houses that are destroyed by fires and natural disasters or that wear out from neglect or old age. Demand for second homes combined with other miscellaneous factors accounts for 50,000 to 100,000 new houses a year.
Household growth typically requires 1.3 million to 1.4 million units.
"The sharp drop in household formation largely explains why the housing glut remains stubbornly high, despite the plunge in housing starts in recent years," said housing economist Patrick Newport, of IHS Global Insight in Lexington, Mass.
Two major sources of household formation — immigration and marriage — remain well below the averages of recent years.
The National Center for Health Statistics reports that the number of marriages per thousand population fell from 8.2 in 2000 to 6.8 in 2009. Divorces per thousand population fell from 4.0 in 2000 to 3.4 in 2009.
There are no hard data on "doubling up" — young people sharing rentals or moving in with their parents in a tight job market — though anecdotal evidence indicates the latter has become more commonplace in recent years.
During the late 1990s and in the first years of this decade, the housing industry banked on immigration for a good part of its growth.
Between 1990 and 2000, the U.S. population grew by nearly 33 million, with almost half of that gain attributable to immigration, according to data provided in 2003 by James Johnson Jr., a professor at the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill.
In the 1990s, census data show, immigrants accounted for 250,000 household formations a year. Immigrants typically rent for their first few years in this country, housing economists say. Then, after becoming established, they become a major factor in the for-sale marketplace.
Newport believes that a drop in immigration might have played a greater role early in the recession than it did later on. In 2009, census data show, households headed by the native-born under age 35 fell by 338,000, indicating that doubling up was the larger contributor.
The number of households headed by those ages 15 to 24 fell 124,000 (students moving back in with parents), while households with six or more people rose 355,000, an 8 percent increase.
A common misconception, Newport said, is that foreclosures account for the oversupply of houses.
"A foreclosure or a bank taking possession of a home," he said, "does not by itself add to the housing glut."
If a household vacates a home and moves into a rental unit, the housing supply is unchanged. Supply increases, however, if one household moves in with another, Newport said, or if its members become homeless.
(c) 2010, The Philadelphia Inquirer.
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