Housing Reflections - Remember When?

Remember a time when this home would've sold itself? Multiple offers, over asking, people fighting .... Now, a short sale? What's a short sale?

Disclaimer: No affiliation (that we know of) to Cindi Hagley. Her video, we're sure, hits home for many. If we inadvertently help in selling this home, we hope she remembers us!

Housing Cycles - Video by John Burns Real Estate Consulting

Housing cycles then and now as advised by John Burns Real Estate consulting. If you haven't followed the past housing cycles, you will get a brief synopsis here. Housing goes up and it goes down. It cycles. Everyone knows this right?

When Does Perception Trump Reality?

Housing prices have dumped significantly especially in the previously overheated boom markets. In a recent post (Case-Shiller Housing Price Index Continues to Plummet), we highlighted the severe drops that have been seen in the highest flying boom markets of yesterday. Amongst the top losers, Phoenix, Las Vegas, San Francisco, Los Angeles, and San Diego all whom saw year over year declines (according to the Case-Shiller housing price index report) of more than 25%.

Is this rational? Was the run-up of equally proportional numbers rational? From euphoria to dire straights, we have numbers, reality, and the human mind to sort it all out ... reality creating perception or perception creating reality?

Whichever camp you find yourself in, this is our reality and right now our reality is very grim.

Mortgage Rates Drop

As reported by CNNMoney.com - "Mortgage rates plummet":

Mortgage rates fell sharply yesterday after the administration announced that it will pump another $800 billion into credit markets to free up frozen consumer and mortgage lending.

That number dwarfed previous government actions aimed at bolstering the mortgage lending market.

"The feds agreed to spend a half a trillion dollars to buy up mortgage backed securities and another $100 billion to fund lending for Fannie and Freddie; we're not talking chump change anymore," said Keith Gumbinger of HSH Associates, a publisher of mortgage information.

30-Year fixed rate and what it means to you:

Rates averaged 5.77% for the day on a 30-year, fixed rate loan, down from 6.06% Monday, according to Gumbinger. They fell as far as 0.75 percentage points during the day, according to Orawin Velz, Associate Vice President for Economic Forecasting at the Mortgage Bankers Association.

That could save a typical homebuyer more than $90 a month on a $200,000 mortgage.

Massive amounts of inventory, historically low interest rates moving lower, the slower home buying Holiday season upon us ... perhaps a good time to negotiate a strong deal for a home?

New Home Sales Report for October 2008 - Record Low Sales

As reported by CNNMoney.com - "New home sales fall to near 18-year low":

Sales of newly constructed homes slumped in October to an annual rate not seen since 1991, according to government figures released Wednesday.

The U.S. Census Bureau reported that new home sales fell to an annualized rate of 433,000 in October. That's down 5.3% from the revised 457,000 annual rate recorded in September, and off more than 40% from a year ago.

What was expected:

October's sales pace was well below the consensus forecast of 450,000, according to economists surveyed by Briefing.com. And it was the lowest number since January 1991, when the sales rate was 401,000.

The number of new homes on the market decreased in October to an estimated 381,000 from 414,000 in September. At the current sales pace, it would take more than 11 months to sell through the inventory.

Median home sales price continues to decline:

The median sales price of new houses sold in October was $218,000, down from $218,400 the month before. It was the lowest level since June 2004, when the median home price was $215,700.

More bad news for all things centered around real estate jobs. More bad news knowing that the housing crisis remains in full swing.

Good news that this lack of new home building / construction will ultimately lead towards lower housing inventory levels. Until we see lower inventory levels, we will continue to have a housing crisis.

Nonetheless, these numbers have been steadily trending down and positively indicate that the repair process is taking place.

Case-Shiller Housing Price Index Continues to Plummet

As reported by Bloomberg - "Home Prices for 20 U.S. Cities Decline Most on Record":

House prices in 20 U.S. cities declined in the year ended in September at the fastest pace on record as rising foreclosures pushed down property values.

The S&P/Case-Shiller home-price index dropped 17.4 percent in September from a year earlier, more than forecast, after a 16.6 percent decline in August. The gauge has fallen every month since January 2007, and year-over-year records began in 2001. - (Bloomberg)

(Click on Case-Shiller housing price chart for larger image)

Let's reiterate, the 20-city Case-Shiller home price index / composite was down over 17% year over year. No surprise, leading the year over year housing price free-fall was Phoenix, AZ (31.90% drop) and Las Vegas, NV (31.33% drop) while Dallas, TX (2.73% drop) and Charlotte, NC (3.50% drop) saw the smallest home price declines.

What else can be said but, wow! The housing market drubbing endlessly continues to go on and on and ....... when will this housing saga end? Someone, anyone, please help! We're past the point of asking, we're on our knees begging for mercy.

ING DIRECT - Suspending Foreclosures Through the End of March 2009

As reported by HOUSINGWIRE.com - "ING DIRECT Suspends Foreclosures":

Wilmington, Del. - based ING DIRECT, the nation's largest direct bank, said Monday morning that effective immediately, it will suspend foreclosure sales on occupied single-family properties through the end of March 2009. The company also said it would suspend all evictions on occupied single-family properties through Jan. 15, 2009, "in the spirit of the holidays," according to a press statement released by the firm.

The eviction freeze formalizes a previously informal, internal process, ING officials said. Eviction freezes are relatively common at most lenders, although many previously weren't publicized; although ING's eviction freeze is clearly much longer than similar freezes at other lenders. - (HOUSINGWIRE.com)

No surprise here as many banks have been doing so in recent days in coordination with their newly found loan modification programs.

October 2008 - Existing Home Sales Report Worse Than Expected

As reported by CNNMoney.com - "Existing home sales tumble:"

Sales of existing homes fell in October and prices continued to decline as potential buyers remain sidelined by the weak economy, according to a real estate group's report issued Monday.

The National Association of Realtors reported that sales by homeowners slid in October to an annual pace of 4.98 million. That was down 3.1% from September's revised reading of 5.14 million.

Economists surveyed by Briefing.com were expecting sales to have declined to an annual rate of 5.05 million in October.

On a year-over-year basis, sales were down 1.6%.

Housing supply increased slightly:

Total housing inventory at the end of October eased 0.9% to 4.23 million existing homes, according to the report. At the current sales pace, that represents a 10.2 months of supply, which was up from the 10-month supply in September.

The West bucks the trend with strong sales numbers:

Sales declined nationwide on a monthly basis. But sales in the West rose 37.5% over year-ago levels, suggesting that some buyers are taking advantage of distressed sales in overbuilt areas in California and Nevada. - CNNMoney.com

The U.S. housing market remains on an extremely shaky foundation. It does continue to appear that extreme pricing pressures have pushed home prices low enough to entice a fair number of investors and home buyers as indicated by the strong numbers posted in the West.

Over the past few months, there have been and continue to be intermittent bright spots and hints at positively trending indicators but, every step of the way, the depression like economic conditions that we continue to face continue to hold back housing.

Sadly, times remain very grim and look to continue, in the near term, on the same wayward path as housing fights for equilibrium.

FHA-Backed Loans, Subprime, and Fraud - Is it Happening All Over Again?

Here we go again, it looks like the same sharks, just another ocean. As reported by BusinessWeek - "FHA-Backed Loans: The New Subprime"?

The same people whose reckless practices triggered the global financial crisis are onto a similar scheme that could cost taxpayers tons more.

As if they haven't done enough damage. Thousands of subprime mortgage lenders and brokers—many of them the very sorts of firms that helped create the current financial crisis—are going strong. Their new strategy: taking advantage of a long-standing federal program designed to encourage homeownership by insuring mortgages for buyers of modest means.

You read that correctly. Some of the same people who propelled us toward the housing market calamity are now seeking to profit by exploiting billions in federally insured mortgages. Washington, meanwhile, has vastly expanded the availability of such taxpayer-backed loans as part of the emergency campaign to rescue the country's swooning economy. - (BusinessWeek)

There seems to be no end to the corruption. The tool to fix one problem is the door to another. In fact, if there was any question in your mind as to how this financial game of life is played, simply have a look at what's transpired over this past year in terms of the economic bailouts handed out by our government. How's your pocketbook?

Capitalism not at it's finest!

California Homes Sales Report - October 2008

As reported by DQNews.com - "California October 2008 Home Sales":

An estimated 42,293 new and resale houses and condos were sold statewide last month. That was up 4.9 percent from 40,371 in September and up 63.7 percent from 25,832 for October last year. It was the strongest month since December 2006 when 43,431 homes were sold. California sales for the month of October have varied from last year's low to a peak of 70,152 in 2003, the average is 44,602. MDA DataQuick's statistics go back to 1988.

The median price paid for a home last month was $278,000, down 1.8 percent from $283,000 for the month before, and down 34.4 percent from $424,000 for October a year ago. Around half the drop in median is due to depreciation, the other half due to shifts in the types of homes selling, and how those homes are financed.

Mortgage payments - good news, bad news:

The typical mortgage payment that home buyers committed themselves to paying last month was $1,310. That was down from $1,337 in September, and down from $2,016 for October a year ago. Adjusted for inflation, mortgage payments are back to where they were in early 2001. They are 36.5 percent below the spring 1989 peak of the prior real estate cycle. They are 48.7 percent below the current cycle's peak in June 2006.

Concluding CA housing tidbits:

Indicators of market distress continue to move in different directions. Foreclosure activity is at or near record levels, financing with adjustable-rate mortgages is near the all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable, non-owner occupied buying activity appears flat but might be emerging, MDA DataQuick reported.

We believe the housing market is ready to turn. Unfortunately, there's not much room to do so in consideration of the extenuating economic conditions (aka - the brick wall). People are losing their jobs and that trend looks to continue into the Holiday season.

On the bright side, the cost of living is beginning to adjust favorably as far as pricing pressure on daily staples. In fact, at one of our local Chevron stations, gas has fallen to $1.99 for a gallon of 87 octane (the cheap stuff). At it's most inflated point this year, the same gallon of gas, at the same Chevron station, was $4.59 a gallon!

Inflation, deflation, what's next?

Bank Failures in 2008 - The List Grows by Three

As reported by CNNMoney.com - "Three banks in California, Georgia fail":

Three more banks - two in California and one in Georgia - failed Friday, bringing to 22 the number of institutions forced to close in the wake of the financial crisis.

The Federal Deposit Insurance Corp. said the banking operations of Downey Savings and Loan Association of Newport Beach, Calif., and PFF Bank & Trust of Downey, Calif., were acquired by U.S. Bank (USB, Fortune 500) of Minneapolis.

... Earlier, Loganville, Ga.- based Community Bank was shuttered by the Georgia Department of Banking and Finance. The FDIC took over the assets and Tappahannock, Va.-based Bank of Essex will assume all Community Bank's deposits.

See the FDIC's list of Bank failures for 2008:
http://www.propertyqwest.com/blog/2008/11/bank-failures-of-2008-fdic-list-of.html

Hope Now: HUD Mortgage Alliance or For A Better Government?

Bailouts, loan modifications, program after program ... does ANYONE know what they're doing? The unbelievable turn of events gets even more unbelievable every minute. When you have incompetence of this magnitude, it's no wonder we have an economic crisis of this magnitude.





Not to worry, this can all be solved by printing a few more bills. Gotta go, the CEO's of the "Big Three" just landed in their private jets. Wow, they look nice. Where can I get one?

Foreclosure Counseling: Preying on the Needy?

As reported by CNNMoney.com - "Mortgage rescue or rip off?":

If mortgage lending was the Wild West during the boom years, foreclosure-prevention counseling is the lucrative new frontier of the bust.

Nearly 1.6 million borrowers are in jeopardy of losing their homes this year, according to economist Mark Zandi of Moody's Economy.com, and thousands of new foreclosure-rescue companies are rushing in to offer the troubled homeowners loan work-out assistance. For a price.

They're looking for you:

Usually homeowners seeking mortgage modifications call their lenders directly or work with non-profit community groups. But many borrowers are now turning to for-profit companies as their mailboxes are flooded with work-out offers.

Each day private firms go online or visit courthouses across the country to pore over foreclosure filings, which are public records. "By 10 or 11 o'clock, they've mailed out solicitations to anyone with a foreclosure filing that day, promising to save their homes," says Jeff Hart, a prosecutor with the Ohio attorney general's office.

Once a borrower contacts a foreclosure-prevention company, the counselor takes their financial information, analyzes how much the client can afford, and then contacts the lender and negotiates new mortgage terms.

Look out, here comes the fraud:

"Folks need to be really careful," said Chris Kukla, a spokesman for the Center for Responsible Lending. "In many cases, these are no better than scams. You should look at all your low-price or free options before signing on with a for-profit company."

One of the main criticisms of for-profit foreclosure counselors is that they are not regulated, with oversight laws varying state by state. As a result, some marginal characters are drawn to the industry, ones who use high-pressure sales tactics and play on fear.

Many firms demand hefty up-front fees, which they keep even if a loan is not successfully modified. Only a dozen states, including Minnesota, New Jersey, New York, Nevada, Massachusetts and Maryland, prohibit that tactic.

As usual the markets are at work. Unfortunately, there's always an angle to be played when it comes to scam artists. As far as we're concerned, this housing market crisis is an endless playground that will enable these scam artists to take advantage of the most desperate individuals in their greatest time of need.

Guaranteed, people will be taken for a ride. Don't be one of them. It's always a few that make a bad name for the rest. Do your homework. Contact multiple experts. Get in the know.

Ignorance is not always bliss.

Housing Starts and Building Permits Drop to Record Low

As reported on CNNMoney.com - "Housing starts, permits at record lows":

Housing starts and permits, both of them key measurements of home construction, hit record lows in October, the Commerce Department reported Wednesday.

Housing starts reached an annual rate of 791,000 last month, the lowest level since the department began tracking starts in 1959. The rate tumbled 4.5% from the revised reading of 828,000 in September.

Building permits fell 12% to an annual rate of 708,000 in October, breaking the previous low of 709,000 in March 1975. The annual rate for September was revised to 805,000.

What was expected?

Building permits were expected to fall to an annual rate of 772,000 in October, according to a consensus of economist opinions from Briefing.com. An annual rate of 780,000 housing starts was expected for October.

Any of this beginning to sound like a broken record? As we suggested in last months housing starts and building permits report (Housing Starts / Building Permits Drop to Levels Not Seen Since January, 1991), the numbers remain atrocious but the bright spot remains that this trend will ultimately lead to shrinking inventory levels. Simple supply and demand. Lower inventory levels equal a happier housing market for everyone except buyers looking for a blockbuster deal. Until then, construction related jobs will remain under pressure.

Homebuilder Confidence Tanks

As reported by Bloomberg - "Homebuilder Confidence in U.S. Drops to Record Low":

Confidence among U.S. homebuilders in November dropped to the lowest level since record-keeping began in 1985, a sign that the deepening credit crisis is preventing prospective buyers from purchasing new homes.

The National Association of Home Builders/Wells Fargo index of builder confidence decreased to 9, lower than forecast, from 14 in October, the Washington-based association said today. A reading less than 50 means most respondents view conditions as poor.

It's really bad:

"The November results are eye-poppingly bad," Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said in a note to clients. "The magnitude of the housing bubble was unprecedented and the corrective process promises to be a long and painful one."

The bad news express is rolling with a full head of steam. Perception is reality. This is what happens when both are bad.

Record Home Price Declines - 9%

As reported by CNNMoney.com - "Home prices in record 9% decline":

National home prices, driven lower by a flood of foreclosures, plummeted in the third quarter by a record 9% year-over-year, according to a report issued Tuesday.

The median price of a single-family home fell in four out of five states, the National Association of Realtors reported. The national median price was $200,500, down 2.9% from the second quarter of 2008.

The California housing market:

Three California markets recorded the steepest year-over-year declines in median prices: Riverside-San Bernardino, east of Los Angeles, where the median price plunged 39.4% to $227,200; Sacramento, down 36.8% to $212,000; and San Diego, down 36% to $377,300.

The high volume of sales in California and other bubble-bust states may indicate a healthy trend, according to Lawrence Yun, NAR's chief economist.

"We have seen cases of multiple bidders on properties in California," he said. "That suggests that future price declines may be minimal."

But while California saw significant declines, fully 79% of all metro areas recorded price drops for the quarter, according to Mike Larson, a real estate analyst at Weiss Research.

The Regional housing markets:

Regionally, single family home prices were the most stable in the South, where they fell just 3.7% to $174,200. They dropped 5.5% in the Midwest to $159,900 and 6.5% in the Northeast to $267,700. In the West, the median price fell 21.4% to $266,300.

If you've been following the housing market (if you haven't, have you been hiding in a cave?), these numbers are no surprise. Perhaps a bit on the bright side, report after recent report, it does look like there are a fair number of buyers cherry-picking discounted properties. After all, the prices have tanked. Home prices couldn't continue to go up forever and they can't continue to drop forever.

If you can time the bottom perfectly, we'd love to hear from you!

Housing in Recovery?

From RealtyTimes.com, Kenneth R. Harney suggests greener pastures for the housing market in his following article (Real Estate Outlook: Housing in Recovery):

Assertion #1:

... new mortgage applications increased last week by 12 percent, according to the Mortgage Bankers Association. Applications from people looking to buy houses with FHA loans were up by 15.3 percent, while applications from purchasers seeking conventional mortgages rose by six and a half percent.

Assertion #2:

... remember that there is a huge pent-up demand simmering away out there for housing -- especially from first-time buyers who want to scoop up low-priced deals.

Assertion #3:

When fixed interest rates drop -- and last week they were down by a quarter of a percentage point -- those buyers start doing the math and getting into the market with offers.

Assertion #4:

Another piece of positive news you may not have noticed: Pending home sales were higher than year-earlier levels for the second straight month -- 1.6 percent higher than September 2007 .

Although pending sales contracts were down slightly for the month, in the western states they were up by 3.7 percent, and now stand at an extraordinary 39.7 percent higher than they were at the same time in 2007.

Assertion #5:

At the National Association of Realtors' convention in Orlando, chief economist Lawrence Yun, warned the delegates not to expect a housing recovery overnight, certainly not with unemployment on the rise. But he projected a slow, steady, multi-year upward trend, with 5.02 million total sales this year, 5.3 million for 2009, and 5.6 million for 2010.

Already sales are up significantly in major markets in many parts of the U.S. Yun specifically mentioned the west coast of Florida, the Phoenix area, Virginia, Long Island New York, Kansas City, Minnesota and Idaho.

Harney's conclusion:

So here's the key point to keep in mind as you try to make sense of the headlines: The stock market is NOT the housing market. It's on a whole different set of tracks. And it's been in a highly volatile state for more than a month.

Housing, on the other hand, has already endured its painful correction for two and a half years … is now pretty much stabilized … and is slowing moving toward its cyclical recovery.

Do you agree with Harney's assessment?

Logic would dictate that we're closing in on the bottom because housing prices have been tanking and are nearing, in many locales, pre-housing boom levels. The Fed's have been endlessly pumping liquidity into our markets and have been working towards spurring the banks to start lending again. Naturally, there would be pent-up demand for housing as many potential home buyers have been "feared" to the sidelines or simply cannot obtain a loan with the latest round of tightening standards.

In short, the housing market is ready to bottom. However, one of the major problems still to be dealt with is the deteriorating economic conditions that we remain confronted with. Times are bad and people are currently losing their jobs in large numbers. We don't believe prices will continue to tank at the fevered level of the past year but we do believe that housing will struggle to find its footing until much of these economic problems can be dealt with or at least have the appearance of being dealt with to build consumer confidence.

Is it a good time to buy? We believe it is. Don't worry about the last 10% as you can make this up, and then some, by negotiating a good deal. Five years down the road, you'll be glad you did and wish you bought more.

Citigroup Layoffs

As reported by CNNMoney.com - "Citigroup to cut more than 50,000 jobs":

Citigroup said Monday it planned to cut more than 50,000 jobs, the latest move by the struggling bank to cut costs in order to weather the credit crisis plaguing Wall Street

In an investor presentation on its Web site, the company said it would reduce its staff levels to approximately 300,000 employees. As of the end of September, the New York City-based bank had about 352,000 workers.

It was not clear from the presentation what parts of the company the cuts would come from, but there was speculation last week that Citigroup was looking to layoff people in its investment banking and wealth management divisions.

Ouch. The pain continues to spread on all economic fronts. It's too bad that when times were good for these corporations the money didn't trickle down as easily as the layoffs.

Mismanagement from the top equals layoffs for everyone else. With some of the latest goings on, it looks as if some of the executive level positions of these corporations will finally have to accept some responsibility for their company's failings. Fortunately for them, they will have plenty of money to last until their next gig.

Bonus anyone?

News Headlines for the Upcoming Week

What real estate or general economic headlines will dominate our news for the upcoming week? You tell us.

Paulson: A Stabilized Financial System?

As reported on Bloomberg - "Paulson's Shift on Bailout Plan":

• Credit markets stabilizing.
• Interbanking credit markets are not frozen.
• The system has been stabilized.
  
• Original bailout plan was a good plan.
• What changed was our understanding of the magnitude of the problem.

Did we hear all of this right? Do they understand the magnitude of the problem now or will their understanding change yet again?

Perhaps Sarah Palin and Joe the Plumber could advise Bush on this matter to help shape and direct this financial policy.

We're definitely not in good hands. The endless incompetence of this administration tells us this every day. I guess if we were good American patriots, we would just keep our mouth shut in regards to these problems. Sorry.

Mortgage Rates Down Again

As reported by CNNMoney.com - "Mortgage rates down for 2nd week":

Mortgage rates fell for the second week in a row, finance firm Freddie Mac said Thursday, as the weakening economy resulted in the slowest pace of home purchase applications in nearly eight years.

Freddie Mac said 30-year fixed-rate mortgages averaged 6.14% this week. That's down from 6.20% last week and below the 6.24% rate at this time last year.

Rates for 30-year fixed-rate mortgages have been at 6% or higher for five consecutive weeks. Between the week of Oct. 9 and Oct. 16, the 30-year fixed-rate mortgage posted its biggest weekly jump since April 1987, rising from 5.94% to 6.46%

"Long-term mortgage rates fell slightly this week as signs the overall economy is weakening brought interest rates down market-wide," according to a statement by Frank Nothaft, Freddie Mac vice president and chief economist.

Rates on 15-year fixed-rate mortgages fell to 5.81% from 5.88% last week. A year ago, the rate was 5.88%.

The five-year adjustable-rate mortgage fell to 5.98%, from 6.19% last week. A year ago, the rate was 5.96%.

The rate on a one-year adjustable-rate mortgage rose to 5.33% from 5.25% last week. At this time last year, the rate was 5.50%.

The bad mortgage news:

Mortgage applications for home purchase loans fell during the last week in October to the slowest pace since the week of Dec. 29, 2000, according to data from the Mortgage Bankers Association.

Lending standards are tight and seem to be getting tighter:

A recent survey of senior loan officers from the Federal Reserve found that about 70% of banks raised their lending standards for prime mortgages, and about 90% of banks that offer nontraditional mortgages did so as well.

Can we give another round of applause and thanks to our government?

Banks are failing to use public funds to make credit more available and to help troubled homeowners, said Sen. Christopher Dodd, D-Conn.

Outside of the mortgage rates making a small move in the right direction, is anything else here what the doctor order? Perhaps our politicians should go back to naming streets and investigating steroids in baseball ... obviously areas which fall more into their comfort zone. If we sound cynical, we are and for good reason! Aren't you?



Learn more about the government bailout plan gone amuck:

1. Government Bailout Plan - Devalued Mortgage Loan Assets No More

Interested in the recent "Loan Modification" buzz? Check out one of our recent articles:

1. Citigroup`s Loan Modification Program
2. Fannie Mae and Freddie Mac - New Loan Modification Program
3. Loan Modification Specialist - Don`t Miss Your Calling!
4. Loan Modification Programs - Officially in Vogue?
5. Loan Modification Programs - IndyMac and B of A Lead the Way
6. JPMorgan Chase Loan Modification - Mortgage Program Expanded
7. JPMorgan Chase Loan Modification - Moratorium on Foreclosures

October 2008 Foreclosure Filings Rise Yet Again

As reported by CNNMoney.com - "85,000 homes lost to foreclosure in October":

As government and industry scrambled to stem the housing crisis, another 84,868 homes were lost to foreclosure in October, according to a report released Thursday.

Last month 279,561 struggling borrowers received foreclosure filings, including default notices, notices of auction sales and bank repossessions, according to RealtyTrac, an online marketplace for foreclosures. That's a 5% increase from September, and up 25% from October 2007.

"October marks the 34th consecutive month where U.S. foreclosure activity has increased compared to the prior year," said James J. Saccacio, chief executive officer of RealtyTrac, in a statement.

A total of 936,439 homes have been lost to foreclosure since the housing crisis hit in August, 2007.

Mixed foreclosure news out of California:

A new law in California, one of the hardest-hit states in the housing crisis, requires banks to contact struggling homeowners 30 days before delivering a notice of default in order to give them time to restructure their plans.

Thanks to that legislation, foreclosures in the state fell 18% from September. But California still had the highest number of foreclosures in the country for October, logging 56,954 filings. That total was down from a peak of more than 100,000 filings in August, but up 13% from October 2007.

States getting clobbered with foreclosures:

Nevada had the highest rate of foreclosures of any state for the 22nd consecutive month in October, with one in every 74 housing homes receiving a foreclosure filing. Arizona had the second highest rate in October, with one in every 149 housing units in default. Florida was third, with one in every 157 homes there in default.

The housing debacle continues to go on and on. As if tanking housing prices and rising adjustable mortgage rates weren't enough, the severely deteriorating unemployment and economic conditions are beginning to take their toll as well. As if we needed anything else to compound matters.

Government Bailout Plan - Devalued Mortgage Loan Assets No More

As reported by Bloomberg - "Paulson Shifts Focus of Rescue to Consumer Lending":

U.S. Treasury Secretary Henry Paulson plans to use the second half of the $700 billion financial rescue program to help relieve pressures on consumer credit, scrapping an effort to buy devalued mortgage assets.

"Illiquidity in this sector is raising the cost and reducing the availability of car loans, student loans and credit cards," Paulson said today in a speech at the Treasury in Washington. "This is creating a heavy burden on the American people and reducing the number of jobs in our economy.''

His remarks are an acknowledgement that the pitch he made to Congress for the bailout hasn't delivered what was promised. Paulson sold the Troubled Asset Relief Program as a way to rid bank balance sheets of illiquid mortgage assets, and he may encounter resistance from Congress for the remaining $350 billion after using most of the first half to buy bank stakes.

What a surprise! The government bailout plan, $700 billion rescue plan, whatever you choose to call it is being retooled as we speak. The three page bailout plan running amuck. Who would've ever thought? It's okay, our kids can pay for this latest round of sheer incompetence.

Looks like it's time for another pool party at the Ritz to review the details. Let's continue to randomly throw more money at the problem. After all, sooner or later something has to work ... doesn't it?

Again, just to think how many people in the presidential election were fearing the future of our country being mired in Socialism.

As seen on a bumper sticker, if you're not outraged, you're not paying attention. A debt of (not gratitude) .... is owed to our government and the American people who have been asleep at the wheel over the past eight years.

IAS360 Home Price Index: September 2008 Report - Housing Prices Continue to Decline

As reported by Marketwire - "County Level IAS360 House Price Index Data Showing Promise Amid Worsening Housing Market in September":

Integrated Asset Services, LLC (IAS, www.iasreo.com), a leader in default management and residential collateral valuation, today released its IAS360 House Price Index for September 2008. The monthly report, which includes the most current and granular data available in the industry, showed a 2.1% decline in house prices on a national level in September, with an annual decline of 13.3%.

(Click on housing price index chart for better viewing)

Perhaps a housing bright spot noted at the local level?

"Housing prices at the national and MSA levels are still seeing declines, but we're seeing positive signs at the county level, and even more encouraging signs at the neighborhood level," said Dave McCarthy, President and CEO of Integrated Asset Services. "A review of the IAS360 House Price Index county level data, which is an aggregate of the 15,000 neighborhoods we track, provides insights into pockets of the country that may be showing signs of improvement."

It's no surprise that some neighborhoods are potentially beginning to show signs of improvement. Prices have been battered in many locales and if you can get a loan (which plenty of people still can), rates remain cheap. If you can negotiate at least a 10-20% discount (plenty of opportunities to do so) from the true market value (consult local experts to get REAL COMPS) of the home you are looking to purchase and you are planning to live in your newly purchased home over the next handful of years, our money bets on your success.

Citigroup`s Loan Modification Program

As reported by MarketWatch - "Citi unveils housing relief plan - Banking giant steps up efforts to avoid foreclosures":

Citigroup said that under the Citi Homeowner Assistance program, it would preemptively contact 500,000 mortgage holders -- involving $20 billion of mortgage balances -- to try to ensure that they can pay their loans. It said it is focusing on borrowers who live in areas that are likely to face "extreme economic distress." Read MarketWatch First Take commentary.

Citi also extended its moratorium on foreclosures, saying it won't begin or complete a foreclosure sale on a home on which it owns the mortgage if the borrower wants to stay in the home, which is his or her principal residence. Citi said it will also need to be sure the borrower is working in good faith with the bank and has enough income for affordable mortgage payments.

"Under our new program we will preemptively reach out to help homeowners before they become delinquent, which is critical to avoiding the loss of a home and protecting their credit score and future borrowing potential," said Sanjiv Das, chief executive officer of CitiMortgage.

The broken record continues to skip along. Same script, just another bank. We're beginning to sound like a broken record too ... until the next loan modification announcement!

Need an additional fix of loan modification news? Find our growing list of links below regarding, you guessed it, more loan modification posts:

1. Fannie Mae and Freddie Mac - New Loan Modification Program
2. Loan Modification Specialist - Don`t Miss Your Calling!
3. Loan Modification Programs - Officially in Vogue?
4. Loan Modification Programs - IndyMac and B of A Lead the Way
5. JPMorgan Chase Loan Modification - Mortgage Program Expanded
6. JPMorgan Chase Loan Modification - Moratorium on Foreclosures

Fannie Mae and Freddie Mac - New Loan Modification Program

As reported by Bloomberg - "Fannie, Freddie Boost Effort to Minimize Foreclosures":

Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance companies, will accelerate anti- foreclosure efforts with a new loan modification program designed to cut monthly payments for struggling homeowners.

Fannie and Freddie, operating under a government conservatorship, will target loans in which borrowers are at least 90 days delinquent and have high loan-to-income ratios, officials from the Treasury and the Federal Housing Finance Agency said today at a press conference in Washington. The companies may offer reduced interest rates and longer terms of as much as 40 years to trim monthly payments.

The loan modification plan:

Under the proposal, mortgage servicers will work with borrowers to reduce monthly payments to 38 percent of their gross income, a level considered a threshold for affordability, using a combination of lower principals, interest-rate reductions and extensions, the people said. The plan doesn't include money from the Treasury's $700 billion bank rescue.

Homeowners will have to apply for the program, and their loan modifications won't become final until they have made three consecutive payments. Their new monthly payment will include all of their monthly housing costs, such as taxes and even condominium payments, one person said.

With increasing regularity, these loan modification programs are becoming commonplace in the industry. In fact, Citigroup is joining the party as well. We've allowed our blog to be hijacked by the relentless news of late regarding the loan modification mania. If you find yourself similarly obsessed, you can find links to our previous loan modification articles below with most certainly more loan modification articles to follow. The housing market bust has created the loan modification boom.

1. Loan Modification Specialist - Don`t Miss Your Calling!
2. Loan Modification Programs - Officially in Vogue?
3. Loan Modification Programs - IndyMac and B of A Lead the Way
4. JPMorgan Chase Loan Modification - Mortgage Program Expanded
5. JPMorgan Chase Loan Modification - Moratorium on Foreclosures

Bank Failures of 2008 - FDIC List of Failed Banks

As reported by the FDIC (bank failures of 2008). 19 and counting. Looking to modify your loan? Wondering who owns your loan? Wondering where you should make your next mortgage loan payment? Follow the links below to learn more about each failed bank and their plight.

1. PFF Bank and Trust, Pomona, CA
2. Downey Savings and Loan, Newport Beach, CA
3. The Community Bank, Loganville, GA
4. Security Pacific Bank, Los Angeles, CA
5. Franklin Bank, SSB, Houston, TX
6. Freedom Bank, Bradenton, FL
7. Alpha Bank & Trust, Alpharetta, GA
8. Meridian Bank, Eldred, IL
9. Main Street Bank, Northville, MI
10. Washington Mutual Bank, Henderson, NV and Washington Mutual Bank FSB, Park City, UT
11. Ameribank, Northfork, WV
12. Silver State Bank, Henderson, NV En Espanol
13. Integrity Bank, Alpharetta, GA
14. The Columbian Bank and Trust, Topeka, KS
15. First Priority Bank, Bradenton, FL
16. First Heritage Bank, NA, Newport Beach, CA
17. First National Bank of Nevada, Reno, NV
18. IndyMac Bank, Pasadena, CA
19. First Integrity Bank, NA, Staples, MN
20. ANB Financial, NA, Bentonville, AR
21. Hume Bank, Hume, MO
22. Douglass National Bank, Kansas City, MO

Bank failure after bank failure! When will they stop? How many more will fall victim? The economic crisis is ugly. Is it getting uglier? The money trees continue to shake into oblivion.

AIG Bailed Out Again

As reported by Bloomberg - "AIG Gets Expanded Bailout, Posts $24.5 Billion Loss":

American International Group Inc. (AIG), the insurer bailed out by the U.S., got an expanded government rescue package valued at more than $150 billion after recording a fourth straight quarterly loss.

The U.S. will reduce the original $85 billion loan that saved AIG in September to $60 billion, buy $40 billion of preferred shares, and purchase $52.5 billion of mortgage securities owned or backed by the company, the Federal Reserve said today. The insurer lost a record $24.5 billion, or $9.05 a share, in the third quarter, compared with profit of $3.09 billion, or $1.19, a year earlier, AIG said in a statement.

No surprise, taxpayers will pick up the tab yet again:

Taxpayers will take on more risk to give Chief Executive Officer Edward Liddy time to salvage AIG, which needed U.S. help to escape bankruptcy in September after at least $40 billion in quarterly losses tied to home mortgages. Liddy's plan to repay the original loan by selling units stalled as plunging financial markets cut into their value and forced potential buyers to shore up their own balance sheets.

The hope behind the new package:

"This gives AIG much more breathing room," said Robert Haines, an analyst at CreditSights Inc. "Now they have the time and flexibility to sell assets for closer to their intrinsic value rather than fire-sale prices." The news is a "big positive" for bondholders, he said. The insurer gained 23 percent to $2.59 at 7:31 a.m. in early New York trading.

Could this actually be true? Executive bonuses curtailed?

The U.S. required a freeze on the bonus pool for 70 top AIG executives and imposed limits on severance benefits, the Treasury said in a statement.

Business as usual continues this Monday morning. More massive corporate failures and government bailouts.

While Corporate America parties at the Ritz, lays off the worker bees, and pays executives top bonuses for bankrupting their companies, the taxpayers get the honorable opportunity to pick up the tab.

Just to think how many people in our past presidential election were fearing the future notion of the "redistribution of wealth". Fear the future yet ignore the reality of what they fear. Anyone else confused?

Pending Home Sales Report - September 2008

As reported by Bloomberg - "Pending Sales of Existing Homes in U.S. Fell 4.6%":

Fewer Americans signed contracts to buy previously owned homes in September, indicating the credit crisis will inflict more damage on the housing market.

The index of signed purchase agreements, or pending home resales, fell 4.6 percent, more than forecast, to 89.2, the National Association of Realtors said today in Washington.

The housing slump may extend well into a fourth year as banks turn away borrowers, foreclosures worsen the glut of unsold homes and job losses climb. Lower property values will keep eroding home-equity, causing consumers to retrench further and reinforcing the risk of a deeper recession.

The numbers by region (as reported by the National Association of Realtors pending home sales index report):

The PHSI (Pending Home Sales Index) in the West rose 3.7 percent to 113.6 in September and remains 39.5 percent above a year ago. In the Midwest the index slipped 0.7 percent to 83.3 and is 3.1 percent below September 2007. The index in the South fell 7.9 percent to 89.0 in September and is 11.3 percent below a year ago. In the Northeast, the index dropped 16.8 percent to 66.4 and is 9.4 percent below September 2007.

Nationally, pending home sales compared to last year:

The Pending Home Sales Index, ... based on contracts signed in September, declined 4.6 percent to 89.2 from an upwardly revised reading of 93.5 in August, but is 1.6 percent higher than September 2007 when it stood at 87.8.

The national pending home sales numbers have trended ever so slightly in the right direction, up nearly 2% year over year. In the West, the pending home sales numbers, as reported, remain nearly 40% stronger. Perhaps some bottom feeding and increased investor interest?

These reports suggest, in lieu of the current credit environment / crisis, that the housing aches and pains are here to stay and may experience increased pains along the way.

The housing "doomers" and "gloomers" are in their, "I told you so" glory. Regardless of how they based their premise and achieved their conclusions, can anyone really argue their overall assessment to the contrary?

The writing's on the wall in bold "RED" letters and continues to look for more space in which to write it's housing stories of devastation as more space it will need as more devastation there will be.

Have You Raffled a Home Lately?

Don't wait, this home (the "Fifty Dollar House") could be yours for literally $50.00. For more information go to FiftyDollarHouse.com. Get your raffle tickets now!

Fifty Dollar House Disclaimer: Property Qwest is offering this as a free plug. We have ABSOLUTELY NO relationship to these sellers. Well, none that we're aware of! We wish them well. Why not give it a shot, nothing else is working ... this may just do the trick!

Housing Market Predictions - A Look Back with Paul Krugman

Housing market predictions, housing boom, housing bubble, housing crash, economic recession. Some did get it right!

In a previous post (Housing Predictions) we highlighted a round-table housing market discussion which included Peter Schiff as one of the leading "housing expert" analysts. Schiff, despite being ridiculed by other panelist, was spot on in his analysis. In fact, as we stated before, his comments regarding the housing boom, housing bubble, and eminent housing crash were nearly prophetic in nature.

Paul Krugman, on the record getting the housing boom, housing bubble, housing crash extremely right as well:





The signs are almost always there if you're willing to listen and you know what you're looking for. The problem. Few people are willing to listen and even fewer people know what they're looking for.

Mortgage Rates Ease

As reported by Inman News - "Mortgage rates pull back from surge":

Rates on both fixed-rate and adjustable-rate mortgages retreated this week from a recent surge, but lenders continue to tighten standards as a pullback in consumer spending and weaker job market provide new indications of a slowing economy.

Rates for 30-year fixed-rate mortgages (FRM) averaged 6.2 percent with an average 0.7 point or the week ending Nov. 6, down from 6.46 percent last week and 6.24 percent a year ago, according to Freddie Mac's latest Primary Mortgage Market Survey.

The 15-year FRM this week averaged 5.88 percent with an average 0.7 point, down from 6.19 percent last week and 5.9 percent a year ago, Freddie Mac said.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.19 percent with an average 0.6 point, down from 6.36 percent last week but up from 5.89 percent a year ago.

One-year Treasury-indexed ARMs averaged 5.25 percent with an average 0.4 point, down from 5.38 percent last week and 5.50 percent a year ago.

Mortgage rates continue to ebb and flow up and down. In short, mortgage rates have been and continue to remain extremely attractive. Qualifying for one of these loans with one of these great rates, good luck. Bring your docs, some cash, and a good luck charm.

Loan Modification Specialist - Don`t Miss Your Calling!

What are you waiting for, you can get your piece of the pie too. Everyone's doing it, why not you? Did you really think the lending industry was dead? It always takes a few minutes to get back on track. There's money to be made. Stop reading this blog and get out there. Short memories - history does repeat itself!

Loan modifications, loan modifications, loan modifications ... the next boom. (Click on image to enlarge in a new window)





Loan modification mania! Find additional links to our loan modification articles below:

1. Fannie Mae and Freddie Mac - New Loan Modification Program
2. Loan Modification Programs - Officially in Vogue?
3. Loan Modification Programs - IndyMac and B of A Lead the Way
4. JPMorgan Chase Loan Modification - Mortgage Program Expanded
5. JPMorgan Chase Loan Modification - Moratorium on Foreclosures

Loan Modification Programs - Officially in Vogue?

As reported by Bloomberg - "Schwarzenegger Seeks to Save Homeowners With Foreclosure Delay":

California Governor Arnold Schwarzenegger proposed a 90-day stay on home foreclosures in California, one of the hardest hit U.S. states by the national housing-market collapse.

Schwarzenegger attempts to add California to the VIP list for the loan modification party:

California, which leads the nation in foreclosures, is one of more than two dozen states that that have taken steps to help distressed homeowners and to stem escalating defaults. Congress has been urging financial-services companies to work with borrowers and avoid foreclosures, which rose to the highest on record in the third quarter.

'The single most powerful action our state can take to shore up its economy is to help Californians stay in their homes - and I am presenting a plan to do just that,' Schwarzenegger, a 61-year- old Republican, said in a statement. 'Curtailing foreclosures will stop the downward spiral of home prices, free up needed cash for homeowners, help save jobs and make an immediate positive impact on our economy.'

Schwarzenegger's loan modification wish list:

Schwarzenegger said he wants lenders to adopt a loan modification plan based on a 38 percent housing debt-to-income ratio so that the modified loan is sustainable for the homeowner.

He said lenders could achieve that 38 percent by reducing the loan's interest rate to as low as 3 percent for five years, increasing the mortgage's term to 40 years and deferring the payment of some principle to the end of the loan term, when it could be paid by refinancing or selling the home.

Are these loan modification programs helping or hurting the housing market? As we've discussed before, modifying ones loan will definitely provide immediate financially relief to struggling homeowners who get to participate.

How many loans will the banks be able to modify in 90 days? Will they be able to modify such a significant amount of these troubled loans that homes that would have entered foreclosure today, won't be doing so in 90 days?

Our opinion, doubtful. The 90 day moratorium will most likely do nothing more than stave off the inevitable for another 90 days for most homeowners ... Foreclosure.

Again, for a select few, this breather will prove to be saving grace. For the remaining overwhelming majority, your holiday season will prove to be just that. After the festivities are over, the fact will remain that the economy is still in bad shape, jobs will remain few and far between, your adjusted interest rate will still be sky high, and, unfortunately, you will still most likely be unable to pay your monthly mortgage obligation to own your home. In fact, your debt load will probably have increased in lockstep with those extra pounds that we always seem to embrace during this time of year.

On the bright side, perhaps in 90 days there will be another loan modification tweak or housing market proposal that will roll the debt forward. After all, we do this with the national debt and almost everything else financially speaking, why not with the housing market too?

It's a perfect time don't you think? Hmmm.

Additional loan modification articles:

1. Loan Modification Programs - IndyMac and B of A Lead the Way
2. JPMorgan Chase Loan Modification - Mortgage Program Expanded
3. JPMorgan Chase Loan Modification - Moratorium on Foreclosures

Mr. President: Barack Obama - History for the Ages

Congratulations President Elect Obama - Our Better Future is Now in Your Hands

Housing Predictions

A look back at housing predictions. Housing boom, housing bubble, housing crash, there's an arrogant fool or two in every crowd. Housing gloomers and doomers will like this mildly edgy clip. Arrogant and wrong ... what a combination ... and then there was the eerily prophetic Peter Schiff.

JPMorgan Chase Loan Modification - Moratorium on Foreclosures

Update to previous post: "JPMorgan Chase Loan Modification - Mortgage Program Expanded"

As reported by CNNMoney.com - "JPMorgan Chase expands housing rescue plan":

The bank will step up its efforts to offer mortgage modifications for borrowers at risk, institute an independent review process to eliminate all unnecessary foreclosures and hire and train more staff to handle the added caseload that the plan will generate.

Most important, it will not put any delinquent loans into the foreclosure process during the 90 days it takes to implement its new plan.

Good news for homeowners currently at the brink of foreclosure. In regards to the overall housing market, this aspect of the program could delay the inevitable because undoubtedly a 100% of the foreclosures put on hold will not be able to be modified by JPMorgan Chase. As a result, the homes that should've foreclosed during this 90 day period will still be ripe for the pickin'. The harvest will be delayed and perhaps so will the stabilization of the housing market.

The fruit will still be bad, but the seeds in the right hands will produce a healthy future crop. Misfortune for some, no doubt opportunity for others.

JPMorgan Chase Loan Modification - Mortgage Program Expanded

As reported by CNNMoney.com - "JPMorgan will modify mortgages":

JPMorgan Chase & Co. said Friday it is expanding its program to modify mortgages in an effort to avoid foreclosures on up to $70 billion in loans.

The enhanced program will include the opening of 24 regional counseling centers, the hiring of 300 additional loan counselors, new financing alternatives, reaching out to borrowers with pre-qualified modification terms and a new process to independently review each loan before it is moved into foreclosure.

Chase said the changes are expected to be implemented in the next 90 days, and until those changes can be made, it will not put any loans into foreclosure.

Other loans ARE included in the loan modification program:

The loan-modification program will also be offered to customers with loans held by Washington Mutual Inc. and EMC. JPMorgan (JPM, Fortune 500) acquired Washington Mutual last month after the bank became the largest in the nation's history to fail. EMC was a mortgage unit of Bear Stearns Cos., which JPMorgan acquired in February.

Who's eligible? Who's not?:

The modification program applies only to owner-occupied properties with mortgages owned by JPMorgan, Washington Mutual or EMC, with investor approval.

It's quite clear that the big push in regards to the banking institutions are the implementation of their loan modification programs. Other banks of note implementing loan modification programs are B of A and IndyMac Bank.

Without a doubt, in the short-term, these loan modification programs will help homeowners to the extent that their monthly mortgage payments will become cheaper, lightening the financial load weighing heavily on most Americans in consideration of today's grim economic conditions.

One of the main arguments against these types of programs is the belief that the inevitable is merely being pushed to a future date. In paraphrasing, "if you can't afford your home now, you most likely won't be able to afford it in a few months or a year (give or take) down the road."

We disagree with this argument (to an extent) in consideration that drastic measures have been taken (to this point, mostly in outlining the laws that will implement these programs) to pump huge amounts of liquidity into the market, the Feds have dropped the Federal Funds Rate to historically low levels, and housing prices have fallen significantly (so significantly that some of these overheated markets are returning to levels seen before the boom).

Again, these government funded measures, coupled with the banks' loan modification programs, WILL equate into more money for the pockets of homeowners who are the recipients of these programs. This money is immediate and couldn't be at a better time for most.

As with many large institutions, we don't believe the banks will be able to move quickly so the effects of these loan modification programs will be slow and gradual resulting in less foreclosures being dumped into the market over a protracted period of time. Not all of these adjustments are merely 1, 2, or 3-year extensions of cheaper rates. Some of these programs include cheaper rates, principle reductions, and a transition into 10-year to 30-year fixed type products. Hence, a wave of future delinquencies are less likely than that of the sub-prime tsunami. Less available housing units now, regardless of which type, means less inventory. The sooner these inventory levels stabilize, the quicker housing prices will begin to stabilize. Systemic positive effects will begin to infiltrate the market just as the negative effects are currently plaguing our economic markets.

Cheap government funded money and lots of it, a battered housing market, a volatile stock market, equates into more investors turning to real estate for their investment vehicle of choice. In the field, many Realtors will tell you that they've already seen a substantial increase in the number of CASH buyers looking to enter many of these overheated markets that have fallen hard and fallen fast. If investors are entering the market now, with CASH, odds are they've done this before thus unscientifically indicating that there's some level of comfort with current housing prices.

In short, we believe many critics of these programs are critics in terms of their ideological views that a thorough cleansing of the housing market needs to happen. They would suggest no more stints and tourniquets as this is what got us to this point. Do you agree?

We suggest that whether you do or not, these programs will have a positive affect in the near term. When it comes to money, future relevancy seems to be of little importance when tomorrows bills are what you fear. Furthermore, how many people are concerned with the future implications of their actions when they're mired in their day to day tasks? Good, bad, or indifferent, nearly everything is put off into the future except for the endless yearning of immediate gratification. Is anyone noticing a trend with this sort of human nature? Does this ever seem to go away? Will we learn our lesson from this current housing and economic mess?

As usual, most definitely will not!


Loan modification mania. Find additional links to our loan modification articles below:

1. Fannie Mae and Freddie Mac - New Loan Modification Program
2. Loan Modification Specialist - Don`t Miss Your Calling!
3. Loan Modification Programs - Officially in Vogue?
4. Loan Modification Programs - IndyMac and B of A Lead the Way
5. JPMorgan Chase Loan Modification - Moratorium on Foreclosures

As Goes Housing Prices, Now So Must Your Clocks!

It's daylight savings time again. In case you didn't get up at 2:00AM:

1. Change your clocks.
2. Change the batteries in your smoke detectors.
3. Enjoy the extra Z's.

What direction you ask, go back and read the title, check Trulia for latest home price trends, and ask yourself what season we're in!

If you're still confused, "fall back" on Wickipedia for more information regarding daylight savings time. Caution, perhaps more information than most of you have ever cared to know!

Still confused? Don't worry about changing your clock as this is obviously the least of your problems!

Florida`s Freedom Bank - Another Victim

As reported by MarketWatch.com - "FDIC takes over Florida's Freedom Bank":

Bradenton, Fla. - based Freedom Bank was closed Friday, marking the 17th bank failure so far this year amid the ongoing credit crisis. The Federal Deposit Insurance Corporation said in a statement that as of Oct. 17, Freedom Bank had $287 million in total assets and $254 million in total deposits. Freedom Bank's four branches will open Monday as branches of Grand Rapids, Mich. - based Fifth Third Bank (FITB), which has assumed Freedom Bank's deposits, the FDIC said.

Another bank, another victim. The economic crisis continues its brisk march down the road nobody ever wanted to travel.

U.S Homeowners Underwater - At Least 7.5 Million Drowning!

As reported by CNNMoney.com - "7.5 million homeowners 'underwater'":

At least 7.5 million Americans owe more on their mortgages than their homes are currently worth, according to a real estate research firm's report released Friday.

In other words: If they sold their homes today, they'd have to bring a check to the closing. Ouch.

Another 2.1 million people stand right on the brink, according to the report by First American CoreLogic. Their homes are worth less than 5% more than the mortgages they're paying on them.

Top Ten States - Most Underwater Loans:





Top Ten States - Fewest Underwater Loans:





Ouch is right! The housing correction, battering, unraveling, whatever you want to call it continues. If you're wondering what that bang was you just heard, it's the balloon. The air is no longer seeping out of the balloon, the balloon just exploded.