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Home Mortgage Applications are up for the Beginning of the Year
By Joseph Shalaby
Applications for home mortgages in the United States rose for the third straight week, driven by increased demand for refinancing, according to data released on Wednesday by a trade group.
The Mortgage Bankers Association (MBA) said its seasonally adjusted index of mortgage application activity, which includes both refinancing loans to buy homes, increased by 7 percent in the week ending on 18 January.
The seasonally adjusted index of refinancing applications increased the MBA 7.7 percent, while the gauge of loan requests for home purchase, the principal measure of property purchases, gained 2.5 percent.
The refinance share of total activity regarding mortgages remained stable at 82 percent of applications. Mortgage rates 30-year fixed averaged 3.62 percent were up 1 basis point over the previous week.
The survey covers over 75 percent of residential mortgage applications U.S. retailers, according to the MBA. Although the government has taken steps to try to protect the most disadvantaged of the threat of eviction, the prospects, today, are bleak. A study by property consultant Alteba, this year and early next year said that another 160,000 families could lose their home.
Unemployment is, once again, the greatest threat to these households. If the situation does not improve, the delinquent can settle the debt in about two years.
And as explained Miguel Angel Bernal, professor at the Institute of Economic Studies (IEB), "during the years 2010 and 2011 there was a significant rise in unemployment which will now notice evictions." In 2009, the unemployment rate was 17.36%. In 2010 it passed the psychological barrier of 20% -20.1% and in 2011 stood at 21.3 percent.
In the meantime, sales of new U.S. homes fell in December, while the median home price rose and the sector still appears to be the bright spot in the country's economic recovery, a report showed Friday.
The Commerce Department said sales fell 7.3% in December to an annual rate of 369,000 units, less than the 385.000 units estimated by analysts.
Government data on new home sales are subject to substantial revisions. In fact, the Commerce Department raised its estimate for sales to November by 22,000, to 398.000, the highest reading since April 2010.
The property sector has been a strong point in the economy over the past year and is expected to help offset the economic damage of taxation hikes this year.
The average price for a new home rose to $ 248.900 $ 245.600 in December from November, according to figures that are not adjusted according to seasonal fluctuations. The price hike is considered a sign of improved health in the housing market.
Economists believe that housing construction contributed to economic growth last year for the first time since 2005. Friday's report showed that in 2012, 367.000 new homes were sold, the most since 2009.
Still, that number is about a third of the record sales of 2005, before the collapse of the housing market contributed to the recession of 2007-2009.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Partisan Battles May Hamper Fiscal Compromise
By Joseph Shalaby
Fiscal experts have argued that the political class in the United States will have to put aside their differences to put together a fiscal deal that will not jeopardize the weak global growth before it reaches the debt ceiling.
The decision to cut spending will not be easy and will have a negative effect politically for Republicans or Democrats. But progress is not feasible if the political elite hold the nations fiscal talks hostage.
The decision taken to solve the fiscal problem and the debt ceiling "contravene the interests of parties, whatever, going to the root of the problem and trying to solve it really will be a politically unpopular decision and you just want to stay within of the power game, so it's so complex, "notes the director of the Center for Economic Analysis ITESM, Leticia Armenta.
On Wednesday the U.S. House of Representatives approved an extension of the federal debt capacity until May 19, placing the bill promoted by Republicans on the fast track to get ahead in the Senate, led by Democrats, it to avoid a default by the U.S. government.
Two key opportunities make these negotiations. Unless the U.S. Congress acts before March 2, the so-called economic kidnapping trigger spending cuts by about $ 1 trillion in defense and elsewhere, something no one wants in the Congress, mentions a report by Jeanne Sahadi, from CNNMoney.com.
If no action is taken for the March 27, federal funding will run out completely and be paralyzed government operations until lawmakers can find a way to agree on spending and taxes for the next year or at least for the coming months, the report said.
The risk that the U.S. economy is hostage to politicians is real, as is the case in other countries. Delays or doubts about whether the talks will be sucessful are likely to inhibit flows of capital from banks and other financial institutions.
"At the end of the day the game and lay politicians do not always go hand in hand with better growth prospects," he adds.
According to the CI Banco analyst Mario Copca the fact that the U.S. economy has not fallen into an abyss tax on 1 January and has postponed the debt ceiling until 19 May, the market has interpreted as something good and expects American politicians to reach an agreement later.
"Regularly economies become hostages of politicians, but this year both in Mexico and in the U.S.," said Copca.
In the U.S., some decisions have been postponed, adds. There are no agreements between Democrats and Republicans, and "no absolute majority for approval of plans and that's the problem."
Copca believes that the market has reacted well, but will face more risks when approaching the negotiations and reach an agreement.
"So (the politicians) prefer to kick the ball a little more and hold it to see if extra reach agreement reduces the fear that they will not achieve a consensus and that this could result in a more [problems] for the economy. While in the U.S. are less prone to such events, the political class is the same throughout the world. "
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Geithner Has No Desire to Lead the Fed When Bernanke Retires
By Joseph Shalaby
The U.S. Treasury Secretary Timothy Geithner said Wednesday that "there is no chance" that he will be proposed as chairman of the Federal Reserve (Fed) and argued that the U.S. economy is in a more "resilient" state after the 2008 crisis.
"No chance. I have great respect for the institution, but that will be the privilege of another person," Geithner said in an interview with the website Politico on his last day in front of the Treasury.
The U.S. economic recovery is entering the final stretch, though unemployment remains high and will only gradually decrease, said the outgoing Treasury secretary there, Timothy Geithner.
"I believe in recovery. If this were basketball, we're starting the fourth quarter," Geithner said in an interview with the Wall Street Journal.
Some media had mentioned the name of Treasury Secretary Geithner as president of the Federal Reserve (Fed), when Ben Bernanke’s term expires in 2014. Geithner, 51, said his future plans include returning to New York to be with his family and traveling with his wife, after three and a half years as head of the Treasury Secretary.
The U.S. economy is in an advanced chapter of its "recovery", said Geithner, which is currently at 7.8%. "That's the inevitable, terrible and tragic legacy of a financial crisis of this nature," he said.
However, he said there is still a "very substantial space" in fiscal policy to reduce the rate of unemployment. "It would be easier if it were accompanied by a long-term plan to reduce future deficits," he said, referring to the ongoing negotiations in Congress to agree on a new budget.
Finally, he used to take stock of his years as Secretary of the Treasury, in which the Congress had to bailout the financial industry and automotive industry. Geithner is a member of the economic team that worked with Obama in the White House to help stabilize the economy.
"I have worked with a president whom I admire deeply," he said. President Obama has already announced his election to succeed his former Geithner's chief of staff, Jack Lew, whose nomination must be approved by Congress.
The United States went further in debt than others to balance the nation's income and cut the risk of leverage in the financial system, "and had the large adjustment in the housing sector," Geithner said.
The recovery in Europe is in a nascent stage much but the continent has done "really important things, like remove market risk of a catastrophic collapse."
Last summer, the European Central Bank (ECB) agreed to do everything necessary to protect the euro and backed up that promise with a bond purchase program if a country needed him after requesting a bailout.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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IMF Urges Obama to Address Foreclosure Crisis
By Joseph Shalaby
The problems of the administration of President Barack Obama to address the foreclosure crisis show the slow housing debt is recovered from deep recessions, the International Monetary Fund (IMF) said in a report.
The agency cited the failure of government flagship program to prevent such liens, in a report released Tuesday on household debt.
The IMF said that fewer than 1 million mortgages have been changed in the United States under the Home Affordable Modification Program, HAMP, against the Government's initial target of between three and four million.
Nearly 8 million Americans are facing foreclosure since the bubble burst in residential construction.
The report noted that the HAMP offered limited incentives to banks and tightened the criteria for application to the program. He said, moreover, it did not reduce monthly mortgage payments to make them affordable enough in many cases - only 11% of permanent modifications included decreases in the amount mortgaged.
The IMF stressed that the government tried to improve other assistance programs in February to increase the number of people eligible and increase the incentives for banks to offer reductions.
However, the IMF warned that millions of American's remain at risk of losing their homes and governmental procedures have not reached the magnitude of the measures taken during the Great Depression.
"Some 2.5 million properties are subject to foreclosure and another 1.5 million are in default. Figures are amazing," said Daniel Leigh, lead author of the IMF report, in a press conference. "There remains a need to do something."
One of the main reasons for the low number of mortgage reductions is that Fannie Mae and Freddie Mac, which fund half of U.S. mortgages, have not reduced the value of debts in cases where homeowners at risk of foreclosure.
Edward DeMarco, the federal regulator that oversees the accounts of Fannie Mae and Freddie Mac, the mortgage banks seized by the federal government, opposed the idea of reducing the amount of the mortgage on the grounds that it would jeopardize the taxpayer funds, despite pressure from lawmakers and the White House.
On Tuesday, DeMarco said his agency would consider the idea.
In other news, Goldman Sachs Group Inc and Morgan Stanley will pay $ 557 million in cash and other assistance to troubled borrowers to conclude a case-by-case foreclosure required by U.S. regulators.
The U.S. Federal Reserve said Wednesday that the two banks will pay $ 232 million to eligible borrowers and 325 million in credits modifications and forgiveness.
The agreement is similar to the 8,500 million dollars that materialized the Fed, the Office of the Comptroller of the Currency and other banking service 10 January 7.
The Fed had ordered Goldman and Morgan Stanley to revise foreclosures conducted by mortgage services business both acquired investment banks before the subprime mortgage crisis.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Housing Market Gaining Momentum in U.S.
By Joseph Shalaby
Sales of existing homes in the U.S. rose in November at the fastest pace in three years, a sign that the recovery in the housing market is gaining momentum.
The National Association of Realtors (NAR) said Thursday that sales of previously owned homes rose 5.9% last month to a seasonally adjusted annual rate of 5.04 million units.
That was the fastest pace since November 2009, when there was an expiring federal tax credit for home buyers. Sales exceeded by far the estimates of analysts polled by Reuters, of 4.87 million units.
The U.S. housing market collapsed during the recession of 2007-2009 and has not yet fully recovered, but continued job creation has helped the housing sector this year, when it is expected to contribute to economic growth for the first time since 2005.
NAR economist Lawrence Yun said the storm that Sandy, which hit the U.S. east coast in late October and hurt the regional economy for weeks, only had a slightly negative impact on home sales.
The NAR estimates that some purchases delayed by Sandy added a slight boost to sales in the coming months, Yun said.
Nationally, the average price for a resale home was $ 180.600 in November, 10.1% more than the previous year, as fewer people sold their homes by necessity compared to the same period of 2011.
The national inventory of existing homes for sale fell 3.8% in November to 2.03 million, the lowest level since December 2001. At the current sales pace, the inventory would run out in 4.8 months, the lowest rate since September 2005.
The volume of housing loans in the U.S. fell 10% last year and recorded its lowest level since 1995, highlighting the problems faced by the government to recover a real estate sector that continues to face problems.
The Board of Examiners of the Federal Financial Institutions, a group of U.S. regulators, released data on Tuesday that showed that in 2011it materialized 7.1 million home loans, a decrease from the 7.9 million loans last year.
The data, which include mortgage loans, refinancing and home improvement loans, showed that for the purchase of a home, as well as for refinancing, fell.
Loans for refinancing homes fell 13% in the year, while new mortgages fell 5%, the council said in a statement. However, the Federal Reserve, one of the regulators involved in the collection of data, emphasized that refinancing activity surged by year-end to lower interest rates.
The analysis highlights the work that the federal government has to do to life the still depressed housing market, which has become an obstacle to economic recovery from the recession 2007-2009. The U.S. government currently holds a guarantor of much of the new mortgages in a backup that has grown strongly since the collapse of the housing bubble helped spark the recession.
The Government also seeks to help owners refinance their homes at lower interest rates.
The Fed has tried to help the industry by reducing interest rates. Last week, the U.S. central bank unveiled a plan to purchase Treasuries intended to reduce costs for home buyers and other borrowers.
However, the Fed said Tuesday that a key measure of loan conditions were tightened last year, showing that banks demanded higher credit scores to qualify for a loan.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Mary Jo White Appointed To Head SEC
By Joseph Shalaby
President Barack Obama proposed Thursday that Mary Jo White be the head of the country's Securities and Exchange Commission (SEC), replacing Elisse Walter.
Walter took office in December after his predecessor Mary Schapiro left the institution. White's nomination shows the president's desire to have a strict officer watching Wall Street. White, the former U.S. attorney for the Southern District of New York known for having tried to known terrorists and mafia figures, would become the third woman consecutive to wield powerful posts in the SEC.
"We need to pursue irresponsible behavior in the financial industry so that taxpayers do not pay the price," Obama said in announcing the nomination. "I am absolutely confident that Mary Jo has the experience and determination to deal with these complex issues and to protect the American people in a way that is smart and in a way that is fair," he added.
His election quickly brought praise from Wall Street reform supporters who claim that White aptly handled the agency that plays a key role in overseeing the U.S. financial markets.
White is a candidate that does not generate more controversy, although she does not have extensive experience with securities policies and recently worked privately defending Wall Street figures, including former chief executive of Bank of America, Ken Lewis.
"I see her as a lawyer with a good reputation who has spent a significant amount of time as a partner in Debevoise representing companies and individuals in high profile issues related to values," said Cheryl Scarboro, former head of the unit of the Act Foreign Corrupt Practices SEC and now a partner in the law firm Simpson Thacher & Bartlett.
New York Senator Charles Schumer, a Democrat who sits on the powerful Senate Banking Committee, praised White's reputation as a tough prosecutor and anticipated to be "easily confirmed." A quick confirmation of White might help the SEC to accelerate its implementation of dozens of regulations required by law to reform Dodd-Frank Wall Street 2010.
Obama also nominated Richard Cordray to continue as head of the Bureau of Consumer Financial Protection, the U.S. agency that monitors consumer products like mortgages and student loans. Both appointments must be confirmed by the Senate. During the reign of White as a prosecutor, U.S. prosecutors won the conviction of about 35 Muslim militants accused of plotting against Americans.
It is unclear whether White's past work defending clients on Wall Street will generate problems during his confirmation process in the Senate. When asked whether the Government intended to problems Cordray is confirmed in the renomination to his office, the White House spokesman, Jay Carney, said he expected no objections "substantial" against him.
"He is the right person for the job," Carney said. He added that previous obstacles to Cordray's nomination had been based on "political considerations" of lawmakers who opposed the creation of financial protection agency.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Bank of America Still Profitable Despite Legal Woes
By Joseph Shalaby
Bank of America Corp reported a small profit on Wednesday, despite dishing out $1.6 billion related to legal settlements.
The results show that the chief executive, Brian Moynihan, has yet to deal with the weight of the acquisitions made during the financial crisis.
Bank of America agreed last month to pay 2.4 million in an agreement on charges that it hid crucial information to shareholders when it bought the investment bank Merrill Lynch & Co at the peak of the crisis. The bank denies the charges.
The bank had already accrued some resources to finance the cost of the deal but said last month that the output of litigation, a tax charge in the UK and an accounting adjustment related to the value of its debt reduced earnings in the third quarter to $0.28 per share.
To boost profits, the bank last year announced a comprehensive program of cost reduction that seeks to eliminate 8 billion dollars annually in costs and 30,000 jobs.
But even with that project, called "New BAC" expenses unrelated to interest rose about 1 percent in the last quarter, to 17.540 million.
The company reported a profit of $ 340 million, which represented a zero profit per share. That compared with a profit of 6.2 billion, or $ 0.56 per share, in the same period last year, when a sale of assets and accounting gains drove the result.
Analysts on average expected a loss of 7 cents per share, according to Thomson Reuters I / B / E / S. It was not immediately clear whether the results were comparable with these estimates.
In its presentation of results, Bank of America shed light on the possible losses from repurchases of bad loans it sold to investors during the housing boom.
It said it could lose up to 6,000 million above its current reserves for claims from Fannie Mae and Freddie Mac and private investors.
Previously, the bank had said that losses could exceed its reserves at 5 billion claims only by private investors.
In a conference call with reporters, Chief Financial Officer Bruce Thompson said the bank still had differences with Fannie Mae regarding the claims and that no agreement had been reached with the signing of the government-controlled mortgage lender.
Bank of America had 16.3 million in claims reserved for repurchases at the end of the third quarter.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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United States Files Civil Suit Against Bank of America
By Joseph Shalaby
The United States filed a civil lawsuit Wednesday for alleged mortgage fraud against Bank of America, which accuses it of selling to Fannie Mae and Freddie Mac thousands of toxic mortgages that fell into default and caused losses of more than 1 billion dollars.
The case, which originated in the information provided by an informant, is the first civil suit for fraud related to mortgage loans sold to Fannie Mae and Freddie Mac.
Also brings problems that Bank of America, the second largest bank in the United States has faced since the disastrous 2008 purchase of Countrywide Financial Corp, which once was the largest U.S. mortgage lender.
According to the lawsuit filed in federal court in Manhattan, Countrywide created in 2007 a scheme known as "Hustle" designed to expedite the processing of mortgage loans.
Operating under the slogan "The loans advance, never retreat," bank executives tried to remove the tools designed to ensure that the loans were safe and untainted by fraud, the government said.
This resulted in "defection rates" that were almost nine times normal in the industry, but it hid Countrywide to Fannie Mae and Freddie Mac, and even gave bonuses to his staff to "refute" the problems were discovered. The scheme worked in 2009 and caused "untold" foreclosures, explained the prosecution.
"The misconduct exposed in at trial on Wednesday was spectacularly brazen in scope," he said in a statement the prosecutor Preet Bharara. "This lawsuit should send another clear message that irresponsible lending practices will not be tolerated," he added.
Bank of America did not immediately respond to requests for comment.
After paying 2.500 billion for Countrywide on July 1, 2008, Bank of America has lost nearly 40 billion in mortgage litigation and investor requests to repurchase delinquent loans, according to Credit Suisse estimated on Oct. 5.
The suit seeks treble damages under the federal false claims, plus civil penalties. Bharara said it was the sixth lawsuit against a major U.S. bank that presents the prosecution in the last year and a half under the same law for alleged reckless mortgage practices that led to the recent financial crisis.
Federal regulators intervened Fannie Mae and Freddie Mac on September 7, 2008 and placed in receiverships. This comes after Bank of America (BofA) will provide 15.800 million to help alleviate the mortgage debt of more than 164,000 customers, as part of an agreement with state and federal mortgage.
Bank of America, which acquired the troubled lender Countywide Financial in 2008, is the most money to the agreement of 2.5 billion from five banks to help borrowers and closing shot accusations that lenders made incorrect and misleading foreclosures .
The five banks must submit quarterly reports to the supervisor on Wednesday, said the former commissioner of the State Bank of North Carolina Joseph Smith, who later presented a report compiling the data.
Smith's first report in August showed that Bank of America is behind on their rivals in reducing debt less risky mortgage customers.
Through September, the second largest U.S. bank by assets, said it had approved or completed a reduction of 4.75 billion of debt for clients with lower-risk mortgages, had provided 2,500 million dollars in relief to other mortgage loans and completed 7.400 billion in short sales or agreements instead of foreclosures.
They provided $ 847 million more in aid through other programs.
Of the 30,000 homeowners who were approved for modifications, about 5,800 have been made three monthly payments required test and have been transferred to a total restructuring, the bank said.
The bank based in Charlotte, North Carolina showed little progress in reducing interest rates for customers who are making one-time payments but have little or no equity in their homes, saying that they first focused on customers with higher risk of foreclosure.
Through September, the bank helped 1,000 clients with $250 million in unpaid balances through this program.
During a conference call with reporters, senior Vice President of Bank of America Eric Telljohann said the agency is on track to meet the terms of the agreement to three years within the first year.
The other banks in the deal are JPMorgan Chase & Co., Wells Fargo & Co, Citigroup Inc and Ally Financial Inc.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Markets Continue to Show Signs of Improvement
By Joseph Shalaby
The S&P 500 closed Friday above 1,500 points on the New York Stock Exchange for the first time in more than five years. This was underpinned by strong quarterly earnings reports that helped it rally to yearly highs.
The Dow Jones industrial average gained 70.65 points, or 0.51%, to end at 13,895.98 points, while the Standard & Poor's 500 rose 8.14 points, or 0.54% to 1502.96 units.
Meanwhile, the Nasdaq Composite Index rose 19.33 points, or 0.62% and ended at 3149.71 units. For the week the Dow rose 1.8% and the S & P and the Nasdaq gained 1.1 and 0.5% respectively. It was the fourth consecutive week weekly earnings for the three indicators.
The winning streak is the longest in eight years and left the S & P 500 to about 4.1% of its record high close to 1565.15 points, reached on Oct. 9, 2007.
The strong start to the year in the stock market has been attributed to strong corporate results, the agreement reached in Washington to extend the government's borrowing ability, encouraging signals from the global economy and the flow of funds into shares.
Shares of Procter & Gamble led the Dow and the S & P was up 4 percent, to $ 73.25, after the world's largest maker of household products, posted quarterly profit that beat estimates and raised previous its sales and earnings forecasts for the fiscal year.
The S & P 500 closed at its highest level since December 10, 2007 and the Dow finished at its peak from October 31, 2007.
Apple shares lost 2.4%, to 439.88 dollars, and iPhone maker ceded the title of the most valuable U.S. company by market capitalization at the hands of Exxon Mobil Corp.
The market capitalization of Apple fell to 431.000 million, almost 250,000 million less than the maximum recorded in September. The decrease in the value of Apple is almost equal to the total value of Google Inc.
U.S. crude futures ended lower Friday in a volatile session due to profit-taking, but closed up weekly. Oil fell $ 0.7, or 0.07%, to close at 95.88 dollars a barrel, after trading between 95.43 to 96.56 dollars a barrel.mFor the week, futures gained 32 cents, or 0.3%.
European stocks hit new highs Friday several months, German economic data boosted by better than expected and a higher rate in the cancellation of loans to banks during the financial crisis reinforced the idea that the region is on track for strong recovery.
The DAX index of the Frankfurt Stock Exchange led the rise, reaching five-year highs and closed with a rise of 1.3% after the Ifo business sentiment index beat estimates.
Confidence in the euro zone recovery was further reinforced by news that banks pay next week 137.000 million (183.000 million) on loans granted by the European Central Bank during the financial crisis, about third more than expected.
The Eurostoxx 50 index of leading eurozone shares closed up 0.78%, to 2744.18 points. The FTSEurofirst 300 closed up 0.32%, to 1174.81 points.
The Eurostoxx 50, which has risen 4.1% so far in January, is on track to close its eighth month with gains, extending its longest winning streak since 1998, but still 67% below their 2007 highs.
In another sign of increased appetite for risky assets, the implied volatility in the index of leading eurozone shares fell to new lows of six months.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Home Sales Down For the Month of December
By Joseph Shalaby
Sales of existing homes in the United States fell unexpectedly in December due to fewer people putting their properties on the market.
The National Association of Realtors (NAR) said Tuesday that sales of existing homes fell 1.0% last month to a seasonally adjusted annual rate of 4.94 million units.
Still, it was the second highest sales rate since November 2009, when a federal tax credit for homebuyers was going to expire.
The U.S. housing market collapsed just before the recession of 2007-2009 and has not yet fully recovered, but the constant creation of employment helped the housing sector last year, when it probably helped economic growth for the first time since 2005.
The inventory of existing homes for sale in the country fell 8.5% in December from November to 1.82 million units, the lowest level since January 2001.
Many Americans are avoiding placing their homes on the market because they owe more on their mortgages than their homes are worth. Inventories fell 21.6% compared to December 2011.
At the current sales pace, the inventory would run out in 4.4 months, the lowest rate since May 2005. Low inventories are encouraging multiple resales for homes and helping to raise prices, said economist Lawrence Yun NAR.
Nationally, the average price for a resale home was $ 180.800 in December, 11.5% more than a year ago. Need sales fell to 24% of total sales compared to 32% a year ago.
The percentage of sales by necessity-which also include those in which the sale price was less than the amount due on the house-up compared to 22% in November.
The volume of housing loans in the U.S. fell 10% last year and recorded its lowest level since 1995, highlighting the problems faced by the government to recover a real estate sector that continues to face problems.
The Board of Examiners of the Federal Financial Institutions, a group of U.S. regulators, data released on Tuesday that showed that in 2011 it materialized 7.1 million home loans, a decrease from the 7.9 million loans last year.
The data, which include mortgage loans, refinancing and home improvement loans, showed that for the purchase of a home, as well as for refinancing, fell.
Loans for refinancing homes fell 13% in the year, while new mortgages fell 5%, the council said in a statement. However, the Federal Reserve, one of the regulators involved in the collection of data-emphasized that refinancing activity surged by year-end to lower interest rates.
The analysis highlights the Fed's efforts to lift the still depressed housing market, which has become an obstacle to economic recovery from the recession of 2007-2009. The U.S. government currently holds a guarantor of much of the new mortgages in a backup that has grown strongly since the collapse of the housing bubble helped spark the recession.
The government also seeks to help owners refinance their homes at lower interest rates. The Fed has tried to help the industry by reducing interest rates. Last week, the U.S. central bank unveiled a plan to purchase Treasuries intended to reduce costs for home buyers and other borrowers.
However, the Fed said Tuesday that a key measure of loan conditions were tightened last year, showing that banks demanded higher credit scores to qualify for a loan.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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What to Consider When Purchasing a New Home
By Joseph Shalaby
Having a home is one of the most common financial goals among Americans, but if you do not have a strategy for managing your mortgage, the purchase of a property can tear apart your personal finances.
During 2012, mortgage lending has grown 30% in number of loans and 20% in value of financings, which indicates that the end of the year will have been placed 580.000 credits for house purchases, according to the latest report from the mortgage industry conducted by BBVA Bancomer.
Americans still have some misconceptions about the dynamics, conditions and life of the loans, said Enrique Margain Pitman, a mortgage lender.
"This is a good time to apply for home refinancing and not only by macroeconomic stability but for the benefits currently offered as fixed monthly payments or acquaintances, interest rates (from 10.00%) and terms ranging from 10, 15 to 20 years," he says.
Here are some tips you can take into account when assessing whether you are ready for funding:
1. Credit or cash: There are still people who do not like the idea of using financing to be made of durable goods and prefer to save up to cover the cost of your home, but as it is a considerable investment it best to analyze the situation carefully.
"If you have the total cost of the home that interests you and on the other hand you have the opportunity to participate in any investment that gives you a higher return than the interest charged to the bank then it is better idea to invest, this route will allow even liquidate the credit in advance, "says Octavio Novelo, director of real estate consulting site Chilanga.com House.
2. The house itself: One of the most common mistakes that novice buyers comment is acquiring the property for them enough to give them credit, because often it is social housing to outskirts of the big cities where the owner cannot live because he works away.
"A house that stands alone deteriorates rapidly and involves considerable expense, people who have homes far from their workplaces must pay rent on a place closer to their offices or lose several hours a day in transport, many people choose by paying off debts and take home as a 'vacation home' or 'weekend', but in the long run the risk of having abandoned houses, "explains Sandra Hendrix, commercial director of Coldwell Banker Real Estate Consultancy.
3. The new trend: With the growth in urbanization levels life in big cities is becoming smaller homes, developers now are favoring vertical housing.
"When you have a home of 38 meters, a single home can be compared to an apartment of 48 square meters with two bedrooms, we are committed to making homes sitting vertical broader, it is difficult to convince customers and vendors that is the new way of life, because there is still a price differential between the ground floor apartments, first class, which are the most requested, and floors that can be higher, "says Germán Ahumada board president of Consorcio Ara .
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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European Banks Repay Debts as Economic Systems Recover
By Joseph Shalaby
Many banks will return 137.159 million euros (184.3 million U.S. dollars) of emergency loans received during the financial crisis to the European Central Bank, in a sign that at least some parts of the European banking system has recovered.
The ECB lent more than a trillion euros to banks-hundred to three years in financing operations between December 2011 and February 2012, a plan that the council president, Mario Draghi, said that it "avoided a great, massive credit crunch. "
The ECB said Friday that 278 banks had decided to repay the loans at the first opportunity, on January 30, but did not name them in particular.
A total of 523 banks had used the first of two programs of long-term loans, known as (LTRO), a little over a year.
The German debt prices fell, while bank shares and the euro rose on news of the advance payment, which exceeded the forecast of 100,000 million euros in a Reuters poll of traders.
Banks can return the money in advance on a weekly basis from now. The repayment of the second LTRO begins on February 27.
“I expect the pace to slow considerably in the next week," said Nordea analyst Jan von Gerich. "Some slightly stronger banks returned the money as soon as possible, while taking money weaker in the second LTRO," he added.
"Do not believe the returns will return to a level where interest rates start to rise," he said.
Strong prepayment will be good news for some ECB officials who were concerned about the increased risks that the central bank had in its balance sheet with loans.
German Chancellor Angela Merkel said at the World Economic Forum in Davos, Switzerland, on Thursday: "it will be important for Europe that gave ample liquidity to banks last year collected again."
Banks generally took the funds for three reasons: as insurance in case of a worsening of the euro zone crisis as a means to finance purchases of government bonds with higher returns and to fund their loan books if they had problems accessing the cheap credit.
Banks in Spain and Italy were among those who poured money into government bonds of their own countries, whose yields were at record levels, but have since declined strongly as a result of loans from the ECB and its promise to buy bonds of nations in trouble.
They seemed less likely to repay the money at the first opportunity, preferring instead to stick with the bonds on which they have reaped huge profits with relief euro zone crisis.
The prepayment of these loans is a distinction for banks looking to impress investors and rating agencies and distance themselves from their troubled rivals. However, the risk of doing so would force them to make an extra effort.
Coeuré Benoit, in charge of market operations at the ECB's executive committee, tried to alleviate those concerns last week to minimize the possibility that banks will return a very large amount of emergency loans.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Insurance Costs Associated With Purchasing a Mortgage
By Joseph Shalaby
Given all the turmoil in the past few years in the housing market, being able to enter a bank to negotiate a mortgage and leave with only the mortgage may seem like mission impossible. The fact of the matter is that many mortgages that are sold in our country are associated with certain insurance contracts that can be more expensive than the cost of the loan.
It is worth knowing what type of insurance types the bank may require at the time of signing a mortgage and which of them are required by law.
I will briefly describe each of the insurance that may be associated with a mortgage loan:
1. Damage Insurance
According to mortgage law, this is the only compulsory insurance the bank may require when a mortgage has fire insurance or liability insurance. In this case, the bank itself should compel an individual to purchase insurance of this type on the mortgaged property.
The client can buy this insurance and any other provided that, in the case of property insurance, there is a mortgage option clause where it appears as the beneficiary. In this case, the bank has granted that the loan shall be secured by the appraised value of the home.
The insurance coverage for this damage is only on the property, that is, on the house, without having to include the contents of the same and the amount is calculated on the basis of the value contained in the appraisal. The requirement of this insurance is determined both by providing security to the owner of the house, as a financial institution to be this good guarantee of repayment.
2. Multi-risk home insurance
It is advisable to distinguish between damage or fire insurance and the only home insurance and comprehensive insurance contracts which in any case is required by law. This home insurance, unlike liability insurance, covers not only the home but also the content of the home such as computers and jewelry.
It also has Liability coverage that covers repairs and compensation that the insured has to pay to third parties for damages they may cause. The Organization of Consumers and Users (OCU) recommends that you hire a home insurance with liability coverage of at least EUR 300,000.
The multi-risk home insurance also offers legal-defense if the insured has to claim damages others have caused on their property, and covers pets.
3. Life Insurance
As is the case with multi-risk home insurance, there is no legislative requirement that obliges the mortgage holder to a life insurance contract; however, many financial institutions require their employment at the time of signing the loan. This insurance covers the risk of death of the holder of the loan. That is, if the owner dies the insurer is responsible for paying off the principal outstanding.
Although insurance is recommended, it is important to assess their cost is very high and can share expensive mortgage very significantly. In addition, the life insurance premium increases with the advancing age of the insured.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Fed Critics Question Usefulness of Quantitative Easing
By Joseph Shalaby
Critics of the Fed have long warned that quantitative easing could result in dangerously bloated balance sheets at the Central Bank, but it has never been clear why the internal finances of the Fed should have such an effect.
Now, the president of the Dallas Fed, Richard Fisher, argues that the health of the Fed's balance sheet could affect the health of the federal government, and even the regulatory role of the Federal Reserve.
Under three rounds of quantitative easing and various other market support programs, the Fed has purchased a whopping $ 2 trillion in Treasuries and mortgage bonds since the financial crisis hit in 2008. At that time, the Central Bank accounted for 900 million in bonds and securities on its balance sheet. Those bonds had accumulated over the years in "open market operations" which is the buying and selling when the Fed makes its policy changes.
Fisher's two favorite subjects are the virtues of his adopted state tax and fiscal sins of the legislature in Washington DC, which ran as a Democratic Senate candidate in 1994. He also mocks California's finances in a story that imagines the governor of California, Jerry Brown, spending millions on environmental impact studies after a confrontation he had with a coyote earlier, we know that the governor of Texas, Rick Perry shot a coyote on a morning walk. ("Bullet Cost: 25 cents. Cost to taxpayers: zero)."
Fisher, who currently has no vote in the Open Market Committee of the Federal Reserve, has long argued that further bond buying is useless until Congress balances the budget. He insists that QE is not achieving its stated goal of reducing the unemployment rate. Other critics, such as bond investor Jeffrey Gundlach, echoed his claims that quantitative easing has crashed into the law of diminishing returns.
Fisher goes further, saying that QE is not only useless, but is potentially toxic.
"The question is how far we are willing to go and how big will the balance sheet that we will be able to leverage before we run the risk of not only (damage) the financial welfare of the Fed, but also the country", Fisher said during a question and answer session after his speech at the Chamber of Commerce in Gainesville.
Basically, if the Fed maintains its mortgage and Treasury bonds as yields rise, it will have to adjust its portfolio with the markets. To remain solvent after a certain level, the central bank should stop sending cash to the Treasury. In 2010, the Congressional Budget Office (CBO) warned that the federal government could become increasingly dependent on remittances generated by the Fed's balance sheet.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Bernanke: Overly Strict Lending Hampering Housing Progress
By Joseph Shalaby
The U.S. housing market has improved, but is still "far from out of difficulties," said the Federal Reserve chairman, Ben Bernanke, on Thursday, noting that overly strict lending standards are part of the problem.
The Fed, which has put the focus on mortgage bonds during the last round of asset purchases, continues doing what it can to support the housing market, he added.
A bubble in the U.S. housing market triggered the financial crisis from 2007 to 2009 along with a brutal recession that continues to weigh on the world economy. Data from the last few months, however, have shown that the sector is reviving.
"While there are good reasons to be excited about the recent direction of the housing market, we should not be satisfied with the progress we have seen so far," Bernanke said in remarks prepared for an event.
The Fed chairman noted that tougher standards for giving credit were an appropriate response to the maximum price of houses and the crisis that followed.
"However, at this point it is possible that the pendulum has gone too far and now extremely stringent loan conditions are preventing deserve credit borrowers from purchasing homes, which therefore slows the recovery of the housing sector and prevents economic recovery, "he said.
Earlier this year, the Fed suggested that other authorities in Washington were considering steps to free up credit and boost the real estate sector.
But critics on Capitol Hill said that the Central Bank should remain attached to monetary policy.
In his speech, Bernanke avoided talking about policy measures that could be taken and detailed official initiatives already being implemented.
Housing prices have risen across the country this year and there are also positive signs in residential investment trusts, sales, demand and construction.
The property sector usually provides strong signals on the output of a recession in the U.S. economy, but the huge losses of assets have lagged the market this time.
An index of pending sales of existing homes in the U.S. rose more than expected in October, a sign that the recovery in the housing market rose in the fourth quarter despite a huge storm and concerns over a looming tax increase , a report showed on Thursday.
The National Association of Realtors (NAR) said its index of pending sales, based on contracts signed in October, increased 5.2%, to 104.8.
Economists polled by Reuters had expected a rise of 0.8%.
"We have had very good accessibility to housing for some time, but now we are seeing a greater impact constantly creating jobs," said NAR chief economist Lawrence Yun.
Yun said the data shows some impact of the massive storm Sandy that hit the U.S. East Coast in late October.
Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the Vice President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
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Mortgage Loan Officer Training: 10 Ways to Increase Your Income by 5,000 Per Month
By Joseph Shalaby What follows are 10 mortgage loan officer training tips that will allow you to become more efficient and productive. These tips have helped me considerably over the years and I am confident that they can help you as well. Training Tip #1 A small number of productive lenders are more than adequate for start up businesses. Around five lenders are more than adequate to deal with all of the credit grades and various loan options. Training Tip #2 Be sure to read the lender’s guidelines and develop an intimate knowledge of all of the various products and procedures. It’s both inefficient and a bad idea to rely on lender representatives to inform you of all the guidelines. They can make misstates like anyone else. Training Tip #3 Be sure to thank your appraiser, title agents, and underwriters with a card or modest gift. This will help you gain their favor and make them happier to work with you in the future. Building strong relationships with your employees is essential to retaining good talent. Training Tip #4 Be able to clearly define your target market. Indentify what types of loans you are willing to provide and state clearly what type of loans you will to make. Agreeing to finance a loan that is outside of your market will cause headache and should be avoided. I typically avoid dealing with loans for people that have a credit score of less than 580. If someone came to me with a credit score of less than 580, then I would refer them to my loan officer and split the commissions. Training Tip #5 It’s not possible to be an expert at everything in life and the same rule applies to mortgage loans. Find an area of specialization that you’re comfortable with and develop your skills in that area. Once you’re an expert in your specialization it becomes easier to monopolize that area of the marketplace. Training Tip #6 There is always room for optimization with the workplace. For example, keep a printer close to your desk so that you don’t spend lots of time running back and forth getting papers. You can also place a fridge in your office or put a copier next to your assistant’s desk. This will help keep your assistants more productive and focused on the task at hand. Training Tip #7 It’s important to get all of the documentation up front. Once you have everything in front of you, then you won’t need to constantly ask for the documents from the borrowers. Once again, this is about optimization and efficiency. Training Tip #8 Use only what’s required to follow through with a loan. There is no point in filling out extra paperwork if it’s not required for what you are doing. Submitting extra paperwork not only makes your time less efficient, it adds unnecessary work for the processors and underwriters. Training Tip #9 At some point in the loan process you’re going to need to contact the borrower to ask for more information. In this situation, it’s best to use what’s been called the “sandwich technique:” Re-establish rapport Make your request: “Oh by the way I need___. When can you fax it to me?” Continue rapport building dialog. Say goodbye and politely get off the phone. Training Tip #10 Positive feedback from customers is an essential component of maintaining profitability. Get testimonials from as many people as you can. Attaining good feedback can be a very useful marketing technique. They can be used to target your client’s CPA, HR manager at work, real estate agent and financial planner to establish a referral relationship. By incorporating these ideas into your business, you can boost the net income of your business by as much as $5000 per month. Joseph Shalaby is a licensed real-estate broker and licensed mortgage agent since 2002. He is a nationally-known mortgage expert and has specialized in mortgage loans for people with bankruptcies, foreclosure and with other credit issues, as well as commercial mortgages. He is currently the President of the Retail Lending division for PacificBanc Mortgage, a premier nationwide mortgage lender.
#loan officer#loan officer marketing#loan officer training#mortgage broker training#mortgage broker#mortgage broker tips
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