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WSJ: Median down payments on the rise

From today’s Wall Street Journal article “Banks Push Home Buyers To Put Down More Cash”:

The median down payment in nine major U.S. cities rose to 22% last year on properties purchased through conventional mortgages, according to an analysis for the Wall Street Journal by real-estate portal That percentage doubled in three years and represents the highest median down payment since the data were first tracked in 1997. The move to force home buyers to lay our more cash is driven mostly by banks, who have found that larger down payments discourage delinquencies by increasing the buyers’ exposure to loss and reducing the impact of declining prices.

Unique financing behind Quincy $1.3 billion downtown renovation

The website Real Estate Channel has a concise piece on Quincy’s huge downtown renovation plan. The piece sheds a little more light on the financing of the plan, which calls for the city to overtake project debt only after revenue is generated from tenants, parking fees, etc. It’s probably not totally unique, but it is an interesting idea in these cash-strapped times. Curiously the piece refers to the “$1.8 billion” project, though the sources we found all mention $1.3 billion.

Appraisal problems

Rona has an interesting post on the crazy appraisal market out there. But there seems to be one missing component in the final analysis: Sellers who have overly high expectations about prices.

Whether as a buyer, seller or appraiser, what are you seeing out there in the appraisal market? It seems to be a little chaotic these days.

File under: Advanced astrology

More post-tax credit numbers (sigh)

First the good news: Mortgage refinancing applications are up, thanks to low interest rates and improved fluidity in the markets. Now the bad news: New-purchase mortgage applications are down, despite low interest rates and improved fluidity in the markets.

File under: April’s showers bring May flowers drought

Lower mortgage rates: Unlikely to help

Mortgage rates continue to fall. Will they significantly boost home sales? Not likely, says this Barrons report.

In the past, current and potential homebuyers would have jumped at these rates, the piece says. But we’re now in a deflationary period, and people are reluctant to buy if they think the value of their underlying asset might decline.

Massachusetts is in better shape than other parts of the country. But the same fundamentals still hold true.

File under: The mortgage world turned upside down.

Mortgage-delinquency rate hits record high

The mortgage-delinquency rate may be easing across the country, but not in Massachusetts. It’s once again at a record high.

What gives? Isn’t the Massachusetts housing market supposed to be in better shape than the rest of the nation? There might be an explanation:

MBA researcher Mike Fratantoni blamed Bay State borrowers’ blues on everything from rising long-term unemployment to consumers’ heavy holiday-time heating and credit-card bills.

But he also cited state laws that give financially strapped borrowers more time to work out their money problems and avoid foreclosure.

Fratantoni said such efforts help some struggling consumers, but also keep lots of mortgages that banks would have quickly foreclosed upon listed on the books as delinquent instead.

“These policies are very effective in slowing down foreclosures, but the flip side is that loans stay in the ‘delinquent bucket’ for longer and longer,” he said.

The key words are “slowing down foreclosures.” It appears we’re only temporarily damming them up with the new law, potentially creating the conditions for a flash flood if the dam doesn’t hold.

Your thoughts?

The Taxman cometh and goeth

Scott unloads on the IRS for launching a crackdown on abuses of the new home tax-credit program.

It seems millions of dollars have been lost to scammers across the country who took the money and scrammed. So what does the IRS do? It cracks down on everyone else.

Some of its new filing procedures are understandable and pretty basic, like, you know, filing proof of ownership and/or occupancy. But now you have to mail in applications (yes, snail mail) and wait longer for returns.

The kicker: The feds still haven’t made a concerted effort to go after the actual scammers.

‘Barney Frank: Fannie, Freddie Bye Bye’

Congressman Barney Frank of Newton wants to abolish Fannie Mae and Freddie Mac.

That’s not a big surprise. But it’s not clear how they might be replaced, if at all, and the impact on the entire housing industry.

Missing documents


Have you ever wondered why it’s been so hard and slow to sort out the mortgage foreclosure mess in the U.S.?

Part of the reason can be summed up in two words: missing documents.

Two European banks have sued Bank of America over their mortgage investments, claiming they at least want back some of the mortgages that they allegedly invested in during the final years of the housing boom.

The probelm is no one can account for many of the mortgages in question. There’s alleged evidence some mortgages may have been sold twice. Some are now under the FDIC’s control due to bankruptcy filings by loan originators.

One mortgage portfolio — worth a half-billion dollars — reportedly has no paperwork at all.

The questions abound: Who did the borrowers pay each month? Who accepted the payments? Where did the money go? What happens if a borrower discovers his or her mortgage has no paperwork? Should they stop making payments and hope no one notices?

File under: Ghost mortgages