The Spouses Real Estate Blog Reporting and comenting on all things real estate August 2007
The turbulence in the mortgage and finance markets continues today as yet another lender, Accredited Home Lenders, begins to 'realign' its operations to avoid bankruptcy. Accredited is jettisoning more than 60% of its workforce and closing more than 65 branch offices. Accredited reportedly closed just shy of $16 Million in loans last year.
More than 50 lenders have gone bankrupt this year, including two of the nation's 10 biggest. California based Quality Home Loans joined the list Tuesday after filing for bankruptcy. Quality listed more than $100 Million in liabilities. According to a report filed with the Associated Press, job loses in the mortgage and finance sector have crossed the 40,000 mark.
Countrywide, who recently tapped an $11.5 Billion line of credit to close existing loans in progress has begun laying off employees while Capital One Financial Corp. rid itself of Greenpoint Mortgage, it's wholesale mortgage banking division, eliminating 1,900 employees.
Today Citi, JP Morgan Chase, Bank of America and Wachovia borrowed $500 Million each from the Federal Reserve after the discount rate was reduced from 6.25 to 5.75 percent on Friday. Such moves are traditionally seen as a last resort for banks in financial trouble, however, the borrowers all issued statements saying they were simply trying to instill confidence that they will be able to continue to meet their financial obligations.
Stay tuned for more updates on what is shaping up to be a very major realignment of the financial services sector.
Aug. 17 (Bloomberg) -- The Federal Reserve lowered the interest rate it charges banks and acknowledged for the first time today that an extraordinary policy shift is needed to contain the subprime-mortgage collapse that began roiling the world's financial markets two months ago.
The Fed, in a surprise announcement in Washington, cut the so-called discount rate by 0.5 percentage point, to 5.75 percent. Policy makers dropped language indicating their bias toward fighting inflation, and instead highlighted a rising threat to economic growth. That suggests officials will reduce their benchmark rate when they meet Sept. 18, economists said.
The Fed said while recent reports indicate economic growth continues at a ``moderate pace,'' risks to the expansion have risen ``appreciably.'' The statement is a marked change from just 10 days ago, when officials kept rates unchanged a ninth straight time and reiterated inflation was their ``predominant'' concern. (Read More)
The housing market is going to be in for a few rough days ahead as the mortgage market attempts to stabilize. It's been reported that First Magnus Mortgage has filed for bankruptcy protection; their website indicates a full and complete stop applies to all loans in progress citing the "collapse of the secondary mortgage market."
First Magnus joins New Century, American Home Mortgage, Aegis Mortgage and more than 50 others who have filed for bankruptcy protection. Mortgage giant Countrywide recently borrowed more than $11 billion to fund loans in progress with the hopes of staving off bankruptcy. According to Bloomberg.com, non-government backed mortgages currently account for more than $2 trillion dollars. The days of no-income, no-asset, no-doc loans are quickly becoming a thing of the past. We'll hope the FED can at least control the secondary mortgage markets downward spiral.
Dealing with an eyesore next door
In a buyer's market, curb appeal -- yours and the neighborhood's -- becomes even more important. Fresh paint, a new front door and colorful landscaping often are sure-fire ways to tease potential buyers over the threshold of a home for sale. But in some cases, no matter how perfect your pansies, nothing can draw their gaze past the tired-looking two-story buried in weeds next door.
More than 60% of 900 people surveyed by contractor-referral site ServiceMagic.com said they have or have had neighbors who make the street look bad by not taking care of the outside of their homes (21% admitted they were the culprit). Common problems: tall weeds and grass, imposing trees or a dying lawn; piled-up junk, particularly old cars; and peeling paint or a visible exterior defect, such as a broken window.
Sloppy properties aren't exclusive to older dwellings in established or up-and-coming neighborhoods. Bad habits are on display in new developments too, say real-estate experts. Neighborhood eyesores aren't a new or uncommon problem. But curb appeal, yours and the neighborhood's, takes on greater significance in a nationwide buyer's market. For buyers, eyesores may present yet one more negotiating advantage. Remember, appraisals factor in the condition of nearby properties.
Michael Lee, a realty broker for 30 years in the San Francisco Bay Area and author of "Black Belt Negotiating," said sellers near eyesores "don't have to have a fire sale, but do need to put their listing at a price that attracts plenty of traffic . . . or risk having a home that just sits on the market." "That is death," he said. "It becomes the tainted house."
The National Association of Realtors says an eyesore can shave about 10% off the value of a nearby listing. Market-by-market differences affect that percentage, real-estate experts say, as does the situation -- an overgrown lawn across the street is better than a boarded-up property right next door.
"If there are or were other similar eyesores in the area but the market is heading up, it's likely that the home will get fixed up or torn down sooner than later," said Bob Golden, a 20-year Atlanta agent with Re/Max. "If it's the only house in the area that looks bad, it can have a greater impact on the resale of neighboring homes."
Copyright MarketWatch 2007
... and so it grows
It looks like the East Fairbanks business district is getting a few new additions. Looking through FNSB records this afternoon I noticed Holiday Inn Express has their name on a piece of property adjacent to Carls Jr. Northim Bank, it appears, is also looking to add their presence to the new commercial hot-spot on Merhar Avenue. Northern Schools Federal Credit Union has secured property in the area as well. The potential new site is across the Johansen directly adjacent to the new McDonalds that's under construction on Harold Bentley Avenue.
FED Leaves Key Interest Rate Unchanged
The Federal Reserve left a key interest rate unchanged on Tuesday as worries about inflation trumped concerns about turbulent financial markets. Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep their target for the federal funds rate, the interest that banks charge each other, at 5.25 percent, where it has been for more than a year.
The Fed decision came after a volatile couple of weeks on Wall Street as investors have been beset by troubles in global credit markets stemming from a sharp rise in defaults on subprime mortgages.
In a brief statement, the Fed acknowledged the turbulence and said the downside risks to the economy had "increased somewhat." But the Fed continued to state that the predominant risk remained that inflation "will fail to moderate as expected." Many analysts believe the Fed will remain on hold through the rest of this year, preferring to watch and make sure that inflation moderates back to an acceptable level.
Associated Press; 2007
Home Page - Showcase Homes - Real Estate Retriever - Client Testimonials - Realty Blog - Our Newsletter About Fairbanks - Market Reports - Buyer's - Seller's - Photo Tour- Contact Us - Realtor Referrals - Privacy Policy Each Office is Independently Owned and Operated. The information published within this Internet website has been deemed by Jesse Clifton Real Estate, LLC (www.the-spouses.com) to be accurate and truthful. The statements contained within this document should not be considered as all inclusive. Jesse Clifton Real Estate, LLC reserves the right to change / alter any information, including listing price and/or terms. For the latest up to date information, contact Jesse or Kathy Clifton. Jesse Clifton Real Estate, LLC dba Carriage House Realty is a licensed Real Estate Brokerage and operates under the authority of the Alaska Real Estate Commission. Carriage House Realty is a member of the Greater Fairbanks Board of Realtors and the Fairbanks Multiple Listing Service.
Jesse & Kathy Clifton, Spouses Selling Houses Jesse Clifton Real Estate, LLC dba Carriage House Realty 410 Dunkel Street Fairbanks, Alaska 99701 Direct: 907.699.6024 Fax: 866.421.4339
