No Surprise Here - Home prices fall

The New York Times reports today, December 30, 2008, that

"home values in 20 large metropolitan areas across the country dropped at a record pace in October as the fallout from the financial collapse reverberated through the housing market, according to data released Tuesday."

"The price of single-family homes fell 18 percent in October from a year earlier, according to the closely watched Standard & Poor’s/Case Shiller Housing Index. All 20 cities reported annual price declines in October; prices in 14 of the 20 metropolitan areas surveyed fell at a record rate as the financial crisis reached a critical point."

To those of us in the New Jersey real estate marketplace, the foregoing comes as no surprise. Pessimism appears to rule, so we should live by another rule, non carborundum illegitimi est!

Read Home Prices Fell at Sharper Pace in October

Vested Title Inc., 648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306.

Tel 201-656-9220. Fax 201-656-4506.

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

JUMBO Mortgage Rates Don't Shrink

Bloomberg News reports-

Jumbo mortgage shoppers in the most expensive U.S. housing markets such as New York and San Francisco aren't getting much relief from lower borrowing costs. The average 30-year fixed-rate for home loans of more than $729,750 remains almost 2 percentage points above conforming rates and the spread between them may set a record this month, according to financial data firm BanxQuote.

Why?

Banks remain reluctant to lend. “The collapse of the private mortgage securities
market means lenders find there's little demand for jumbo loans they want to
sell.”

Good News

“If low conventional rates entice enough homeowners to refinance, jumbo home loans may become more affordable as loan payoffs add liquidity to the
banking system.”

“The average 30-year fixed jumbo loan rate was 7.32 percent on Dec. 22, compared with 5.38 percent for a conforming loan, according to BanxQuote of White Plains, New York. The difference between the two averaged 2.13 percentage points in December, 10 times the spread from 2000 to 2006 and above last month's 1.95 percentage points that was the highest on record. If current rates reflected the historical difference of 0.2 percentage points, jumbo borrowers with an $800,000 mortgage would save $913 a month.”

More Good News?

Buyers in markets that rely on jumbo loans, such as New York, San Francisco and Boston, may see rates fall in 2009 because of Federal Reserve chairman Ben Bernanke's plan to buy at least $500 billion of securities issued by Fannie Mae and Freddie Mac.

Here's the report from Bloomberg News

Vested Title Inc., 648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306.
Tel 201-656-9220. Fax 201-656-4506.
E-mail vti@vested.com - www.vested.com

Sphere: Related Content

LandAmerica Title Company Sale Approved by Bankruptcy Court

The Richmond Dispatch reports on Bankruptcy Court approval of the sale of LandAmerica's title insurance companies, Commonwealth and Lawyers Title to Fidelity National. See Bankruptcy judge OKs LandAmerica core sale

The U.S. Bankruptcy Court in Richmond yesterday approved the sale of LandAmerica Financial Group Inc.'s core operations to Fidelity National Financial Inc. of Jacksonville, Fla.

Stewart Title Guaranty Co. of Houston, the other suitor for the Henrico County-based company's main subsidiaries, was shut out of the deal.

Fidelity's $282 million offer includes $157 million to recapitalize the subsidiaries so they can continue operating, according to papers filed Monday with the Nebraska Department of Insurance.

Its cash offer was enough to finance LandAmerica's pension shortfall of $59 million, lawyers for LandAmerica argued. Topping off the pension fund would be a requirement of any deal, they said.

The Nebraska insurance authorities have approved the sale and it is expected that the Federal Trade Commission will do so in time to close on Monday, December 22, 2008.

Vested Title Inc., 648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306.
Tel 201-656-9220. Fax 201-656-4506.
E-mail vti@vested.com - www.vested.com

Sphere: Related Content

On Wall Street, Bonuses, Not Profits, Were Real

The New York Times saga of The Reckoning continues with On Wall Street, Bonuses, Not Profits, Were Real

Reports the Times, "For Dow Kim, 2006 was a very good year. While his salary at Merrill Lynch was $350,000, his total compensation was 100 times that — $35 million.The difference between the two amounts was his bonus, a rich reward for the robust earnings made by the traders he oversaw in Merrill’s mortgage business. "

As now widely recognized, Merrill’s and other company's record earnings "in 2006 turned out to be a mirage. The company has since lost three times that amount, largely because the mortgage investments that supposedly had powered some of those profits plunged in value.Unlike the earnings, however, the bonuses have not been reversed."

Tales abound of associates with six figure salaries reaping multi-million dollar bonuses. Purchases of art, homes and luxury automobiles with that money fueled an entire cottage industry. And I thought the title business was a good one!

So, where's the payback?

Vested Title Inc., 648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306.

Tel 201-656-9220. Fax 201-656-4506.

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

Fidelity closes in on LandAmerica deal - Regulators must still approve

From Inman News-

Fidelity closes in on LandAmerica deal-Antitrust regulators must still grant approval

Fidelity National Financial Inc. has the green light from Nebraska insurance regulators and a federal bankruptcy court in Virginia to buy LandAmerica Financial Group Inc.'s two largest underwriting subsidiaries, Lawyers Title Insurance Corp. and Commonwealth Land Title Insurance Co., for $282 million.

The transaction, when completed, would make Fidelity the nation's largest title insurance company.

Roadblocks:

The sale is opposed by the two smallest of the "big five" title insurers -- Stewart Title Guaranty Co. and Old Republic International Corp -- who argue that the resulting industry consolidation could restrict competition.

Lawyers representing LandAmerica's creditors had also asked the bankruptcy court to delay the sale for seven to 10 days, saying a better offer than Fidelity's could be in the works.

What will the impact be in New Jersey? Hard to say right now. We write for Fidelity National Title Insurance Company and Chicago Title Insurance Company. Arguments have been made over the years that there is no true competition between title insurance companies because rates are governed by the so-called "Rate Manual." With the elimination of LandAmerica's presence, one more competitor has been reduced at the top level although you can say the title operations are separate.

Will Fidelity save money by consolidating different aspects of its business, e.g., underwriting and claims by blending Commonwealth and Lawyers Title operations into Fidelity and Chicago Title?
Time will tell.

Vested Title Inc., 648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306.
Tel 201-656-9220. Fax 201-656-4506.
E-mail vti@vested.com - www.vested.com

Sphere: Related Content