Current and Performing Mortgages fell for the 6th Straight Quarter

This according to Street Signs on CNBC.

Serious U.S. mortgage delinquencies rise 20% in 3rd quarter
www.chinaview.cn 2009-12-22 03:46:36

WASHINGTON, Dec. 21 (Xinhua) — Serious delinquencies among U.S. prime mortgages rose nearly 20 percent in the third quarter from the prior quarter, indicating that the country’s housing financial market remains in trouble, according to a report released by U.S. banking regulators on Monday.

The report by the Office of Comptroller of the Currency and the Office of Thrift Supervision, which are banking regulatory agencies of the Treasury Department, covered about two-thirds of all U.S. mortgages.

Read More….

Few borrowers helped by modified mortgages
Associated Press (msnbc)
updated 8:46 a.m. PT, Mon., Dec . 21, 2009

WASHINGTON – One of the biggest challenges to ending the foreclosure crisis is this: A surprising number of homeowners who get their monthly payments reduced fall behind again within a year.

When borrowers get into financial trouble, lenders have several ways to help. They can offer grace periods, longer repayment schedules, lower interest rates or reduced balances.

Read More….

I know we have been hearing story after story about how the housing market is coming back. How many are making money flipping and new home sales are way up. None of these stories are false, but they are probably based on misconceptions that the market has hit bottom and the economy is stablizing. Housing has still not grown as much as most other sections of the market recently.

Real Estate is location based and we have hit the bottom in some markets and are on the upswing in others, but overall nothing is over yet. Most new home sales have been the result of tax credit stimulus. Also the economy is far from on the upswing even though we had great GDP numbers in the 3rd quarter of this year.

According to the Bureau of Labor Statistics the numbers are not looking bad this quarter compared to previous, but all the news I hear is that unemployment may tick up to 10.5. It looks more like confusion to me and 2010 looks like it will be another choppy year as the numbers jump up and down. Like GLD did today as it dropped from it’s recent highs by 50%.

Can this market sustain new home sales numbers as foreclosures are still growing even amongst more credit worthy buyers? If fundamentals count the deck seems to be stacked against sustained growth this next year.

JW Najarian

CREPIG
CREDAA

When will the Commercial Real Estate Market Recover? Are you Kidding Me?!

I recently commented on a blog post on LoopNet. This was the Q4 Poll on the Current State of the State of CRE. http://blog.loopnet.com/2009/10/q4-poll-results-when-will-market.html

I wanted to share my comments here as I would like to start a discussion that may help us figure out what we are doing and where we might be headed going forward. I used to love to watch CNBC as the market was up for a day we were told that we were in recovery Yeah! and then the market dumped for a couple of days and all you heard was doom and gloom. Do they really have that short term a memory or are they really that reactive? News has become entertainment and if you tell the same story every day then you will be boring and probably won’t last to long on the show.

I recently saw David Rosenberg, chief economist and strategist at Gluskin Sheff and believe he has a real handle on the state of the state. Here is a video I found from him. Not the one I saw. http://www.cnbc.com/id/15840232?video=1174036163&play=1

Here is my rant:

What would a recovery in 2010 or 2011 be based on? Most I talk to base the recovery on a hope of recovery, not any real data.

CMBS will be coming due up till 2015, Double digit unemployment, the fed is holding distressed properties off the market indefinately, banks are still failing. The dollar is at all time low as trillions were printed for the bailout. GDP figures (un-incentivised) was flat and even if we could sustain 3% growth, this did not help Japan over the last 20 years.

We are doing a great job of keeping ourselves in the comfort zone and pushing the inevitable into the future, but are we really in recovery or headed toward recovery. I think not.

There are hundreds of billions in committed funds waiting to pick up distressed properties or non-performing notes (Check out RIISnet.com), but REO’s in commercial real estate and residential are not being released in any bulk.

I believe the recent stock market climbs are all based on smoke and mirrors for the most part. If you have been in the market you will have to agree it has been substantially bullish in some sectors, but this cannot last. I believe there is no V recovery or U recovery, but more a a W.

The obstacles to more transactions are mainly based on debt financing, this I believe. Also the market is still having a real hard time pricing itself and cash flow assumptions are very hard to make, but there is money out there and plenty of it for both unstable and stable assets. The problem is that letting go of current properties will result in losses to the owners; be it the private owner or the bank. And no one is ready to take the loss yet, but this too shall pass and if I am right this does not spell recovery. Let’s not forget about the shadow market in residential that will or is affecting Multi-Family in some locations.

Not a doom and gloomer, just a realist. Hope I am wrong, but my partners and I have started a Distressed Assets Association in alliance with RISSnet and their ARGUS Software ADAPT Platform to try and help the market work out the distressed properties and notes. Our association hopes to be an information source that can make sense of the markets and possibities for recovery.

JW Najarian
Co-Founder
CRE Distressed Assets Association
http://www.CREDAA.com
Founder
CRE Professional Investor Group
http://www.CREPIG.com