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Rising rental costs may drive home sales up
Home sales could turn out sunnier than expected this spring based on data coming out of the rental market, according to economists at the Mortgage Bankers Association.
Jay Brinkmann, the trade group’s chief economist, said Thursday that apartment owners have raised their rates, in particular large investment trust Equity Residential ($58.05 0.45%). That’s coupled with fewer people, roughly 60%, who intend to renew a lease, according to a study by Kingsley Associates.
"This means we might see a spring season better than the numbers are predicting," Brinkmann said at the MBA’s mortgage servicing conference in Orlando, Fla. The trade group forecasts 4.39 million single-family homes sold in the second quarter, already an increase from the seasonally adjusted 4.17 million a year earlier.
Many Americans ran to rentals during the worst of the housing crisis, pushing homeownership to a 14-year low, and more tenants elected to stay put.
"The question is not how did (homeownership) fall, but how it got so high in the first place," Brinkmann said.
The MBA adjusted its forecast for mortgage originations in 2012 to just more than $1 trillion with more refinances than initially expected, according to Mike Fratantoni, vice president of economics and research. That’s still below 2011 levels and would be the lowest since 1997.
Fratantoni expects home sales to grow 10% in 2013, though he predicted refinances will drop off considerably as MBA projects interest rates to slowly move off the lowest levels in 40 years.
Positive employment news, including a continued decline in jobless claims, could impact housing soon, but Brinkmann said uncertainty over business taxes in an election year and European debt could keep growth at bay.
"Everything is going to be based overall where the economy goes," Brinkmann said. "This is going to be a slow year. There are a number of headwinds we’re facing in terms of economic growth."
Source: “MBA: Rising Rental Costs May Drive Home Sales Up,” HousingWire (Feb. 23, 2012)
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Federal Government & Attorneys General reach landmark settlement with major banks
Roughly $25 billion in relief for distressed borrowers, states and federal government.
After many months of negotiation, 49 state attorneys general and the federal government have reached agreement on a historic joint state-federal settlement with the country’s five largest loan servicers:
The settlement will provide as much as $25 billion in relief to distressed borrowers and direct payments to states and the federal government. It’s the largest multistate settlement since the Tobacco Settlement in 1998.
The agreement settles state and federal investigations finding that the country’s five largest loan servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both of these practices violate the law. The settlement provides benefits to borrowers whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.
About the Settlement: Learn about the settlement, who is affected and what claims may still be pursued against the banks. Find links to your state Attorney General’s Office to find state-specific information and contacts.
Help for Borrowers: Learn how to find out if your loan is affected by this settlement, the timeline for relief, how you will know if you are eligible. Find links to your state Attorney General’s Office to find state-specific information and contacts.
News: Read the national news release and find links to your state Attorney General’s Web site for state-specific news.
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Thought of the Day
From my favourite (intentional spelling) Canadian poet. Learn more bout Margaret.
What Does A Trillion Dollars Look Like
One Hundred Dollars
$100 – Most counterfeited money denomination in the world. Keeps the world moving.
Ten Thousand Dollars
$10,000 – Enough for a great vacation or to buy a used car. Approximately one year of work for the average human on earth.
One Million Dollars
$1,000,000 – Not as big of a pile as you thought, huh? Still this is 92 years of work for the average human on earth.
One Hundred Million Dollars
$100,000,000 – Plenty to go around for everyone. Fits nicely on an ISO / Military standard sized pallet.
One Billion Dollars
$1,000,000,000 – You will need some help when robbing the bank. Now we are getting serious!
One Trillion Dollars
$1,000,000,000,000 This is double stacked pallets of $100 million dollars each, full of $100 dollar bills. You are going to need a lot of trucks to freight this around.
If you spent $1 million a day since Jesus was born, you would have not spent $1 trillion by now…but around $700 billion.
One Trillion Dollars
Comparison of $1,000,000,000,000 dollars to a standard-sized American Football field and European Football field. Say hello to the Boeing 747-400 transcontinental airliner that’s hiding on the right. This was until recently the biggest passenger plane in the world.
15 Trillion Dollars
$15,000,000,000,000 Statue of Liberty seems rather small in comparison.