1 / 14

16 th Annual Fisher Center Real Estate Conference

16 th Annual Fisher Center Real Estate Conference. Financial Markets Supply/Demand. Conforming vs. Jumbo Mortgage Rates. Conforming/Jumbo Spreads. What Rates Don’t Show. Much higher pricing for the default option

senta
Download Presentation

16 th Annual Fisher Center Real Estate Conference

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 16th Annual Fisher Center Real Estate Conference Financial Markets Supply/Demand

  2. Conforming vs. Jumbo Mortgage Rates

  3. Conforming/Jumbo Spreads

  4. What Rates Don’t Show • Much higher pricing for the default option • 25%-35% down-payment requirements (as opposed to 20% before) to get the best rate. • No loans with less than 20% down-payment • No loans without income verification, and ability to cover the payments, independent of LTV • Very hard to get bridge loans when buying and selling property simultaneously.

  5. What Rates Don’t Show (continued) • Securitization market is still dead. The ratings agencies are irrelevant, no substitutes yet. The substitutes that are coming up are likely to make the marketplace even less able to transact efficiently. • The loans are held in bank’s own portfolio, hence there is a great variability in bank’s appetite for the loans – the loan marketplace has become extremely heterogeneous.

  6. Existing Homes Sale Rate

  7. Months of Inventory

  8. AffordabilitySource: LPS Applied Analytics Source: LPS Applied Analytics

  9. Percentage of people who can afford medium priced house STATE/REGION/COUNTY Q1 2011  Q1 2010  US 69   66   S.F. Bay Area 39   36   Alameda 35   34  Contra-Costa (Central County) 30   25   Marin 27   24   Napa 48   44  San Francisco 25   21  San Mateo 28   22  Santa Clara 37   34  Solano 74   70  Sonoma 47   40

  10. What Housing Inventory and Affordability Don’t Show • The real affordably is even considerably greater than implied since the average price is much higher than the medium (the latest is about 190%). • Increasing REO inventory; REO liquidation will continue depressing the prices • 20% of non-agency borrowers can’t afford to buy because of the increased down-payment requirements. It will take time to build up savings.

  11. Five Million Borrowers Are Delinquent HAMP and other loan mods cause delinquencies to dip slightly in 2010 Source: Lender Processing Services

  12. Fewer Current Loans Are Falling Behind Source: Lender Processing Services

  13. Significant REO Volume For a Long Time Source: Lender Processing Services

  14. Who Originated All These Bad Loans? Source: Lender Processing Services

More Related