by Calculated Risk on 6/20/2009 08:57:00 AM

From the Sacramento Bee: 7 lenders get immunity from state foreclosure prevention act

Bank of America Home Loans, CitiMortgage and Carrington Mortgage Services are among the first seven lenders and loan servicers granted immunity from the state's foreclosure prevention act launched this week in California.

The new law makes lenders prove to the state that they have a comprehensive loan-modification program that helps borrowers stay in their homes. Those that can't prove it to the state's satisfaction must wait an extra 90 days before foreclosing on borrowers.
...
State agencies reported Friday that 38 institutions received temporary 30-day immunity while the state reviews their applications. Among them were some of the Sacramento region's leading lenders, including Wells Fargo, GMAC and JPMorgan Chase.

From the California Department of Corporations: Mortgage Loan Servicers who have been granted an exemption

Exemptions under the Department of Corporations

Exemptions under the Department of Financial Institutions

Exemptions under the Department of Real Estate

This was never a big deal. Most lenders will be exempt.

by Calculated Risk on 6/20/2009 01:00:00 AM

From Bloomberg: GE Vice Chair Rice Sees No ‘Green Shoots’ in Orders (ht Comrade de Chaos)

... “I am not particularly of the green shoots group yet,” [General Electric Co. Vice Chairman John] Rice said ... “I have not seen it in our order patterns yet. At the macro level, there may be statistics suggesting the economy is starting to turn. I am not seeing it yet.”
...
“We see a world where good companies and good consumers can’t get all the credit we would like,” Rice said. “Companies with lots of cash on their balance sheet are worried about whether they will get what they need for working capital” and are cutting spending.

“Until that changes I don’t think you will see a significant rebound,” Rice said. “We are preparing for 12 or 18 months of tough sledding.”

Maybe the cliff diving is over, but no green shoots ....

by Calculated Risk on 6/20/2009 12:11:00 AM

During the Chrysler bankruptcy, I excerpted and linked to lawyer Steve Jakubowski's Bankruptcy Litigation Blog. Steve has taken it a step further and stepped into the GM fray ...

From Steve: Objecting to the GM 363 Sale's Treatment of Product Liability Claims: Stepping Into The Fray

[A] lot of panicked plaintiffs' lawyers involved in cases against GM are screaming these days as they watch years of toil on behalf of people seriously injured by defective GM products (like crushed roofs, exploding "side saddle" gas tanks, and collapsing seat backs) potentially go for naught as GM makes its grandest attempt ever to crush an entire class of former customers and existing and future products liability claimants in a sale that many plaintiffs lawyers of record only received written notice of in the past couple of days.

Those following this blog know my rising concern (even anger) over how products liability claimants were completely stiffed in Chrysler ...

So, I decided to do something about it, and officially stepped into the fray by filing this Objection to the GM Sale and this Memorandum in Support jointly with counsel for the Center for Auto Safety, Consumer Action, Consumers for Auto Reliability and Safety, National Association of Consumer Advocates, and Public Citizen.

From the NY Times: New Objections May Delay G.M. Exit From Bankruptcy

A group of General Motors bondholders and some of the automaker’s labor unions filed objections on Friday to G.M.’s plan to sell its assets to a new company that could emerge from bankruptcy protection.

Their opposition, with objections filed by consumer groups, a handful of states and cities, and individual retirees, shareholders and bondholders, threatens to put the brakes on what the company and the government had hoped would be a rapid trip through the Chapter 11 process.

The GM bankruptcy might take a little longer than Chrysler.

by Calculated Risk on 6/19/2009 07:13:00 PM

Regrets to Kansas
Carry on my wayward bank...
Now, dust in the wind
by Soylent Green is People
From the FDIC: Bank of Kansas, South Hutchinson, Kansas, Assumes All of the Deposits of First National Bank of Anthony, Anthony, Kansas

As of March 31, 2009, First National Bank of Anthony had total assets of $156.9 million and total deposits of approximately $142.5 million.
...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $32.2 million. Bank of Kansas' acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. First National Bank of Anthony is the 40th FDIC-insured institution to fail in the nation this year, and the second in Kansas.

by Calculated Risk on 6/19/2009 06:11:00 PM

Spring wanes to Summer
Crushing debt broods over banks
Fresh Winter for one.
by Soylent Green is People
From the FDIC: United Community Bank, Blairsville, Georgia Assumes All of the Deposits of Southern Community Bank, Fayetteville, Georgia

As of May 29, 2009, Southern Community Bank had total assets of $377 million and total deposits of approximately $307 million.
...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $114 million. United Community Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Southern Community Bank is the 38th FDIC-insured institution to fail in the nation this year, and the seventh in Georgia.

Consiglieres?
Blair's agents aren't advisors
More like a Capo
by Soylent Green is People
And from the FDIC: First Bank, Troy, North Carolina, Assumes All of the Deposits of Cooperative Bank, Wilmington, North Carolina

As of May 31, 2009, Cooperative Bank had total assets of $970 million and total deposits of approximately $774 million.
...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $217 million. First Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Cooperative Bank is the 39th FDIC-insured institution to fail in the nation this year, and the second in North Carolina.

by Calculated Risk on 6/19/2009 05:24:00 PM

NOTE: These graphs were correct, but the data was incorrect. The State added a zero to the HELOC data - I'll post corrected charts tomorrow. (ht Armin)

best to all

by Calculated Risk on 6/19/2009 02:58:00 PM

The 2009 First Quarter results from the Department of Corporations Survey of Loan Servicers has been released. Historical data is here.

There is a lot of information in this survey: the unpaid balances by loan type, the number of loans by loan type, and modification data.

From Jim Wasserman at the Sacramento Bee: Growing trouble with prime loans (ht Paul)

I was going through the state Department of Corporation's newest quarterly report (Q1-2009) for lenders' loan modification activities and this jumped out at me: The number of workouts initiated for prime loans is rising fast, mirroring rising unemployment in California.

The data come from lenders that report to the state as part of Gov. Arnold Schwarzenegger's Nov. 2007 Subprime agreement. These lenders service about 3.3 million loans in California, about half the state's total.

Click on graph for larger image in new window.

The first graph shows the number of loan modifications initiated by type (Prime, Alt-A, Subprime). This totals almost 1.5 million loan modifications initiated in California since January 2007 (there are 3.3 million loans including HELOCs) - so there is probably some double counting as modification negotiations are started and stopped.

Modifications for prime loans are surging (and Alt-A is increasing rapidly too). It is possible that subprime peaked during the moratorium period.

The second graph shows loan mods completed by category. The data was only broken out by category starting in Jan 2008.

I expect a surge in prime loan mods completed based on the mods initiated.

Note that completion can mean: account paid current (about 5%), paid-in-full (6%), modified terms (about 60% of completions), short sale (about 11%), deed-in-lieu of foreclosure (few), reductions in principal (few), and other workouts (about 15%).

As an aside, the California website is titled "Subprime". With the surge in prime modifications, I guess we're all subprime now!

by Calculated Risk on 6/19/2009 01:11:00 PM

From Bloomberg: Obama Mortgage Refinancing Program May Expand, Lockhart Says

President Barack Obama’s program to help more homeowners refinance may be expanded to include borrowers who owe more than 105 percent of their homes’ values, Federal Housing Finance Agency Director James Lockhart said.

The Obama administration is considering allowing Fannie Mae and Freddie Mac to refinance loans with current loan-to-value ratios of 125 percent or higher, Lockhart said at a National Association of Real Estate Editors Association conference in Washington yesterday.

This is part of the Home Affordable program, and only applies to homeowners with loans that Fannie and Freddie holds or guarantees.

As long as this is no cash out, increasing the LTV limit from 105% to 125% just allows Fannie and Freddie to lower the risk on loans they already own or guarantee.

by Calculated Risk on 6/19/2009 11:04:00 AM

Note: the BLS started keeping state records in 1976, so obviously this doesn't include the Depression.

From the BLS: Regional and State Employment and Unemployment Summary

Michigan again reported the highest jobless rate, 14.1 percent in May. The states with the next highest rates were Oregon, 12.4 percent; Rhode Island and South Carolina, 12.1 percent each; California, 11.5 percent; Nevada, 11.3 percent; and North Carolina, 11.1 percent. Six additional states and the District of Columbia recorded unemployment rates of at least 10.0 percent. The California, Nevada, North Carolina, Oregon, Rhode Island, and South Carolina rates were the highest on record for those states. Florida, at 10.2 percent, and Georgia, at 9.7 percent, also posted series highs. Nebraska and North Dakota registered the lowest unemployment rates, 4.4 percent each. Overall, 12 states and the District of Columbia had significantly higher jobless rates than the U.S. figure of 9.4 percent, 29 states reported measurably lower rates, and 9 states had rates little different from that of the nation.

by Calculated Risk on 6/19/2009 10:30:00 AM

Here are some more CRE price declines ...

From Bloomberg: Simon Halabi’s Companies Default on $1.9 Billion Debt (ht Brian)

Billionaire investor Simon Halabi’s real estate companies defaulted on 1.15 billion pounds ($1.9 billion) of bonds backed by nine London office buildings as the recession cut the value of the properties by about 50 percent.
...
The buildings were valued at 929 million pounds as of June 8, down from 1.83 billion pounds in October 2006, Hatfield Philips said. Halabi’s companies borrowed against the buildings in 2006. The debt, which was packaged into bonds, expires in October.

Another 'half off' sale.