by Calculated Risk on 10/17/2009 06:35:00 PM

Just a follow-up to the previous post - here is the HUD Inspector General's report on the FHA single-family lender approval process (ht MrM)

Click on graph for larger image in new window.

This graph from the Inspector General's report shows the number of approved FHA lenders by year. In 2008 there were 3,297 lender applications approved by the FHA, more than triple the number in 2007.

And 2009 is on pace for a similar number of approvals as 2008 (another 3,000+ lenders).

From the report:

Congressional concerns brought about in part by media coverage has raised concerns that former subprime lenders and brokers are obtaining approval to participate in the FHA program and that they will be responsible for FHA insurance of loans to people unlikely to make their payments.

Our audit objective was to determine whether the application process for Title II provided effective controls to ensure approval of only those lenders that complied with FHA requirements ...

And from the results:

Finding 1: FHA's Lender Approval Process Did Not Ensure That Only Eligible Applicants Were Approved

FHA's lender application process was not adequate to ensure that all of its lender approval requirements were met. This condition occurred because FHA control procedures had been enhanced and automated to handle the recent large increase in the number of lenders applying for the FHA program.

by Calculated Risk on 10/17/2009 03:35:00 PM

From the WaPo: FHA Set to Hire Freddie Mac Official

On Friday, the Inspector General of the Department of Housing and Urban Development, which includes FHA, said the agency lacks the ability to ensure that lenders meet its requirements.

The report also said that FHA did not obtain or consider negative information on lenders from other HUD offices, follow up on whether the required fees or documentation were collected, or properly dispose of lender application files containing personally identifiable information.

The AP has more on the report. (I haven't seen the report yet).

No wonder so many FHA lenders have off-the-chart default rates (see: FHA Lenders with High Default Rates).

by Calculated Risk on 10/17/2009 01:17:00 PM

From the Miami Herald: Florida's jobless rate hits 11 percent as public toll worsens

Florida's overall jobless rate hit 11 percent in September, up two-tenths of a percentage point from the previous month, according to figures released by the state labor department on Friday. That's the highest since 1975, and represents more than a million Floridians out of work.
emphasis added

The BLS will report all the state data this week, and just like in California and Nevada, unemployment in Florida is at an all time high for the state series (started in 1975).

A couple other high unemployment states ...

In Illinois, from the Chicago Tribune: Ill. jobless rate hits 10.5 percent in September

The jobless rate in Illinois increased to 10.5 percent in September after falling to 10 percent in August.

That is almost 700 thousand people unemployed in Illinois.

And the "good news" from the Detroit Free Press: State's jobless rate is showing stability

Michigan's unemployment rate inched slightly higher during September, rising one-tenth of a percentage point to 15.3%.
...
"Michigan's unemployment rate was largely unchanged in September, as a modest recall of auto workers from temporary layoff was countered by job losses in the service sector," said Rick Waclawek, director of [Michigan Department of Energy, Labor & Economic Growth]'s Bureau of Labor Market Information and Strategic Initiatives. "The state jobless rate, which rose sharply by five percentage points from December 2008 to June 2009, has stabilized somewhat since June."

That is the good news. The recall of some auto workers kept the unemployment rate "largely unchanged".

My guess is the overall unemployment rate will hit 10% this month or in November.

by Calculated Risk on 10/17/2009 09:30:00 AM

Note: this is not seasonally adjusted. There is a very distinct seasonal pattern for imports, but not for exports.

Sometimes port traffic gives us an early hint of changes in the trade deficit. The following graph shows the loaded inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). Although containers tell us nothing about value, container traffic does give us an idea of the volume of goods being exported and imported.

Click on graph for larger image in new window.

Inbound traffic was 17.4% below September 2008.

Outbound traffic was 8.6% below September 2008.

Even with the decline in September, there has been a clear recovery in U.S. exports. And export traffic at the LA area ports is at the September 2006 level.

However, for imports, traffic is about at the September 2003 level, and 2009 will probably be the weakest year for import traffic since 2002.

Note: Imports usually peak in the August through October period (as retailers import goods for the holidays) and then decline in November.

And some color from the LA Times: Imports dive at ports of Los Angeles and Long Beach

As dismal as those figures are for the two ports, which rank first and second in the U.S. in container volume and together rank fifth in the world, a greater worry goes beyond the immediate and substantial loss of local trade-related jobs: Some of the ports' most important tenants were so poorly positioned for the downturn that they might sink completely in a sea of billions of dollars of red ink, experts say.

"Without a doubt, the Southern California ports should be worried," said Neil Dekker, an analyst at Drewry Shipping Consultants in London who produces container industry forecasts. "Companies will go bust; freight rates may take years to recover."

by Calculated Risk on 10/16/2009 11:41:00 PM

If no video: Dow Jones Rebounds to 1999