by Calculated Risk on 10/18/2010 09:48:00 PM

Statement from GMAC: GMAC Mortgage Statement on Independent Review and Foreclosure Sales

GMAC Mortgage ... has engaged several leading legal and accounting firms to conduct independent reviews of its foreclosure procedures in each of the 50 states.
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In addition to the nationwide measures, the review and remediation activities related to cases involving judicial affidavits in the 23 states continues and has been underway for approximately two months. As each of those files is reviewed, and remediated when needed, the foreclosure process resumes. GMAC Mortgage has found no evidence to date of any inappropriate foreclosures.

Earlier I posted the BofA and Citi comments (BofA is resuming foreclosures, Citi said their foreclosure process was "sound".) Several large banks report Q3 results over the next two days (BofA, Goldman Sachs, Wells Fargo and Morgan Stanley), and I expect more comments on foreclosure issues (and possibly more questions).

On the Citi conference call this morning there were no questions on foreclosure-gate and only one on securitization issues - and that didn't provide any new information.

by Calculated Risk on 10/18/2010 06:59:00 PM

The Census Bureau has released the final weekly payroll report for the 2010 Census. The report shows only 2,766 temporary workers were on the payroll for the week ending Oct 2nd.

Click on graph for larger image in new window.

This graph shows the number of Census workers paid each week. The red labels are the weeks of the BLS payroll survey.

I'm providing this update because every month there is some confusion over how to report the payroll numbers in the employment report. Starting with the October employment report (to be released on November 5th), we can go back to reporting the headline number (not ex-Census), and we can ignore the impact of the temporary Census hiring on the monthly payroll numbers - well, until the next decennial Census!

by Calculated Risk on 10/18/2010 03:38:00 PM

From Dow Jones: Citigroup Says Its Foreclosure Processing Is 'Sound' Dow Jones is reporting that the Citigroup CFO John Gerspach said they have found no issues with the foreclosure process, and they see no reason to halt foreclosures.

"While we use external attorneys to prepare [foreclosure] documents, each package is reviewed by a Citi employee, who verifies the information and signs the foreclosure affidavit in the presence of a notary," Gerspach said ...

And from the WSJ: BofA Sets Timetable for Foreclosure Review. The WSJ is reporting that BofA will resubmit new affidavits for 102,000 pending foreclosures, and that they expect to resubmit the affidavits, with the proper reviews and new signatures, by October 25th.

by Calculated Risk on 10/18/2010 01:03:00 PM

From Atlanta Fed President Dennis Lockhart: The Challenges of Monetary Policy in Today's Economy

To opt for more quantitative easing at this juncture is a big decision. Today I will walk you through the thicket of considerations that lead me, at this moment, to be sympathetic to more monetary stimulus in the near future.
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With current inflation running at about 1 percent or a little higher and with official unemployment measured at 9.6 percent, it's clear that the economy is not where we want it to be. In my mind, the question is whether this situation is a call to immediate action.
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As a starting point, I expect final measures of third quarter GDP growth to be close to that in the second quarter which came in at 1.6 percent. My current forecast sees a modest increase in the rate of growth in the fourth quarter and further, but still modest, improvement in 2011. In this forecast, inflation remains low but with no further disinflation, and unemployment comes down very gradually.

In my thinking, the range of plausible divergence from this forecast is quite wide, and the risks are more to the downside.
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In my view, the decision is not clear cut. We policymakers have to weigh these arguments pro and con, potential costs versus benefits, and competing risks. As I said earlier, I am leaning in favor of additional monetary stimulus while acknowledging the longer-term risks the policy may present. At this juncture, and given the circumstances of sluggish growth and measured inflation that is too low, I give greater weight to the risk of further disinflation leading to deflation. In my mind, QE2 is a form of risk management—an insurance policy that is prudent to put in place at this time.

Lockhart is not currently on the FOMC.

Note: Lockhart see modest improvment in both GDP growth and unemployment, but I think we will see a little more weakness in GDP growth and the unemployment rate will even tick up a little from 9.6%.

by Calculated Risk on 10/18/2010 10:00:00 AM

The National Association of Home Builders (NAHB) reports the housing market index (HMI) was at 16 in October. This is a 3 point increase from 13 in September, and is the highest level since June. The record low was 8 set in January 2009, and 16 is still very low ...

Note: any number under 50 indicates that more builders view sales conditions as poor than good.

Click on graph for larger image in new window.

This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the October release for the HMI and the August data for starts (September starts will be released tomorrow).

This shows that the HMI and single family starts mostly move in the same direction - although there is plenty of noise month-to-month.

Press release from the NAHB: Builder Confidence Improves in October

Builder confidence in the market for newly built, single-family homes rose three points to 16 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for October, released today. This was the first improvement registered by the HMI in five months, and returns the index to a level last seen in June of this year.
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All three of the HMI's component indexes registered gains in October. The index gauging current sales conditions rose three points to16, while the index gauging sales expectations in the next six months rose five points to 23 and the index gauging traffic of prospective buyers rose two points to 11.