real estate

Illinois prices turn around

Median home prices in Illinois snapped a 20-month streak of price declines in March, a turnaround coinciding with the start of the spring selling season.  The statewide median price in March came in at $130,000, even with March 2011, according to the Illinois Association of Realtors. It’s the first time the state’s median price hasn’t decreased since June 2010.  “There’s no doubt that these are strong numbers to open the spring selling season,” said IAR President Loretta Alonzo. “To see such good sales numbers, coupled with a measure of price stability is encouraging news no matter what side of a real estate transaction you happen to be on.”  Illinois home sales posted the best March sales numbers since 2007. Home sales (including single-family homes and condominiums) in the month totaled 9,575, expanding 21.1% from 7,904 home sales a year earlier.  In the nine-county Chicago Primary Metropolitan Statistical Area, 6,590 homes were sold in March, up 23.8% from March 2011 sales of 5,323 homes. The median price in March was $151,850 in the Chicago PMSA, down 3.9% compared to a year earlier when it was $158,000.  “Sales volumes are up, time-on-the-market levels are down significantly from a year ago and prices appear to be stabilizing in Illinois although continuing to fall in Chicago,” said Geoffrey Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois.  “Further, in the last month there was a more even spread of sales prices compared to previous months where homes sold for less than $200,000 dominated the market,” Hewings added.

Hiring going up?

The National Association of Business Economics’ (NABE) industry survey found that 39 percent of respondents expect hiring will pick up in their companies and industries during the next six months, up from 27 percent in January.  Some 48 percent of respondents expect hiring will hold steady. While that is down from 64 percent in January, it still underscores the slow pace of recovery in the labor market following the 2007-2009 recession.  The survey was conducted between March 20 and April 10.  The NABE surveyed 55 members from companies and trade organizations. Not all responded to every question.  The uptick in demand for labor could be leading companies to offer bigger paychecks. Some 44 percent of respondents said wages and salaries were rising, up from 26 percent in January.  The poll also showed 63 percent of respondents expected U.S. gross domestic product to grow between 2.1 and 3 percent in the fourth quarter from a year earlier.  In the NABE’s previous poll released in January, 60 percent of respondents expected growth in that range.

Olick – Phoenix turns around

“Mike Ripson hasn’t built a home in three years, but he is about to. He has been sitting on one hundred sixty acres of land just outside Phoenix, Arizona, which he intends to divide into 121 one-acre lots.  ‘Now’s the time because we’ve been studying the marketplace, and we noticed beginning late last summer, early fall, that for homes priced less than $100,000, the market was becoming very tight,’ says Ripson, whose company is celebrating its ten year anniversary this week.  ‘Over the last several months that price point has increased such that today, homes priced less than 300,000 dollars, there’s less than a thirty-day supply in the marketplace,’ Ripson adds.  The supply of homes for sale in the Phoenix area is down 42 percent from a year ago, and foreclosures are down 52 percent, according to Michael Orr, of the Real Estate Center at ASU. That is bringing demand back to the builders.  Ripson is building about 40 miles outside of Phoenix in Wittmann, where there is less competition from foreclosures.  ‘To give you an example, within a five mile radius of where we sit here at Sonoran Acres, two months ago there were 18 homes on the market. Today there’s only one,’ says Ripson.  That’s why he re-opened his model home two weeks ago, and immediately saw high buyer traffic. He filed permits for two new homes, which he expects to sell in the next few weeks, thanks to his low, $200,000 price point. 

Closer in to Phoenix, prices are a bit lower, thanks to a higher supply of distressed properties, but those properties are selling fast as well, as large scale and institutional investors flood the market.  ‘I really think we’re at the top of the first inning in terms of this opportunity, and there will be ebbs and flows, ups and downs, people will come in and come out,’ says Justin Chang, principal at Colony Capital, which intends to invest over a billion dollars in distressed properties this year.  ‘But if you’re looking to build a business over the next five to seven years, this is the first inning, and we’re pretty excited about it,’ Chang goes on to say.  Colony has a history of investing in commercial real estate, but about a year ago they saw the potential as well in the single family rental market. They began building an infrastructure, and started buying homes last month from banks, the government and at auction.  They own 170 homes in three states so far and intend to close on fifty more this week. They spend $3,000 to $5,000 rehabbing each home and readying it to rent. Their team is entirely internal, which they say saves them extra costs.  ‘We’ve got our internal team doing acquisitions, we’ve got our internal team doing the rehab and we’ve got an internal team doing the property management. These are employees,’ explains Jay McKee, COO of Colony American Homes.  ‘We have 120 people on our payroll, W-2 employees, right now doing this work. A lot of other folks are doing it by outsourcing to third parties,’ says McKee. ‘We think by doing it in house, we can do it without markups.’

At a Colony home in Laveen, AZ, a suburb of Phoenix, workers were installing new appliances into a former foreclosure, as the old ones had been stolen. Nearby, a large development from Pulte Homes advertised new construction starting at $100,000. McKee is not concerned.  ‘There are people who cannot buy those homes, and those are our clients. The people that lost their home to foreclosure, are repairing their credit, or just decided they don’t want to be owners of properties anymore, they’re our client,’ confirms McKee.  Colony is considering a program to help their renters become buyers, much like some rent-to-own programs being considered by banks and the government. Colony has also been pre-approved to bid on Fannie Mae foreclosures through a new pilot program by the Federal Housing Finance Agency (FHFA).  ‘We really understand what they want to accomplish, and we think we can be good partners,’ says Chang. ‘The pilot programs that are out there now are very smart, and I hope they are the first of many.  Colony is just one of a growing cadre of investment teams buying distressed real estate to rent. Chang expects to see returns of anywhere from 15 to 25 percent on his investment. Cash flow is almost immediate. He says he can rehab a home in three days and have it rented in less than a month. 85 percent of Colony’s homes are already rented.  As for competition in the space, which Chang calls a pioneering asset class, he’s not concerned.  ‘The opportunity is so vast that there’s room for a lot of companies,’ Chang says. ‘Eight to ten million homes will be foreclosed over next 3-5 years. That’s $800 billion in capital required. Fifty other firms could do it, and it still would be a drop in the bucket. We’re really just a small part of the game at this point.’”

Gas prices down

The average retail price of a gallon of gasoline in the United States declined for the first time since mid-December, dropping 5.44 cents over the past two weeks, the nationwide Lundberg Survey showed.  The national average for a gallon of regular gasoline fell to $3.9127 on April 20, from $3.9671 on April 6, according to the survey of gasoline retailers in the continental United States.  Still, drivers are paying 3.27 cents more for a gallon than they did a year ago.  “The decline began in California about six weeks ago,” survey editor Trilby Lundberg said, adding that prices peaked there on March 9 at $4.3162 and fell in subsequent surveys by nearly 15 percent to $4.1669.  Drivers in Chicago continued to pay the most at the pump — $4.26 per gallon — even though prices fell nearly 19 cents from April 6.  Prices in Tulsa, Oklahoma, remained lowest at $3.52 per gallon.  “If crude oil does not shoot back up we may find another price decline of 5-10 cents in the coming weeks,” Lundberg said.  Average diesel prices fell 4.15 cents to $4.1735 compared with two weeks earlier.

California Bay area sales up

March home sales in California’s Bay Area reached their highest level for the month in five years, the result of lower prices, low interest rates and an improving economy.  About 7,700 new and resale houses and condos sold in the nine-county Bay Area in March, up 34.9% from 5,702 in February, and up 9.1% from 7,051 a year earlier, according to San Diego-based DataQuick.  The February to March sales jump is normal for the season, but the latter’s sales count was the highest for the month since 8,317 homes were sold in 2007. Since 1988, March sales have ranged from 4,898 in 2008 to 12,645 in 2004, with an average of 8,812.  “This is the time of year when buying patterns usually start to normalize,” said DataQuick President John Walsh. “And while the changes we’re seeing are incremental, they’re incremental in a positive direction. That said, there’s a long way to go.”  The median price paid for all new and resale houses and condos sold in the Bay Area in March totaled $358,000, a 10.2% increase from $325,000 in February, but down 0.6% from $360,000 in March 2011. 

To put these figures in perspective, the low point of the current real estate cycle fell to $290,000 in March 2009, while the peak rose to $665,000 in June/July 2007.  Statewide median home prices posted their first year-over-year increase in 16 months. The California Association of Realtors members said tight inventory (4.1 months) throughout the state and particularly robust sales in the San Francisco Bay area helped fuel the price increase.  “Two of the big issues to watch closely are how fast distressed properties are being put on the market, and the availability of, or lack of availability of, mortgage financing,” DataQuick’s Walsh said.  Distressed property sales, according to the firm, made up 44.3% of the resale market, down from 48.8% in February and 48.2% a year earlier.  Foreclosure resales accounted for 24.9% of resales in March, falling from 26.4% in February, and down from 31.5% in the year-ago period. Foreclosure resales averaged about 10% over the past 17 years.  Short sales made up 19.4% of Bay Area resales in the month, down from 22.4% in the previous month and up from 16.7% a year earlier.

Half a decade into the deepest US housing crisis since the 1930s, many Americans are hoping the crisis is finally nearing its end.  House sales are picking up across most of the country, the plunge in prices is slowing and attempts by lenders to claim back properties from struggling borrowers dropped by more than a third in 2011, hitting a four-year low.  But a painful part two of the slump looks set to unfold: Many more US homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.  “We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010,” said Mark Seifert, executive director of Empowering & Strengthening Ohio’s People (ESOP), a counseling group with 10 offices in Ohio.  “Last year was an anomaly, and not in a good way,” he said.  In 2011, the “robo-signing” scandal, in which foreclosure documents were signed without properly reviewing individual cases, prompted banks to hold back on new foreclosures pending a settlement.  Five major banks eventually struck that settlement with 49 US states in February. Signs are growing the pace of foreclosures is picking up again, something housing experts predict will again weigh on home prices before any sustained recovery can occur.

 Mortgage servicing provider Lender Processing Services reported in early March that US foreclosure starts jumped 28% in January.  More conclusive national data is not yet available. But watchdog group, 4closurefraud.org which helped uncover the “robo-signing” scandal, says it has turned up evidence of a large rise in new foreclosures between March 1 and 24 by three big banks in Palm Beach County in Florida, one of the states hit hardest by the housing crash.  Although foreclosure starts were 50% or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47% from 2011. Those of Wells Fargo’s rose 68% and Bank of America’s, including BAC Home Loans Servicing, jumped nearly seven-fold — 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment. 

Housing experts say localized warning signs of a new wave of foreclosure are likely to be replicated across much of the United States.  Online foreclosure marketplace RealtyTrac estimated that while foreclosures dropped slightly nationwide in February from January and from February 2011, they rose in 21 states and jumped sharply in cities like Tampa (64%), Chicago (43%) and Miami (53%).  RealtyTrac CEO Brandon Moore said the “numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed.”

One big difference to the early years of the housing crisis, which was dominated by Americans saddled with the most toxic subprime products — with high interest rates where banks asked for no money down or no proof of income — is that today it’s mostly Americans with ordinary mortgages whose ability to meet payment have been hit by the hard economic times.  “The subprime stuff is long gone,” said Michael Redman, founder of 4closurefraud.org. “Now the folks being affected are hardworking, everyday Americans struggling because of the economy.”

Crackdown on tax havens

As regulators clamp down on money flows around the globe, governments, even those that prided themselves on the strength of their secrecy laws, like Switzerland, are facing pressure to share banking information and change their policies.  Now, private banks and wealth managers are scrambling to convert so-called black money — assets that have not been disclosed — into accounts that are above board.  The shift may provide opportunities for the industry. As more funds become legitimate, analysts say financial institutions will be able to sell extra wealth management products to affluent people and enter markets that had previously been off limits.  “There’s much less black money now than three years ago,” said Jean Schaffner, head of the Luxembourg tax practice at the law firm Allen & Overy. “It’s in the banks’ interests for clients to come forward with their money.”  For decades, Western governments tolerated offshore tax havens, places where the wealthy could park millions away from the gaze of their domestic authorities. Switzerland, in particular, developed a reputation as a place where the wealthy could rely on secrecy laws.  But the tide began to turn in 2008, particularly after the financial crisis prompted many governments to act in concert.  As Switzerland and other locales tightened their financial controls, many people initially flocked to other tax havens like Singapore and Hong Kong, which still offer some of the world’s most secret accounts. But these places, too, are facing new pressures.

NAHB – 101 improving housing markets

The list of housing markets showing measurable improvement expanded slightly to include 101 metropolitan areas in April, according to the National Association of Home Builders (NAHB)/First American Improving Markets Index (IMI), released today. Thirty-five states (including the District of Columbia) are now represented by at least one market on the list. The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. The 101 markets on the April IMI represent a net gain of two from March, with 13 metros being added and 11 markets slipping from the list while 88 markets retained their places on it. Among the new entrants, areas as diverse as Rome, Ga.; Coeur d’Alene, Idaho; Greenville, N.C.; Brownsville, Texas; St. George, Utah; and Huntington, W.Va., are now represented on the IMI.  The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas.

The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the US Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metropolitan area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.  A complete list of all 101 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in April, is available at: www.nahb.org/imi.

Job improvement slows

US payrolls rose far less than expected in March, keeping the door open for further monetary policy support from the Federal Reserve, even as the unemployment rate fell to a three-year low of 8.2%.  Employers added 120,000 jobs last month, the Labor Department said on Friday, the smallest increase since October.  Economists polled by Reuters had expected nonfarm employment to increase 203,000 and the unemployment rate to hold at 8.3%.  The slowdown in employment growth last month likely reflected the fading boost from unseasonably warm winter weather. It supported the caution on the labor market from Fed Chairman Ben Bernanke last week.  Bernanke expressed doubts the recent job gains could be sustained, and March’s weak report was in line with expectations that economic growth slowed to an annual pace of 2% in the first quarter from the 3% rate in the October-December period. 

The weakness in hiring last month was concentrated in the vast private services sector, which added only 90,000 after increasing payrolls by 204,000 in February. Retail employment fell dropped 33,800 after falling 28,600 the prior month.  Construction hiring fell 7,000, the second straight monthly decline. Temporary help fell 7,500 after rising 54,900 in February.  However, manufacturing enjoyed another month of strong job gains, with factories adding 37,000 new positions, helped by carmakers trying to meet pent-up demand for motor vehicles. Factory jobs increased by 31,000 in February.  Government employment edged down 1,000 after rising 7,000 in February. Despite the weak employment gains last month, average hourly earnings rose 5 cents.  The workweek dipped to 34.5 hours from 34.6 hours in February.

WSJ – Fed in favor of the banks’ foreclosure-rental approach

Last month, Bank of America Corp. announced a plan to allow homeowners at risk of foreclosure to hand over deeds to their houses and sign leases that will let them rent the houses back from the bank at a market rate.  In addition, Fannie Mae is selling 2,500 homes in eight metropolitan areas around the country. The government-controlled mortgage firm is selling the $320 million portfolio to investors, who would be required to turn them into rental properties.  The Federal Reserve set out new polices for banks that decide to rent out foreclosed homes, endorsing a strategy for managing the huge number of distressed properties that have piled up during the housing bust. The central bank said in a six-page policy statement Thursday that the Fed’s regulations permit the rental of foreclosed properties to tenants “in light of the extraordinary market conditions that currently prevail.” The policy clarified that banks that would otherwise be required to sell off the properties more quickly can turn to rental as a strategy. 

Federal Reserve Chairman Ben Bernanke and other central bank officials have spoken publicly about the need to encourage banks to rent out foreclosures. “With home prices falling and rents rising, it could make sense in some markets to turn some of the foreclosed homes into rental properties,” Mr. Bernanke said in a February speech.  The central bank said that banks holding large numbers of foreclosures should establish detailed policies for renting foreclosures, including a process to determine whether the properties are safe to occupy and meet local building code requirements.  The Fed said banks should set up criteria by which properties are picked to be rental properties. The banks should establish plans that “describe the general conditions under which the organization believes a rental approach is likely to be successful,” the central bank said.

Short sales up in 2011

Short sale volumes may not have experienced the boom many predicted, but they’re certainly moving up.  Late last week, the Office of the Comptroller of the Currency issued a report on year-end loss mitigation activity for most of the mortgages serviced by the nation’s largest banks.  The 227,570 new short sales completed in 2011 was a 12% increase from one year ago and more than double the 112,000 measured in 2009, according to the report.  As the robo-signing freeze thaws, and new requirements under the attorneys general settlement are enforced, short sales may continue upward in 2012.

Eurozone unemployment hits new record

Unemployment in the 17 nation euro zone rose to 10.8% in February — as expected by economists’ polled by Reuters — and compared to 10.7% in January, the European Union’s statistics office Eurostat said on Monday.  Joblessness last reached February’s levels in May and June 1997 and was only slightly higher in April 1997 at 10.9%.  In February, unemployment was 10.2% of the working population in the wider, 27-nation EU, or some 24.5 million people, rising from 10.1% in January, Eurostat said.  Europe’s debt crisis has forced governments to drastically cut spending, while business confidence collapsed late last year, leaving many Europeans struggling to find work at a time when the euro zone heads into a recession.  The European Commission expects the euro zone’s output to shrink 0.3% in 2012, and data released separately on Monday showed that the bloc’s manufacturing activity contracted for an eighth successive month in March.

Detroit razing houses

More than a quarter of homes in Detroit whose loans failed at the height of the foreclosure crisis in 2006 and 2007 have already been razed or are on the demolition list, becoming a huge obstacle to the city’s rebirth, a Detroit News analysis shows.  In neighborhoods on the far west side and the northeast corner of the city, as many as two-thirds of the properties that went into foreclosure just five years ago are in the city’s crosshairs or already on the ground. The worst-hit areas almost mirror perfectly parts of the city where the most subprime mortgages were issued before they helped trigger the collapse of the banking industry.  And more vacancies could be on the way: Although the rate has slowed, lenders have foreclosed on 28,000 more homes since 2007, according to records from RealtyTrac.  Mayor Dave Bing has made reshaping the city one of his top priorities, and his Detroit Works Project is focusing on fixing targeted neighborhoods. But increasing vacancy squeezes the city’s already feeble tax base, diminishes the quality of life and undercuts the city’s recovery efforts.  In parts of the city least able to absorb abandonment, evictions are almost instantly followed by strippers who can gut properties in days.

Detroit has struggled with abandoned homes for years, and its population fell 25% to 713,777 from 2000 to 2010. But foreclosures from 2006 and 2007 alone have added 7,600 homes to the demolition list. Now, there are an estimated 38,000 homes in some stage of demolition, a number equal to 10% of all housing units in the city.   The city has knocked down 4,200 homes since 2010 and hopes to get to 6,000 more, which could take another three years at its current pace. That doesn’t take into account the 1,800 homes the Detroit City Council has targeted for demolition, or the 26,300 homes that are in the process of being considered for demolition.  If foreclosures continue to increase vacancies, the city will be hard-pressed to keep up with demolitions. City leaders are working with banks and other institutions to find ways to preserve occupancy, said Karla Henderson, Detroit’s group executive of planning and facilities.

Eurozone manufacturing in trouble

The euro zone’s manufacturing sector shrank for an eighth month and at a faster pace in March, adding to signs the bloc is in recession as the downturn spread to core members France and Germany, a survey showed today.  Markit’s Eurozone Manufacturing Purchasing Managers’ Index (PMI) dropped to 47.7 last month from 49.0 in February, in line with a preliminary reading.  It has now been below the 50 mark that divides growth from contraction since August.  Earlier data from Germany, Europe’s largest economy, showed its manufacturing sector contracted last month and it was a similar story in neighboring France.  In Spain, struggling to implement swinging austerity measures demanded by the European Union to meet tough deficit targets, the sector contracted for the 11th month.  Manufacturing in Italy shrank for an eighth month.  The economic slump will make it even harder for the 17-nation euro zone to overcome its debt crisis as it will depress tax revenues and hurt consumer spending.  Periphery countries have borne the brunt of the sharp downturn as their own austerity measures continue to hamper a return to growth, particularly Greece where the sharp decline in manufacturing continued last month.

Mortgage insurance slightly up

Members of trade group Mortgage Insurance Companies of America wrote $5.4 billion of primary new insurance in February, up from $5 billion in January and $4.2 billion from February 2011, the group reported on Friday.  The members, who include Genworth Mortgage Insurance Corporation, Mortgage Guaranty Insurance Corporation, and Radian Guaranty Inc., posted number for primary insurance in force was $397.7 billion, which is down from $399.2 in January and down greatly from $625,764.7 the February before.  February’s cure to default ration was 113.5%, that’s up from January’s 80.9% ratio and slightly up from February of last year, when the rate sat at 112.2%, continuing the trend of February, March and April seeing cure to default ratios of above 100%, which is not so for the rest of the year. 

In April, the Federal Housing Administration (FHA) will increase its insurance premiums.  But already, the FHA insurance premiums have risen significantly over the past 18 months, according to Genworth Financial, increasing a mortgage payment by $95 a month for borrowers at or above 95% loan-to-value ratios.  While many mortgage insurers are operating under state capital ratio waivers, some claim they are ready to take over market share from the FHA.  “Private mortgage insurance is more competitive than ever with FHA, and is well-positioned to take on new risk,” according to statement from Genworth Financial. “By contrast, the FHA is dealing with an unprecedented increase in delinquencies and defaults, and this precarious financial position suggests that FHA may continue to increase costs for FHA loans.”

Smart Real Estate News & Commentary by Chris McLaughlin March 5, 2012

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Underwater borrowers eligible for settlement write-downs

A calculation by a Brookings Institution economist narrowed down a pool of underwater homeowners to 500,000 who could qualify for principal reduction from the $25 billion mortgage settlement.  Using the parameters of the settlement, Ted Gayer found just 5% of the nation’s 11.1 million underwater borrowers could get the principal reduced on their mortgage, first reported by The Washington Post. About $10 billion of the settlement, in the form of credits, will go toward principal write-downs made by the five banks. Only homeowners delinquent on their mortgages are eligible. Gayer eliminated others according to underlying requirements, including Fannie Mae or Freddie Mac loans and homes not owner-occupied. It’s a rough calculation, Gayer warned, and he made some assumptions in the process. He eliminated any loans not held on the banks’ balance sheets, as well as any with a second loan. Mortgage bondholders may not take kindly to principal write-downs, he said.

Greek Bond Swap Deal Rests on Knife Edge

Greece faces a decisive week in its struggle to avert a sovereign default, with a planned debt swap poised on a knife-edge amid doubts over the level of participation by private bondholders. Charles Dallara, the head of the international consortium of financial institutions that negotiated the debt restructuring, declined to predict the rate but acknowledged that the complexity of the deal had required some investors to spend time understanding it. Many investors need to decide by Tuesday because of the complications of the deal. Because of the size of their holdings, a large number of bondholders will have to consult their boards, especially as the loss is about 75 percent in net present value terms. Private holders of 206 billion euros in Greek bonds have until Thursday evening to decide whether to take part in a swap where they would trade bonds for a package of bonds and cash that would knock about 100 billion euros off Athens’ debts. Private holders of 206 billion euros in Greek bonds have until Thursday evening to decide whether to take part in a swap where they would trade bonds for a package of bonds and cash that would knock about 100 billion euros off Athens’ debts.

New Jersey witnesses lending resurgence

The volume of loans written by New Jersey-based banks rose 16.5% in 2009-2011, while lending fell 5.6% nationwide over that span, according to The Star-Ledger in Newark. Most of the gains in the Garden State were attributable to MetLife expanding into mortgage lending, which the insurance giant has since abandoned. But smaller lenders stepped into the void left by the exit of some of the larger banks, as well. HousingWire explored how community banks are boosting market share as big banks write fewer home loans in our latest HW Focus on Lending, a supplement to the March issue. “We made a conscious effort to take advantage of other banks stepping back,” Kevin Cummings, president and CEO of Investors Bank of Short Hills told the Star-Ledger. Cummings’ firm increased its commercial balance sheet to $3.6 billion from $380 million at the end of 2007.

US stock futures fall on global economy worries

US stock index futures fell on Monday after data showed Europe’s private sector activity declined last month and China cut its growth target, reigniting concerns about the strength of the global economy. European stocks dropped, with shares in euro zone peripheral countries such as Italy and Spain among the worst hit, after data showed the region was likely to slide back into recession. Chinese Premier Wen Jiabao cut his nation’s 2012 growth target to an 8-year low of 7.5 percent and put a priority on boosting consumer demand in hopes of weaning the economy off a reliance on external demand and foreign capital. European markets were also pressured ahead of a March 8 deadline for Greece and private bondholders to complete a debt swap. Failure to reach agreement would put the country back on the brink of a messy default. Economists look for a drop of 1.5 percent after a 1.1 percent rise in the previous month. American International Group Inc is selling part of its stake in AIA Group Ltd to raise about $6 billion to help repay a huge federal government bailout.

DSnews.com: Treasury Reinstates HAMP Incentives

The Treasury Department says servicers participating in the Home Affordable Modification Program (HAMP) are getting better at evaluating homeowners for the program, including noticeable improvement in assessing borrower income to determine program eligibility and calculate the amount of their modified payments. HAMP performance reviews evaluate servicers based on three categories: identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management, and governance. Treasury said it agreed to release withheld incentives for past deficiencies as part of the $25 billion federal-state mortgage servicing settlement announced last month, but officials stress that they retain the right to withhold incentives in the future should the results of HAMP compliance reviews warrant such remedial action. As of the end of January, participating servicers had granted 951,319 permanent HAMP modifications to distressed borrowers. There are an additional 76,343 HAMP trials currently in active status.

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Chris McLaughlin

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