Texas Real Estate Daily

Freddie Mac today announced it is ordering servicers to suspend all foreclosure sales on properties with Freddie Mac-owned mortgages in the federally declared disaster areas caused by Hurricane Ike in Texas and Louisiana. Freddie Mac is one of the nation’s largest investors in residential mortgages.

“Freddie Mac is taking this step because the extensive damage Hurricane Ike caused has made it difficult for our servicers to get the information they need to make case-by-case decisions about forbearance or other workout options,” said Ingrid Beckles, vice president of servicing and asset management at Freddie Mac.

The suspension will extend from October 8 to December 31, 2008 and include mortgages that were in default prior to Hurricane Ike.

Servicers will be required after the suspension ends to consider individual circumstances in determining whether additional foreclosure relief should be extended or whether to proceed with foreclosure.

Today’s announcement only applies to properties with Freddie Mac-owned mortgages in Texas or Louisiana counties, municipalities or parishes that were declared federal disaster areas and where federal aid in the form of individual assistance is available.

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac raises capital on Wall Street and throughout the world’s capital markets to finance mortgages for families across America. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

Credits: Au.Sys.Con

The U.S. landscape industry has enjoyed decades of prosperity, but that will continue only if operators find more environmentally-friendly growing and selling methods, and embrace sustainability, says the executive vice president of the American Nursery and Landscape Association.

Speaking Wednesday at Texas A&M University, Robert Dolibois, delivered the keynote address for the Distinguished Lecture Series of the Ellison Chair in International Floriculture.

Dolibois said his Washington, DC-based organization represents some 2,300 companies that provide products and services to about 80 million U.S. households, but he said the relative good fortune of the industry faces crucial challenges that must be overcome for future success.

For one, the industry “has ridden on the back of the Boomer behemoth” for the past 15 years, he said, but now must realize that the primary purchasing population - the middle-aged households - are diminishing.

The industry certainly must pursue the Gen Y’ers - those who now are 18 to 30 years old - as they transition toward maintaining their own homes, Dolibois said, but the industry must also look for ways to extend the Boomers’ interest in buying plants and landscape items.

“In all instances, we need to reverse an alarming trend of reducing the proportion of plant materials relative to hardscaping in residential and commercial design,” he said.

Hardscaping is the use of non-plant materials such as sand, gravel or rock to landscape a space. It is preferred by residents weary of yardwork or those in arid urban environments such as Las Vegas who must decrease the amount of water they use to maintain their properties.

Dolibois said new programs such as the Sustainable Sites Initiative being developed in Austin in cooperation with the American Society of Landscape Architects, the Lady Bird Johnson Wildflower Center and the U.S. Botanical Gardens, can show the way.

Just as the U.S. Green Building Council’s LEED® rating system measures a building’s environmental impact, the Sustainable Sites Initiative will measure the sustainability of designed landscapes of all types including public, commercial, and residential projects using a site rating system now under development.

The U.S. Green Building Council is lending its support to this project and anticipates adoption of the Sustainable Sites metrics into its LEED system once they are finished.

“Embracing sustainability,” said Dolibois, is a vital key for the industry’s success.

“At this point, it is invoked as both blessing and curse,” Dolibois said. “It is time for us to more fully pursue the concepts, define its threats and opportunities and, in significant measure, declare industry ownership of its implications for us.”

“Let’s re-engineer, re-use, revert and recycle like we never have before,” he said.

But pursuing customer groups and stepping up environmental efforts, along with possible increased regulation and the industry’s lack of research and development funds, can only be met with better problem-solving skills, Dolibois said.

“Our defense must now be built on hard data and communicated by industry business owners in their terms with authentic examples, repeatedly,” he stressed. “Such a defense will require much more research and understanding than we currently enjoy.”

Dolibois said meeting the industry’s challenges successfully is achievable “provided we build on a strong foundation of collaboration.”

The Sustainable Sites Initiative will issue its next major report on sustainable landscape design for public comment in November. A preview was presented at the American Society of Landscape Architects annual meeting and trade show that concluded Tuesday in Philadelphia.

Credits: Ens-Newswire

Dallas real estate agent Betty Mayes knows all too well about the sluggish Texas economy.

But wait, do the math.  Betty sells homes.  She has clients to buy those homes.  So what’s the problem?  “The requirements for them to prove certain things to the lender are just unbelievable,” Mayes explains. “It’s one hoop, then another hoop and another.  That wasn’t happening before.”

In simple terms, getting a loan today is harder than ever.  “We’re finding that even buyers with good credit and a good job history are finding it a little more difficult to get a loan,” says Mayes.

In fact, even people with good credit are being told, “no”.

Gone are the days of the 100% loan.  Buyers are being asked to put down more of their own cash, which is money many of them simply don’t have.

Those looking to buy a million dollar home are being told to forget it unless they can put down a third in cash. Jumbo loans are also a thing of the past.

But Mary Beth Harrison, with Keller Williams, says it’s not all ‘doom and gloom’.  “We never saw that meteoric rise in price that you saw in California, New York and Florida where things were going up 20, 30, even 50-percent in appreciation, which is crazy.”

While that type of appreciation was happening in other states, North Texans saw their homes appreciate only four to six-percent.  Experts say, that turned out to be a blessing since home values in those other states are now plummeting; making it harder to get a loan there than here.

North Texas mortgage banker Reid Mitchell puts the chances of getting a loan in perspective.  Mitchell says he’s turning down nearly half of those who apply for home loans; even before they start looking at houses.

Both Mayes and Harrison agree that the weak economy is likely to eliminate more than a quarter of the real estate agents currently working in North Texas.

Credits: CBS11TV

Retail gasoline prices in Austin have fallen an average of 22 cents over the last week as refiners increase the supply of fuel on the market after recovering from Hurricane Ike last month.

Also, the current economic downturn is driving down the price of crude oil on the commodities market.

Drivers in San Antonio are currently paying $3.26 on average for a gallon of regular gasoline. That’s down from $3.49 the week before, according to AAA Texas.

Three months ago, local drivers were paying a record high of $3.96 a gallon, more than 78 cents higher than what they are paying at current levels.

“Fuel demand in both the U.S. and Europe is lower than last year, the current economic situation has driven down the price of crude oil, and Gulf refineries are just about back to their normal volumes for production and delivery, after Hurricane Ike,” says AAA-Texas Houston spokesperson Sarah Schimmer. “With lower demand, and more fuel in the market, Texas prices have decreased.”

The statewide average price of regular unleaded gasoline fell by more than 22 cents over the past week to close at $3.28 a gallon. That mirrors the national average of $3.40 a gallon, also down about 19 cents from last week.

Credits: Biz Journals

Only six months ago, John McCain advocated “temporary” help for homeowners facing foreclosure while preaching against a “bailout” of irresponsible parties – “whether they are big banks or small borrowers.”

On Wednesday, he pitched his new $300 billion plan for the government to buy distressed mortgages from banks without making them take a discount on the sale. The loans would be reduced, at taxpayer expense, so borrowers could afford to keep their homes.

The plan reverses Mr. McCain’s long-held aversion to bailouts, yet reflects a rising consensus that only the federal government’s deep pockets can save both banks and homeowners. Some critics conceded the plan might work even as they criticized it as welfare for banks that made bad loans.

“One of the pluses of Senator McCain’s plan is he’s saying we need to make this happen, the government needs to play a proactive role in buying these loans,” said John Taylor, president of the National Community Reinvestment Coalition.

Yet Mr. McCain would have banks selling the endangered mortgages at face value.

“It’s a total bailout,” Mr. Taylor said.

The proposal is likely to generate fans in some battleground states, such as Ohio, where foreclosure rates are among the nation’s highest. It may be viewed less favorably in states such as Texas, where the number of subprime-loan foreclosures is below the national average.

The plan may also be more difficult to implement than Mr. McCain suggests because individual loans are sliced and wind up as pieces of complex securities held by different investors, making it difficult to determine who owns a single loan.

Democrat Barack Obama criticized the plan Wednesday, saying it would “massively overpay for mortgages” and “guarantee” that taxpayers lose money.

“The biggest beneficiaries of this plan will be the same financial institutions that got us into this mess, some of whom even committed fraud,” his campaign said in a statement.

Critics said Mr. McCain’s idea isn’t new. Elements have appeared in proposals by Hillary Rodham Clinton in March, in the bailout engineered by Treasury Secretary Henry Paulson and by conservative academics in recent weeks.

Mr. McCain’s campaign conceded the plan echoes previous calls for the government to buy mortgages. But the proposal would work more quickly and could reach “millions of people,” said Douglas Holtz-Eakin, Mr. McCain’s senior policy adviser. The plan would use existing government programs to reduce foreclosures and stabilize housing prices.

Borrowers with subprime or adjustable-rate mortgages who can show creditworthiness would get federally insured fixed-rate mortgages. The interest rate would be around 5.25 percent, according to the McCain campaign.

The campaign says that if the program is successful, it could reduce the need to spend even more money to buy mortgage-related securities held by banks. Lawmakers authorized $700 billion for that effort, which can purchase whole mortgages.

Mr. Holtz-Eakin said more lenders would participate if they don’t have to take a loss on loans they sell. Lobbyists for financial-services companies agreed.

“Offering to purchase them at face value vs. a discount would make them more attractive,” said Scott Talbott, a lobbyist at the Financial Services Roundtable, which represents the country’s largest banks and insurance companies.

However, it’s not clear that the mortgages could quickly be sold to the government. The packaging of mortgages to investors creates “a layer of complexity” that may slow progress so much that the effort is “helpful, but too late,” Mr. Taylor said.

But James Gaines, research economist at Texas A&M University’s Real Estate Center, said the government could buy individual mortgages. The government has made some progress refinancing exotic mortgages through a voluntary program known as Hope Now, though its reach has been questioned by some critics.

“It does seem that a fundamental level buying the mortgage might have the most bang for the buck,” Dr. Gaines said. “You’ll be helping the borrower and keeping people in their houses, which also simultaneously might help stem the flow of the real problem, which is declining home prices.”

Yet analysts cautioned that Mr. McCain’s approach might not reach enough borrowers to make a difference.

Many loans were made to borrowers who didn’t provide a down payment or didn’t show proof of income – the latter known as Alt A loans.

In the first half of 2006, 16 percent of the value of all loans was in Alt A loans, according to the Mortgage Bankers Association. Even in the second half of 2007, after lenders began to pull back on such loans, the figure was 7.8 percent.

“In general, he has the right idea,” Dr. Gaines said. “What they are leaving out is there are other loans, beside subprime, that are also problematic.”

Credits: Dallas News

Homeowners were able to hold steady on the sales price they sought their property in North Texas in September, which put the area ahead of most in the country, according to research released Wednesday from Real IQ and Altos Research.

Asking prices for homes in Dallas-Fort Worth had no change in September from the previous month and increased 0.3 percent from three months ago, according to the figures.

The research found that listing prices in 21 of 26 metro areas surveyed declined from the previous month.

The inventory of homes in North Texas has fallen 3.8 percent in the past month and 9.2 percent in the past three months.

The homes are staying on the market longer. The average number of days a North Texas home stayed on the market in September was 96, an increase of 9.9 percent over the past three months. The figures show that 19 of the 26 metro areas average 100 days or more.

A composite index of 10 metro areas studied showed that asking prices dropped 1.4 percent in a month and 2.9 percent since July.

Las Vegas had the largest drop in asking prices, with a 3.5 percent decline in September. In the past year, asking prices there have fallen more than 30 percent.

Credits: Star Telegram

An estimated 30,000 Texas homeowners with mortgages from Countrywide Financial may get friendlier loan terms through a settlement announced Monday to help rescue those in over their head.

The deal, involving the company and several states, allows eligible homeowners to modify terms of their loans to make monthly mortgage payments more affordable.

The loan modification program affects Texans who are in default or likely to default on subprime mortgages from Countrywide, a financially struggling company recently acquired by Bank of America.

Possible help measures include:

• Lower interest rates to as low as 2.5 percent for up to five years.

• Conversion of adjustable-rate mortgages to fixed-term loans.

• Reduced principal loan amounts.

• Suspension of foreclosure for eligible homeowners who are in default but want to stay in their homes.

Distressed Texas homeowners will get up to $350 million worth of benefits as part of an $8.4 billion settlement involving deceptive lending practices.

“Helping eligible Texans pay their mortgages and stay in their homes will help our great state weather this financial storm,” Texas Attorney General Greg Abbott said.

“This is, obviously, a very stressful time for homeowners around this state. It’s important that they be able to stay in their homes.”

A major component of the program will help steer eligible homeowners into refinancing with the Federal Housing Administration and a new mortgage pegged at 90 percent of the current home value, Bank of America spokesman Terry Francisco said.

“We would use that as our preferred method for handling a loan modification,” he said.

The program won’t solve all mortgage-related problems, Abbott said, “but it is a step down the path (of) helping Texans stay in their homes and continue to work to build the American dream.”

The settlement affects only those with subprime mortgages issued by Countrywide.

But Abbott said his office would contact other mortgage companies to determine whether the Countywide settlement can be used as a model to help other struggling homeowners.

Bank of America embraced the agreement, which obligates the bank to spend $150 million nationwide to help homeowners who are at least four months behind on their payments or who have already lost their home.

The company also will spend up to $70 million to help homeowners move into rental housing if the loan modification program is insufficient to help them keep their homes.

The “soft landing” provision will provide cash payments — roughly $200 — to help families who lose their home to pay for relocation costs, such as moving and apartment security deposits, said Francisco, the Bank of America spokesman.

The investigation into predatory lending practices focused on Countrywide making high-risk loans and charging high fees, Abbott said.

“They mislead the borrower into a situation (that) was financially detrimental,” he said.

Credits: Chron

As Wall Street reeled and global markets plunged, President Bush on Monday said the U.S. economy is going to be “just fine” in the long run. But he cautioned that the massive rescue plan will take time to work.

On another jittery day in the financial markets, the president made two rounds of unscheduled comments on the economy — first after meeting with small-business owners in San Antonio, and then at the top of a speech in Cincinnati about judicial nominees.

In both cases, he defended the $700 billion economic bailout plan as one that won’t just help Wall Street, but everyday workers and businesses, too.

“I believe that in the long run, this economy is going to be just fine,” Bush said. In the short term, he said the Treasury Department must go about enacting its plan to buy up troubled assets from financial firms so that credit will start flowing again to consumers.

Recognizing the scope of the government’s intervention, Bush to reassure his audiences that taxpayer money will not be wasted.

The president added that the country has been through rough times before, and “we’re going to come through just fine.”

Earlier, in Texas, Bush emphasized that the program must be effectively designed and not rushed into action.

“It’s going to take awhile to restore confidence in the financial system,” he said. “But one thing people can be certain of is that the bill I signed is a big step toward solving this problem.”

Bush signed the bill into law after Congress approved it last week.

On Monday, the Dow fell as much as 800 points at one point.

The catalyst for the selling was the growing realization that the Bush administration’s $700 billion rescue plan and steps taken by other governments won’t work quickly to unfreeze the credit markets. Global banks, hobbled by wrong-way bets on mortgage securities, remain starved for cash as credit has dried up.

The president, after a weekend at his ranch in Crawford, Texas, met with small business owners at an old-fashioned soda shop in San Antonio. He said he understands why so many people are frustrated about why they were suddenly “helping Wall Street.”

“The answer is because had we not done anything, people like the folks behind me would be a lot worse off,” Bush said as the business owners stood with him. “We’ll make sure, as time goes on, this doesn’t happen again.”

Bush’s comments came as his top economic advisers pledged to work with their counterparts around the world to restore confidence and stability to financial markets roiled by tight credit and worries about a global economic slowdown.

To that end, the administration was expected to announce shortly that it had tapped a 35-year-old former Goldman Sachs executive, Neel Kashkari, to head the government’s rescue effort on an interim basis, according to an official who asked not to be named.

Credits: Associated Press

Voters in 3 Tarrant County towns went to the polls over the weekend voting on tax hikes to help local schools.

The measure failed in Crowley with 56 percent of voters against the plan, but it passed in Kennedale by a narrow margin.

In Lake Worth, 61 percent voted in favor of the tax hike.

The hikes add $260 to the taxes on a $200,000 home.

Credits: NBC 5