Yesturday's Economic Summit

Michael Fratantoni

-The true unemployment number is up to 13.3% (people who can no longer claim and still don’t have a job) but is report as 9.7% - it will peak midyear next year to a reported 10.2 % similar to the early 80’s
-No pressure on inflation –some deflation happening right now to keep it in check –as an example energy prices are down - a barrel of oil is in the $70’s when a price of $90 to $100 is normal
-Stock market losses $6 trillion slight rebound in Q1 & Q2
- New home sales lowest on record in 50 yrs
-Housing prices nationally are not going to rise until 2011 and won’t stabilize until mid 2010
-The Federal Reserve is largest buyer of MBS 60% currently and they hold $850 billion loans currently they have gone from 0% to 60 % this year and want to go back to 0% by year end. Will going to 0% add volatility to market? This is something to watch over the next 6 months when Fed leaves market increase in rates by .25 basis points – Just saw the Fed will buy MBS until March of 2010
-Theme things are looking up slightly but we have huge hole to climb out of
-FHA represented only 2% of loans in previous years. This year they represent 45%!
-National delinquency survey show 14% of borrowers are 90 day or more late 2.5 million loans
-Prime fixed rate loans 28 million and many of those are reaching seriously delinquency rates – more than 90 days
-Delinquencies & foreclosures are delayed or lag behind employment trends
-Delinquencies – we are up because of jobs being lost
-25% of option arms have been modified or foreclosed on not the problem media has mentioned and continues to mentions as the problem in mortgage market
-Watch bill HR 1728 – Barney Frank
-Allen Jones BOA SS expert is available to us about Short Sales and BOA
Allen.h.jones@bankofamerica.com

Frank Nothaft

-Its going to get worse much worse slower recovery than previous recessions
-After end of 1991 recession unemployment peaked 15 months later
-After end of 2001 recession peaked 19 months later
-Bernanke says we may be out of recession – the question is how long before we peak with unemployment after this recession
-$15-17 billion is the cost to extend tax credit. The challenge is too many politicians say they didn’t approve of spending gov’t funding to stimulate economy so even though they understood the need to extend they have politically painted themselves into a corner
-Freddie Mac National rebound of prices bottoms out in 2010 and it is 2011 before rebounding
-Lowest interest rate in 50 years
-Prime loans are performing worst since the 30’s – the depression
-Subprime 8 to 10% of loans represent over 35% of foreclosures
-9% of all loans are subprime but they represent 35% of foreclosures
13% of all loans are FHA and they represent 10% of foreclosures
15% of all loans are Prime/Arms and they represent 28% of foreclosures
63% of loans are Prime and Alt-A Arms and represent 27% of foreclosures
-4.2 million seriously delinquent 90 days behind
-To determine if loan is owned by Freddie Mac check out – www.makinghomesaffordable.com or www.Freddiemac.com

Lawrence Yun

No housing bubble it was a credit market bubble
We are overshooting bottom & need stimulus to nudge further back to make our market “normal” again
-From typical NAR survey 3000 responses - HVCC appraisal survey resulted in 30,000 responses1/3 had properties not close due to appraisals
Prices are below fundamental values
All cash purchases are 20 % of market typically low single digits 8 %
Foreclosures will rise because of toxic issues of unemployment & underwater buyers
Full builder recovery not until 2011
Our prices locally are down 20 % were 33 %
Stock market is at 1 year highs
Support tax credit extension - Wall Street got $700 billion whole economic stimulus $800 billion extending the tax credit will only be $15 billion
NAR is on FB why aren’t you?
See his presentation below!

Stephen Fuller

View his updated slides in the link below!
Look for collaboration amongst our peers share data share ideas work together get along
We in DC better at looking at bad news

Dr. Frank Nothaft
Dr. Michael Fratantoni
Dr. Lawrence Yun
Dr. Stephen Fuller