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Taxation Without Representation | Cross River Real Estate
Fed Officials Saw Start of Subprime Crisis in August 2007 | Cross River Real Estate
Federal Reserve officials in August 2007 saw the beginnings of the crisis in subprime mortgages and concluded that the U.S. economy would be able to withstand it, transcripts from their 2007 meetings show.
“Well-capitalized banks and opportunistic investors will come in and fill the gap, restoring credit flows to nonfinancial businesses and to the vast majority of households that can service their debts,” Donald Kohn, then vice chairman of the board, said in Aug. 2007 according to transcripts of the Federal Open Market Committee meetings released today in Washington.
The transcripts show the committee’s slow grasp on the enormity of contagion that was to spread throughout global markets as a result of billions of dollars in low-quality housing assets that had been securitized into bonds and sold to banks and investors worldwide.
“The odds are that the market will stabilize,” Bernanke told the committee in Aug. 2007, according to the transcripts from that year. “This restrictive effect could come in various magnitudes. It could be moderate, or it could be more severe, and we are just going to have to monitor how it adjusts over time.”
Concern about capital losses from toxic mortgage securities froze interbank lending markets and prompted runs against major investment banks. The Fed and JPMorgan Chase & Co. (JPM) rescued Bear Stearns Cos. in March 2008, and Lehman Brothers Holdings Inc. collapsed into bankruptcy that September. Both Goldman Sachs Group Inc. and Morgan Stanley converted to bank holding companies to access backup funding from the discount window.
Rate Unchanged
U.S. central bankers kept their benchmark lending rate unchanged at their regularly scheduled meeting on Aug. 7, 2007, saying in their statement that “the predominant policy concern remains the risk that inflation will fail to moderate as expected.”
Fed officials did have a legitimate inflation worry in 2007. Revised data shows the personal consumption expenditures price index rising at a 3.5 percent rate for the year ending that December. The unemployment rate hit a low of 4.4 percent in March and May. Still, financial markets were beginning to unravel.
via bloomberg.com
“Sand States” are Still the Wettest | Cross River Real Estate
Some 10.7 million homeowners, or 22 percent of all residential properties with a mortgage, were in negative equity at the end of the third quarter of 2012, down by 100,000 from the second quarter. But the “sand states”, the states that dominated foreclosures for years, still account for a lion’s share of underwater borrowers.
With the addition of 100,000 borrowers, the total number of borrowers who moved from negative equity to positive equity by September reached 1.4 million year-to-date. An additional 2.3 million borrowers had less than 5 percent equity in their home, referred to as near-negative equity, at the end of the third quarter, according to a new analysis from CoreLogic.
Together, negative equity and near-negative equity mortgages accounted for 26.8 percent of all residential properties with a mortgage nationwide in the third quarter of 2012, down from 27 percent at the end of the second quarter in 2012. Nationally, negative equity decreased from $689 billion at the end of the second quarter in 2012 to $658 billion at the end of the third quarter, a decrease of $31 billion. This decrease was driven in large part by an improvement in house price levels. This dollar amount represents the total value of all homes currently underwater nationally.
Rising home values also pushed the equity Americans have in their homes higher than at it was at the onset of the housing crash five years ago, according to the December HUD Scorecard. Homeowners’ equity reached $7714.3 billion, a 5.2 percent increase over the second quarter and an 18 percent increase over the level of $6526.9 in the third quarter of 20011. In 2007, homeowners’ equity reached $1.02 trillion, but fell to $7050.9 billion in 2008, according to the quarterly Federal Reserve’s Flow of Funds report.
Negative equity has been a major cause of foreclosures and short sales. Even three years after the height of the foreclosure flood in 2010, a handful of states that were reasonable then for the majority of the foreclosures are the same states that today are home to an overabundance of underwater homes.
Nevada had the highest percentage of mortgaged properties in negative equity at 56.9 percent, followed by Florida (42.1 percent), Arizona (38.6 percent), Georgia (35.6 percent) and Michigan (32 percent). These top five states combined account for 34 percent of the total amount of negative equity in the U.S.
Of the total $658 billion in aggregate negative equity, first liens without home equity loans accounted for $323 billion aggregate negative equity, while first liens with home equity loans accounted for $334 billion.
Third quarter highlights included:
- 6.6 million upside-down borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $214,000. The average underwater amount is $49,000.
- 4.1 million upside-down borrowers possess both first and second liens. The average mortgage balance for this group of borrowers is $298,000.The average underwater amount is $82,000.
- Approximately 41 percent of borrowers with first liens without home equity loans had loan-to-value (LTV) ratios of 80 percent or higher and approximately 61 percent of borrowers with first liens and home equity loans had combined LTVs of 80 percent or higher.
- At the end of the third quarter 2012, 17.1 million borrowers possessed qualifying LTVs between 80 and 125 percent for the Home Affordable Refinance Program (HARP) under the original requirements first introduced in March 2009. The lifting of the 125 percent LTV cap via HARP 2.0 opens the door to another 4.6 million borrowers.
5 Awesomely Bad Listing Photos | Cross River Real Estate
2013 Autos: Mileage Matters | Cross River NY Realtor
“Fuel economy is the No. 1 concern of buyers,” says Ford’s new Chief Operating Officer Mark Fields, and that’s all the more true for real estate practitioners, who spend a good part of their week behind the wheel. The latest in a long-running series of studies by the University of Michigan Transportation Research Institute finds that the typical car is now delivering better mileage than ever before. But the better news is that you don’t necessarily have to sacrifice comfort, convenience, or legroom to improve your efficiency.
Consider the new-for-2013 Porsche 911 Carrera 4S. The all-wheel-drive sports car delivers a marked improvement in power compared to the outgoing model, even as mileage jumps more than 15 percent. You can tell a similar story about almost every new product on the market. As we earlier noted, the new three-row Nissan Pathfinder gains 30 percent compared to the old 2012 model.
There are a variety of reasons behind these improvements. Even conventional gas-powered products makers are slashing vehicle weight, and the general rule of thumb is that every 100 pounds translates into about one extra mile per gallon. The industry also is migrating to more advanced powertrain designs, such as the direct injection used in the new Honda Accord V-6 and the turbocharging technology that’s at the heart of the various Ford EcoBoost engines. Ford will offer a new 1.0-liter EcoBoost on the updated Fiesta model that will deliver significantly more power than the current 1.6-liter naturally aspirated engine, even though mileage expected to be well in excess of 40 miles per gallon will likely be the highest of any non-hybrid model sold in the United States.
That said, expect to see more hybrids and other battery-based vehicles in 2013 and beyond. By the end of the new model year, virtually every maker in the U.S. market will have at least one “electrified” offering. Toyota and its Lexus brand will offer hybrid versions of virtually every model. Toyota has also just launched its first pure battery-electric vehicle, the RAV4-EV, as well as a plug-in version of the Prius.
Honda will add a plug-in version of the Accord and a full battery-powered Fit. Nissan, meanwhile, is working up a hybrid Altima and will have a battery car for Infiniti in 2014, though the Leaf will remain its primary electrified model this coming model year.
Detroit is expanding its battery-model mix as well. GM’s Chevy brand will add the new Spark EV minicar alongside the Volt plug-in, currently the nation’s best-selling advanced propulsion vehicle. Ford is rolling out an array of new battery-based products, such as the C-Max and Fusion hybrids and Energi plug-ins.
Japanese makers were first to market with hybrid technology, and Toyota remains the dominant player from a sales perspective — especially having expanded its Prius “family” to include the plug-in and the new compact Prius C hybrid. But Europeans are rapidly expanding their lineup; even Porsche is offering hybrid versions of its Panamera four-door coupe and Cayenne crossover models. Among more mainstream offerings, there’s the new Volkswagen Jetta Hybrid. That said, European makers are well aware that American motorists have less than fully embraced battery technology so far. Add all the hybrids, plug-ins, and BEVs together, and they still account for less than 3 percent of the total U.S. new car market.
No wonder, then, that European makers are expanding their lineup of diesel powertrains. Audi will adding four new models for 2013. Also, VW is trying to boost capacity at its new U.S. assembly plant. Currently, about 20 percent of its midsize Passat models are coming with diesel technology. VW Group of America CEO Jonathan Browning believes that could soon top 30 percent. For those who tend to do more highway driving, diesels tend to deliver better mileage than most hybrids — and even in urban settings they’re close, while sacrificing little in terms of performance.
Facebook vs. Google: It’s on in search | Cross River Realtor
Facebook’s new “graph search” is the beginning of a long-term attempt to strike at Google’s most lucrative product.
When Google unveiled free word processing and spreadsheet apps back in 2007, the company wasn’t trying to immediately topple Microsoft’s Office suite. After all, Google’s apps were―and still are―inferior to powerful programs like Word and Excel. But their launch was the beginning of a long-term campaign to nibble away at one of Microsoft’s core franchises. In fiscal 2012 Microsoft’s business division, which includes Office, brought in $24 billion. But there is little doubt that it would be even larger had Google not offered a cheaper alternative now used by millions of businesses.
Facebook (FB) is taking a page from Google’s (GOOG) playbook. The social networking giant on Tuesday unveiled a search service. It is not aimed at toppling Google from its perch as the king of Web search any time soon. Instead, it is the opening round in a long-term campaign to erode Google’s monopoly over the most powerful and profitable business on the Internet. If successful, Facebook’s so-called “graph search” will offer users an alternative to Google that may work better for many types of queries. In due time, it could turn into a tidy business for Facebook.
“Graph search is not Web search,” Mark Zuckerberg, Facebook’s co-founder and chief executive, said during a packed press conference at the company’s headquarters in Menlo Park, Calif.
Indeed, Facebook only searches for things that have happened on its sprawling site. For now, it concentrates on four types of searches: people, photos, interests and places. But the types of queries possible with Facebook’s new service are innovative and useful. Users can “find friends who like soccer” or “find friends who like soccer in your hometown.” Users can find all the photos they’ve liked or all the photos their friends have taken in Paris. They can find restaurants in San Francisco liked by friends who are locals, or by friends who are Indian―say if they’re in the mood for spicy food. Users can’t do that on Google.
The promise of this kind of service—which, by the way, was built by a team of 50 engineers led by two ex-Googlers—is enormous. For starters, it could broaden the utility of Facebook, turning it from a tool of interaction into one that helps users discover new things. And Google, which is trying to be the place where people find not only other Web pages, but also restaurants or plumbers or HD televisions, should be worried. (Google declined to comment.)
Yet Facebook’s caution―graph search is still in beta or test mode, and is only being rolled out to a very small fraction of the site’s more than 1 billion users―is warranted. The company’s demo was dazzling, but the queries were for users who were also Facebook employees. These are Facebook “super-users” who likely check in every place they go, and click the Like button on every book, song or brand they, well, like.
I’d venture a guess that the majority of Facebookers are more parsimonious in their usage of the site and may not regularly share what they’re reading or listening to, let alone recommend their plumber, dentist or contractor to their closest 500 friends. Without that information, their contribution to the search graph will be limited. I have hundreds of Facebook friends, yet the answer to the query “pizza places in Oakland that my friends like” was hardly satisfying—it listed just one result. (Regular Facebook users can request access to graph search here.)
And of course, Google has never been known for taking its eye off the ball when it comes to search. The company already has a social network in Google+. While it lacks the level of activity that Facebook enjoys, it could readily serve as the basis for Google to build a rival graph search service. (As Fortune chronicled in its 2011 cover story, this battle has been a long time coming.)
The biggest understatement of the press conference may well have been Zuckerberg’s response to the question of monetization. “This could potentially be a business over time,” he said. For now, graph search has no ads. But if people start searching for restaurants of stores in large numbers, plenty of those businesses will be willing to pay Facebook in exchange for preferential placement in search results. Zuckerberg said Facebook would focus on improving the product, and rolling it out on mobile phones and in other languages, before it considers taking ads.
“This is one of the coolest things that I think we have done in a while,” Zuckerberg said. Many Facebook analysts agree. If Facebook appeared beleaguered after its disastrous IPO, Zuck’s crew is gunning for Google again, reminding its biggest rival that while it was down for while it certainly wasn’t out.
Oh, and as the two giants battle it out in the coming years, there is bound to be collateral damage. On Tuesday, shares of Yelp (YELP), which risks being tripped up by Facebook’s graph search sooner than Google will, dropped more than 6%.
‘Spider-Man’ Star Apartment Makes Debut Appearance | Cross River Realtor
via zillow.com
Many Sandy-damaged homes lacked flood insurance | Cross River Realtor
via newsday.com
