Posts Tagged mortgage
4 Investment Ideas That Provide Income
Posted by Tetyana Matychak in Investing on July 1st, 2010
As of this moment, the S&P/TSX Composite index is down 384.58 point or -3.27% year to date. The S&P 500 is down 67.32 or -6.04% year to date. That is your market update. When the global economic outlook appears uncertain and on the brink of another recession, equity markets reflect this reality in terms of greater than normal volatility. In markets like these, what we should be looking for are non-correlated assets and managers that have demonstrated the expertise to preserve capital during uncertain times like today.
In addition, one should also be focusing their efforts on receiving some form of income while the economic climate sorts itself. The following 4 ideas should hopefully accomplish both those goals. While we cant speak to the best/worst time to buy/sell particular securities, as that depends on one’s personal circumstances, the approach we usually take, especially with closed end funds, is to purchase them when they are trading at the steeper than normal discount to their Net Asset Value (NAV). The only other thing we would like to add is that you should do you own due diligence.
Trident Performance Corp.
This closed end fund is managed by CI Investments. Its investment objective is to provide tax-efficient risk-adjusted long term rates of return by obtaining exposure to a Global Macroeconomic Portfolio, advised by Trident Investment Management. Co-Founded in 1998, by Nandu Narayanan, Trident Investment Management seeks to exploit macroeconomic trends to generate attractive risk-adjusted rates of return with low or negative correlation to traditional ‘long’ investments. This is exactly what Mr. Narayanan did during the financial crisis, when the CI Global Opportunities Fund recorded positive performance of 109% in 2007 and 42.6% in 2008. Since inception in March 1995, the fund has averaged 19.69% as of the end of May 31, 2010. Read the rest of this entry »
Mortgage Data Leaves Bankers Uncertain of Trend
Posted by Tetyana Matychak in Banks on May 24th, 2010
Any way you look at it, extraordinary numbers of people are having trouble paying their mortgage. What is less clear is the extent to which the problem is getting worse, better or is simply holding its own.
Data released Wednesday by the Mortgage Bankers Association showed the mortgage delinquency rate rose in the first quarter to 9.38 percent of all loans outstanding, from 8.22 percent in same period last year.
When adjusted for seasonal variations, the default rate rose over 10 percent for the first time.
Seasonal adjustments are used to smooth out data in ordinary times, but in these extraordinary times the bankers’ group said it was not sure how much they could be trusted. In the first quarter the seasonal adjustments showed the delinquency rate worsened considerably. The raw data, on the other hand, indicated a marked improvement.
Warning that “fundamental market factors” might be exercising undue influence over the seasonal numbers, the mortgage bankers said they did not know whether the optimistic or pessimistic sequence was more accurate.
“We may be at a point where the market is changing for the better, but we can’t be sure because of the confounding effect of seasonal differences,” said Jay Brinkmann, the group’s chief economist. Read the rest of this entry »
Four Tips for Single, Female Homebuyers
Posted by Tetyana Matychak in Investing on May 11th, 2010
Buying a home today takes a certain confidence — in the market and in your own financial strength. A lot of single, female homebuyers are taking that bold step in high heels, with no one at their side.
Nationally, single women accounted for 21 percent of all home purchases in the year ended this past June, while single men accounted for just 10 percent, according to the National Association of Realtors.
Experts say female homebuyers share characteristics and concerns that set them apart from male buyers. Following are four tips single, female buyers should keep in mind when purchasing a home.
Buy with confidence
A variety of factors — such as a greater likelihood of working at jobs that offer paltry retirement and other benefits — keep single women from achieving their financial goals, says Mariko Chang, a consultant who recently completed a report on the wealth gap for women for the Insight Center for Community Economic Development in Oakland, Calif. Read the rest of this entry »
Along with SEC, other investigators and suits may target Goldman Sachs
Posted by Tetyana Matychak in Banks, Favourites on April 23rd, 2010
As investigators in Massachusetts considered charging Wall Street firms for their role in the financial collapse, they focused on Goldman Sachs because it had bundled and sold the shoddiest of subprime mortgage loans, setting up the housing market for a greater fall by continuing to sell shaky securities even as other banks withdrew.
After discussions with the office of state Attorney General Martha Coakley (D), Goldman last year agreed to pay up to $60 million to end that investigation, the first major settlement involving Wall Street’s role in the subprime mortgage crisis.
“Goldman was particularly active with respect to facilitating the lending by two of the more notorious and unsound subprime lenders — Fremont and New Century,” Coakley said Wednesday. “Goldman was especially active with these companies in the latter stages of the subprime lending boom . . . when it should have been increasingly clear to any responsible person that the subprime loan pools underlying securitizations suffered serious problems.”
Even before the Securities and Exchange Commission sued Goldman last week, accusing it of creating a complex financial product designed to fail and selling it to unknowing investors, the firm had become a frequent target of investigators. In courts and in Congress, Goldman has been accused of a range of misdeeds, including manipulating oil prices and using taxpayer money for handsome bonuses. Read the rest of this entry »
Housing: Time to Pull the Plug on Government Support
Posted by Tetyana Matychak in Budget, Favourites on March 22nd, 2010
America’s housing market implosion was the epicenter of the Great Recession. It’s hardly surprising that the federal government directed enormous resources at the market. Besides bailing out vulnerable banks, the federal government nationalized mortgage behemoths Fannie Mae and Freddie Mac, opened the lending spigot at the Federal Housing Administration (FHA), passed a first-time home buyers’ tax credit, and established a mortgage modification program for troubled homeowners. The Federal Reserve embarked on a $1.25 trillion purchase of mortgage-backed securities in an effort to engineer lower mortgage rates.
The Herculean efforts may be understandable. But they were a mistake in the early months of the downturn—and now stand as a public policy blunder in the early months of a recovery. That’s a harsh judgment, but it’s way past the time for ending taxpayer support of the housing market.
These policies are geared toward propping up home prices, the definition of a perverse public policy. Artificially holding prices at above-market levels harms new potential buyers, from young adults starting their own households to immigrants putting down stakes in the American Dream. The subsidies wrongly delay the inevitable home market price adjustment to excess supply in many markets across the country. Read the rest of this entry »
Americans are regaining their lost wealth
Posted by Tetyana Matychak in Trading Markets on March 19th, 2010
Americans are recovering their shrunken wealth – gradually. Household net worth rose last quarter, mainly because the healing economy boosted stock portfolios. But the gain was slight. And it was less than in the previous two quarters.
The Federal Reserve said Thursday that net worth rose 1.3 percent in the fourth quarter to $54.2 trillion. It marked the third straight quarter of gains. But economists say consumers would need a stronger and more prolonged increase in their wealth to persuade them to ratchet up spending.
Net worth had risen by a more robust 4.5 percent in the second quarter of 2009 and an even faster 5.5 percent in the third quarter. Net worth is the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards.
Even with the gain, Americans’ net worth would have to rise an additional 21 percent just to get back to its pre-recession peak of $65.9 trillion. That illustrates Americans’ vast loss of wealth from the worst downturn since the 1930s. Read the rest of this entry »
For Landlords, the Numbers Are Starting to Look Better
Posted by Tetyana Matychak in Investing on March 5th, 2010
Home prices are falling, rents are tumbling, and apartment vacancies are rising. So why are thousands of small investors becoming landlords?
Because real-estate prices have fallen much faster than rents, the math of buying a rental has actually improved substantially in most parts of the country. Money invested in an apartment complex today typically generates annual returns of 7% to 8% right off the bat, up from less than 6% at the peak of the housing bubble in 2006.
If your property appreciates in value or rents rise, you could end up with double-digit annualized returns when you sell it. But higher returns usually come with higher risks. If you overpay for a rental property or you buy in the wrong market at the wrong time, you can lose a lot of money.
In general, landlords should pick communities where real-estate prices and rents appear to have nearly bottomed out, and jobs are stabilizing. Some of the best deals are in places like Fort Worth, Texas, or Columbus, Ohio, where prices never went wild. Markets like Las Vegas and Phoenix, both plagued by overbuilding, and Detroit, hurt by auto-industry woes, still look dicey.
But other markets like San Francisco or Chicago can still be attractive for landlords who find the right neighborhoods. Fred Bertucci, 50 years old, has been investing in small apartment properties in the Chicago suburbs since 1990. In August, he and his business partner, Kevin Moriarty, 54, bought a six-unit apartment house out of foreclosure for $280,000. It brings in about $25,000 per year in net operating income, he says, or about a 9% yield on the dollars invested. That’s up from roughly a 5% yield several years ago when prices were higher, he says. Read the rest of this entry »
Housing Prices Fall at Slower Pace
Posted by Tetyana Matychak in Budget on February 25th, 2010
Home prices kept falling, but at a slower rate, at the end of last year as the housing market continued to stabilize.
The national S&P/Case-Shiller home-price index declined 2.5% in the fourth quarter, compared with the same period a year earlier, according to a report released Tuesday. The slight drop is a clear improvement from earlier in the recession. In the fourth quarter of 2008, for example, home prices fell 18.2% from the same period in 2007.
“Overall, this report suggests that the recent positive momentum in the U.S. housing market is gaining further traction and underscores that home prices are continuing to stabilize,” Millan Mulraine, a TD Securities analyst, wrote in a note to clients. “As such, we may only be a few months away before we see a monthly gain in national home prices.”
The month-to-month change in home prices for a composite index of 20 housing markets that S&P/Case-Shiller tracks showed that home prices rose 0.3% in December from the prior month, adjusted for normal seasonal variation. That measure of home prices also rose 0.3% in November.Prices fell in just five of the 20 markets included in the survey, remained flat in one and rose in the other 14. Read the rest of this entry »
The worst is yet to come
Posted by Tetyana Matychak in Budget, Favourites on February 17th, 2010
Over the next few years, a wave of commercial real estate loan failures could threaten America’s already-weakened financial system. So warns a new report from the Congressional Oversight Panel as part of its oversight of the Troubled Asset Relief Program, highlighting yet one more hurdle for this country’s fragile economy.
The panel, chaired by Harvard law professor Elizabeth Warren, says it remains “deeply concerned” that commercial loan losses could jeopardize the stability of many banks, particularly the nation’s mid-size and smaller banks. Read the 183-page report for yourself here.
Worries about CRE loans — those loans taken out by developers to purchase and maintain shopping malls, offices, hotels, and apartments — have been simmering for months, as we noted in an October article. See “How Banks Will Fare in a Commercial Real Estate Crash.”
The problems now plaguing commercial real estate have no single cause, and the panel notes that the loans most likely to fail were made at the height of the real estate bubble when commercial real estate values had been driven above sustainable levels and loans.
“[M]any were made carelessly in a rush for profit,” the panel said. Read the rest of this entry »
China vows to keep “hot money” out of property market
Posted by Tetyana Matychak in Investing on February 12th, 2010
China vowed on Sunday not to let foreign speculative investment affect the property market, the latest expression of official concern that real-estate prices are racing ahead too fast.
The directive from the State Council, China’s cabinet, will serve as a guideline for local authorities and ministries, including the People’s Bank of China and the China Banking Regulatory Commission, to work out detailed policies.
“Relevant departments must enhance monitoring of loans and cross-border investment to prevent illegal inflows of capital into the property market and to avoid the impact of overseas hot money on China’s real-estate market,” the cabinet said.
It said the central bank and banking regulator should step up oversight and “window guidance” of mortgage lending.
About one-sixth of China’s nearly 10 trillion yuan ($1.5 trillion) in new loans last year flowed into the property sector.
Concerned that a property bubble could stir social and economic instability, Beijing has vowed to combat overly fast price increases, although its moves to date, such as restricting sales tax exemptions, have been relatively mild. Read the rest of this entry »
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Consumer Spending in U.S. Rises More Than Forecast
30 August 2010
Monetary Policy Gets No Respect
19 July 2010
Stocks May Surprise By Year-End
5 July 2010
Is A Global Reserve Currency A Necessity?
28 June 2010
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