homesmillbrae.com » Credit Suisse

Jumbo Mortgage Divide Starts Shrinking

Tue, 12 Mar 2013 21:42:42 +0000

“The jumbo market has heated up, as tight lending guidelines have drastically reduced consumer late payments, strategic defaults, and foreclosures,” wrote Julian Hebron, a mortgage banker in California and author of the blog The Basis Point. “This gives investors confidence to buy jumbos again, which means lower rates for consumer borrowers. These borrowers can count on lending guidelines remaining tight, but all that means is a bit more paperwork when getting a loan.”

(Read More: Housing Recovery Leaves Some Behind)

The jumbo securitization market is tiny, however, as most jumbo loans are still held on bank balance sheets. There are so far just two players in jumbo securitizations, Redwood Trust Inc. and very recently Credit Suisse Group AG, although others, including JPMorgan Chase, are preparing to join them.

There were no jumbo securitizations at all between 2008 and 2010. When Redwood dipped its toes in, securitizations totaled less than $1 billion in 2010-2011. By 2012 they hit $3.5 billion, according to Inside Mortgage Finance, and are already at $2 billion so far for 2013. Hebron believes they could surge dramatically in the very near future.

The rebirth of jumbo securitizations is being driven not just by investor confidence, but by growth in jumbo originations, which increased after the conforming loan limit was lowered. Originations of non-agency jumbo mortgages jumped by over 19 percent in 2012 from 2011, according to Inside Mortgage Finance.

So why is the conforming-jumbo spread shrinking? Not because jumbo rates are falling but because conforming rates are rising due in part to government intervention.

“Congress keeps raiding the guarantee fees (g-fees) Fannie and Freddie charge lenders in the securitization process for other purposes, like funding payroll tax cuts,” noted Hebron. “For each 10 basis point hike in g-fees, we’ve seen consumer rates rise about 0.125 percent.

Article source: http://www.cnbc.com/id/100543189

Spring Housing Season

Tue, 07 Jun 2011 02:33:16 +0000

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I don’t know what the official end of the Spring housing market is, but it seems as if the experts have called the close, and it ain’t great.

Last week, after the folks at the vaunted SP/Case Shiller Indices put a period on the home price double dip, which others had been reporting for months — and The New York Times did a piece on falling home prices — it seemed like suddenly the housing watchers got nervous again.

Over the weekend, JP Morgan Chase’s housing analysts revised their outlook lower for home price recovery, “largely based on existing home sales coming in lower than expected.” While they expect that regional divergences will increase, “Our new base case is down percent from here (Q1 2011) and bottoming in mid-2012. We expect home prices to modestly improve over the summer months.”

Soon after, Credit Suisse’s Monthly Survey of Real Estate Agents announced: “Weak ending to the Spring season.” CS’s Daniel Oppenheim notes, “A lack of urgency continues as does a fear and hesitation of buying if prices still have further to fall.” This, we knew.

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Article source: http://www.cnbc.com/id/43298147?__source=RSS*blog*&par=RSS

California hedge fund manager settles SEC charges

Wed, 02 Mar 2011 00:13:51 +0000

SAN FRANCISCO |
Tue Mar 1, 2011 3:54pm EST

SAN FRANCISCO (Reuters) – A Bay Area hedge fund manager settled civil charges that he secretly diverted more than $12 million in proceeds to other entities he controlled, securities regulators announced.

Lawrence Goldfarb, of Baystar Capital Management in Larkspur, California, allegedly redirected the money from a fund that it managed worth more than $100 million at its peak, the U.S. Securities and Exchange Commission said in a court filing on Tuesday.

Attorneys for Goldfarb did not immediately respond to a request for a comment.

In addition to managing Baystar, Goldfarb also ran LRG Capital Group, which promotes itself as a global investment, banking and advisory boutique, the SEC said in its filing.

According to LRG’s website, Goldfarb previously worked at Credit Suisse (CRP.N) as a partner and director of mergers and acquisitions. Before that, he was an attorney at law firms including Skadden, Arps, Slate, Meagher Flom, the website says.

Representatives for Credit Suisse and Skadden had no immediate comment.

Goldfarb transferred funds from a “side pocket” investment, which is commonly used by hedge funds to separate illiquid assets from the rest of the fund’s investments, the SEC filing said.

Instead of returning money to fund investors, Goldfarb diverted it to several entities he controlled, including a separate real estate fund, a San Francisco record company and various other private companies.

According to the SEC filing, Goldfarb asserted his constitutional right to remain silent and refused to answer SEC questions about his management of the fund, called Baystar Capital II.

A spokesman for the U.S. attorney’s office in San Francisco declined to comment.

Goldfarb agreed to pay more than $14 million to settle the SEC case, including nearly $2 million in prejudgment interest and a $130,000 penalty.

He will also be barred from associating with any investment adviser or broker.

(Reporting by Dan Levine, editing by Maureen Bavdek and Matthew Lewis)

Article source: http://www.reuters.com/article/2011/03/01/us-sec-hedge-idUSTRE7206X920110301

Home Builders May Be Faring Better Than We Think

Tue, 01 Mar 2011 05:39:22 +0000

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Last week the Realtors were on the block, criticized for overestimating the number of existing home sales in 2010.

They admitted there were some issues with their “benchmarking,” and are currently working on a quick fix.

That acknowledgement was certainly a bombshell to those of us who cover housing, but it didn’t really affect investors, as it’s more of a macro-economic issue than a tradable one.

Well here’s a new one that could affect how you stock players trade.

Housing analyst Ivy Zelman, much renowned during her time at Credit Suisse for calling the crash of the subprime mortgage and charting adjustable rate mortgage resets, tells me the Census Department’s data on sales of new construction is also way off:

“In December, our survey channel checks implied a 12 percent sequential decline in seasonally-adjusted new home sales, which was consistent with what the public builders had said throughout earnings season, yet the Census reported an 18 percent increase.

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Article source: http://www.cnbc.com/id/41830035?__source=RSS*blog*&par=RSS