Saturday, May 28, 2011

Republicans, Realtors To Spar Over FHA Loans

House Republicans are provoking a fight with the powerful National Association of Realtors by drafting legislation that would curtail the number of loans backed by the Federal Housing Administration, the main source of mortgage money for first-time home buyers.
GOP lawmakers have made scaling back government support of the housing market a key priority. However, they are encountering resistance from Realtors and many Democrats, who believe such support is essential to keep the moribund housing market from sinking further.
Home buyers who take out FHA loans pay insurance premiums to the government. That money is used to pay claims to lenders when borrowers default. Currently, homeowners are able to take out FHA-backed loans with a minimum down payment of 3.5% as long as they have a relatively healthy credit score.
A draft bill to be discussed at a House subcommittee hearing Wednesday would raise the minimum down payment to 5% in an effort to require the agency to make safer loans and stabilize the agency’s finances, which deteriorated in the wake of the housing bust.
Rep. Judy Biggert (R., Ill.), said in a statement Monday that Republicans aim to redesign government mortgage programs to strike “the right balance for taxpayers and home buyers.” The legislation also would make a significant cut to the maximum size of loans backed by FHA in many parts of the country.
The maximum size of loans that can be backed by FHA in expensive parts of the country is already scheduled to go to $625,500 from $729,750 on Oct. 1. However, in areas where home prices are more modest, that limit is scheduled to fall as low as $271,050.
The GOP bill would allow those limits to fall even more—to 125% of a county’s median home price.
In some parts of the country, the GOP bill would result in far-lower loan limits than those that are scheduled to go into effect in October, according to data compiled by the Realtors. For example, the limit would be nearly $440,000 lower in Accomack County, Va. and about $351,000 lower in Baltimore.
“While we support reforms to strengthen the program, changes should not be made at consumers’ expense by drastically impacting the affordability and availability of mortgage capital,” said Ron Phipps, NAR’s president, in a prepared statement.
Brian Chappelle, a mortgage industry consultant, said such a move would also be bad for FHA’s fiscal health because it would eliminate loans on more expensive properties, which tend to have lower rates of default.
The bill, however, could be good for private mortgage insurers such as PMI Group Inc. and MGIC Investment Corp., which compete with FHA, but could hurt the housing market in the short term, said Jaret Seiberg, a financial policy analyst at MF Global’s Washington Research Group.
“It would make it even harder for first-time buyers to enter the housing market regardless of their incomes or earnings potential,” Mr. Seiberg wrote in a note to clients.
Loans backed by the FHA made up nearly 18% of new loans made in the first quarter, according to trade publication Inside Mortgage Finance.
The FHA doesn’t make loans but rather insures them against default. The agency’s volume grew rapidly in the wake of the mortgage bust, sparking warnings that the agency would need government funding for the first time in its history.
The Obama administration hiked fees and tightened lending standards, and an audit released last year showed the agency’s finances have started to stabilize.

House Republicans make moves to curtail FHA-backed loans

House Republicans have drafted controversial legislation that would raise the minimum down payment and curtail the maximum size of Federal Housing Administration-backed loans in a move that has angered the National Association of Realtors, according to the Wall Street Journal. 

Homebuyers who take out FHA loans are required to pay premiums to the government. Those premiums are then used to pay out claims to lenders if a borrower should default. With a good credit score, a homeowner may currently take out a loan with a minimum down payment of 3.5 percent. If the legislation passes, the down payment would increase to 5 percent. Republicans, such as Rep. Judy Biggert, say they're trying to strike the correct balance for taxpayers and homebuyers in an effort to stabilize the agency's finances. 

On Oct. 1, the maximum size of FHA-backed loans will drop to $625,500 from $729,750, without the help of the bill. With the bill, it would fall further, to 125 percent of each county's median home price. 

The move has encountered resistance from real estate brokers and Democrats, who believe support is essential to keep the market afloat. Almost 18 percent of new loans made in the first quarter of 2011 were backed by the FHA.

The Real Deal Residential Report

Friday, May 20, 2011

Design Revolution in New York City's Chelsea

A design revolution in New York City is taking place, as the Chelsea neighborhood transforms from a derelict wasteland to a thriving nexus of art and architecture.

The Hotel Americano, the first U.S. outpost of the splashy Mexican hotel chain Grupo Habita, recently materialized on Manhattan’s West 27th Street. It’s situated between 10th and 11th Avenues, at the northern frontier of the Chelsea art district, in the middle of a block best known for its cacophonous, warehouse-scale nightclubs. Why, you might wonder, would anyone want to build a hotel here? But the unpromising appearance of the location is part of the allure. “It’s gritty,” says owner Carlos Couturier, “and I like that grittiness. It feels like what the Meatpacking District was ten years ago. Very authentic.”
Yes, Way-West-27th is authentic—some of the nearest residents are in a cluster of city-owned housing projects—but here, as elsewhere in Manhattan, grit is an endangered species. Just down the block from the hotel is the biggest driver of neighborhood transformation since Vaux and Olmsted put the final touches on Central Park 138 years ago. The first section of the High Line—a boldly designed and landscaped strip of public space atop an abandoned elevated freight railway—opened to endless acclaim in 2009; it now draws 2 million visitors a year. The second section, running between 20th and 30th streets and dotted with newly planted magnolia trees and pussy willows, is set to open this summer, around the same time as the Americano.
All you have to do is look at the buildings that have sprung up along the High Line to understand that Couturier’s hotel, a minimalist slab designed by Mexican architect Enrique Norten, is in precisely the right spot. On nearby blocks you’ll find HL23, an angular 14-story condo tower shoehorned into an impossibly small lot, which muscles its way into the airspace over the High Line; and 245 10th Avenue, a shiny heap of stainless steel that wraps around a gas station at the corner of 24th Street. At the southern end of the High Line, a new Renzo Piano–designed branch of the Whitney Museum is under construction. (The 200,000-square-foot space is scheduled to open in 2015.)
“There’s a spot around 17th Street where you can stand and see buildings by Frank Gehry, Jean Nouvel, and Shigeru Ban,” says Robert Hammond, the cofounder and executive director of Friends of the High Line, the grassroots organization that saved the railway from demolition. Actually, what you see is 21st-century Manhattan coming into focus—an intriguing mixture of old and new.
Perhaps the most impressive piece of Old New York visible from the High Line is the 1932 Starrett-Lehigh Building, on West 26th Street, a 2.3-million-square-foot behemoth renowned for its windows, eight miles of them, running like ribbons around its perimeter. Originally designed for industrial use—it has elevators massive enough to carry trucks—the building is now occupied by media, fashion, and design companies, including Martha Stewart, Hugo Boss, and Diller Scofidio & Renfro, the design firm that helped transform the High Line into a park. Couturier is betting that the Starrett-Lehigh crowd will embrace the Americano as its clubhouse, which naturally will make the hotel a mecca for designers everywhere.
From the High Line you catch glimpses of the steel mesh that covers the Hotel Americano’s fa├žade, turning transparent or opaque depending on the angle of the sun. Behind the scrim you’ll find a hive of activity, overflowing with Couturier’s ideas about America, New York, and the nature of hotels.
Couturier and his partners started by asking themselves: “What was the best time in America?” The answer, they decided—obvious to fans of Mad Men—is the late 1950’s and early 1960’s. That would suggest yet another Midcentury Modern hotel. But Couturier then hired a Parisian interior designer, Arnaud Montigny, and the concept became: “How would a Frenchman perceive the fifties and early sixties in America?” So the furniture—vintage pieces picked up in Milan, such as the Sacco, a shiny 1960’s beanbag chair; as well as contemporary pieces, like a pouf by French designer Eric Jourdan—isn’t of the Modernist variety routinely found in boutique hotels. The confounding result is that the guest rooms look… Japanese. The style is neither American nor French nor Mexican but “urbanryokan.” A smooth wooden platform, topped with a mattress dressed to resemble a futon, occupies much of the floor space in each of the 56 tiny rooms (the smallest ones are 230 square feet; the largest, 430). A wee built-in desk is outfitted with a 1960’s-style push-button phone, an analog alarm clock by the 1970’s-era Italian designer Joe Colombo, a custom-engraved harmonica, and a bottle of the house-brand mescal. Go figure.
Even the architectural layout of the place is the product of scrambled motives. Couturier thinks the hot-spot hotels developed by his American counterparts deny their patrons “a certain intimacy.” A party atmosphere may prevent guests from getting a good night’s sleep, and they’re often denied the option of joining in the fun. Couturier recalls checking in to a downtown New York hotel: “I said I would like to go to the rooftop. ‘No, sorry. It’s closed because we have a private event.’ I’d like to go to the bar. ‘No, sorry, you have to book two weeks in advance.’ ” Americano guests, he says, will have unchallenged run of the place, from the diminutive rooftop pool (which will become a hot tub in winter) to the Latin-inflected French restaurant off the lobby and the two cozy bars in the basement.
Of course, Couturier is also a nightlife connoisseur, and he intends the Americano to be a magnet for fun. To insulate hotel guests from the din, revelers are transported to the rooftop in a glass-enclosed elevator that runs along the exterior of the building, without stopping on any of the room floors.
Couturier acknowledges that the Americano, given its location and its quirks, is not for everyone. “This hotel is more for people who know New York well. I don’t think it’s for first-timers.” He’s banking on the hotel having a certain mystique, as a “best-kept secret.” But it surely won’t be a secret to the art lovers who flock to the hundreds of nearby galleries. The Americano’s restaurants and bars—even its lobby coffee shop—will no doubt be an immediate draw, for this is the rare Manhattan neighborhood that (even now) has too few places to eat and drink. Just try to get a table at Bottino, the art world’s semi-official cafeteria, on a Thursday night, when galleries generally hold their openings.

For now there are a handful of other options. Trestle on Tenth, down the block from Bottino, serves Swiss-inspired cuisine (duck with huckleberries!) with disarming cordiality. Lately an inordinate number of tapas bars have opened in northwestern Chelsea, each of them as skinny and crowded as a subway car. (Try Txikito if you actually want to sit down while snacking on pintxosand sipping zurracapote, a Basque variation on sangria.) Until more restaurants arrive, guests at the Hotel Americano might do just as well eating in. Don the soft denim yukata robe hanging in the bathroom, power up the hotel-provided iPad, and order room service. No matter what type of food you order, it will arrive in a bento box—which, in the cultural mash-up created by Couturier and his cohorts, is an obvious stand-in for that symbol of 1960’s America, the TV dinner.
Meanwhile, the neighborhood’s reinvention continues apace. A few blocks north, at 30th Street, the newest section of the High Line will end with a panoramic view of the West Side Rail Yards, where a 13-million-square-foot mixed-use development, Hudson Yards, may one day draw Manhattan’s center of gravity westward. The latest renderings of the project, slated to begin construction in 2012 or 2013, show a futuristic glass retail hub designed by German engineer Werner Sobek. The northernmost spur of the High Line—as yet unrestored—would run right through this sparkling new chunk of city.
Robert Hammond points out that people today tend to see the High Line as an extension of the West Village and the Meatpacking District. “But really,” he adds, “in twenty years, most people are going to think of the High Line as part of Hudson Yards.” And in 20 years, West 27th Street may well be an extension of midtown. The grit will be history.
By Karrie Jacobs - Travel & Leisure

Wednesday, May 18, 2011

Justin Timberlake Finds a Buyer for $5 Million Tribeca Condo

Tired of the paparazzi and part-time doorman, Justin Timberlake ditched Tribeca's Pearline Soap Factory for a penthouse at Soho Mews back in December. At the time, he hadn't yet found a buyer for the Pearline Soap pad, a 3,000-square-footer for which he paid around $4.77 million. But now he has! According to thelisting and StreetEasy, the apartment is in contract as of yesterday. The ask was down to $4.995 after a small PriceChop of $225,000 back in February. But the place isn't worth our tears.

414 Washington Street #5 in Tribeca

StreetEasy: 414 Washington St. #5 - Condo Apartment Sale at Pearline Soap Factory in Tribeca, Manhattan

Enjoy beautiful sunsets on the river every night 
from this gorgeous three bedroom, three bath 
loft located in the North Tribeca Historic District. 
This loft home features 11 foot ceilings and 
gracious entertaining space in the oversized 
living area as well as four exposures through 
14 floor-to-ceiling arched windows. The open 
state-of-the-art kitchen features restaurant 
quality appliances by Wolf, Sub-Zero, and Miele. 
A Lutron technology system controls lighting, 
sound system, temperature, and shades with 
the touch of a button. The Pearline Soap Factory 
is a part-time doorman condominium located on 
a cobblestone street in the heart of Tribeca. 
With only one apartment per floor, this 
condominium provides additional security 
and privacy with key-locked elevators. 
Experience the ultimate in a coveted 
downtown location, luxurious finishes, 
and privacy in this superb residence.
Condo Tribeca      
3,000 ft²     
$1,665 per ft²

5 rooms 3 beds  3 baths
Common Charges: $2,157     Taxes: $265

Building Amenities
DoormanElevatorPets Allowed

Listing Amenities 

Tuesday, May 17, 2011

Federal Retreat on Bigger Loans Rattles Housing

By summer’s end, buyers and sellers in some of the country’s most upscale housing markets are slated to lose one their biggest benefactors: the deep pockets of the federal government. In this seaside community of pricey homes, the dread of yet another housing shock is already spreading.

“We’re looking at more price drops, more foreclosures,” said Rick Del Pozzo, a loan broker. “This snowball that’s been rolling downhill is going to pick up some speed.”
For the last three years, federal agencies have backed new mortgages as large as $729,750 in desirable neighborhoods in high-cost states like California, New York, New Jersey, Connecticut and Massachusetts. Without the government covering the risk of default, many lenders would have refused to make the loans. With the economy in free fall, Congress broadened its traditionally generous support of housing to a substantial degree.
But now Democrats and Republicans agree that the taxpayer should no longer be responsible for homes valued well above the national average, and are about to turn a top slice of the housing market into a testing ground for whether the private mortgage market can once again go it alone. The result, analysts say, will be higher-cost loans and fewer potential buyers for more expensive homes.
Michael S. Barr, a former assistant Treasury secretary, said the federal government’s retrenchment would be painful for many communities. “There’s always going to be a line, and for the person just over it it’s always going to be an arbitrary line,” said Mr. Barr, who teaches at the University of Michigan Law School. “But there is no entitlement to living in a home that costs $750,000.”
As the housing market braces for more trouble, homeowners everywhere have been reduced to hoping things will someday stop getting worse. In some areas, foreclosures are the only thing selling. New home construction is nearly nonexistent. And CoreLogic, a data company, said Tuesday that house prices fell 7.5 percent over the last year.
The federal government last year backed nine out of 10 new mortgages nationwide, and losses from soured loans are still mounting. Fannie Mae, which buys mortgages from lenders and packages them for investors, said last week it needed an additional $6.2 billion in aid, bringing the cost of its rescue to nearly $100 billion.
Getting the government out of the mortgage business, however, is proving much more difficult than doling out new benefits. As regulators prepare to drop the level at which they will guarantee loans — here in Monterey County, the level will drop by a third to $483,000 — buyers and sellers are wondering why they should be punished simply for living in an expensive region.
ellers worry that the pool of potential buyers will shrink. “I’m glad to see they’re trying to rein in Fannie Mae, but I think I’m being disproportionately penalized,” said Rayn Random, who is trying to sell her house in the hills for $849,000 so she can move to Florida.
Buyers might face less competition in the fall but are likely to see more demands from lenders, including higher credit scores and larger down payments. Steve McNally, a hotel manager from Vancouver, said he had only about 20 percent to put down on a new home in Monterey County.
If a bigger deposit were required, Mr. McNally said, “I’d wait and rent.”
Even those who bought ahead of the changes, scheduled to take effect Sept. 30, worry about the effect on values. Greg Peterson recently purchased a house in Monterey for $700,000. “That doesn’t get you a palace,” said Mr. Peterson, a flight attendant.
He qualified for government insurance, which meant he needed only a small down payment. If that option is not available in the future, he said, “home prices all around me will plummet.”
The National Association of Realtors, 8,000 of whom have gathered in Washington this week for their midyear legislative meeting, is making an extension of the loan guarantees a top lobbying priority.
“Reducing the limits will put more downward pressure on prices,” said the N.A.R. president, Ron Phipps. “I just don’t think it makes a lot of sense.” But he said that in contrast to last year, when a one-year extension of the higher limits sailed through Congress, “there’s more resistance.”
Federal regulators acknowledge that mortgages will get more expensive in upscale neighborhoods but say the effect of the smaller guarantees on the overall housing market will be muted.
A Federal Housing Administration spokeswoman declined to comment but pointed to the Obama administration’s position paper on reforming the housing market. “Larger loans for more expensive homes will once again be funded only through the private market,” it declares.
Brokers and agents here in Monterey said terms were much tougher for nonguaranteed loans since lenders were so wary. Borrowers are required to come up with down payments of 30 percent or more while showing greater assets, higher credit ratings and lower debt-to-income ratios.
In the Federal Reserve’s quarterly survey of lenders, released last week, only two of the 53 banks said their credit standards for prime residential mortgages had eased. Another two said they had tightened. The other 49 said their standards were the same — tough.
The Mortgage Bankers Association has opposed letting the limits drop, although a spokesman said its members were studying the issue.
“I don’t want to sugarcoat this,” said Mr. Barr, the former Treasury official. “The housing finance system of the future will be one in which borrowers pay more.”
The loan limits were $417,000 everywhere in the country before the economy swooned in 2008. The new limits will be determined by various formulas, including the median price in the county, but will not fall back to their precrisis levels. In many affected counties, the loan limit will fall about 15 percent, to $625,500.
Monterey County, however, will see a much greater drop. The county is really two housing markets: the farming city of Salinas and the more affluent Monterey and Carmel.
Real estate records show that 462 loans were made in Monterey County between the current limit and the new ceiling since the beginning of 2009, according to the research firm DataQuick. That was only about 1 percent of the loans made in the county. But it was a much higher percentage for Monterey and Carmel — about a quarter of their sales.
Heidi Daunt, with Treehouse Mortgage, said loans too large for a government guarantee currently carried interest rates of at least 6 percent, more than a point higher than government-backed loans.
“That can definitely blow a lot of people out of the water,” Ms. Daunt said.

Monday, May 16, 2011

Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers

WASHINGTON -- A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post. The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said. The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges. The federal audits mark the latest fallout from the national foreclosure crisis that followed the end of a long-running housing bubble. Amid reports last year that many large lenders improperly accelerated foreclosure proceedings by failing to amass required paperwork, the federal agencies launched their own probes. The resulting reports read like veritable indictments of major lenders, the sources said. State officials are now wielding the documents as leverage in their ongoing talks with mortgage companies aimed at forcing the firms to agree to pay fines to resolve allegations of routine violations in their handling of foreclosures. The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents. Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources. The audit on Bank of America finds that the company -- the nation’s largest handler of home loans -- failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October. Back then, the bank said it was resuming foreclosures, having satisfied itself that prior problems had been solved. According to the sources, the Wells Fargo investigation concludes that senior managers at the firm, the fourth-largest American bank by assets, broke civil laws. HUD’s inspector general interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, the sources said. The investigations dovetail with separate probes by state and federal agencies, who also have examined foreclosure filings and flawed mortgage practices amid widespread reports that major mortgage firms improperly initiated foreclosure proceedings on an unknown number of American homeowners. The FHA, whose defaulted loans the inspector general probed, last May began scrutinizing whether mortgage firms properly treated troubled borrowers who fell behind on payments or whose homes were seized on loans insured by the agency. A unit of the Justice Department is examining faulty court filings in bankruptcy proceedings. Several states, including Illinois, are combing through foreclosure filings to gauge the extent of so-called “robo-signing” and other defective practices, including illegal home repossessions. Representatives of HUD and its inspector general declined to comment. The internal audits have armed state officials with a powerful new weapon as they seek to extract what they describe as punitive fines from lawbreaking mortgage companies. A coalition of attorneys general from all 50 states and state bank supervisors have joined HUD, the Treasury Department, the Justice Department and the Federal Trade Commission in talks with the five largest mortgage servicers to settle allegations of illegal foreclosures and other shoddy practices. Such processes “have potentially infected millions of foreclosures,” Federal Deposit Insurance Corporation Chairman Sheila Bair told a Senate panel on Thursday. The five giant mortgage servicers, which collectively handle about three of every five home loans, offered during a contentious round of negotiations last Tuesday to pay $5 billion to set up a fund to help distressed borrowers and settle the allegations. That offer -- also floated by the Office of the Comptroller of the Currency in February -- was deemed much too low by state and federal officials. Associate U.S. Attorney General Tom Perrelli, who has been leading the talks, last week threatened to show the banks the confidential audits so the firms knew the government side was not “playing around,” one official involved in the negotiations said. He ultimately did not follow through, persuaded that the reports ought to remain confidential, sources said. Through a spokeswoman, Perrelli declined to comment. Most of the targeted banks have not seen the audits, a federal official said, though they are generally aware of the findings. Some agencies involved in the talks are calling for the five banks to shell out as much as $30 billion, with even more costs to be incurred for improving their internal operations and modifying troubled borrowers’ home loans. But even that number would fall short of legitimate compensation for the bank's harmful practices, reckons the nascent federal Bureau of Consumer Financial Protection. By taking shortcuts in processing troubled borrowers' home loans, the nation's five largest mortgage firms have directly saved themselves more than $20 billion since the housing crisis began in 2007, according to a confidential presentation prepared for state attorneys general by the agency and obtained by The Huffington Post in March. Those pushing for a larger package of fines argue that the foreclosure crisis has spawned broader -- and more costly -- social ills, from the dislocation of American families to the continued plunge in home prices, effectively wiping out household savings. The Justice Department is now contemplating whether to use the HUD audits as a basis for civil and criminal enforcement actions, the sources said. The False Claims Act allows the government to recover damages worth three times the actual harm plus additional penalties. Justice officials will soon meet with the largest servicers and walk them through the allegations and potential liability each of them face, the sources said. Earlier this month, Justice cited findings from HUD investigations in a lawsuit it filed against Deutsche Bank AG, one of the world's 10 biggest banks by assets, for at least $1 billion for defrauding taxpayers by "repeatedly" lying to FHA in securing taxpayer-backed insurance for thousands of shoddy mortgages. In March, HUD's inspector general found that more than 49 percent of loans underwritten by FHA-approved lenders in a sample did not conform to the agency's requirements. Last October, HUD Secretary Shaun Donovan said his investigators found that numerous mortgage firms broke the agency’s rules when dealing with delinquent borrowers. He declined to be specific. The agency’s review later expanded to flawed foreclosure practices. FHA, a unit of HUD, could still take administrative action against those firms for breaking FHA rules based on its own probe. The confidential findings appear to bolster state and federal officials in their talks with the targeted banks. The knowledge that they may face False Claims Act suits, in addition to state actions based on a multitude of claims like fraud on local courts and consumer violations, will likely compel the banks to offer the government more money to resolve everything. But even that may not be enough. Attorneys general in numerous states, armed with what they portray as incontrovertible evidence of mass robo-signings from preliminary investigations, are probing mortgage practices more closely. The state of Illinois has begun examining potentially-fraudulent court filings, looking at the role played by a unit of Lender Processing Services. Nevada and Arizona already launched lawsuits against Bank of America. California is keen on launching its own suits, people familiar with the matter say. Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions. And New York’s top law enforcer, Eric Schneiderman, wants to conduct a complete investigation into all facets of mortgage banking, from fraudulent lending to defective securitization practices to faulty foreclosure documents and illegal home seizures. A review of about 2,800 loans that experienced foreclosure last year serviced by the nation's 14 largest mortgage firms found that at least two of them illegally foreclosed on the homes of "almost 50" active-duty military service members, a violation of federal law, according to a report this month from the Government Accountability Office. Those violations are likely only a small fraction of the number committed by home loan companies, experts say, citing the small sample examined by regulators. In an April report on flawed mortgage servicing practices, federal bank supervisors said they “could not provide a reliable estimate of the number of foreclosures that should not have proceeded." The review of just 2,800 home loans in foreclosure compares with nearly 2.9 million homes that received a foreclosure filing last year, according to RealtyTrac, a California-based data provider. “The extent of the loss cannot be determined until there is a comprehensive review of the loan files and documentation of the process dealing with problem loans,” Bair said last week, warning of damages that could take “years to materialize.” Home prices have fallen over the past year, reversing gains made early in the economic recovery, according to data providers and CoreLogic. Sales of new homes remain depressed, according to the Commerce Department. More than a quarter of homeowners with a mortgage owe more on that debt than their home is worth, according to And more than 2 million homes are in foreclosure, according to Lender Processing Services. Rather than punishing banks for misdeeds, the administration is now focused on helping troubled borrowers in the hope that it will stanch the flood of foreclosures and increase consumer confidence, officials involved in the negotiations said. Levying penalties can't accomplish that goal, an official involved in the foreclosure probe talks argued last week. For their part, however, state officials want to levy fines, according to a confidential term sheet reviewed last week by HuffPost. Each state would then use the money as it desires, be it for facilitating short sales, reducing mortgage principal, or using the funds to help defaulted borrowers move from their homes into rentals. In a report last week, analysts at Moody’s Investors Service predicted that while the losses incurred by the banks will be “sizable,” the credit rating agency does “not expect them to meaningfully impact capital.” ************************* Shahien Nasiripour is a senior business reporter for The Huffington Post.

Manhattan Taste & Style in Jackson Heights!!

Manhattan's apt.-vacancy rate? Less than 1%

Borough sees ultra-low inventory benchmark for two months straight. Average rents are up 9% for studios from year-earlier numbers, 10% for one-bedrooms, 11% for two-bedrooms.

Finding a good deal on a Manhattan rental apartment will continue to get tough through the spring and summer. Rents are rising and vacancy rates are below 1% for the second consecutive month, according to a report released Wednesday.
Last month, the Manhattan vacancy rate was 0.94%, significantly below the April 2010 vacancy rate of 1.23%, according to Citi Habitats, the city's largest rental residential brokerage. In March, the rate was 0.99%.
Average monthly rents were up for all apartment sizes in April from the same period a year ago, with three-bedroom apartments recording the highest rise in rent, reaching $4,946 a month, up 12% from the same month a year ago.
“The market is fierce right now,” said Gary Malin, president of Citi Habitats. “Tenants no longer have the luxury to negotiate rents and wait to make a decision on an apartment.”
The rise in rents and low vacancy rate is making rental brokers' jobs harder. Soozy Katzen, director of relocation at Fox Residential Group, is currently having a hard time finding one-bedrooms in Manhattan under $3,000 a month for her clients.
“I'm getting a lot of requests from graduates coming into the city and new hires at investment banks asking for $2,500 rentals and there is nothing out there,” said Ms. Katzen. “It is incredibly tight and prices aren't negotiable.”
In April, average monthly rents for studios rose 9%, to $1,967, from a year ago. Rents for one-bedrooms increased 10% and two-bedrooms were up 11%, to $2,643 and $3,711, respectively. Mr. Malin expects rent to continue to increase by at least 10% through the spring and summer.
In another sign that that the rental market has shifted in favor of the landlord, a mere 11% of rental transactions brokered by Citi Habitats in April included a tenant concession consisting of either a free month's rent and/or payment of the broker fee. That figure continued to slide from the previous month, when 14% of transactions included a tenant incentive. The results are a stark contrast to last year: In April 2010, 41% of Citi Habitats' deals included some type of concession.
“Landlords are pushing the envelope,” said Mr. Malin, adding that tenants frequently are still slow to adjust to the change in the market—they may continue to negotiate on rents but end up losing an apartment they really want to someone else who acted in a faster fashion.
By Amanda Fung - Crains New York

Friday, May 6, 2011

Tribeca's Ultimate Teardown About to Hit the Market for $45 Million

Developers of the once-troubled Skylofts at 145 Hudson Street got the last laugh when the two-story glass box they built atop the Art Deco building sold for $30 million. That was in 2009, when the market was in free-fall, and this was actually the second Skylofts penthouse. The first wasn't built to Landmarks Preservation Commission-approved specifications, and had to be torn down. In the meantime, the building couldn't get a Certificate of Occupancy, buyers couldn't close on their apartments, and rioters burned Tribeca to the ground (we might have been dreaming that last part). But that's all in the past! Now the duplex penthouse is about to hit the market again for $45 million, the Times reports, which would be the most expensive Downtown apartment sale ever. The current record-holder? This penthouse! C'mon, Skylofts, stop trying to impress us.

The Times writes that "the current owner allowed a tour on the condition that he not be identified and that no photos be taken of his extensive art collection, which made full use of the specially designed walls," but we've long known that investor/ex-con William Duker bought the penthouse as an investment property. The Times does have some fun details about the place, which has 7,500 square feet of interior space and 4,500 square feet of wraparound terrace action. Here's one: "On the main floor, insulated glass panel dividers can either be closed to create more intimate spaces, or opened, to create a larger one." Moving glass walls? What is this, The Matrix? If so, the seller definitely took the blue pill.
Skylofts coverage [Curbed]