A report from Mortgage Orb. “For the fifth consecutive quarter, a plurality of mortgage lenders expect near-term profitability to decrease, according to Fannie Mae’s Q4 2021 Mortgage Lender Sentiment Survey. ‘Mortgage lenders’ profitability outlook has significantly weakened over the past several quarters from its early pandemic run-up,’ observes Doug Duncan, Fannie Mae’s chief economist.”
From The Street. “Mortgage refinancing applications plunged 41% last week from a year earlier, as higher interest rates kept homeowners from acting, the Mortgage Bankers Association said. Mortgage applications slid in every category, dropping 4% last week from a week earlier. Purchase applications dropped 10.3% from a year earlier. Many analysts see the housing market in a bubble, with prices surging and inventory tight.”
From Housing Wire. “In November, Interfirst Mortgage issued pink slips to hundreds of non-commissioned loan officers at its call centers in Charlotte, North Carolina and Rosemont, Illinois, according to WARN notices in both states. The layoffs take effect on Jan. 21, 2022. ‘They were trying to capitalize on the refinance boom,’ said Cullen Gandy, a classically trained opera singer who had been hired as an LO at Interfirst and left in July. ‘I think 99% of the loans that I was writing there were refinances. And then when, you know, when they felt like that was going to not be viable anymore, they were just like, alright, pack up ship and then cut the fat.’”
From USA Today. “Just last month, the Federal Reserve was set on keeping its key interest rate near zero to boost the economy and help more Americans return to work. The Fed on Wednesday agreed to clear the way for earlier and faster interest rate increases in 2022 by accelerating the phaseout of its bond-buying stimulus. It’s now forecasting three rate increases next year.”
From Newsday in New York. “Sale prices in Nassau reached their record levels in July and August when the median hit $670,000 two months in a row. Suffolk set its own record in August, when the median was $531,000. Homeowners sold far fewer properties in November than at that time in 2020. ‘We were at record highs — that’s really not the case anymore,’ said Jim Speer, CEO of OneKey MLS. ‘We’re seeing a leveling off. We’re really not seeing a decrease.’”
The San Francisco Business Times. “One factor driving the population loss was a drop in people moving to the Golden State, with a particularly severe decline in those moving to the Bay Area, where the study found new arrivals fell 45%. In total, 150,000 more residents on average left California than moved into the state in the third quarter of 2021, the study found. That compares with 60,000 net exits in the first three months of 2020. For the first time in California history, the state lost population last year, according to Census Bureau data.”
The New York Post on California. “After Black Lives Matter protesters last year demanded that cities ‘Defund the Police,’ San Francisco Mayor London Breedheld a press conference to announce that her city would be one of the first to do exactly that. This week, Breed reversed herself in dramatic fashion, announcing that she was making an emergency request to the city’s Board of Supervisors for more money for the police to support a crackdown on crime, including open-air drug dealing, car break-ins and retail theft.”
“‘It is time for the reign of criminals to end,’ she said. ‘And it comes to an end when are we more aggressive with law enforcement and less tolerant of all the bulls–t that has destroyed our city.’”
From Radio New Zealand. “Change is in the wind with the new year expected to see price growth slow. ‘Sales volumes have already turned a corner and are likely to be much quieter in 2022, with the pace of annual value growth surely set to continue to ease from a figure of more than 25 percent for calendar-2021 to perhaps single digits, even low single digits, in 2022,’ CoreLogic property economist Kelvin Davidson said.”
“Key data from the CoreLogic report has identified four key emerging issues for the market to consider, including further lending restrictions, rising mortgage interest rates, a growing inventory of houses for sale and a potential cooling of the construction sector as rising prices put more people off building a new home. ‘It might take a while for vendors to respond to changed conditions, and some might pull their listing rather than accept a lower price than they were hoping for,’ Davidson said.”
From Bloomberg. “China Fortune Land Development Co. said it has been unable to get hold of a money manager that it gave $313 million for investment, the latest blow for the debt-laden developer. Fortune Land has ‘lost contact’ with China Create Capital Ltd., a British Virgin Islands-registered firm to which it handed over $313 million in 2018 in hopes of receiving an annual return of 7%-10% through 2022, it said in a filing with the Shanghai bourse late on Wednesday. The developer, which has headquarters in Beijing, has reported the matter to the local police.”
“The company defaulted on a $530 million dollar bond in March this year, becoming the nation’s first real estate firm to suffer a repayment failure since Beijing tightened controls of the debt-burdened sector. Shanghai-listed shares of Fortune Land ended down around 0.8% Thursday, after losing about 90% of their value from a record high in early 2018. Its dollar bond prices have plunged since its default, and are indicated at deep distressed levels of around 30 cents on the dollar.”
The South China Morning Post. “Chinese developer Shimao Group Holdings has found itself in a spot of bother after the Shanghai Stock Exchange raised questions over an asset sale, while investors continue to sell down the stock. The inquiry came after an announcement by Shimao Group earlier on Tuesday, saying that it would cancel transactions of 93 flats at Shanghai’s bustling Lujiazui finance and trade zone because of technical issues.”
“The Shanghai-based developer has laid off employees this year and even earlier, mainly in marketing, sales, engineering and operations, multiple sources said, adding that the lay-offs were as high as 20 per cent in some departments. ‘All signs show that Shimao is grappling with cash flow problems,’ said Yin Ran, a Shanghai-based angel and property investor. ‘The inquiry and the cancellation of the transactions are bad news to the developer.’”
“With Shimao reneging on the transactions of 93 flats, buyers have lodged complaints with authorities, which could taint its reputation. Shimao acquired those flats from residents about a decade ago and resold them in the past two months. However, the ownership could not be transferred to the new buyers as these flats had already been pledged as collateral to a trust. The flats were good buys based on the price of 80,000 yuan per square metre, nearly a 20 per cent discount to homes in the same area, according to Xu, a buyer who only gave his surname.”
“You Liangzhou, owner of Baonuo, a property agency in Pudong, Shanghai, said the move indicated Shimao was desperate for cash.”