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Archive for April, 2009

Housing and Insurance Industries Buoy Stocks

Wednesday, April 8th, 2009

Ending a two day slide, traders bought insurance and housing stocks as a result of some indications that the housing market may be close to a rebound. The recent slide seems to be the result of jittery investors worries about upcoming quarterly earning reports.

Today a $1.3 billion deal between Pulte Homes Inc. and rival Centex Corp. gave investors some reason to think that the new company, now America’s largest homebuilder was a reason for optimism in the homebuilding sector. The optimism didn’t ripple throughout the rest of the industry as other homebuilders, were mixed.

Insurers enjoyed a bump in sales today in the wake of a report by the Wall St. Journal that the government may be providing bailout funds for a struggling life insurance industry. An announcement is expected as soon as tomorrow.

Loan modifications not a silver bullet for delinquent homeowners

Monday, April 6th, 2009

Homeowners are increasingly falling into delinquency in spite of programs implemented by mortgage lenders intended to prevent further foreclosures.

The report, by the Office of Thrift Supervision and the Office of the Comptroller of the Currency, which regulate mortgage lenders, has shown that in spite of a massive effort on the part of the government and Lenders, it has not been possible to draw a line in the sand and prevent further foreclosures. Moreover, decreasing labor markets are expected to exert upward pressure on foreclosure rates.

The financial services industry has been increasingly focused on Loan Modification, trying to find ways to keep homeowners in their homes. The modifications however have been subject to a re-default rate as high as 58%.

There have been increases in delinquency in prime mortgage holders, which have been considered low risk historically. Also on the rise are mortgages where the borrower is delinquent before making a single payment on the loan. Fraud is considered a possible cause in these cases of delinquency.