Origination

Sales of existing single-family homes in Florida totaled 11,498 in July, marking the first time in more than two years that resales have risen in Florida on a year-over-year basis, according to the Florida Association of Realtors. The increase was slight -- only six more than the 11,492 recorded in July 2007 -- but FAR said it "could indicate stabilization in Florida's housing sector." The median sales price of homes sold in July stood at $193,600, down 19% from $238,900 a year earlier, FAR reported. Among the state's larger markets, resales decreased 22% in the Miami metropolitan statistical area and 16% in the Orlando MSA, while median resale prices fell to $230,700 in Miami, down 19% from $285,800 a year earlier, and to $121,900 in Orlando, down 17% from $147,700 a year earlier. FAR can be found online at http://media.living.net.

The sales of existing single-family detached homes in California were up 43.4% in July from the level recorded a year earlier, according to the California Association of Realtors. The seasonally adjusted annualized rate of closed-escrow resales totaled 489,080 in July, up from the revised 341,130-unit rate recorded in July 2007, CAR reported. The median price of an existing single-family detached home in California totaled $350,760 in July, down 40.3% from a revised $587,560 a year earlier, the association said. "Sales improved significantly in July 2008 and remained above the 400,000 level for the third consecutive month," said CAR president William E. Brown. "Deeply discounted distressed sales continue to drive volume in many regions of the state." CAR can be found online at http://www.car.org.

People are more focused on their tasks when they are uncomfortable, motivational speaker Michael Stahl told attendees Aug. 25 at the NAMB/Southwest conference in New Orleans. Mr. Stahl said there are three zones of performance: the comfort zone; the performance or "uncomfort zone"; and the panic zone. What makes people feel uncomfortable in sales and marketing strategies is what they need to be doing right now, he said, whereas being in a panic zone will hurt performance. To be comfortable with change, people must leave their comfort zone, he said, adding that change can make them feel vulnerable unless they are open to it. According to Mr. Stahl, there is a "cycle of positive results." When people achieve positive results operating outside their comfort zone, they want to perform the task more and more, he said.

The Commercial Mortgage Professional Program of the National Association of Mortgage Brokers is designed not to compete with the states for members, according to program director Kristi Wallace. At the group's NAMB/Southeast conference in New Orleans, Ms. Wallace said that to be eligible for commercial mortgage membership, the mortgage broker must do commercial mortgage loans exclusively and not have a residential mortgage broker's license (except where state law applies). Commercial brokers will become direct members of the national organization and not of the state affiliate. They will have the right to participate in voice votes on bylaw changes but cannot elect or serve on the NAMB's board or delegate council. State affiliates will receive $150 per commercial member to help defray costs for serving as contact points for these members. Commercial members are not eligible for the Lending Integrity Seal of Approval program, Ms. Wallace said. The NAMB will have a full-day commercial program at its forthcoming NAMB/West show, and a two- or three-day commercial symposium is being planned for 2009.

House prices in June were 15.9% below the level recorded a year earlier but down only slightly from that of the previous month, possibly signaling that the rate of decline is "slowing," according to preparers of the Standard & Poor's/Case-Shiller 20-city house price index. House prices fell only 0.5% in June from those recorded in May, and the decline was far less than the 2% monthly drops earlier this year. "While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level," said S&P economist David Blitzer. In June, nine of the 20 cities posted month-to-month increases in house prices. Denver and Boston were the best-performing markets, with monthly gains of 1.5% and 1.2%, respectively. The index can be found online at http://www.homeprice.standardandpoors.com.

A house price index based on Fannie Mae and Freddie Mac mortgage data shows that house prices plunged in key states -- California and Florida -- where the mortgage giants suffered most of their credit losses in the second quarter. The Office of Federal Housing Enterprise Oversight HPI said house prices (based on purchase mortgage and refinancing data) fell by 6.9% in California, 5.6% in Nevada, 5.3% in Florida, and 4.4% in Arizona in the second quarter. Nationally, the OFHEO HPI fell 1.4% in the second quarter and 1.7% since the second quarter of 2007. "Tighter credit conditions and relatively high inventory levels have led to some sharp price declines in the second quarter," OFHEO Director James Lockhart said in releasing the second-quarter report. OFHEO's purchase-only HPI shows that house prices fell 1.4% in the second quarter and 4.8% since the second quarter of 2007. The purchase-only HPI was flat from May to June. However, the inflation-adjusted price of homes is down 10% from that of a year ago.

State Farm's federally chartered thrift can use the insurance company's independent agents to market residential mortgages and home equity loans without complying with state licensing requirements, according to a U.S. appeals court. However, the circuit judges noted that their decision may be moot once a new federal law goes into effect that sets registration and licensing requirements for all mortgage originators. The 6th Circuit Court of Appeals ruled that operations of State Farm Bank are not subject to an Ohio law that would require the independent agents to be licensed as mortgage brokers. "We reach this conclusion because the Ohio Act's application to State Farm Bank's exclusive agents fits within the categories of state laws that are expressly preempted by OTS regulations," the appeals court said. Banking attorney Steven Kaplan, a partner at K&L Gates, said, "We have to see how this plays out with the new federal [licensing] law. But at the moment, it is a significant victory for federally chartered entities. It allows them flexibility in how and to whom they solicit customers." The NAMB can be found on the Web at http://www.namb.org.

The annualized sales pace of new single-family homes totaled 515,000 units in July, a slight increase since the previous month but a 35% decline from that of a year earlier. Meanwhile, the inventory of new homes for sale fell to a 10.1-month supply, compared with a 10.7-month supply in June. The median sales price was $230,700, compared with $230,100 in June and $246,200 a year earlier. "Single-family new-home sales in July were very close to expectations, but the 515,000 reading turned out to be a rise from the June level, which was revised downward from 530,000 to 503,000," said RBS Greenwich analyst Stephen Stanley. "In any case, new-home sales fell sharply through around March of this year and have been steadier since then. We look for sales to drag along that bottom for the most part in the second half of the year."

Twenty-one classes of notes issued by four collateralized debt obligations with exposure to subprime residential mortgage-backed securities have been downgraded by Fitch Ratings and removed from Rating Watch Negative. The affected securities are as follows: six classes from Independence IV CDO Ltd./Inc., a cash flow structured finance CDO; five classes from C-BASS CBO XVIII Ltd., a static cash structured finance CDO; five classes from C-BASS CBO XIX Ltd., a static CDO; and five classes from Costa Bella CDO Ltd./Corp., a hybrid structured finance CDO. The downgrades were attributed to collateral deterioration in the portfolios, especially in subprime RMBS and structured finance CDOs with underlying exposure to subprime RMBS.

The ratings of American International Group Inc. and its insurance and financial services subsidiaries have been placed on Rating Watch Negative by Fitch Ratings, partly as a result of exposures to residential mortgage-backed securities. Fitch previously had a negative rating outlook on AIG and the majority of its insurance-related subsidiaries that are rated by Fitch, and a stable rating outlook on AIG's financial services subsidiaries (including AIG Capital Corp., International Lease Finance Corp., and American General Finance Inc.). Fitch said the rating actions were based on an updated assessment as part of its ongoing ratings review of AIG and its subsidiaries. The actions reflect "Fitch's uncertainty regarding potential outcomes of AIG's previously announced business unit review, which is expected to be completed in late September," the rating agency said. The actions also reflect uncertainty related to AIG's "potential for additional losses" on various exposures to residential mortgage-backed securities, Fitch said. The rating agency can be found online at http://www.fitchratings.com.