May 8, 2007
NAR Revises Forecast (Key Phrase: “Stricter Lending Standards”)
A month after revising their 2007 national housing forecast downward, The National Association of Realtors (NAR) has once again lowered expectations. The newly revised forecast now calls for a 2.9% decline in 2007 existing-home sales (down from -2.2%), and a 1.0% drop in median existing-home prices (down from -0.7%).
According to the association, “stricter lending standards and subprime mortgage woes are producing headwinds for the sector.” And while subprime woes are mostly subterfuge in the San Francisco market, stricter lending standards are not.
First Published: May 8, 2007 10:00 AM
Comments from "Plugged In" Readers
I'm sure that this time REALLY is the bottom.
Until the next forecast.
Posted by: Tipster at May 8, 2007 11:50 AM
so it's from +1.2% to -.7% to -1% for '07 ... I wonder if this is why ...
“Even established lenders of high-quality mortgages lost their compass and chased bad business as competition increased, said Angelo Mozilo, CEO of the largest U.S. mortgage lender, Countrywide Financial Corp.”
“For many years, he said, ’standards never changed: verification of employment, verification of deposit, credit report.’”
“But then new players came in with aggressive lending policies. Names like Ameriquest, New Century, NovaStar Financial and Ownit Mortgage Solutions set a new, lowered standard, changing the rules of the game, Mozilo said.”
“‘Traditional lenders such as ourselves looked around and said, ‘Well, maybe there’s a (new) paradigm here. Maybe we’ve just been wrong. Maybe you can originate these loans safely without verifications, without documentation,’ Mozilo said.”
“Bill Dallas, CEO of Ownit, the nation’s 20th-largest subprime lender in 2006, said he saw the handwriting on the wall in April 2005 after he overheard a rival account executive tell a customer how to get a better rate by committing occupancy or income fraud.”
“‘I just went, ‘We are hosed as an industry,’ Dallas said. ‘I told our guys, ‘We’re the problem.’”
Posted by: badlydrawnbear at May 8, 2007 12:01 PM