Foreclosure, Commercial Loans and Mandatory Mediation

Economy’s Real Estate Component Still Shaky
July 20, 2009

Experts are beginning to ask whether the bottom is in sight. Some aspects of the market are looking up, and the general arc of the recession is proceeding in an expected manner. Foreclosure and new housing start numbers, however, are doggedly sluggish (to say the least), and new problems in that sector could be both imminent and disastrous for the overall economy’s recovery. Banks continue to receive criticism for their handling of debt, government incentives or not.

Kentucky Takeaway: For 2007-2008, Kentucky was one of very few states to see its GDP in the negative. The RealtyTrac foreclosure graphic shows counties on the Ohio River generally have suffered more than others in the state, Jefferson County included. Good news? Kentucky is not in Nevada.
http://seekingalpha.com/article/149813-weekly-market-notes-on-the-verge-of-recovery


Unemployment Fuels Foreclosures
July 20, 2009

Though comparisons have been made to the U.S. recession of nearly thirty years ago, one decided difference this time around appears to be poor conditions for a housing boom leading a recovery. There will be no home building frenzy until the market becomes less saturated, and with unemployment on the rise, foreclosures may not be going anywhere just yet.

Kentucky Takeaway: Kentuckians could be more vulnerable to this latest foreclosure wave, depending on how many state jobs are lost during the recession.
http://www.delawareonline.com/article/20090720/BUSINESS/907200302/1003/Foreclosure-problem-grows-in-U.S.


Commercial Loans Suffering As Well
July 20, 2009

The commercial mortgage industry is the roughest it has been in at least a couple of decades, causing concern over the fate of many regional banks that have heavy exposure to commercial real estate. This sets up a potential face-off between bank regulators and bank administrators, as determinations are made about how much debt to charge off in the near term and how much to bury for later.

Kentucky Takeaway: Kentucky’s banks are like other regional banks in that they have commercial real estate exposure, and rising unemployment and an extended recession put them in a certain amount of jeopardy.
http://online.wsj.com/article/SB124804759792663783.html

Can Foreclosure Be Mediated?
July 20, 2009

The Center for American Progress argues that mandatory mediation is the U.S.’s best bet for heading off the foreclosure crisis. An overwhelming majority of distressed homeowners never even seek help from their lenders, and the court system certainly is not equipped to dole out solutions while hammering through foreclosure dockets. The article details several actions that (if required) could assist troubled homebuyers.

Kentucky Takeaway: Kentucky is like the majority of the states in that it has minimal mandatory mediation on its books. If foreclosure worsens, though, local support could grow, and one would expect Louisville to be out front on that campaign.
http://www.inman.com/news/2009/07/20/mediation-proposed-foreclosure-fix


Forecasters Expect Positive Existing Home Sales Report for June
July 20, 2009

This article focuses on the various important market releases for the week. On Thursday, the Existing Home Sales report will be unveiled, and general consensus is that the rate will be higher once again, with inventories (albeit foreclosure-dominated ones) dropping. Tempering the optimism is the probability of a rougher 2009 ahead, as unemployment begins to affect the numbers.

Kentucky Takeaway: Kentucky should benefit with some increased stability in the overall real estate market.
http://www.mortgagenewsdaily.com/channels/fed-economy/07202009-week-ahead-bernanke-earnings.aspx