Definite Signs of Life, Real Estate is ready for a Comeback!

We have become so accustomed to bad news in this and neighboring industries that we often draw the long sigh of despair before we’ve had a chance to digest all the information. Thankfully, there is some good news.

We all know the market will recover; it’s just a question of when and although the first signs are much like those of an impending spring bloom, hardly noticeable at first, they are present. Home sales were up by as much as 5.5 percent in the Midwest with the entire nation showing improvements between 2 percent and 4.6 percent. Condo sales were up as well, showing an improvement of 5.5 percent nationally. Read More Here

Bank of America and Countrywide Jobs

As if we needed more bad news, pretty soon there will be less bread on the table after the merging of Bank of America and Countrywide.  The combination of two power houses will ironically eliminate a bevy of positions.  If you’re one of these employees, how do you plan on securing your next position?

See how jobs plan on being sliced in the upcoming merger.

Giant real estate partnership files bankruptcy

BK is not only known for the “royale with cheese” and ”have it your way;” 
nope, in our financial real estate world, it’s the infamous two-letter ‘F-word’ for a myriad of troubled and distressed real estate/mortgage companies of 2007-2008. 

My guess is that companies would rather not “have it this way.”

See who bit the BK burger this time. 

..and if you’ve worked or are currently still working with any of these BK companies, what measures have you taken to secure future employment?

Real Estate Stock on the Rise

For most real estate professionals out there, business is slow (non-existent for others).  The industry is our restaurant.  For the sake of this mental imagery, let’s call it our Italian restaurant.  The buyers, sellers and investors are our patrons.  We are the chefs, sous-chefs, and maitre’d’s of our establishments.  Customers used to pour in through the doors.  We would even give them pagers to wait in line, having them wait 45-60 minutes for the next seating. 

Well, times have changed, but don’t tell that to the piece of yeast-filled dough growing in the kitchen.  Where does this all tie-in?  You’ll see in a second.  The dough, a simple and yet integral ingredient to many of our pasta dishes.  Without it, we would have soupy messes.  The dough in this illustation are our builders!  Yes, even in this woeful market, there are builder stocks on the rise!*   

Have you considered employment in this “rising” segment?
(*Not to be considered a stock tip, but if you happen to secure a position, earn a lot of dough and want to “do the right thing,” we will humbly respect your decision to break bread and will offer you a free large drink at our “Italian restaurant.”)

No-money-down loans for 2008?

You would think that while we are STILL in the middle (and hopefully, tail-end) of this real estate debacle, all exotic and zero-money down loans would be relics of the past.  Isn’t that the initial thought?  Lenders have tightened up their guidelines and many of today’s loans are plain vanilla, original cake donut, full doc only loans.  But wait!  Bust out the sprinkles on that donut because there’s a new form of NO-MONEY DOWN LOANS that you should be aware of.  Do these loans really help us stimulate employment and real estate value?  Or are we just shooting ourselves in the foot, arm and gut with this new, simple carbohydrated, but delectable offering? 

Take me to the donut..err, No Money Down Loans!

The Feds Big Give

WASHINGTON—The Federal Reserve, still working to combat the effects of a severe credit squeeze, said Tuesday it had auctioned another $50 billion to cash-strapped banks. Meanwhile, the International Monetary Fund warned that further actions are needed globally to prevent more wrenching problems.

The Fed auction marked the ninth in a series that began in December that so far have pumped $310 billion in short-term loans into the nation’s banking system.

Meanwhile, the 185-nation IMF delivered its most detailed review yet of the global credit crisis that hit last August. It said Tuesday that governments must be prepared to do more to support the global financial system if conditions worsen.

“Markets remain under considerable strain” from a variety of forces such as weakened balance sheets from increased bad loans, the IMF said in a report prepared for meetings this week in Washington of the IMF and its sister lending institution, the World Bank.

The global credit crisis is expected to be a top agenda item at those discussions. The IMF report urged policymakers in the United States and other nations to consider what else needs to be done.

“The critical challenge now facing policymakers is to take immediate steps to mitigate the risks of an even more wrenching adjustment, including by preparing contingency and other remediation plans, while also addressing the seeds of the present turmoil,” the IMF said.

Ben Bernanke and his colleagues hope that the increased resources being supplied in the Fed auctions will encourage banks to keep lending to consumers and businesses and alleviate the economic drag from a severe credit squeeze that began last August.

In a related move, the European Central Bank, which serves the 15 nations that use the euro as their common currency, announced Tuesday that it had auctioned $15 billion in short-term credit to European banks. It was the sixth auction conducted in tandem with the Fed as the two central banks continue to coordinate their efforts to battle the credit crisis.

Bernanke told Congress last week that it was possible that all the blows the economy has sustained from the credit crisis, a prolonged housing slump and now rising unemployment could push the country into a recession. But he said he still believed that the period of weakness would be short-lived and the economy would resume stronger growth in the second half of this year.

The Fed has been holding its auctions to supply direct loans to commercial banks every two weeks starting in December.

The auctions are only one of a number of emergency procedures the central bank has employed to battle the credit crisis, which claimed its biggest victim last month with the forced sale of Bear Stearns, the nation’s fifth largest investment bank, to JP Morgan Chase & Co.

In addition to the auctions which supply loans for 28 days to commercial banks, the Fed announced last month that it was employing Depression-era provisions to allow investment banks to borrow directly from the Fed. Previously, only commercial banks had that privilege.

This week’s auction, which was held on Monday with the results announced Tuesday, attracted 79 bids seeking a total of $91.6 billion.

Will You Trade in Your Calculator for a Thermometer?

Nursing: The Recession-Proof Job Market 
Former finance workers are switching careers to answer the huge demand for new nurses.

NEW YORK (CNNMoney.com) — When Heidi Sadowsky quit the finance sector, she abandoned a job market on the verge of collapse for one that may be air-tight: nursing.

“I was never happy in my life in finance,” said Sadowsky, 39, a former liaison for institutional investors and money managers at Citibank and Invesco. “I always felt like a square peg in a round hole. I decided I had to get out of this business. I was never cut out for this.”

Inspired by the compassion of nurses who cared for her terminally ill father, Sadowsky took up training last year at New York University’s College of Nursing. Since she already had an undergraduate degree, she was accepted into the nursing school’s accelerated 15-month bachelors program and she expects to graduate in May. At $64,000, the NYU tuition is far from cheap, but starting pay for graduates is up to $70,000 a year in New York City. Nationwide, the average pay is about $56,000.

Most importantly, the job security is iron-clad. When Sadowsky graduates in May, she will enter one of the few areas of the job market that’s showing significant growth.

“People are always going to be sick, and the nurses are the front line in the hospitals,” said Sadowsky, who believes there will “always be jobs” in the nursing profession.

Timing is everything

Sadowsky picked the right time to switch careers. The finance sector has shed 124,000 jobs since the beginning of 2007, according to the Department of Labor, including 22,000 jobs in the first two months of this year. Major firms like Bear Stearns (BSC, Fortune 500), Merrill Lynch (MRL) and Sadowsky’s old employer Citigroup (C, Fortune 500) have been hard-hit by the subprime collapse, and analysts expect up to 30,000 more job cuts in finance by the end of the year.

Meanwhile, hospitals, clinics and nursing schools are scrambling to fill vacant positions for nurses and teaching staff. The Department of Labor estimates the number of vacancies for registered nurses will expand to 800,000 in 2020, from its 2005 tally of 125,000.

“No other occupation is seeing a higher ratio of job postings to seeker-resumes,” said Hugo Sellert, head of economic research at the employment Web site Monster.com.

Sellert said there’s been a 15% increase in nursing jobs posted on Monster.com over the last year, compared to a 15% decrease in finance and insurance jobs, and a 5% decline overall.

“We know that the demand for nursing is going to grow,” said Cheryl Peterson, senior policy fellow at the American Nurses Association. “We’ve got an aging baby boomer population which is only going to drive the demand.” Many nurses are themselves boomers who will be retiring soon, further increasing the need.

Claire Young, chief nursing officer at the Cleveland Clinic, one of the nation’s top-ranked hospitals, said she’s looking for 300 new nurses to add to her current staff of 3,800. Many of these nurses would be working in expanded facilities to meet “enormous” demand from a growing patient population, she said.

In order to woo new nurses, the clinic is offering thousands of dollars in tuition reimbursement, as well as free uniforms and flexible schedules.

It’s also trying to convince workers who’ve been laid off from other professions, like manufacturing and computer technology, to move into nursing. “The shortage is something we’ll be living with for a long time, but we can’t stop offering care,” said Young. “Unfortunately, one of the strategies is capitalizing on this recession.”

NYU’s College of Nursing has doubled enrollment since 2001, to 1,180 students. Terry Fulmer, dean of the college, said the school doubled the size of its facility since 2002, and doubled its full-time faculty to 52.

“We’re turning away students because the demand is tremendous,” said Fulmer, whose school accepted only 200 students out of 908 applicants for the fall semester. To meet demand, she said the college is getting ready to build a new facility that’s twice the size of the current one.

Nine women to every man

To help fill the ranks, the nursing profession is trying to convince men, not just women, to become nurses. The profession is currently 90% female.

“Tradition holds that a guy’s going to be a doctor, and the female is going to be a nurse,” Neville Lewis, 40, an NYU nursing student who is married to an RN.

Like Sadowsky, Lewis abandoned finance to take up nursing. Since he already had a bachelor’s, he qualified for NYU’s accelerated 15-month program. Lewis said he majored in political science and mass communications at Midwestern State University in Texas, and then embarked on a 15-year career in the bond and IPO sector at the investment firms Equiserve (now Computershare) and Fidelity Investments.

“I kind of fell into finance after graduation,” said Lewis, who had felt the lucrative pull of the finance sector. “You make a lot of money, but do you enjoy it? I was not happy.”

After getting laid off from Equiserve in 2002, Lewis took a job at Fidelity and considered going back to school to pursue tax law. But he changed his mind, quit Fidelity in 2007, and started at NYU’s nursing school in January, 2008. He expects to graduate in 2009.

“I felt like I could accomplish more by working to heal people, then by helping people fight over money,” he said. And as he watched his former sector collapse, Lewis realized that altruism wasn’t the only motive to get into nursing.

“Seeing what’s happening now, I have no regrets in leaving finance,” he said. “People are always going to be sick. We live in an aging society.” 

Full Article Here

Fannie, Freddie cleared to pump $200 billion into market

By Patrick Rucker

WASHINGTON (Reuters) - The regulator of Fannie Mae and Freddie Mac on Wednesday eased capital requirements for the two biggest housing finance agencies, allowing them to pump up to $200 billion into the distressed U.S. mortgage market.

The regulator, the Office of Federal Housing Enterprise Oversight, said it was lowering to 20 percent from 30 percent the amount of extra capital the companies are required to hold. It will also consider further reductions. The 30 percent requirement had been imposed after the discovery of lax accounting and risk controls earlier this decade.

In addition, the companies will begin to raise “significant capital,” OFHEO said in a joint statement with Fannie Mae and Freddie Mac. Last year, the companies sold nearly $14 billion in preferred stock.

The extra $200 billion would allow Fannie Mae and Freddie Mac to purchase both existing mortgage-backed securities and new home loans originated by banks. It could also enable them to increase their business of guaranteeing mortgages, a key to helping pull the U.S. housing market out of its funk.

“It’s good news,” said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi in New York. “A lot of mortgage originators have left the business, so it’s a good thing that mortgage money will be made more available.”

The move is a shift for the Bush administration, which has long argued the combined $1.4 trillion portfolio of the companies represents more of a risk to the U.S. financial system than a help to homeowners. The new policy comes as falling home prices and increasingly jittery financial markets have pushed the U.S. economy to the verge of recession.

After the announcement, shares of Fannie Mae and Freddie Mac rose sharply for a second day. Fannie Mae stock rose 10.5 percent to $31.17, a five-week high, while Freddie Mac jumped 8.3 percent to $28.18, the highest since February 20.

FULL COMPLIANCE

The regulator said Fannie Mae was in “full compliance” with government restrictions placed on the company for accounting violations, while Freddie Mac had to clear one more hurdle relating to the separation of the roles of the chairman and chief executive.

Freddie Mac has already said it is splitting what had been a co-chief executive/chairman job and was currently searching for a new chief executive.

The regulator said it expects to remove special regulatory constraints placed on the companies after the book-keeping scandals, which came to light for Freddie Mac in mid-2003 and in 2004 for Fannie Mae.

Increased investment by Fannie Mae and Freddie Mac is expected to bolster confidence in a secondary mortgage market shaken by a wave of failing home loans. Cratering prices and a sell-off of mortgage-related assets this year have fueled an escalating credit crunch that may have already tipped the U.S. economy into recession.

Mortgage-backed securities issued by Fannie Mae and Freddie Mac rallied, pushing their yield spreads to government debt to their tightest since February — indicating a perception of falling risk. Fannie Mae and Freddie Mac are the biggest buyers in the $4.5 trillion “agency” mortgage-backed securities market.

The government-sponsored enterprises have been surprised by the magnitude of the housing slump, raising questions of how much risk they can take with the capital, analysts said. Both companies boosted forecasts for credit-related losses through 2009 after reporting combined net losses of more than $6 billion for the fourth quarter.

(Additional reporting by Mark Felsenthal in Washington and Al Yoon in New York, Editing by Frank McGurty) - Full Article

Bear Market Blues for Bear Sterns

Bear Stearns dramatic plunge stuns Wall Street  

 Posted: March 17, 2008 03:31 PM PDT

INDIANAPOLIS (WISH) - The stock market finished the day on an upward note after a dramatic turn of events this weekend. Bear Stearns, the country’s leading overnight lender, fell at breathtaking speed.

In the end, the Federal Reserve stepped in to try to avert what it believed could be a global financial crisis.

“The old run on the banks is when people would go to take their money out of the bank. That’s not what’s happening with Bear Stearns. With Bear Stearns people are not putting their money into the bank and Bear Sterns is the number one provider of overnight loans. They don’t have any money to lend,” said

Bear Stearns securities, backed by home loans made investors nervous.

So, they wouldn’t buy Bear Stearns stock and the stock price plunge was dizzying.

$57 a share on Thursday, $30 on Friday, and finally on Sunday JP Morgan Chase bought the 85-year-old investment firm for the bargain basement price of $2 a share.

“The engine of the economy is slowing down. It is slowing down to the point that companies are not investing, their not building parts, their not buying equipment, they’re not hiring people as a result,” said Matt Will of the University of Indianapolis.

And that’s when Wall Street affects Main Street.

The fed cut the rate it lends money to banks a quarter point.

Some analysts criticize the move.

“They’re fueling inflation. The biggest fear in this economy should be inflation,” said

So, the result of Bear Stearns’ monumental fall and the fed’s unprecidented actions to fix it could directly affect your wallet.

“It’s very likely that inflation this coming year could be between 5 and 10 percent. That’s scary because inflation represents a paycut for every one of us,” said

Investors are now looking for profit reports from Lehman Brothers, Goldman Sachs and others to see if they could suffer the same fate as Bear Stearns.

And, Tuesday could be another big day for the federal reserve as it begins its meeting. Analysts expect another rate cut.

14 Calif. counties get maximum FHA limit

By Marcy Gordon - Washington

The government on Wednesday raised the mortgage limits for loans guaranteed by the Federal Housing Administration in 14 high-cost California counties.

The Department of Housing and Urban Development released the new loan limits for California — a hotbed during the housing boom that now is suffering the worst home-price declines in the nation. The limits, with the maximum at $729,750, are derived from median home prices in each county.

HUD is expected to raise the limits in other counties nationwide in the coming days.

The economic stimulus package includes a temporary increase in the limit on FHA-backed loans, from $362,790 to as high as $729,750 in expensive areas, to let more homeowners with high-rate subprime mortgages refinance into federally insured loans.

The package also includes a temporary increase in the cap on mortgages that the government-sponsored mortgage companies Fannie Mae and Freddie Mac can buy or guarantee from $417,000 to $729,750.

The idea is to stoke investor demand for securities made up of more expensive mortgages — so-called jumbo loans — backed by Fannie and Freddie, the two biggest mortgage financers in the country. That would drive interest rates lower and spur home buying and refinancing.

Roughly half of all jumbo mortgages are in California, according to federal regulators.

California Gov. Arnold Schwarzenegger said the new limits will “help California’s housing market rebound.”

“No other state has been more impacted by the ongoing mortgage crisis than California, and the announcement today … will help more working Californians achieve the American dream of homeownership through less expensive and more secure loans,” he said in a statement.

Schwarzenegger has pressed Congress to make the increased limits — which expire at year’s end — permanent.

The Federal Housing Administration, a Depression-era agency within HUD, insures mortgages for low- and middle-income borrowers.

Counties that get the $729,750 maximum for FHA loans are likely to get that same level for Fannie and Freddie mortgages, experts said. HUD is expected to designate new Freddie and Fannie limits for other parts of the country too.

In California, the counties at the maximum level for FHA loans are Alameda, Contra Costa, Los Angeles, Marin, Monterey, Napa, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz and Ventura. At the other end, Lassen, Modoc and Trinity counties are subject to a loan cap of $271,050 — a standard amount in an area with normal home prices.

HUD Secretary Alphonso Jackson said Wednesday the new limits will make FHA-backed loans available to as many as 30,000 Californians and 250,000 homeowners nationwide.

The new limits “will allow for greater economic stability for our communities,” Jackson said in a speech in Los Angeles. A text of his remarks was distributed by HUD.

“We confront an emergency, a crisis,” Jackson said. “Los Angeles has been hard hit.”

He noted that home foreclosures in southern California soared 433 percent in January from a year earlier.

The number of U.S. homes facing foreclosure rose 57 percent in January. 

Next Page »