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ib feel this one FCNR is ready to assume is place in the market
all economic real estate marks are in line with a recovery, the share price is sooo low now, i am looking tomorrow to bag some more shares
i am long in fcnr, READY TO MAKE THE GRADE
REPAIR7
.002 HOD very low float a little more volume and could explode big imo :)
FCNR .0014x.002 someone want shares! http://stockcharts.com/charts/gallery.html?fcnr
im alone here ? sleeping builder monster waking up :) http://stockcharts.com/charts/gallery.html?fcnr
i am no economist, but if there are signs of the recession lifting, I think it'll still be a long waiting game before it begins effecting the real estate market. I think people want to see signs of economic recovery and stability before they invest in buying homes, but its only my opinion. any feedback?
shares dont get traded very often on this one. Would like to buy into it but not at that ask.
if the araziona real estATE market starts to grow, as our leader (wonderful) obama says, we are out of the worst economic crissis ever, then falcon ridge will show growth??
any opinions
repair7
FCNR could be a monster!!! The Company is in the process of developing approximately 139 acres of raw land in the Belen, New Mexico referred to as "Spanish Trails." Spanish Trails consists of land platted into approximately 517 home sites. Home sites will be sold to different builders or developed by the Company.
Real estate held for development and sale, consists of the following at March 31, 2009:
Real estate held for development and sale $ 1,201,995
from the filing 10-Q Jul 7, 2009
http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=6689428
and only 78,054,805 and 47,315,917 shares issued and outstanding respectively
Picked this up on MACD bullish cross over scan today...
EOD= 0.0040
KIWI
Picked this up on MACD bullish cross over scan today...
KIWI
low float monster here 78,054,805shares of outstanding as of May 5, 2009 .
We believe the long-term fundamentals, namely population growth and household formation, remain solid and will continue to support housing demand. This is especially true when put in the context of specific, targeted markets that the Company is in a position to enter. We also believe current market conditions are extremely challenging and demanding and will remain so for the near term. However, it will moderate over the long term. In the interim, we are exploring other areas related to real estate that could generate revenue for the Company. For instance, we are currently exploring potential merger(s) and/or acquisition(s) of related businesses and Corporations. Renegotiating or cancelling land option purchase contracts from current levels is also under serious consideration. The ability to obtain financing, both for development and home building projects, and for home mortgages, remains extremely difficult to obtain. Any or all\of these factors can predictably lower sales volume and gross profits significantly Management is also exploring how to best use its real estate and finance experience, One area of focus is loan workouts. In this scenario the Company may create a division to help real estate owners in financial distress avoid foreclosure through the use of structured refinance and loan modifications. It is currently under Letter of Intent with one such company as a potential acquisition.
http://www.pinksheets.com/pink/quote/quote.jsp?symbol=fcnr
Management is also exploring how to best use its real estate and finance experience, One area of focus is loan workouts. In this scenario the Company may create a division to help real estate owners in financial distress avoid foreclosure through the use of structured refinance and loan modifications. It is currently under Letter of Intent with one such company as a potential acquisition.
http://stockcharts.com/h-sc/ui?s=FCNR&p=D&yr=1&mn=0&dy=0&id=p68156517963
Might be time to watch
Good Luck (I think you will need it)?
https://esos.state.nv.us/SOSServices/AnonymousAccess/CorpSearch/corpActions.aspx?lx8nvq=Vn4LTk75AksEFGjmhwSNDQ%253d%253d&CorpName=FALCON+RIDGE+DEVELOPMENT+INC.
1 - 13 of 13 actions
Actions\Amendments
Action Type: Correction
Document Number: 20090021476-81 # of Pages: 3
File Date: 01/05/2009 Effective Date:
Previous Stock Value: Par Value Shares: 50,000,000 Value: $ 0.001 Par Value Shares: 1,000,000 Value: $ 0.001 No Par Value Shares: 0 ----------------------------------------------------------------- Total Authorized Capital: $ 51,000.00 New Stock Value: Par Value Shares: 900,000,000 Value: $ 0.001 No Par Value Shares: 0 ----------------------------------------------------------------- Total Authorized Capital: $ 900,000.00
There's only about 22 million in the float as per the transfer agent and FCNR could bounce back quick imo. Best of luck to you Robstock, if you hear anything let us know.
they never responde when I call fred .. they need more pr news so this company's stockholders feel alittle better. They had 30 days to get the info complete but never heard a thing and no one calls me back very disapointed.. I still believe when the housing and financials come back this stock will jump up alittle but for now cant wait anymore and have sold. I wish you all the luck with this.
I read it on a press release from a few months back. I also hope that they announce something on that in the near future, please let us know if you hear anything.
any here on gypsum land yet?I was holding this stock sense july..
100% gain from .005, nice.
Any volume and this gets back to a penny in no time...
Just a matter of time.
Not at all...sometimes...it's just too easy...
FCNR is highly speculative compared to those but then again, that's why people tend to play pennies, for speculation and risk vs. reward. With such a low float it would not take much to turn this one around imo.
Even the larger Construction Companies are starting to turn here...
Today Citigroup raised LEN to a buy from hold. Perhaps it's a good sign for the entire housing industry, only time will tell.
6.5% is a healthy increase...
US Dec Existing Home Sales Up 6.5% To 4.74 Mln RateLast update: 1/26/2009 9:59:21 AM
============================================================
Dec Existing Home Sales Dec Nov ! Consensus: !
Total Sales: 4.74M 4.45Mr ! 4.40M !
% Change: +6.5% -9.4%r ! Actual: !
Months Supply: 9.3 11.2 ! 4.74M !
============================================================
By Jeff Bater
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--Existing-home sales rose in December as buyers took advantage of discounted prices in distressed housing markets. Home resales rose to a 4.74 million annual rate, a 6.5% increase from November's revised 4.45 million annual pace, the National Association of Realtors said Monday. November originally was seen down by 8.6% to 4.49 million. NAR economist Lawrence Yun said sales in distressed markets were very high amid foreclosures; of all sales in December, about 45% were distress sales at discounted prices. The median home price was $175,400 in December, down 15.3% from $207,000 in December 2007. The median price in November this year was $180,300. The 15.3% drop was the largest on record, the NAR said. "It appears some buyers are taking advantage of much lower home prices," Yun said, adding the market is far from balanced as buyers hold an edge over sellers. The December resales level of 4.74 million reported Monday by NAR was above Wall Street expectations of a 4.40 million sales rate for previously owned homes. For all of 2008, sales totaled 4.91 million, down 13.1% from 5.65 million in 2007. The average 30-year mortgage rate was 5.29% in December, down from 6.09% in November, according to Freddie Mac (FRE). While a drop in mortgage rates is an incentive for demand, the housing industry is floundering as big challenges lurk. The labor market, for one thing, is shrinking - 2.6 million jobs were lost last year. People are afraid to make major purchases, like homes. Also, home prices are falling, discouraging buying by those waiting for a better deal. And mortgage financing is harder to secure than during housing's boom years. U.S. sales of new homes dropped in November by 2.9% to 407,000, the latest government data showed. Year over year, sales were down 35%. High inventories of unsold homes virtually guarantee lower prices and sales down the road. Data on December will be released this week. Monday's data on the existing-home market showed inventories fell 11.7% at the end of December to 3.68 million available for sale, which represented a 9.3-month supply at the current sales pace. There was a 11.2-month supply at the end of November. Regionally, sales rose 4.0% in the Midwest, 7.4% in the South, and 13.6% in the West. Sales fell 1.4% in the Northeast.
-By Jeff Bater, Dow Jones Newswires; 202 862 9249; jeff.bater@dowjones.com
(END) Dow Jones NewswiresJanuary 26, 2009 09:59 ET (14:59 GMT)
make ya wonder how does financials really work at ground zero.
Fed expected to keep rates at record lows
Fed expected to keep rates at record lows, mull options to revive moribund economy
Jeannine Aversa, AP Economics Writer
Sunday January 25, 2009, 2:13 pm EST
WASHINGTON (AP) -- With the country stuck in a painful recession, the Federal Reserve is widely expected to keep its key interest rate at an all-time low this week and examine other unconventional ways to lift the economy.
Unlike other downturns, Fed Chairman Ben Bernanke and his colleagues are battling a three-headed economic monster: crises in the housing, credit and financial markets that -- taken together -- haven't been seen since the 1930s.
While Bernanke has pledged to do all he can to provide relief, President Barack Obama and Congress are racing ahead to enact an $825 billion package of increased government spending and tax cuts to revive the economy.
Against that backdrop, the Fed is all but certain to hold rates near zero and may offer greater insights into what other steps might be taken to ease the problems. The Federal Open Market Committee -- the central bank's main policymaking group -- opens a two-day meeting Tuesday to assess economic and financial conditions, review the effectiveness of programs already in place to deal with the trio of crises and examine new relief options going forward.
At its previous meeting in December, the Fed took the unprecedented action of slashing its key rate from 1 percent to a new, targeted range of between zero and 0.25 percent. Economists predict the Fed will leave rates at that record-low range on Wednesday and probably through the rest of this year in a bid to help brace the economy.
"Fed policymakers don't want to let up until they are absolutely sure an economic recovery has taken hold," said Bill Cheney, chief economist at John Hancock Financial Services. "Overall, their tone is going to be pretty pessimistic. The economy is still spiraling down and all the negative forces are feeding on each other."
Economists are divided on whether the Fed might announce some new actions Wednesday to deal with the crises.
One option being considered is expanding a program aimed at bolstering the availability of consumer loans.
Under the program, which is expected to start in February, up to $200 billion will be made available to spur auto, student and credit card loans as well as loans to small businesses. To do that, the Fed will buy securities backed by those different types of consumer debt. The Fed also hopes that action will lower rates on those loans.
"If the program is successful, (it) could be increased in size or expanded in scope to provide financing for additional types of securities, such as commercial mortgage-backed securities, for which the markets are currently distressed," Donald Kohn, the Fed's No. 2 official, told Congress earlier this month.
Another option is for the Fed to buy longer-term Treasury securities.
"In determining whether to proceed with such purchases, the committee will focus on their potential to improve conditions in private credit markets, such as mortgage markets," Bernanke said in a Jan. 13 speech in London.
Since the credit and financial crises erupted in the summer of 2007, the Fed has rolled out one radical program after another.
It is buying up mounds of companies' short-term debt called commercial paper. It is making cash loans to banks. And at the beginning of this year, it started buying mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae to help bolster the crippled housing market.
Because of all these programs, the Fed's balance sheet has mushroomed to $2.05 trillion, from just under $900 billion in September. Bernanke recently described this policy approach as "credit easing."
Even as the Fed wants to use all tools available to battle the crisis, it is mindful that there are dangers: the potential to put ever-more taxpayers' dollars at risk; sow the seeds of inflation in the future; and encourage "moral hazard," where companies feel more comfortable making high-stakes gambles because the government will rescue them.
"Since we are in uncharted territory, I believe we must proceed with caution," Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said in a speech earlier this month.
On a separate track, the Treasury Department is overseeing a much-criticized $700 billion financial bailout program that is likely to be retooled by the new administration.
The recession, now in its second year, is dragging on and could turn out to be the longest since World War II.
The nation's unemployment rate bolted to a 16-year high of 7.2 percent in December and could hit 10 percent or higher at the end of this year or early next year. A staggering 2.6 million jobs were lost last year, the most since 1945.
With jobs disappearing, home values tanking, foreclosures soaring and nest eggs shriveling, consumers have sharply cut spending. That's played a big role in causing the economy's backslide. So has the collapse in housing, which has ricocheted through the economy.
Many economists predict the economy contracted at a pace of 5.4 percent in the final three months of last year. The government releases the gross domestic product report Friday. If they are correct, that would mark the worst performance since a drop of 6.4 percent in the first quarter of 1982, when the country was suffering through a severe recession. The economy is still contracting now -- at a pace of around 4 percent, according to some projections.
Robert Dye, economist at PNC Financial Services, described the economy as in a "free fall."
Meanwhile, consumer prices have been falling. At first that seems like a blessing for shoppers, but it if spreads to wages and already stricken prices for homes, stocks and other things for a long time, it could wreak more havoc on the economy. The country's last serious bout of "deflation" was in the 1930s. Holding rates at record lows would help fend off any deflation risks.
All in all, the picture is "really grim," said Michael Feroli, economist at JPMorgan Economics.
will new money coming someone always needs housing.
Now is a good time to buy in my opinion and the housing market should turn up by mid year.
as you know homes got inflated badly. i see home prices generally retreating back to some prices that were normal
before big jumperoo.
http://www.fixhousingfirst.com/
one mistake made during financial and housing fallening.
everyone can't not afford a home with min wage or green card
gov't support.
i'd like to know where first 350 billion went.
need some volume, Falcon Ridge Develmt (BB) (FCNR)◊$0.005Change:- (-%)Volume:20,000--
Bid (USD) Ask (USD) P/E EPS P/S
0.004 0.005 - -0.13 -
Volume Avg Volume Mkt Cap Outstanding Float
20,000 78,400 $ 232,330 46,465,917 33,074,710
Prev Cls Open Dividend Dividend Yield
0.005 0.005 $ - -%
Day's Range 52-wk Range Ex-Dividend Date Dividend Date
0.005 - 0.005 - - 0.20 - -
No doubt...and also ...now that we have anew administration...the honeymoon period should start to pick things up as well...
It could create some momo for several stocks involved in the housing industry.
Market...that's good stuff there...amazing how you dig that stuff up...
Good morning Bigzz. I've also been watching this ...
http://realconcepts.blogspot.com/2009/01/housing-revisions-under-tarp-reform.html
On Friday the U.S. Senate voted 52-48 to approve the release of the $350 billion second tranche of TARP funds to the Treasury Department. The House continues work on the TARP Reform and Accountability Act (H.R. 384) introduced by Representative Barney Frank on January 9th to amend the original TARP provisions, which as presented includes significant changes on foreclosure mitigation and loan modifications.
BusinessWeek cites the argument by some "that TARP has failed because it hasn't cut to the root of the credit crisis: the rise in foreclosures on poorly vetted home loans, which has turned a vast assortment of securitized products into a toxic brew." The bill proposed by Rep. Frank suggests setting aside a portion of the rescue funds—"up to $100 billion but in no case less than $40 billion"—to prevent and reduce residential foreclosures. "President-elect Obama has promised to use as much as $100 billion of the TARP money in this way."
This TARP funds allocation will be used to also strengthen the Hope for Homeownership program, which to date has been a complete flop.
From an earlier Real Concept blog on the Hope program:
Hope for Homeowners, run by HUD, has proven to be a dismal failure. Only 357 people have signed up for loan modification aid since October 1. So what's the problem? Here is where the Washington Blame Game for Hope gets interesting:
The Creators: Congress says that lenders aren't willing to modify loans voluntarily and they should be forced to do so.
The Administrators: HUD says Congress made it too restrictive and too expensive for homeowners.
The Solution: Amnesty for liars.
In order to refinance through Hope for Homeowners, applicants must certify they did not supply false or misleading information on a previous loan application. The HUD program also requires homeowners to supply two years of financial records.
So what did our governing fathers propose to strengthen Hope for Homeowners? They watered it down - significantly. And they provided amnesty for liars. Borrowers no longer have to prove they did not lie on their previous loan application and they don't have to prove their income. In other words, The Liars Club is once again open for business, courtesy of our own government. Isn't this how we got into this mess? It sounds dangerously like a government sponsored Subprime loan.
Here is an excerpt of some of the "Hope for Homeownership Improvements":
Raises maximum loan to value (LTV) from 90% to 93% for borrowers above a 31% mortgage debt to income (DTI) ratio or above a 43% ratio
Eliminates government profit sharing of appreciation over market value of home at time of refi. Retains government declining share (from 100% to 50% after five years) of equity created by the refi, to be paid at time of sale or refi as an exit fee
And my personal favorite:
Administrative simplification: (a) eliminates borrower certifications regarding not intentionally defaulting on any debt, (b) eliminates special requirement to collect 2 years of tax returns, (c) eliminates originator liability for first payment default, (d) eliminates March 1, 2008 31% DTI test, (e) eliminates prohibition against taking out future second loans, (f) requires Board to make documents, forms, and procedures conform to those under normal FHA loans to the maximum extent possible consistent with statutory requirements.
Here is the proposed language for the Home Buyer Stimulus program (Good news!):
Requires Treasury to develop a program, outside of the TARP, to stimulate demand for home purchases and clear inventory of properties, including through ensuring the availability of affordable mortgages rates for qualified home buyers. In developing such program, Treasury may take into consideration impact on areas with highest inventories of foreclosed properties. The program will be executed through the purchase of mortgages and MBS using funding under HERA.
In developing such program, Treasury shall provide mechanisms to ensure availability of such reduced rate loans through financial institutions that act as either originators or as portfolio lenders.
Treasury shall make the affordable rates available under this program available in connection with Hope for Homeowner refinancing program.
Click Here for H.R. 384 "TARP Reform and Accountability Act of 2009"
Manager's Amendment
Short Summary of Manager's Amendment
Long Summary of Manager's Amendment
Click Here for Summary of Amendments
NOTE:
Still, there is the legal question of performing surgery on the principle for loan modifications. The following is a quote from Congressional testimony that proposes the use of Eminent Domain to buy mortgages for loan modification principle reduction. I find the thought pretty scary, but at this point it was only discussed in testimony before Congress - that's all. Messy, messy, messy can of worms. It bears watching closely:
"In testimony before Congress on Jan. 13, John Taylor, president and chief executive of the National Community Reinvestment Coalition (NCRC), proposed using the doctrine of Eminent Domain as the legal basis for the government to buy 3 million to 5 million home loans at a 30% to 35% discount from homeowners who still have jobs and are good credit risks. That would allow the principal on these mortgages to be reduced so that families can afford to stay in their homes."
Stay tuned.
good morning marketedge
got my eye on this one
* Housing stocks as a speculative play ? ...
OTCBB :
FCNR
BIG BOARDS :
FRE/FNM
BEAZER HOMES USA INC. $ 1.22
BZH -0.07
Short Interest (Shares Short) 11,986,000
Short Percent of Float 32.99 %
LENNAR Corp. $ 7.23
LEN -0.62
Short Interest (Shares Short) 26,450,100
Short Percent of Float 19.61 %
MERITAGE HOMES Corp. $ 10.25
MTH -0.65
Short Interest (Shares Short) 5,274,400
Short Percent of Float 19.53 %
STANDARD PACIFIC CORP. $ 1.49
SPF -0.13
Short Interest (Shares Short) 11,316,100
Short Percent of Float 11.54 %
Shift to original TARP could ease housing crisis
Tue Jan 13, 2009 6:27pm EST
By Patrick Rucker and Karey Wutkowski - Analysis
WASHINGTON (Reuters) - The Treasury is being urged to soak up billions of dollars of soured mortgage investments in a move that would return the $700 billion financial rescue fund to its original purpose.
Backers of the plan, including banking regulators, housing industry officials and bankers, say the about-face for the Troubled Asset Relief Program (TARP) would help both banks and homeowners.
Since it was conceived in September, TARP has been retooled as a capital-injection program and Treasury has almost fulfilled its promise to buy $250 billion worth of stakes in banks. Another $100 billion has been doled out in other emergency measures.
President-elect Barack Obama has asked Congress to unlock the remaining $350 billion of the rescue money which lawmakers hope to divvy up among several initiatives meant to prevent foreclosures and restore credit availability.
"TARP needs to be used to buy illiquid mortgages and for the government to modify those loans," Lawrence Yun, the chief economist for the National Association of Realtors, said in a statement.
Treasury would need a big chunk of money to fund an asset-purchase program and the initiative would be cumbersome to manage but backers say the effort would almost uniquely achieve the dual goals of helping homeowners and the financial system at large.
"If the government becomes the sole owner of these mortgage assets, it's easier for them to rewrite the terms," said Lawrence White, a finance professor at New York University. "There are virtues to the original plan that seem to have been forgotten."
Federal Reserve Vice Chairman Donald Kohn expressed support for the idea at a Congressional hearing on Tuesday as did the Federal Deposit Insurance Corp which maintains a fund to protect depositors.
"Preventable foreclosures harm not only the affected borrowers and their communities but also, through their effects on the housing market, the broader economy and the financial system as well," said Kohn.
John Bovenzi, chief operating officer for the FDIC, said that removing problem assets from banks' balance sheets should be "a key component" of the second half of the TARP funds.
"Such a program is necessary to expand banks' balance sheet capacity to undertake new lending as well as to attract private equity investment," he told the U.S. House of Representatives Financial Services Committee.
LOAN TRIAGE
Andrew Jakabovics of the Center for American Progress sees value in collecting troubled loans from the disparate investors who now hold them.
"The government could really triage these loans in a unique way once they own them," said the researcher with the liberal think tank that is acts as an incubator for Democratic Party policy.
"Also, the government could buy these housing assets at such a discount that taxpayers could see an upside to this."
Banks have been weighed down by their bad housing bets that are selling at deep discounts when anyone is even buying. Meanwhile, millions of homeowners have been locked in unaffordable loans heading for default.
The TARP program was originally pitched as a rescue two-step where the government would buy Wall Street's failing mortgage investments and then rewrite those loans to help homeowners.
The Treasury Department got a blessing from Congress but policymakers changed the plan as investor panic spread.
Making direct investments in banks would restore credit markets faster than buying bad assets, Treasury decided, and there was not enough money to both buy capital and bad loans.
GUARANTEES VERSUS PURCHASES
"For the asset purchase program to be effective, it must be done on a very large scale," Neel Kashkari, the Treasury's top TARP official, said in a speech last week.
Democratic leaders in Congress and the President-elect Obama's transition team have already begun to carve up the remaining $350 billion in rescue funds leaving little for asset purchases.
Banking lobbyists say such a program could still work if the government were to guarantee bad loans rather than purchase them outright. The Federal Reserve has pioneered several such blended approaches to aid during the ongoing crisis.
Federal Reserve Chairman Ben Bernanke said on Tuesday that the government could consider public purchases of these problem assets, asset guarantees, or setting up a so-called bad bank to take over assets in exchange for cash and equity.
"Should the Treasury decide to supplement injections of capital by removing troubled assets from institutions' balance sheets, as was initially proposed for the U.S. financial rescue plan, several approaches might be considered," Bernanke said.
A toxic assets purchase program could also ease the public perception that the financial bailout plan has been targeted at Wall Street instead of consumers.
"This is the bridge between helping banks and helping homeowners," said Jakabovics, who has brought the idea to Capitol Hill and to members of the Obama transition team.
(Editing by Tim Dobbyn)
* Courtesy disclaimer : currently own shares and plan to add shares of various companies listed above.
Shift to original TARP could ease housing crisis
Tue Jan 13, 2009 6:27pm EST
By Patrick Rucker and Karey Wutkowski - Analysis
WASHINGTON (Reuters) - The Treasury is being urged to soak up billions of dollars of soured mortgage investments in a move that would return the $700 billion financial rescue fund to its original purpose.
Backers of the plan, including banking regulators, housing industry officials and bankers, say the about-face for the Troubled Asset Relief Program (TARP) would help both banks and homeowners.
Since it was conceived in September, TARP has been retooled as a capital-injection program and Treasury has almost fulfilled its promise to buy $250 billion worth of stakes in banks. Another $100 billion has been doled out in other emergency measures.
President-elect Barack Obama has asked Congress to unlock the remaining $350 billion of the rescue money which lawmakers hope to divvy up among several initiatives meant to prevent foreclosures and restore credit availability.
"TARP needs to be used to buy illiquid mortgages and for the government to modify those loans," Lawrence Yun, the chief economist for the National Association of Realtors, said in a statement.
Treasury would need a big chunk of money to fund an asset-purchase program and the initiative would be cumbersome to manage but backers say the effort would almost uniquely achieve the dual goals of helping homeowners and the financial system at large.
"If the government becomes the sole owner of these mortgage assets, it's easier for them to rewrite the terms," said Lawrence White, a finance professor at New York University. "There are virtues to the original plan that seem to have been forgotten."
Federal Reserve Vice Chairman Donald Kohn expressed support for the idea at a Congressional hearing on Tuesday as did the Federal Deposit Insurance Corp which maintains a fund to protect depositors.
"Preventable foreclosures harm not only the affected borrowers and their communities but also, through their effects on the housing market, the broader economy and the financial system as well," said Kohn.
John Bovenzi, chief operating officer for the FDIC, said that removing problem assets from banks' balance sheets should be "a key component" of the second half of the TARP funds.
"Such a program is necessary to expand banks' balance sheet capacity to undertake new lending as well as to attract private equity investment," he told the U.S. House of Representatives Financial Services Committee.
LOAN TRIAGE
Andrew Jakabovics of the Center for American Progress sees value in collecting troubled loans from the disparate investors who now hold them.
"The government could really triage these loans in a unique way once they own them," said the researcher with the liberal think tank that is acts as an incubator for Democratic Party policy.
"Also, the government could buy these housing assets at such a discount that taxpayers could see an upside to this."
Banks have been weighed down by their bad housing bets that are selling at deep discounts when anyone is even buying. Meanwhile, millions of homeowners have been locked in unaffordable loans heading for default.
The TARP program was originally pitched as a rescue two-step where the government would buy Wall Street's failing mortgage investments and then rewrite those loans to help homeowners.
The Treasury Department got a blessing from Congress but policymakers changed the plan as investor panic spread.
Making direct investments in banks would restore credit markets faster than buying bad assets, Treasury decided, and there was not enough money to both buy capital and bad loans.
GUARANTEES VERSUS PURCHASES
"For the asset purchase program to be effective, it must be done on a very large scale," Neel Kashkari, the Treasury's top TARP official, said in a speech last week.
Democratic leaders in Congress and the President-elect Obama's transition team have already begun to carve up the remaining $350 billion in rescue funds leaving little for asset purchases.
Banking lobbyists say such a program could still work if the government were to guarantee bad loans rather than purchase them outright. The Federal Reserve has pioneered several such blended approaches to aid during the ongoing crisis.
Federal Reserve Chairman Ben Bernanke said on Tuesday that the government could consider public purchases of these problem assets, asset guarantees, or setting up a so-called bad bank to take over assets in exchange for cash and equity.
"Should the Treasury decide to supplement injections of capital by removing troubled assets from institutions' balance sheets, as was initially proposed for the U.S. financial rescue plan, several approaches might be considered," Bernanke said.
A toxic assets purchase program could also ease the public perception that the financial bailout plan has been targeted at Wall Street instead of consumers.
"This is the bridge between helping banks and helping homeowners," said Jakabovics, who has brought the idea to Capitol Hill and to members of the Obama transition team.
(Editing by Tim Dobbyn)
"The government and taxpayers have an enormously strong incentive to address the housing market given that the losses to banks will not end and the economy is unlikely to stop declining until the housing market stabilizes."
R. Glenn Hubbard and Christopher Mayer
Columbia Business School
The Wall Street Journal, October 2, 2008
http://www.fixhousingfirst.com/
TARP? i hope it does get used for homes, rebuilding america again.
Housing market data at NAHB ...
http://www.nahb.org/reference_list.aspx?sectionID=134
Builders Testify Before Congress On Use Of TARP Funds
January 13, 2009 - As Congress considers releasing the second half of the Treasury’s $700 billion Troubled Asset Relief Program (TARP), the National Association of Home Builders (NAHB) today urged lawmakers to use a portion of the funds to stem the rising tide of foreclosures and increase the flow of credit for housing production. NAHB also urged passage of legislation to stimulate housing demand.
“Up to this point, the TARP program has failed to expand the flow of credit to business and consumers on competitive terms,” NAHB Chairman-elect Joe Robson, a home builder from Tulsa, Okla., said in testimony before the House Financial Services Committee. “In addition the TARP program has not adequately responded to the nation’s foreclosure crisis, which must be addressed to keep people in their homes, help stabilize home prices and promote recovery of the housing market and economy.”
NAHB supports foreclosure prevention measures advocated by Federal Deposit Insurance Corporation Chairman Sheila Bair, which would use $24 billion of the funds Congress authorized for the TARP to provide loan guarantees to achieve greater success in foreclosure mitigation efforts. FDIC estimates that the program could help about 1.5 million home owners to avoid foreclosure.
With falling home values at the core of the current economic crisis, Robson said that foreclosure relief absent a plan to address demand for housing will not succeed in fixing the nation’s housing and economic woes.
“The only way to stabilize the housing market and restore consumer confidence is to put a floor under declining home values,” he said. “In conjunction with foreclosure mitigation efforts, Congress must pass temporary and targeted incentives to encourage Americans to buy homes again. This will help to stabilize home prices, prevent future foreclosures, restore consumer confidence and start creating jobs.”
Specifically, Robson urged Congress to enact NAHB’s proposal to boost housing demand by providing a bigger and better home buyer tax credit and offering below-market fixed-rate mortgages on home purchases, which would increase home sales by 1.1 million in 2009 and create more than 539,000 jobs.
“This two-pronged housing stimulus approach mirrors legislation passed by Congress in 1974 and 1975 to deal with the exact same problem,” said Robson. It helped bring our economy out of recession back then and it can do it again.”
With the nation’s credit markets still frozen, banks who have received TARP monies have come under deserved criticism for not using the funds to expand credit liquidity, he said. The dramatic deterioration in credit availability has severely impacted the acquisition, development and construction (AD&C) credit market, which is fueling the downward economic spiral by further depressing home prices and increasing the number of distressed properties on the market.
“The bank regulators must improve accountability through monitoring and reporting requirements for banks receiving TARP funds,” said Robson. “Builders are reporting it is much more difficult to obtain AD&C loans and those with outstanding loans are experiencing onerous new requirements or are having their loans called in. In short, many good loans are unnecessarily being turned into problem assets as a result of these actions.”
NAHB is seeking an allocation from TARP explicitly targeted to AD&C lending, which would enable financial institutions to allow builders to complete viable projects.
“The goal is to avoid unnecessary and onerous equity calls by financial institutions on projects that are bankrupting many small and medium sized builders that rely exclusively on bank funding,” said Robson. “If this situation is not aggressively addressed, it will unnecessarily put more real estate-related loans into default, additional pressure on the banking system and the insurance fund, and create more hardship on already stressed communities.”
With production of badly needed new affordable housing units declining in the current economic climate, Robson offered several suggestions to improve the financial health of the Low Income Housing Tax Credit (LIHTC), the single most important affordable housing production program in the federal government. He urged Congress to:
- Bring individual taxpayers back into the LIHTC investment market by changing the passive loss rules established as part of the Tax Reform Act of 1986.
- Make the LIHTC a refundable tax credit to stimulate investment and ensure that existing credits are not resold in the syndication market, thus checking the decline in LIHTC prices.
- Expand the LIHTC carry back rule from one year to five years to ease the downward pressure on LIHTC by allowing credits to be claimed by investors that may not have federal tax liability in the current year.
- Allocate funds to state housing finance agencies to make up equity shortfalls in developments which have LIHTC allocations but have not generated sufficient equity for the projects to move forward.
it will need some fine tuning.
It's been falling all of 2008. One would think that most of the damage has already been baked into the cake.
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FCNR.OB
Claremont Approx. 2148 sq. ft. 4 bedrooms 2 1/2 baths Great room Breakfast nook Loft | |
Mendocino Approx. 3606 sq. ft. (living area) Approx. 962 sq. ft. (porch) Approx. 4568 sq. ft. (total) 4 bedrooms 3 baths Guest suite | |
Montebello Approx. 4576 sq. ft. (living area) Approx. 962 sq. ft. (porch) Approx. 5748 sq. ft. (total) 4 bedrooms 3 1/2 baths Home office | |
Napa Approx. 1645 sq. ft. 3 bedrooms 2 baths Dining room Living room | |
Sausalito Approx. 1363 sq. ft. (includes garage) 3 bedrooms 2 baths Living room Nook One car garage | |
Sutherland Approx. 2359 sq. ft. 2 bedrooms 2 baths Great room Arizona room Living room |
Southeastern New Mexico's housing market video: http://www.truveo.com/Southeastern-New-Mexicos-housing-market-remains/id/3848708469#
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