The astute reader will notice that this blog has not been updated in many months. As of now this site is officially closed, and will no longer be updated. For information on consumer protection law please check out www.NewYorkConsumerLitigation.com. For consumer bankruptcy information please go to www.NewYorkBankruptcyLitigation.com

Sales of new US homes slid 8.3 percent in August to their lowest level in seven years, Commerce Department data showed today (September 27, 2007). The report showed new-home sales at a seasonally adjusted annual pace of 795,000, worse than market expectations of a decline to a rate of 825,000. The pace of new-home sales is down 21.2 percent from a year ago.

Also, the median sales price fell to 225,700 dollars, an 8.3 percent decline from the previous month and a level not seen since January 2005.

The report included a modest downward revision to July new-home sales to an 867,000 pace from 870,000, in a month that saw a surprise gain, possibly with troubled homebuilders clearing out inventories.

The inventory of new homes on the market in August fell 1.5 percent to 529,000 units. If the rate of sales stays at levels seen in August, the supply of new homes on the market would take 8.2 months to sell.

The weakness in housing has been the main drag on the US economy this year, but analysts are divided on how long the slump will last.

The latest report reflects sales in August, before the Federal Reserve announced an interest rate cut of .5 percent to 4.75 percent.

Source: Google

Newsday reports today that Foxtons, New York metropolitan area real estate powerhouse, said it may file for bankruptcy and close its business, explaining it “can’t stand in the way of a hurricane” that has come about as a result of the decline in the home mortgage industry.

The New Jersey-based company announced that it is “releasing” 350 of its 380 employees “and may be filing for bankruptcy protection in order to close the business in an orderly fashion.”

“Releasing” appears to be a euphemism for “firing.” Just in case that didn’t come through loud and clear.

In a statement, John D. Blomquist, Foxton’s senior vice president and general counsel, said that “the plain fact is that we have been battling against a real estate market that recently has turned into a sharp decline, and the company no longer has the liquidity to operate as a going concern.”

Countrywide Financial Corp. announced today, September 25, 2007, that it would be altering the terms for 35,000 home loans this year to avert foreclosures. Changes include repayment plans, postponement of payments, refinancing and modifications that bring loans out of default, the company said in a statement.

Countrywide handled billing and collections for about 9 million loans at the end of August, the Calabasas, California-based company said in a Sept. 13 report. So that means that Countrywide is going to assist borrowers in .14% of its entire loan servicing portfolio.

The U.S. Treasury Department and Federal Reserve have urged mortgage companies to stave off foreclosures by cutting or postponing payments for cash-strapped homeowners. They will surely be pleased that Countrywide is taking the bull by the horns.

“This is a great, unprecedented effort to help homeowners,” Steve Bailey, Countrywide’s delusional senior managing director of loan administration, said in an interview. Countrywide, which services about one of every five U.S. mortgages, plans to meet with Moody’s executives to discuss the issue, he said.

Bailey also claims that the impact of higher resets of adjustable rate loans is widely overstated. Countrywide found that only 1.3 percent of foreclosures in July stemmed from homeowners unable to pay higher interest rates, he said. While that percentage will increase in coming months, he predicted it would remain well below 20 percent. But even if that’s all true, why didn’t Countrywide make an effort to modify the loans of 1.3 percent of its borrowers, those who are in trouble due to the toxic mortgages foisted upon them in recent years?

The Texas attorney general has cracked down on Foreclosure Assistance Solutions, LLC, a company accused of preying on homeowners needing mortgage help.

“Countless Texas homeowners have been duped into giving $1,200 to FAS and unfortunately, in the process, still lost their home,” Texas Attorney General Greg Abbott said.

The Better Business Bureau in Clearwater, Fla., has 236 complaints filed against FAS. Forty-three of the complaints are from Texas residents.

For more information, visit the Texas Attorney General’s Web site.

This article in the Washington Post discusses ways to avoid foreclosure. The on-line version’s teaser says: “There are plenty of ways to avoid foreclosure: Refinancing, persuading the lender to modify the terms of the loan, selling the house or filing for bankruptcy protection, to name some. But there are also plenty of pitfalls.”

Ameriquest Mortgage Co, the largest U.S. subprime lender as recently as 2005, is closing. Citigroup Inc said on Friday it agreed to buy the wholesale mortgage lending and payment collection assets of Ameriquest’s parent, ACC Capital Holdings, for an undisclosed price.

Ameriquest was the first major subprime lender to downsize in the current housing cycle, deciding in May 2006 to close all 229 retail branches and cut 3,800 jobs.

U.S. President George W. Bush said on Friday the government would try to keep some borrowers from defaulting, but would not bail out lenders.

ACC “is preparing the orderly wind down of its retail mortgage business, which is no longer accepting applications,” spokesman Chris Orlando said.

Citi said in a statement it would expand its efforts to make sure distressed borrowers get to stay in their homes.

Source: Reuters

H&R Block Inc. said yesterday that continued problems in credit markets were forcing it to renegotiate the sale of its Option One Mortgage Corp. arm to a subsidiary of Cerberus Capital Management.

In a conference call with analysts, chief executive Mark Ernst stated the obvious by saying that the mortgage origination market was in the midst of “the most severe dislocation it has seen in years, maybe the most severe since the 1930s.”

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Today, August 3, 2007, Bloomberg reported that Countrywide Financial Corp.’s stock fell to 2004 levels and IndyMac Bancorp Inc. shares hit a four-year low as demand from investors who buy home loans dried up.

Rising defaults by borrowers with the worst credit histories have spread to people with more reliable records. That’s making investment banks that repackage home loans into bonds reluctant to buy, threatening profits of residential lenders. Mortgages backed by federally chartered agencies such as Fannie Mae are the only bright spot, said KBW Inc. analyst Bose George in New York.

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An interesting side product to the housing market slump is that so many people who were previously unable to afford to purchase a home are now in a better position.

From Los Angeles, this article about people looking at the depressed real estate market in a new way.