Some housing bubble news from Wall Street and Washington. Origination News, “Subprime lender ECC Capital Corp., Irvine, Calif., posted a stunning $54 million loss in the third quarter, citing loan buybacks and early payment defaults. Through the first nine months of the year, the publicly traded nondepository lost almost $80 million.”
“ECC said it is continuing to “experience higher levels of repurchase claims generally relating to early payment defaults.”
“Williams-Sonoma Inc. on Thursday posted lower third-quarter profit and cut its outlook for the fourth quarter due to weak demand for home goods.”
“‘We are increasingly concerned about the ‘home-related’ macro-economic environment, as well as the competitive landscape,’ CEO Howard Lester said.”
From CNN Money. “Economists think it’s looking more and more likely that the Federal Reserve will hold interest rates steady for quite a while, maybe through all of next year. So investors hoping for a rate cut in 2007 may need to kiss that wish goodbye.”
“‘There’s no reason to assume that inflation pressures will come down quickly so it’s very unlikely the Fed will ease anytime soon,’ economist Chris Probyn said.”
From Bloomberg. “Central bankers and finance ministers from the world’s 20 largest economies may say inflation risks have increased amid the fastest global economic expansion in decades, raising the specter of higher interest rates.”
“‘They’re more concerned about inflation than growth,’ said Jean-Michel Six, chief European economist at Standard & Poor’s. ‘There will be more hikes from the European Central Bank and the Bank of Japan. The Federal Reserve will pause, but it won’t cut rates until the second half’ of 2007.”
From Reuters. “The conforming loan limit for mortgage finance giants Fannie Mae and Freddie Mac will be frozen for a year if national home prices decline in 2006, the Office of Federal Housing Enterprise Oversight said.”
Tags: Mortgages, Real Estate, Homes, Market Conditions
