Democrats and Republicans in the U.S. Senate agreed Tuesday to draft a housing rescue bill that could deliver billions of dollars to homeowners facing foreclosure and help steer the economy away from a deep recession.
Democratic leaders want the federal government to pay for more mortgage counselors, rehab projects for empty homes and tax breaks for borrowers stuck in unaffordable loans. Perhaps the most controversial provision of their plan would let bankruptcy judges erase some mortgage debt.
Lawmakers and policy-makers on all sides agree that the country is facing a tough economic crisis led by a wave of failing home loans, but Republicans generally resist a big government bailout.
A "bailout" bill can only partially address the symptoms, it cannot solve the problem. The problem is that there are too many homes for sale, and the price of these homes remains above the fundamentals. Until these conditions are gone, falling prices will continue to wreck havoc with the housing market and the economy.
Many thanks, as always, to M for pulling the numbers from ARMLS for our March preview. Do remember that agents have a couple of days to add sales in, so this number may be slightly lower than the number ARMLS releases at the middle of the month:
ARMLS is reporting home sales of 3445 in February, so month-to-month March saw a lot more activity, but this is typical for the season. This is the worst March since March 2001[the earliest data available to me] when 5704 homes sold.
There was one big surprise this month- there was a marked increase in sales in Queen Creek and Maricopa:
Sold 337 +68.8% YOY.
8.8 months of inventory
M asks "But is this sustainable?" I have to ask the same question. Particularly when he gives us the following breakdown for Queen Creek sales:
Standard & Poor’s Ratings Services believes that the bulk of the writedowns of subprime securities may be behind the banks and brokers that have already announced their results for full-year 2007. There may be some additional marks to market as market indicators have shown deterioration in the first quarter. However, when we dissect the percentage of writedowns taken against various types of exposures, in our opinion the magnitude of some writedowns is greater than any reasonable estimate of ultimate losses.
UBS doubled its writedowns from the subprime crisis on Tuesday, dumped its chairman and sought more emergency capital in a second attempt to reverse its fortunes.
Its shares climbed 7.5 percent as investors hoped the move marked a turning point for the firm that now leads the global list of banks hit hardest by the credit crisis.
UBS wrote down an additional $19 billion in ailing assets, bringing to $37 billion the damage wrought by the subprime crisis and causing a net loss of 12 billion Swiss francs ($12.03 billion) in the first quarter.
It pushes UBS, Switzerland’s flagship bank and financial fortress for rich investors, past Merrill Lynch to the top of the league of writedown shame.