Colorado Housing Rates ‘Better Off’ in 33 of 35 Counties

According to RealtyTrac’s 2014 Election Housing Market Scorecard released on Tuesday, 33 out of 35 counties in Colorado with sufficient housing data to score ranked in the “better off” category, meaning that the housing market in those counties is better off than it was two years ago.
The total population of the better off counties was 4.8 million, which accounted for 99 percent of the population in Colorado with sufficient housing data to score. None of the 35 counties in the state ranked in the “worse off” category. Two counties with a population totaling 40,385 ranked in the toss-up category, according to RealtyTrac.
One reason for the overwhelming “better off” rating in Colorado is the fact that unemployment is way down in the state’s most populated housing counties, which are El Paso, Denver, and Arapahoe, compared to where it was two years ago in each of those counties. In Denver County, unemployment fell by 3 percentage points from July 2012 to July 2014, while El Paso County and Araphaoe County experienced declines of 2.9 and 2.5 percentage points, respectively, in that same two-year period, RealtyTrac reported.
Another possible reason for the better off rating for most of Colorado is the decreasing number of underwater mortgages. According to RealtyTrac, only 6 percent of homeowners with a mortgage in the three most populated housing counties in Colorado are underwater. Foreclosure starts are down in two of those three counties from August 2012 to August 2014: Denver County and El Paso County saw declines of 67 and 54 percent in foreclosure starts for the two-year period, while Arapahoe County saw a slight increase (3 percent) in foreclosure starts for that same period.
Home prices are up in all three counties compared with where they were two years ago, according to RealtyTrac. Arapahoe County led the way with a 22 percent increase in home prices from two years ago, while home prices jumped by 14 percent in Denver County and by 5 percent in El Paso County. A rise in prices without a corresponding rise in income is hurting the housing affordability in those three counties, however. Denver and Arapahoe Counties reported a 5 percent increase in the percentage of median income needed to purchase a median price home in the last two years, while El Paso County reported a 2 percent jump.
In the polls, Democratic incumbent Mark Udall and Republican challenger Cory Gardner are almost locked in a dead heat with Udall leading in the latest poll by only one percentage point, 48 percent to 47, in a Rasmussen Reports poll on October 1. Obama won Colorado in 2012. This year’s election will be on November 4.


Survey Finds Consumer Spending Tight Despite Financial Security

Stagnant income growth and uncertainties about the economy’s future have spurred more Americans to putting a tight lid on their monthly spending, according to a new poll.
In survey findings released Tuesday, reported that two-thirds of American consumers are now limiting how much they spend each month. Of those who have had to draw their purse strings tighter, 32 percent cited stagnant income as the main reason, while 29 percent said they need to save more. Sixteen percent cited worries about the economy in general.
“Sustainable growth in household income is the missing ingredient from this economic recovery and the leading culprit for why consumers are holding back on monthly spending,” said Greg McBride, CFA, Bankrate’s chief financial analyst. “Worries about the economy have dissipated somewhat over the past year while consumers’ desire to forego additional spending in order to save more has increased.”
Americans between the ages of 30 and 49 are the most likely right now to limit their monthly spending, according to Bankrate. The company notes Americans in that age range are in their prime years for buying a house or a car or starting a family.
What’s more, millennials—whose population makes up the majority of first-time homebuyers—were the most likely to cite the need to save more money as their primary reason for spending less.
Bankrate also reported Tuesday the results of its Financial Security Index, which increased for a second month in October to 101, its highest reading since June. Readings above 100 indicate improved financial security compared to the year prior.
Survey respondents indicated improvement in four of the five index components over the past year, with their job security, net worth, comfort level with debt, and overall financial situation all coming up.
The only indicator to see a decline was consumers’ comfort level with their savings, with one-third now saying they’re not happy with how much they have saved.

Citigroup Reports 7 Percent Net Income Growth in Q3

Citigroup Profits 2014 Citigroup reported an increase of 7 percent in its net income from $3.2 billion up to $3.4 billion year-over-year in the company’s 2014 Third Quarter Earnings Report released on Tuesday.
The net income increase was driven by higher revenues and a decline in credit costs and was partially offset by higher operating expenses. Excluding credit value adjustment/debit value adjustment (CVA/DVA) in both periods and the tax benefit from the prior year, Citigroup’s net income for Q3 was $3.7 billion, representing a 13 percent year-over-year increase.
Overall, Citigroup’s revenues increased by 9 percent year-over-year in Q3, up to $19.6 billion. Without CVA/DVA, the company reported revenues of $20 billion, which marked a 10 percent increase from the same period in 2013. The revenue increase was driven by Citicorp revenue growth of 8 percent and an increase in Citi Holdings revenues of 30 percent.
Citigroup’s loans and deposits were each down by 1 percent in Q3 from the same period in 2013. Loans dropped slightly down to $654 billion while deposits fell to $943 billion. Citigroup’s loans increased by 1 percent and deposits remained largely unchanged on a constant dollar basis, however. Declines in Citi Holdings, driven mostly by the North America mortgage portfolio, partially offset growth in Citicorp.
Global Consumer Banking (GCB) revenues in North America climbed by 5 percent in Q3 from the prior year up to $5.0 billion, reporting higher revenues in retail banking, Citi-branded cards, and Citi retail services. Revenues for retail banking jumped by 9 percent from Q3 2013 to Q3 2014, an increase that reflects a 9 percent increase in average loans and a 2 percent hike in average deposits. The gains in retail banking also reflect higher revenues in the U.S. mortgage business driven by an approximate $50 million repurchase reserve release in Q3. GCB net income in North America was reported at $1.2 billion in Q3, an increase of 33 percent from Q3 2013.
Citi-branded cards revenues moved slightly upward by 1 percent up to $2.1 billion for Q3, and revenues for Citi retail services jumped up by 8 percent to $1.6 billion, largely driven by the acquisition of the Best Buy portfolio.
Citi Holdings reported a net income of $238 million in Q3, compared with a net loss of $115 million from the same period a year ago. Excluding CVA/DVA, Citi Holdings’ net income was $272 million compared with a net loss of $113 million in Q3 2013. The gains in Q3 2014 were driven by higher revenues, lower operating expenses, and lower net credit losses. Net credit losses experienced a 45 percent decline in Q3 from the previous year, down to $347 million, fueled by improvements in the North America mortgage portfolio. The net loan loss reserve release plummeted by 79 percent in Q3 year-over-year, mostly due to the North America mortgage portfolio-related lower releases.
Citigroup reported an earnings per share of $1.07 for Q3, an amount that increased to $1.15 per share excluding CVA/DVA.

Study: 52 Percent of County Housing Markets ‘Better Off’ Than Two Years Ago

A total of 811 U.S. county housing markets (52 percent) were rated as “better off” than they were two years ago, compared to only 11 percent (176 markets) categorized as “worse off,” according to RealtyTrac’s 2014 Election Housing Scorecard released on Tuesday.
Meanwhile, 560 counties (36 percent) were categorized as a “toss-up” as far as the health of housing market in those counties, according to RealtyTrac.
The total population of the markets in the better off category was about 140 million, which accounted for 50 percent of the population in all the housing markets RealtyTrac analyzed for the election housing scorecard. The total population of the worse off markets was 24 million, about 9 percent of the population in markets analyzed. The housing markets that rated as a toss-up had a total population of about 115 million, or 41 percent of the population in markets analyzed.
“The housing market recovery has truly taken hold in about half of the country, but the recovery is weak or experiencing a relapse in the other half,” said Daren Blomquist, vice president of RealtyTrac. “Whether because of good government policy, sheer luck or otherwise, the majority of county housing markets in six of the eight states with close U.S. Senate races are better off than they were two years ago. This should favor the incumbent, or the incumbent’s party, all else being equal — which of course we know it is not. The only exceptions were Iowa and Alaska, where the majority of county housing markets were classified as toss-ups compared with two years ago.”
RealtyTrac’s election housing scorecard rated 1,547 county housing markets in the U.S. based on five factors that affect the health of housing: housing affordability, unemployment rates, median home prices, and foreclosure starts all compared with two years ago, as well as the percentage of seriously underwater homeowners.
With three weeks remaining before the election, RealtyTrac examined the housing market in eight states where the Senate Race is most highly contested: Alaska, Arkansas, Colorado, Georgia, Iowa, Kansas, Louisiana and North Carolina. The states that had the highest population out of those eight states in the better off category were Colorado (99 percent, 4.8 million) and Kansas (97 percent, 2 million). The states that had the highest population in the toss-up category were Alaska (81 percent, 387,000) and Iowa (62 percent, 641,000). Only three of those eight states reported at least one county in the worse off category: Iowa (29 percent, 304,000), Georgia (5 percent, 427,000), and North Carolina (4 percent, 387,000), according to RealtyTrac.

Wells Fargo, JPMorgan Chase Profits Turn Upward in Q3

Third-quarter profits improved annually at two of the nation’s biggest megabanks, though mortgage banking results were mixed.
For the latest completed quarter, JPMorgan Chase reported net income of $5.6 billion compared to a loss of $380 million a year ago. Earnings last year were flattened by a $7.2 billion (after-tax) legal expense, while Q3 2014’s results include a $1.0 billion after-tax charge.
Revenue for the quarter totaled $25.2 billion, up 5 percent from a year prior.
Commenting on the results, chairman and CEO Jamie Dimon said the bank has “continued to deliver strong underlying performance” in maintaining its balance sheet, simplifying business, and adapting to regulatory changes.
“We remain very focused on executing the control agenda and investing to protect our customers and the company for the future,” he said.
Mortgage banking net income was $439 million, down $266 million from a year ago and $270 million from the prior quarter. Much of the year-over-year decline stemmed from a reduced benefit from credit loss provisions—$19 million compared to last year’s $1 billion.
Originations for the quarter came to $21.2 billion, down 48 percent from last year but up 26 percent from the second quarter, JPMorgan reported.
The bank’s mortgage servicing income (pretax) was $138 million in Q3, up from a loss of $406 million a year prior as a result of lower expenses and higher risk management income. As of the end of the quarter, total third-party mortgage loans serviced were $766.3 billion, down 8 percent from Q3 2013 and up 3 percent from Q2 2014.
On the other side of the country, Wells Fargo posted profits of $5.7 billion for the quarter, up from $5.6 billion in Q3 2013 and flat from Q2 2014.
Revenues came to $21.1 billion, down slightly from last year’s $21.4 billion.
“The Company’s third quarter results demonstrated strength in the fundamental drivers of our long-term growth,” said John Stumpf, chairman and CEO of Wells Fargo. “We continue to see signs of a steadily improving economy, and I remain optimistic about the opportunities ahead for Wells Fargo.”
While profits were up slightly, mortgage business at the country’s biggest home lender was down on a quarterly basis. According to the bank’s report, mortgage banking noninterest income was $1.6 billion in Q3, down $90 million from Q2 2014 and about level with where it was last year.
Home mortgage originations last quarter came to $48 billion, up $1 billion from the second quarter but down from $80 billion a year ago, Wells Fargo reported. Applications totaled $64 billion with a pipeline of $25 billion at quarter-end, down from $72 billion and $30 billion, respectively, in Q2.
The bank explained that origination gains were largely due to an increase in the gain on sale margin (1.82 percent compared to 1.41 percent in the second quarter), though that was “more than offset” by a decline in servicing income driven by lower net mortgage servicing rights and an increase in unreimbursed directing servicing costs.
Meanwhile, credit losses were $668 million in the third quarter, an improvement of 31 percent from last year, allowing the bank to release $300 million from its allowance for credit losses.
“Credit quality continued to trend positively in the third quarter as loan losses remained at historic lowers, nonperforming assets continued to decrease, delinquency rates were stable, and we continued to originate high quality loans,” said Mike Loughlin, chief risk officer. “We continue to expect future reserve releases absent a significant deterioration in the economic environment, but expect a lower level of future releases as the rate of credit improvement slows and the loan portfolio continues to grow.”
Coming from two of the biggest names in U.S. banking and mortgages, Tuesday’s earnings report provide a glimpse at how the market performed at a time when housing usually starts to slow down each year. Also released on Tuesday was the latest from Citigroup, which took in $3.4 billion during the quarter. Earnings from other big-name firms, including Bank of America, Goldman Sachs, and Morgan Stanley, are due later this week.

Investors Shore Up Stock in GSEs

Two major investors have shored up their stock in Fannie Mae and Freddie Mac after a judge dismissed two lawsuits regarding the sweeping of GSE profits into the U.S. Department of Treasury, causing the price of GSE stock to plummet.
William A. Ackman, head of Pershing Square, and Bruce Berkowitz, head of Fairholme Capital, have both added to their respective stakes in the two GSEs. In the last week of September, Judge Royce Lamberth threw out lawsuits filed by Fairholme and Perry Capital against the government claiming that the sweeping of GSE profits into Treasury was illegal. The judge ruled the sweeping of the profits was legal under the Housing and Economic Recovery Act.
Pershing Square filed two similar lawsuits against the government in mid-August, and those suits are still pending. Fairholme and Perry have each filed an appeal of the judge’s decision to dismiss their lawsuits. Pershing Square no longer regularly reports its holdings in Fannie Mae and Freddie Mac, but it is known that the New York-based hedge fund is the largest non-government owner of GSE common stock.
“Fairholme’s conviction in its Fannie Mae and Freddie Mac positions has not changed, and Fairholme actively monitors all of its positions – particularly during periods of market overreaction,” a source familiar with Fairholme said.
Pershing Square could not immediately be reached for comment.
The share price for both Fannie Mae and Freddie Mac experienced gains of more than 5 percent last week after the announcements by Ackman and Berkowitz, but the price of shares for both is still down by more than 30 percent since the judge’s ruling.
The government seized control of Fannie Mae and Freddie Mac back in September 2008 at the height of the nation’s financial crisis, after which Treasury provided $188 billion to bail out the companies. Fannie Mae and Freddie Mac have since become profitable and have returned $218.7 billion in dividends to taxpayers. The Obama administration wants to phase out the two GSEs, which have been in conservatorship since the government takeover six years ago.

Report: Tampa Area Accounts for 3.3 Percent of Nation’s Foreclosure Completions

Foreclosure inventory was down in the Tampa, Florida, area in August but the area still led all core-based statistical areas (CBSAs) nationwide in foreclosure completions over a 12-month period, according to data recently released by CoreLogic.
In the Tampa-St. Petersburg-Clearwater CBSA, there were 19,153 completed foreclosures from September 2013 to August 2014, most of any CBSA in the nation for that time period, CoreLogic reported. The 19,000+ foreclosure completions in the Tampa area for that period accounted for 3.3 percent of the 575,706 foreclosure completions nationwide for those 12 months, according to CoreLogic. The state of Florida, with 120,842 foreclosure completions in those 12 months, accounted for 21 percent of foreclosure completions nationwide.
The Tampa CBSA also had the highest serious delinquency rate among the 25 CBSAs with the most foreclosure completions over 12 months, according to CoreLogic. Tampa’s serious delinquency rate of 9.9 percent was ahead of Nassau County-Suffolk County, New York, and Newark, New Jersey-Pennsylvania, which tied for second place with a rate of 9.2 percent each. Serious delinquency is defined as being 90 days or more late on mortgage payments or in foreclosure. For August, the national average serious delinquency rate was 4.3 percent, CoreLogic reported.
Tampa’s foreclosure inventory, or the number of residential properties in some state of foreclosure, fell by 3 percentage points in August from the same month a year ago, according to CoreLogic. In August 2014, Tampa reported that 5.6 percent of all residential mortgages nationwide were in some state of foreclosure, tied with Nassau-Suffolk County for second only to Newark (5.8 percent) among the top 25 CBSAs in foreclosure completions over the previous 12 months, Corelogic reported. The national average foreclosure inventory rate was 1.6 percent for August.
Three other CBSAs reported more than 10,000 foreclosure completions from September 2013 to August 2014, according to CoreLogic: Atlanta-Roswell-Sandy Springs, Georgia (16,834), Orlando-Kissimmee-Sanford, Florida (14,375), and Chicago-Naperville-Arlington Heights, Illinois (11,341).