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According to our fav real estate gossip guy, Braden Keil of the NYPost, North Haven recently experienced a bidding war on a waterfront property. Check it out:
Warner Music Group chairman Lyor Cohen is spending $6.8 million for a teardown in the Hamptons. Sources say Cohen has just closed on the property in North Haven after a bidding war erupted for the bayfront home, which was listed at $5.5 million.
“Lyor was actually the second-highest bidder,” says a source, “but the guy with the highest offer couldn’t come up with the $7.2 million - and he also lost his $720,000 deposit.”
While the four-bedroom Contemporary is nothing to crow about, the stunning 2.5-acre property has 170 feet of waterfront. Meanwhile, Cohen has taken his Bridgehampton estate with a $9.5 million price tag off the market in anticipation of his lengthy construction project.
see the article here
There’s all sorts of nifty new fact and figures coming out about sub-prime. Here’s a map from Newsday showing the percentage of mortgages for 2006 that were sub-prime loans.
Presumably, that will give an indication as to how many foreclosures might be in these community’s future? Looks like the East End has a much lower overall percentage than our sister markets to the west. see map here
OK, I admit it. This bull (not just because I’m a Taurus) started growing claws the last few weeks, with the news stories flowing about AHM, IndyMac, First Mangus, Thronburg, Green Point, Countrywide, and countless others. I’m an eternal optimist, with a realist bent, but even my closest business friends were walking about with one raised eyebrow since early August.
As I have heard and repeated many times before “if you do a rain dance long enough, it’s going to rain”.
“Is our rainy day(s) here?”, I asked.
“Just look at the papers and listen to the news”, I was told. Ohhhhhh, of course.
Well, refreshingly, lawyer, writer, actor and economist Ben Stein, as usual, helped put things in perspective for me this morning:
“ FEAR CAN TRUMP FACT Today’s news media will “catastrophize” anything they can. The subprime mess was always much smaller than the media let on. (See my column of two weeks ago.) In a nation of our size, in a world economy on fire with prosperity and liquidity, the losses were not large, but the media endlessly tried to scare us. ” Ben Stein 8/26/07
See the rest of Ben’s NYTimes article here: Avoid the Craziness and No One Gets Hurt
SEE BEN STEINS CBS REPORT HERE
Speaking with Christine Curiale, Wells Fargo in Southampton (HREB8/5/07)
They’re writing everything: jumbos, limited doc, stated income loans, EXCEPT NO INCOME SUB PRIME.
LATEST RATES:
Jumbo
30 yr fixed 7.250
5/1 ARM, interest only 6.750
see Wells Fargo rates HERE
Not bad!! You see, Wells Fargo is one of the largest banks in the US and has been selling off their sub-prime loans all along - to those doing the Mexican Jumping Bean Dance on CNBC these days.
call Christine at 631.283.2120
[tags]Beachamptons, Hamptons, hamptons mortgage broker, Christine Curiale, mortgages, subprime, hamptons real estate, Countrywide, American Home Mortgage[/tags]
Everyone should know a little about what has been going down the mortgage industry…..in simple terms.
In simple terms: The risk tolerance has changed for investors of mortgage backed securities (MBS).
MBS are investments in the performance of large pools of “like” mortgages, i.e. no-doc or bad credit loans. Performance, meaning the actual payments made on a monthly basis. After mortgages are funded at the closing table, they are grouped in “like pools” and shipped to investors willing to buy these “graded” MBS.
In actuality, the purchase is consumated before hand and the sale begins on the “day the loan is locked”.
That is why a loan with a 60 day lock must fund within 60 days. Because the “secondary market”, the MBS investors, are counting on that guarenteed margin.
When the real estate market was still firing hot along with a robust economy and hot job market, these securities, naturally, were risky, but profitable. The “perfect storm” for profiting on junk. Now that these economic factors have changed, these riskier MBS are not performing so well and investors have lost billions. Investors have stopped buying them and also are balking at, or lowering their purchase offers, on even A-minus paper MBS. A-minus paper would be a high credit score / stated (not verified) income, full asset verification loan. In other words, an otherwise perfect loan, but the income is not documented, just stated on the application. Hence, A-minus, or Alt-A paper.
So much money has been lost on investing in the subprime market (bad credit, B-C-D paper), that investors haved changed their terms on the purchase of A-minus loans literally overnight. Investment in the subprime loans was huge: hedge funds, global banks, giant investment firms. The reprecussions have traveled around the globe.
Investors of MBS are also the lifeline of many mortgage banks. Without the purchase of these huge bundles of loans, the bank has no cash flow to fund the next wave of loans. The banks less vulnerable to this condition are banks that are diversified i.e. funded by deposits, CD’s, etc, that do not count entirely on the secondary market.
Mortgages virtually unaffected by this are Fannie Mae (FNMA) “conforming” loans. That is, full-doc, good credit loans at (currently) $417,000 and under . FNMA must buy these loans. There is no negotiating when a lender has a giant pool of conforming loans. The money keeps flowing. But, not all of us live in that world. And not all of us can, are able, or even willing to document income. Sometimes we can’t prove cash income. Sometimes we don’t want to if we have ten corporations and it’s more work to produce documentation or divulge the sources, than paying the quarter point in additonal fees or slightly higher rate.
So we’ll always have these mortgage options. We just have to deal with more restrictive guidelines than we’re used to until the secondary market gets over this fright, subprime loans are charged off or begin performing and things get back to normal.
We don’t know how far the subprime effects will ripple. We can only wait and see. If you currently are, or will be originating a non-conforming loan, due to a purchase or a refinance…..get it done! Because in the meantime, any loan that is non-conforming will be changing before our eyes, as investors will decide on the risk and demand more restrictive lending guidelines and higher rates of return…….until things get back to “normal”.
Ted Soulopulos
949-463-4680
I like Lou Barnes and find his perspective and advice, usually on the money.
“This episode is nothing — nothing — compared to October ‘79, when over one long weekend Paul Volcker announced that the cost of money would float free with demand. Many mortgage bankers never answered their phones again. Mortgage rates went from 10% to 11.5% over that weekend, and to 13% by Christmas. The technical top was 18.1% in 1981, but that was statistical artifact: lights-on-but-dead S&Ls priced money just beyond demand. There wasn’t any mortgage money, except the first of the new-fangled adjustables, start rate a-hell-of-a-deal 16%. “
Check out his: Mortgage Credit News - August 6, 2007
[tags]Beach properties, Hamptons, mortgage money 2007, sub-prime, AHM, Wall street mortgage, bear sterns[/tags]
May 13, 2008 UPDATE:
For all of you looking for blood, yes foreclosures are up in the Hamptons. ALL THE WAY to EIGHT FOR THE FIRST QUARTER. WOW, JUICEY HUH?!?!? And yes, there are more people behind in their mortgage payments than there were a year ago, and THAT’S WHAT HAPPENS IN A SOFT ECONOMY!!!.
I think it’s a disgrace that those cynical morons in the media, most of whom can’t even afford their own home, have the nerve to print the names of those in financial distress.
Here, I have something for those sick-o’s; why not goto the top 10 most accident prone intersections in NY and get your thrills: http://www.stephanpeskin.com/CM/Custom/Intersection-Injury-Fatalities.asp
ORIGINAL POST
The recent past has not resulted in a great many foreclosures in the combined townships of Southampton and East Hampton.
Here’s a look at the total foreclosures, on a quarterly basis since 2002, which I compiled, based upon information from Long Island Profiles -LIProfiles.com
The trend shows foreclosure activity going down in recent years. We’ll look again in a few months. md
[tags]Hamptons, hamptons foreclosures, mortgages, subprime, hamptons real estate[/tags]
With all the hullabaloo going on with sub-prime and American Home Mortgage closing down this week, it was nice to see someone ’step up to the plate’ in the heat of it all. AND, it was no suprise, that that someone was Christine Curiale, Branch Manager from Wells Fargo Private Mortgage banking in Southampton, NY.
Christine is a real pro and has never-ever let me down with a client. Try to say that about a lot of people!
Anyway, with bullets flying and indexes dropping, here is the “jist” email that I, and many other loyal CC colleagues received:
Subject: FW: East End Mortgage/Realestate Market
(With) the changes in our recent real estate/mortgage market and the challenges that lie ahead. Many home mortgages are in a state of flux. Clients are confused and nervous. This instability has resulted in some banks and clients walking away from the closing table. Many are even afraid to begin the process. What do you do? How do we protect your East End clients and our East End business?
The answer is simple. Education. Knowledge is power — and in this market, knowledge means business.
Be proactive! They will send one of their experienced private mortgage bankers to your office. They will conference with your agents and provide the means to keep your clients informed and comfortable from ACCEPTANCE OF OFFER through CLOSING TABLE AND FUNDING. If you wish, this can be an ongoing process. Continued flow of information; up to the minute mortgage programs; continued customer service. Your clients need to know that you can deliver. You are the essence of the East End Real Estate business. Wells Fargo has been there since 1852.
They have weathered a few storms along the way. They remain the only AAA rated bank in the United States. I believe we can generate a mutually beneficial relationship that will not only ride out the storm, but provide a solid position for future markets. Time is of the essence.
Call Christine at your earliest convenience. Christine E. Curiale
Branch Manager
Wells Fargo Private Mortgage Banking
M6586-011
AU# 38690
42 Hill Street
Southampton, New York 11968
631.283.2120 x110 Tel
631.255.5888 Cell
631.287.6072 Fax
631.204.6920 Direct Fax
Christine.curiale@wellsfargo.com [tags]Beachamptons, Hamptons, hamptons mortgage broker, mortgages, subprime, hamptons real estate[/tags]
Some interesting Monday morning insights into the sub-prime mortgage situation. Seems like Mozilo is trying to hedge the worst case… Great post by Matt Carter, Inman News
“In a conference call with investment analysts, Countrywide CEO Angelo Mozilo said that (as the) subprime tsunami recedes, there will be just five major lenders with a major share of the mortgage lending market (compared to 10 today), and that Countrywide intends to be one of them.”
Where this might have inpact in the Hamptons is with the “stretched” investor. The stretched investor is the one who is borrowing 110% on properties in hopes of flipping and dipping into equity in a short period of time. Real estate investing is a cottage industry for many folks out here. It’s how many people make their living. Tighter lender restsrictions and slower appreciation are having an effect on certain segments.
See the WSJ article below:
Regulators Tighten Rules
For Subprime-Lending By Damian Paletta
Lou Barnes, from Boulder West Financial Services has, in my opinion, a clear and pragmatic view of national mortgage money issues and addresses them weekly. This week’s is particularly insightful for me…more here
