39% of Homebuyers in 2010 put a downpayment that was less than 20%

That is significant because new mortgage risk retention rules and mortgage underwriting rules are being suggested.

Regulators proposed a rule in March requiring lenders to maintain 5% of the credit risk on loans, including mortgages, that are packaged into securities. The exception is the qualified residential mortgage, which among other standards, must include a 20% downpayment from the borrower.

While rule makers intended the QRM to maintain a narrow slice of the market, a variety of trade groups and lawmakers began an effort to lower that downpayment figure. But even if it was lowered to 10%, as Federal Housing Administration Acting Director Bob Ryan suggested to Congress, the impact would still be widespread. Nearly 25% of homebuyers in 2010 paid less than 10% down, CoreLogic said.

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BarCap: MERS foreclosure issues may be spreading to commercial real estate

According to BarCap, these lawsuits are spreading outside the residential space, challenging foreclosures on loans backing commercial mortgage-backed securities.

But analysts believe there are legal remedies available to limit any negative effect for investors.

"As such, there could be a scenario where MERS originated loans could see a possible extension in liquidation timelines by a few months, but this should not affect CMB

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Housing Slump Offers Opportunity In Apartment-Building Market

Please note this is for out of California

"The pain was concentrated where we had gross overbuilding in overall housing: Florida, Phoenix, Las Vegas, Southern California, and to some degree smaller markets like Tucson, Charlotte and Atlanta," says Badji.

Marc Solomon, whose Solomon Organization owns 10,000 garden apartments in New York, New Jersey, Connecticut and Pennsylvania, says that it is difficult to find opportunities that make good business sense in his markets, which still offer slow, steady returns. "There's a lot of dollars out there chasing these deals," he says.

One of the reasons

"I don't think you're going to get fire-sale prices," he says. "But you can get that kind of return ahead of the job growth and ahead of the economic recovery."

Rental occupancy rates contracted dramatically during the recession, as people doubled up to save money and young adults boomeranged back home. Vacancies nationwide hit a high of 8 percent in the last quarter of 2009, according to real estate research company Reis.

But industry insiders argue that rentals will bounce back quickly and dramatically as well. Indeed, in the third quarter of this year, vacancies dropped to 7.2 percent, according to Reis

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Apartment Sector Sees Record Improvements

This might not what it appears to be.  Household size is actually increasing so people actually moving in together.  I believe what might  be happening is that as people lose their homes/townhouse their moving into rental units or with other family members.  However, that house that was foreclosed upon is temporarily not available for occupancy. 

National vacancies fell from 7.8% to 7.2% in the third quarter of this year, one of the sharpest quarterly declines in vacancy on record. Occupied stock increased by over 84,000 units, the highest quarterly number for net units absorbed by the overall market on record. That in turn pushed asking and effective rents up 0.5 AND 0.6% respectively. With rents pushing even higher in larger cities, where home ownership has become more difficult thanks to the credit crunch.

And there is corresponding increasing in multifamily units

But now with increased demand and low inventory, builders who can get financing are responding.

Witness a 32 percent jump in multi-family housing starts in August, compared to just a 4 percent increase in single family

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Kroger, Google , Waste Management investing in housing?

These companies which traditionally had nothing to do with housing are investing in low income rental housing.

The investments are attracting nonfinancial companies seeking to offset taxable income that is climbing as the economy recovers. The deals, which help make affordable housing more available, also provide an alternative to record-low yields on government and corporate bonds.

Investor returns, which vary based on terms of individual deals, are derived from federal credits and depreciation deductions that reduce tax bills. Investors make money primarily by paying less than a dollar for a dollar’s worth of tax credits. The transactions are usually best suited to companies with consistent profits and a long-term outlook because the tax credits are meted out over 10 years and equity can be tied up for 15 years.

These companies found a new niche.

Corporate investors are helping fill a gap left by mortgage companies Fannie Mae and Freddie Mac, which together accounted for about 35 percent of the market before the housing collapse wiped out their profits and forced them to pull out in 2008. Banks, which use investing in affordable housing to help meet their obligations under the federal Community Reinvestment Act, cut back after the financial crisis amid losses on mortgage securities and leveraged-buyout loans.

And the outlook in the future?

Joe Hagan, chief executive officer of National Equity Fund, a Chicago-based syndicator, said his company expects to be involved in $700 million of affordable-housing investments in 2010. In 2009, it brokered $350 million in private-investor deals. Hagan’s concern is that the popularity of tax credits could work against it.

“What keeps me up at night is that because of our success, returns start coming down to the point where the new investors step out of the market,” Hagan said. “Then we’re back to the drawing board.”

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Dubai Financial Center Office Vacancies Could Reach 40% On Oversupply

I like to just cover So Cal and a few other areas.  But look at the vacancy rate in Dubai.

Vacancy levels in Dubai's financial center are predicted to peak between 30% to 40% in 2011 and 2012, but then are expected to decline to 10% to 15% by 2014.

In areas outside the central business district the outlook is worse, with vacancy rates likely to increase to over 50%, the report said, adding that the emirate should consider mothballing projects or in some cases convert construction sites into other uses such as car parks or golf driving ranges

And look at the housing picture

The research is another blow to Dubai's property market, where house prices tumbled 50% during the financial crisis and are yet to recover as supply surges ahead of flagging demand.

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One In Five Hotel-Backed Loans Is Now Delinquent

This is just amazing.  It seems people were pulling equity out of their homes to finance vacations.  As now people have to use their real wages the hotel industry is hurting.  Here's the breakdown of specific investment classes.

Of the $3.1 billion new delinquencies in August, $1.1 billion (36%) corresponded to hotel-backed loans, pushing the hotel-specific delinquency rate past 20%. Current delinquency rates by property type are as follows:

--Hotel: 20.80% (from 18.64%)
--Multifamily: 14.18% (from 13.87%)
--Retail: 6.11% (from 6.35%)
--Industrial: 5.55% (from 5.20%)
--Office: 5.06% (from 5.08%)

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CMBS delinquencies accelerate toward 9% in August: Trepp

Commercial Real Estate is struggling.  Many of these properties were financed with loans that assumed ever growing rents.  Now, rents have been decreasing since 2007 and some cases with large concessions in tenant improvements and free rents.  The vacancy rate is high and with little or economic expansion in California, I think we will see more delinquencies.

While the amount of modifications on CMBS loans in 2010 has already passed the combined total of the last two years, the amount of serious-delinquent loans increased 20 bps in August to 8.15%. That includes loans in 60-plus day delinquency, foreclosure, REO or other nonperforming pools. A year ago, the rate of loans in serious delinquency stood at 3.08%

It should also be noted that construction usually helps leads the economy out of recession.  With historically low real estate construction levels it will probably be as big as factor this recession.

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