Owner occupancy, LTVs at heart of FHFA lawsuits
Major banks allegedly misrepresented the owner occupancy and loan-to-value ratios by sometimes as many as 50 percentage points or more on securities sold to Fannie Mae and Freddie Mac , according to the lawsuits the Federal Housing Finance Agency filed last week.
The FHFA, overseer of the government-sponsored enterprises, filed suits against 17 major banks and scores of individual executives, alleging they knowingly falsified the quality of mortgage-backed securities sold to the GSEs. The lawsuits span nearly $190 billion in MBS.
The FHFA checked the presale prospectus for the securities and conducted an analysis of 1,000 loans per bond. In securitizations of less than 1,000 mortgages the FHFA analyzed them all.
The agency first targeted the owner-occupancy rate reported to the GSEs. Borrowers who actually live in the home underlying the mortgage are more likely to remain current on the loan compared to investors who buy to rent.
FHFA looked at whether or not the borrower's tax bill was sent to the property's address or a different one, whether the borrower claimed a tax exemption or whether the mailing address of the property was reflected in credit reports, tax or lien records.
On one securitization underwritten by JPMorgan Chase ( JPM : 32.42 +1.06% ), owners did not occupy 2.5% of the underlying properties, according to the prospectus given to investors. After conducting the test, the FHFA found this number to be at 14.6%, more than five times the amount disclosed to investors.
"The data analysis revealed that for each securitization, the prospectus supplement misrepresented the percentage of non-owner occupied properties," according to the lawsuits.
The FHFA also conducted retroactive automated valuation models to determine the value of the properties at the time the mortgages were originated. This was done to uncover any possible faulty loan-to-value ratios.
Housing Occupancy Rate - News
The agency first targeted the owner-occupancy rate reported to the GSEs. Borrowers who actually live in the home underlying the mortgage are more likely to remain current on the loan compared to investors who buy to rent. FHFA looked at whether or not
As a result, apartment vacancy rates are declining and rents are rising at faster rates.” Looking at commercial vacancy rates from the third quarter of this year to the third quarter of 2012, Yun forecast vacancies would decline 0.3% in the office
And Sesso said his occupancy rate is nowhere near the region's 92 percent average. More than half of the 20 units at Island Court are vacant, one since last October. That's why he's offering a move-in special: $199 for the first month, with no credit
Riverside County had a 58 percent occupancy rate on average through July compared to a 54.5 percent rate in the same time in 2010 and 53.5 percent rate in 2009. The county's hotels earned $63.63 per available room on average. San Bernardino County had
The national occupancy rate in July, 93.95%, has been essentially flat for the past two months. "Effective rents increased 0.64% nationally between June and July, which was higher than for the same period in 2010, but the lowest monthly rate so far
Seniors Housing Occupancy Rates and Other Indicators Hold ...
By Barbra Murray, Contributing Writer
Annapolis, Md.–Sometimes no news is good news. According to the National Investment Center for the Seniors Housing & Care Industry’s third quarter NIC MAP, the occupancy rate, as well as rent growth and new construction activity, did not diverge much from second quarter figures, but that may very well mean that the sector has hit bottom.
As was exactly the case in the second quarter of 2010, the occupancy rate in the third quarter was 87.7 percent for the seniors housing sector. The performance in the independent living and assisted living sub-sectors helped maintain the balance. Occupancy rates at independent living properties dropped 30 basis points to 87.1 percent, but the 40 basis points jump that pushed up the assisted living rate to 88.7 percent prevented a downturn in seniors housing as a whole. “The message could suggest that we are past or at the bottom,” Chuck Harry, research director with NIC, tells MHN . “Many areas of seniors housing at the national level are showing good numbers. Assisted living is showing some strength, but that could be short-lived because of new developments coming online in the next couple of quarters.”
Annual rent growth in seniors housing dropped ever so slightly from 0.8 percent in the third quarter of 2009 to 0.7 percent in the third quarter of this year, and annual absorption was 1.2 percent, marking the third quarter in a row where the quarter-over-quarter figure remained over 1 percent
As for inventory in the national seniors housing market, it held relatively steady quarter-over-quarter, but rose 1.7 percent from the third quarter of 2009. Although the change denotes a year-over-year increase, it also denotes a small, but significant continuation of the decline in the 2 percent inventory growth rate that occurred for three years until the second quarter of this year. The drop in construction activity from 2.1 percent in the second quarter to 2 percent in the third only helps close the supply-demand gap. The key to a significant return to health in the seniors housing market is contingent upon factors that continue to plague the country. “We’re looking forward to employment growth, and recovery in the housing market, particularly as it pertains to sales prices, may factor in,” Harry says. “Home value has a high correlation with occupancy in seniors housing. So, we’re keeping close tabs on those economic factors as indicators of improvement within the sectors.
Housing Occupancy Rate - Bookshelf
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