Union Protesters Disrupt Mortgage Bankers’ Conference

Alan Zibel and Nick Timiraos report:

A rowdy group of about 200 union protesters shut down a Mortgage Bankers Association conference for about 10 minutes on Wednesday, taking over the Washington stage to protest against home builder PulteGroup Inc. before leaving peacefully.

The protest led to some head-scratching among attendees, who wondered why a mortgage-banking conference was targeted. The protest appeared to be triggered by the presence of Debra Still, chief executive of Pulte’s mortgage unit and chairman of the mortgage bankers newly created council on residential mortgage servicing issues.

Unions have been pressing Congress to assess how Pulte, one of the nation’s largest builders, spent about $900 million in government tax breaks meant to help spur job creation and avoid layoffs. As we’ve written before, the unions’ real beef is Pulte’s use of contractors that don’t hire unionized workers, a practice that hurts union members and makes it harder for union organizers to justify why other workers need to join their ranks.

FDIC’s Bair: Mortgage Industry Should Compensate Consumers

The lending industry should compensate consumers harmed by shoddy foreclosure practices and is in need of far-reaching reforms to ensure that homeowners get better treatment in the future, a top U.S. banking regulator said Wednesday.

Sheila Bair, head of the FDIC, called for a “foreclosure claims commission” to handle complaints from homeowners who say they have lost their homes through errors made by their mortgage companies. The commission, she said, could distribute claims to affected borrowers–much like Gulf Coast oil spill fund–and would be paid for by the mortgage industry.

“We need to provide remedies for borrowers harmed by past practices,” Bair said in a sternly worded speech at a Mortgage Bankers Association conference in Washington. She called for broad changes across the industry, potentially as part of a settlement with attorneys general investigating allegations that mortgage servicers broke state laws.

“The fact is, every time servicers have delayed needed changes to minimize their short-term costs, they have seen a deepening of the crisis that has cost them–and the rest of us–even more,” she said. “It is time for government and industry to reach an agreement that will finally bring closure to the crisis.”

Real Estate News: Home Construction Declines

Here is a look at real-estate news in today’s WSJ:

Home Construction Declines: Housing starts fell 4.3% to a seasonally adjusted annual rate of 529,000 in December, but building permits, a gauge of future construction, surged 16.7%.

Motto Comes Back to Haunt: IMH Financial had a philosophy of ‘Don’t Lose the Money.’ But its strategy was no match for the real-estate downturn.

As Values Rise: iStar Looks to Dig Out: The company’s success at selling assets at higher-than-expected prices has helped it reduce its debt level. A big test comes in June, when $2.2 billion is due.

Home Builders Still Pessimistic: The National Association of Home Builders’ index remained flat at 16 in January, remaining low levels despite increasing signs of improvement elsewhere in the economy.

J.P. Morgan Admits Wrongful Military Foreclosures: J.P. Morgan Chase admitted that it wrongly foreclosed on 14 active-service military families and overcharged thousands more on their mortgages, a continuing internal bank review has found.

Mortgage Servicers Face New Fee System: Federal housing regulators said they will develop a new payment system for mortgage-servicing companies, which have been battered by paperwork errors and widespread consumer complaints.

GMAC Tells Court It Will Dismiss, Re-File Certain Foreclosures

GMAC Mortgage Corp., a unit of Ally Financial Inc., told a Maryland court on Friday that it would dismiss around 250 pending foreclosures in the state to avoid a potentially lengthy class action lawsuit.

The bulk dismissals allow the bank to restart foreclosure proceedings without the threat of litigation and title disputes. But they could lead to delays because Maryland has stepped up scrutiny of banks’ foreclosure filings in recent months, and the state last year began requiring banks to conduct mediation with delinquent borrowers in a bid to avert foreclosures.

A spokeswoman for GMAC says that the company had already begun dismissing and re-filing all Maryland foreclosure filings signed by Jeffrey Stephan, a back-office employee who had admitted under oath to signing documents without first reviewing them.

“The process to file for dismissal has been well underway,” said Gina Proia, the company spokeswoman.

Builders’ Depressed Confidence Level Sinks Stocks

What a difference a month makes. Last month, when the National Association of Home Builders’ monthly confidence index came in at 16 out of 100—anything over 50 is considered positive—shares of builder companies reacted positively.

But the index remained flat at 16 again in January, news the sector’s stocks didn’t take well. Every major builder saw a loss Tuesday afternoon, with shares of Meritage and Beazer both down more than 6.75%. The DJ builder index saw a decline of nearly 2%.

Why the different reactions to the same number? In December, builders were ready to end another brutal year and the stable reading beat another decline. But Tuesday’s news, which missed expectations for a modest uptick to 17, starts the new year off on a weak note. And it bolsters some analysts’ predictions that 2011 won’t be worth celebrating. “We’re not going to have a lot of improvement,” UBS analyst David Goldberg told Developments last week. (Read his predictions.)

It’s no secret that numerous headwinds remain.

Real Estate News: Pent-Up Demand for New York City Office Space

Here is a look at real-estate news from the weekend’s and Tuesday’s WSJ:

Fed Felt Hamstrung by Housing Bubble: Federal Reserve officials acknowledged a housing-market bubble more than a year before U.S. house prices peaked, but they showed little inclination to address it.

Pent-Up Demand for New York City Office Space: During the fourth quarter in New York City, the absorption rate spurted by 2 million square feet, according to Cushman & Wakefield. That was the most positive absorption since the first quarter of 2007.

Anatomy Lesson: Peter Dunham’s L.A. Living Room: How Los Angeles interior designer Peter Dunham does serene that’s anything but sleepy with his easy, casual style.

Take Two for Brooklyn’s Film and Movie Studio: Brooklyn’s Steiner Studios, where movies including Spiderman and Sex and the City were shot, has completed a $90.5 million financing package that will allow it to add 11 sound stages to its existing five.

RLJ Buys Doubletree: A company controlled by Robert L. Johnson, the founder of the Black Entertainment Television network, has cut a $335 million deal for a Midtown hotel known for its striking architecture.

Survey: Affordability Top Reason for Home Buying in 2010

Home buyers who purchased a house last year were largely motivated by affordability—low interest rates and lower house prices—and the desire for more living space. But virtually no one bought a home because they had a desire to own rather than to rent, a sharp decline from five years earlier, according to a customer survey by Weichert Realtors, Inc.

The survey of 1,261 home buyers who bought a house between July 1 and Dec. 31 found that 28% said “favorable financing” motivated them to buy a home in 2010, which was less than the 31% a year earlier, but more than twice as high a share as in 2008, when 14% said that “favorable financing” had moved them to buy a house.

In 2010, almost none of the respondents said they bought because they wanted to own instead of rent. In 2005, the tail end of the housing boom, 26% of survey respondents said they were motivated by the desire to own their home and stop paying rent.

“The takeaway is that homebuyers who still see long-term potential financial growth in housing are more motivated today by the value presented by very low interest rates and discounted prices than they were five years ago,” says Dominick Prevete, regional vice president for Weichert Realtors Inc., headquartered in Morris Plains, N.J.

Are Home Prices Still Too High?

Have home prices corrected? The answer depends on how historical home prices are measured, according to a new study from economists Gleb Nechayev of CBRE Econometric Advisers and William C. Wheaton of the Massachusetts Institute of Technology.

If at least some of the recent housing bubble was rational market behavior and deserves to be included in the historical price trend, then home prices in most U.S. markets “have now dropped clearly ‘below trend,’” say the authors.  On the other hand, if the recent bubble is a “true aberration” and excluded from the historical trend, then more than half of the country’s housing markets are still overvalued.

The paper concludes that just as the question of whether prices have returned to normal levels varies heavily from market to market, so to does the definition of the price benchmark determine whether housing is currently overvalued or undervalued.

UBS’ 2011 Forecast Sees Little Improvement for Housing

Last year, we wrote about UBS analyst David Goldberg’s ten predictions for the housing market and promised to check back and see how he did.

Well? Overall, “I think we had a pretty good hit rate,” Goldberg says.

He stated that “fundamentals will remain ‘choppy’ … with conflicting data points making it difficult to ascertain whether we’ve actually reached the trough in housing.”  That was quite true last year and it remains the case.

Goldberg also predicted that “builders will see sequential improvements in their quarterly results.” That was also accurate. Many builders saw narrowed losses and land-related charges fall, though that was helped by the federal home-buyer tax credit. Recent results from builders have shown the market remains tough.

Real Estate News: Mortgage Rates Hit Four-Week Low

Here is a look at real-estate news in today’s WSJ:

Mortgage Rates Hit Four-Week Low: The average 30-year fixed-rate mortgage fell to 4.71% in the week ended Jan. 13, reaching a four-week low.

Serviced Apartment Ownership: The Next Investment Trend in Hong Kong? In a move aimed at gaining cash, serviced apartment operator Ovolo Group is selling 48 units in a Sheung Wan building — and guaranteeing buyers a return.

The Home Front: A Living Room Ready for Liftoff: Boston architect Warren Schwartz designed and built a modern home that slopes down a hill in the Berkshires before dramatically cantilevering for 45 feet. The great room floats 14 feet above the ground.