Chuck Ponzi March 7th, 2007

Realtors predict a better year… for themselves, not for homeowners or home sellers.

The real estate market traditionally picks up in the spring, but Remax Gold Coast’s Virnig said waiting until then to put up a “For Sale” sign might not be the best strategy.

“I always think if you’re a seller, it doesn’t really matter. You can wait for a busier time,” he said, “but there are going to be more buyers and sellers out there. It’s not like there’s going to be a bunch more buyers out there and the same number of sellers.”

Nothing like a little common sense to shake up a seller. How many do you think are really thinking like this? Last year was the year of insane asking prices and a disconnect. This year seems to be the year of cognitive dissonance. Buyers are vanishing, and sellers are in deep, deep denial (except a few… I actually saw a home priced somewhat sanely in Mission Viejo the other day)

Meanwhile.. elsewhere in the southland…

I was so distracted by the New Century implosion (I’m across the street from one of their servicing facilities, and the traffic has been something of interest), that I didn’t bother to find out that Fremont all but went belly up when they got the Spring Smackdown from the FDIC.

For those of you who do not know, Fremont is headquartered in Santa Monica, but the subprime unit is based out of Brea (North Orange County). It’s a decent sized employer. They sent all of their employees home and told them that they’re working to save their jobs.

But seriously, anyone think they’ll be bought for anything what they were worth only 6 months ago? We’re already talking 70 cents on the book value, if at all, and it’s basically shut down or sell… not too many options. They say they have 6 suitors, ahem… vultures in talks with them.

Fremont said last week it was getting out of the subprime mortgage business, and agreed to halt at least 14 practices that violated federal rules. The lender sent most of its residential lending staff home earlier this week to await word on the fate of their jobs and their company, which specialized in loans to people with poor credit ratings and heavy debts.

“Because we continue in discussions with these companies, you will all continue to be on paid leave,” he said. “That’s going pretty well. Do I know what’s going to happen with that? I don’t at this point.”

Hope you’re at home polishing your resume… and not for a loan broker job, a real one. I’m not trying to be mean… it just comes so naturally. Seriously, how many brokers do you think the world needs? I’m sure it can do with one less.

Matthew Padilla over at the Mortgage Insider blog at the OC Register covered this as well…

In other news, Fitch Ratings knocked its subprime servicer rating down three notches on Fremont Investment & Loan.

It rates on a scale of 1 to 5, with 1 being best. It lowered Fremont from a 3+ to a 4, skipping over 3 and 3- entirely. Fitch says a company with a 4 rating (actually RPS4) “may not be acceptable for new residential mortgage-backed security (RMBS) transactions unless additional support or structural features are incorporated.” The agency said it might further lower the rating. Fitch pointed to the FDIC cease-and-desist order. Fitch says the agreement constrains Fremont by placing capital demands on the business as well as restrictions on its commercial real estate lending.

Lessee… can’t operate, can’t sell, can’t buy. Yup, tis a mere flesh wound.

When it rains, it pours. Looks like this turd is circling the toilet too.

• Housing Costs , Inventory , SoCal