Real Estate Industry

Borrowers are rushing to refinance their mortgages at record low interest rates but face unexpected delays as swamped lenders struggle to cope with the surge at a time when layoffs have sharply cut staffing. Bank of America Corp., which started shedding 7,500 employees after its July merger with Countrywide Financial Corp., recently yanked 300 workers from its home equity line department to help deal with refinancing requests, said Matt Vernon, the bank's national sales executive.

The Federal Reserve is trying to push mortgage rates down. But the marketplace has other ideas. Home loan rates rose this week to the highest level since mid-December, according to mortgage giant Freddie Mac's latest national lender survey. The average rate on 30-year loans was 5.25%, up from 5.10% last week and the highest since 5.47% the week of Dec. 7. "I don't think this is going as planned," said Tom Atteberry, a money manager at First Pacific Advisors in Los Angeles.

Battered by falling sales and leasing activity, international commercial real estate brokerage company CB Richard Ellis Group Inc. reported a 94% drop in profit during the fourth quarter Tuesday but still managed to beat Wall Street's expectations. The Los Angeles company said it had net income of $6.5 million, or 3 cents a share, compared with $122.4 million or 54 cents, in the same period a year ago. Revenue was down 30% to $1.3 billion.

President Obama will roll out his much-anticipated housing plan today in an effort to stem the tide of foreclosures that has triggered the worst recession in decades. The president will outline the plan during a speech in Phoenix, where home values have dropped 33% in the last year -- the steepest decline of any metropolitan area in the country. Across the nation, thousands of people continue to be forced from their homes every day.

Commercial real estate prices in the U.S. dropped by almost 15% in 2008, more than home prices, with fourth-quarter depreciation the greatest in the national apartment market, Moody's Investors Service said Thursday. The price decline eliminated the gains seen in 2006 and 2007 and returned values to 2005 levels, according to the Moody's/REAL commercial property price indexes. Prices fell 2.2% in December from November, said New York-based Moody's.

Ledeen Halloran and Harry Snegg live a few houses apart on Claiborne Drive in Long Beach. They both have good jobs, they both voted for John McCain -- and they both have seen their home values fall more than 40%. But when it comes to their views on mortgage relief, these two neighbors are on different sides of the street. Halloran, 50, is a fan of President Obama's new plan to stave off foreclosures and thinks it could provide the cushion she needs to stay in her home.

Southern California -- with home prices now at 2002 levels and falling -- is at the start of what is likely to be a long period of relatively affordable housing, economists and housing market analysts say. Home prices are now below their historical average compared with incomes, putting them within reach of more people than they have been since about 2000, several studies show. But that doesn't mean prices will stop falling soon, especially if jobs continue to vanish at their current pace.

The Obama administration's plan to stave off foreclosures could fall flat in California, where nearly one-third of mortgage holders are underwater on their loans -- many of them by amounts that would disqualify them for government-sponsored refinancing. The problem is likely to be especially acute in areas like the Inland Empire, where homes have lost more than 40% of their value in the last year and nearly half the homeowners owe more on their loans than the properties are worth.

The latest development in the mortgage market fomenting outrage in the streets and condemnation across the media spectrum is the spectacle of rich investors -- Wall Street traders, hedge fund operators, even former executives of the detested Countrywide Financial Corp. -- buying up delinquent home loans, reworking terms for borrowers, and selling them off to new investors at a handsome profit. Here's what I think about these bottom feeders: God bless them.

The low prices and interest rates stimulating sales of residential real estate have done nothing to help the market for commercial buildings. The big deals for offices, shopping centers and warehouses that dominated much of the last 10 years in commercial real estate have been notably absent in recent months, as developers find they cannot obtain financing to buy or construct new buildings and potential tenants stay put or go out of business.