| States Being To Feel Housing Slump Where It Hurts - Their Budgets
State tax revenues around the country are growing far more slowly this year and in some cases falling below projections, a result of the housing market slowdown that has curbed voracious spending on real estate, building materials, furniture and other items. Nowhere is the downturn more apparent than in Florida, where tax revenue is projected to drop this year for the first time since the energy crisis of the 1970s. But other states, especially those where housing prices soared in recent years, are also seeing their collections slow, especially in the sales and real estate transfer tax categories. While the economy remains generally strong and it is too early to predict whether the housing slump will have long-term effects, some states will have to adjust their wish lists.
Accredited, New Century Lead Slide in Mortgage Shares (Update4)
March 13 (Bloomberg) -- Accredited Home Lenders Holding Co. shares lost more than half their value and New Century Financial Corp. was delisted from the New York Stock Exchange after the mortgage lenders said they can't meet bankers' demands for cash. Accredited shares plunged 65 percent to $3.97 at 4 p.m., leading a decline in financial-services companies. The San Diego- based lender said in a statement today it must raise more money to buy back bad mortgages from investment banks. Bankers made the same demand on New Century this month, prompting analysts at Merrill Lynch & Co. and J.P. Morgan Securities Inc. to predict bankruptcy. Late payments on subprime loans reached a four-year high of 13.3 percent, the Mortgage Bankers Association said today, and foreclosures on all home loans rose to a record.
Subprime troubles hit home
Subprime-mortgage lenders nationwide are in the midst of a meltdown, and the effects are starting to ripple through Ohio. Mortgage lenders are closing offices and getting pickier about who can qualify for a loan, while regional banks are facing deflating bottom lines and selling their subprime-mortgage divisions. It's clear that the subprime-loan market, which often involves lending money to those with questionable credit and has been blamed for Ohio's skyrocketing foreclosure rate, is shrinking. "The mortgage industry is experiencing a significant contraction," said Brendan McDonagh, CEO of HSBC Finance Corp, in testimony to the Senate Banking Committee. "The subprime market has lost 20 percent of its origination capacity" just from lenders going out of business, he said.
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