Author: therawinformant

"It's an unprecedented opportunity."

from Yahoo Finance https://ift.tt/2LxyHet

(Bloomberg) — U.S. homeowners hurt by coronavirus were told they could delay their mortgage payments without facing consequences. Now, some are learning they’re at risk of being shut out of the housing market.The snafu has been triggered by the hastily drafted $2.2 trillion stimulus bill that Congress passed in March. The law allowed borrowers with government-backed loans to postpone payments for as long as 12 months if they’re dealing with financial hardships stemming from the pandemic. It even specified that mortgage firms must report homeowners in forbearance as being “current” on payments, thus preventing any damage to their credit scores.But the law didn’t address long-standing policies that restrict consumers from getting new loans for a year after their forbearances end. For instance, Fannie Mae and Freddie Mac — the government-controlled companies that facilitate nearly half of U.S. home lending — won’t buy such mortgages.Some borrowers who took advantage of the relief lawmakers provided are now being told that they will have to wait before they can refinance or obtain a fresh mortgage to purchase a home. That’s true even for those who ultimately make their payments on time, as the forbearances are still being noted on some consumers’ credit reports.The issue is the latest for a real-estate market that has been thrown into chaos by the coronavirus economic crisis and lawmakers’ decision to let millions of Americans temporarily stop paying their mortgages. The industry and government officials are racing to mitigate the law’s unintended consequences.Fix Coming? Fannie and Freddie’s policies don’t contemplate an emergency such as the current pandemic or specify how affected borrowers should be treated, said Raphael Williams, a spokesman for the Federal Housing Finance Agency. The agency, which regulates Fannie and Freddie, is working with the companies to resolve the situation, he said.Fannie and Freddie spokesmen referred comment to the FHFA.Read More: Ginnie Bond Investors May Find That Worse Is BetterIan McDonald, a branch manager with Fairway Independent Mortgage Corp. in Hutchinson, Minnesota, said his firm recently tried to lend to someone who wanted to purchase a new home. The borrower had his work hours cut back in March and April, but recently had them restored. The individual called his mortgage servicer to ask about forbearance but never actually missed a payment, according to McDonald.But when a Fairway loan officer pulled the borrower’s credit report, they found that he was in the forbearance program approved by Congress. The borrower rushed to make his May mortgage payment, which wasn’t yet due, and told his servicer to take him out of forbearance. Still, McDonald’s company determined it was too late.“We believe he’s ineligible for all loans,” McDonald said. “They put this legislation in with good intentions but there wasn’t contemplation of all the ripple effects that are taking place right now in real time.”Lobbying Lawmakers The National Association of Mortgage Brokers wants lawmakers to get involved. In a Tuesday letter, the trade group told members of the Senate Banking Committee that it believes it violates the spirit of the virus stimulus bill for mortgage forbearance to be disclosed to credit reporting companies — the firms that collect consumers’ financial data. NAMB President-Elect Kimber White said in an interview that halting such disclosures would reduce the negative impacts of Fannie and Freddie’s forbearance policies.Fannie and Freddie don’t make mortgages themselves. Instead they buy them from lenders and wrap them into securities to sell to investors. Lenders rely on that process to make new mortgages. So Fannie, Freddie and government agencies that backstop loans dictate which borrowers get mortgages.Part of the issue is that many mortgage servicers, which collect money from homeowners and facilitate payments to mortgage-bond investors, didn’t know themselves until recently that borrowers who took forbearance couldn’t get new loans. So consumers may have decided to delay their payments without being told of the potential consequences.Read More: If Landlords Get Wiped Out, Renters Won’t Benefit St. Louis-based lender F&B Financial Group has fielded calls from several customers wanting to refinance their loans who didn’t know their recent forbearance requests had made them ineligible for mortgages backed by Fannie and Freddie, said owner Chris Fox.Pointed QuestionsFox said he discovered himself that servicers were leaving borrowers in the dark after calling the company that handles his mortgage.“I went through the process with them, and pointedly asked twice, ‘So there are no negative impacts from doing this?’ and I was told, ‘No, sir, go ahead and do it,’” he said.To address the problem, Fannie and Freddie are considering shortening the time period homeowners are restricted from getting new loans to three months or even fewer if borrowers never missed payments, said a person familiar with the companies’ discussions. The issue has taken on some urgency due to concerns that consumers have received forbearance without being informed of the risks, said the person, who asked not to be named in discussing internal deliberations.If Fannie and Freddie don’t take action, the broader economy could take a hit should a substantial number of homeowners fail to secure financing to buy new properties once the pandemic passes, Moody’s Analytics chief economist Mark Zandi said. A slump in mortgage refinances wouldn’t have the same negative impact, he said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

from Yahoo Finance https://ift.tt/2WsCnEG

Stock futures were mostly lower Thursday morning after a selloff during the regular session Wednesday sent the Nasdaq back into negative territory for the year to date.

from Yahoo Finance https://ift.tt/2Ln01wa

Top news and what to watch in the markets on Thursday, May 14, 2020.

from Yahoo Finance https://ift.tt/2Z4JEMG

from Yahoo Finance https://ift.tt/3fMHoQ2

(Bloomberg) — Saudi Arabia will trim oil shipments to the prized Asian market in June and cut exports even more aggressively to Europe and the U.S., in a possible sop to President Donald Trump and hard-pressed American shale producers.OPEC’s biggest member is seeking to shore up a tentative recovery in crude markets after the coronavirus crushed energy demand and sparked the oil industry’s worst crisis in decades. The Saudis are voluntarily reducing supply to the lowest level in 18 years as they lead a global effort to drain a glut that has dragged down prices by more than half this year.State-producer Saudi Aramco will cut June exports to at least a dozen Asian customers, according to traders notified by the company. Aramco plans even deeper reductions in the amount of crude it will send to the U.S. and Europe, according to people with knowledge of the situation.“It’s politically important to the U.S. and to Trump” that the Saudis will be sending less oil to the Atlantic Basin, said Olivier Jakob, managing director at consultant Petromatrix GmbH in Zug, Switzerland. “It’s also a gesture toward the Russians that the Saudis aren’t looking to crash the European market.”Aramco didn’t immediately respond to emails seeking comment, and the people asked not to be identified because the information is private.Eight of the 12 refiners in Asia that had their supplies cut said the reductions were substantial, with curtailments of 20%-30% or more from contracted amounts. Most of the larger cuts were among buyers in China and India, and some of them said they were in talks with Aramco to try and get more crude. Three other regional buyers received what they asked for.The world’s largest oil exporter will go even further, however, in curbing shipments to the U.S. and Europe, where buyers will receive only about half of the volumes they normally purchase, according to the people. Some buyers may see purchases slashed by as much 70%, the people said.The reduction in sales to the U.S. may benefit Trump, who is keen to protect jobs in the American oil industry during an election year. The president has threatened to impose tariffs on Saudi crude imports, and he helped orchestrate last month’s output-cuts agreement between the Organization of Petroleum Exporting Countries and allies such as Russia.Trump said this week crude prices were rising thanks to Saudi supply reductions. “Our great Energy Companies, with millions of JOBS, are starting to look very good again,” he said on Twitter.Days after Trump spoke last week with Saudi Arabia’s King Salman, the monarchy announced it would voluntarily cut 1 million barrels of daily production. That’s on top of cuts the Saudis already pledged to make under the OPEC+ accord.Iraq, OPEC’s second-biggest producer, is also curbing supplies to Asia. The group’s third- and fourth-largest members, the United Arab Emirates and Kuwait, said they would make additional output cuts beyond what they promised OPEC.The decrease in shipments to Asia, the world’s biggest oil market, is likely to support premiums in the spot market for July-loading cargoes. It coincides with an improvement in demand as the Chinese economy revives from the coronavirus and consumption in India shows signs of recovering.Russian Sokol and Iraqi Basrah crudes have already started trading at higher differentials, according to three traders who buy and sell those grades in the region.Russia, which also sells Urals grade crude in Europe in competition with Saudi barrels, played a key role in reassembling the OPEC+ alliance to reach the April output-cuts deal and ending a global price war.See also: Saudi Arabia, Russia See Oil Recovery While Cuts Take EffectAramco’s allocation announcement for Asia came later than usual this month, following a delay in its release of official selling prices. The Saudi price increase to Asian buyers took many of them by surprise. While the company raised prices to all regions for June, it made its biggest increases for buyers in Europe.(Updates from first paragraph with cuts to the U.S. and Europe.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

from Yahoo Finance https://ift.tt/35WzOxQ

Royal Caribbean Cruises (RCL) is planning to raise $3.3 billion from a bond sale as the ailing cruise operator struggles with the financial fallout of the coronavirus-related travel restrictions which brought its operations to an almost complete halt.The embattled cruise operator is offering series of notes due 2023 and 2025, which will be secured by 28 of the company's vessels, it said in a SEC filing. The proceeds of the $3.3 billion secured note issuance will be used to refinance the cruise operator’s existing $2.4 billion 364-day secured facility that matures in March 2021 with the balance being held for liquidity purposes.“The incremental $1 billion will bolster the company's liquidity position and ensure the company can get through the next year even with operations remaining suspended,” Moody’s Investors Service said in a report.Moody’s slashed Royal Carribean’s credit rating by two notches to Ba2 into junk territory with a negative outlook due to its suspended operations and in expectation of a slow recovery even when cruise activity will resume.The cruise operator disclosed that it expects to post a preliminary first-quarter net loss of $1.44 billion versus a profit of $249.7 million year-on-year. It will also write down the value of its Silversea Cruises unit and a number of ships by $1 billion to $1.3 billion. A prolonged suspension of operations is estimated to incur cash burn of about $250 million to $275 million per month. Total revenue in the three months ended March 31 dropped 16.7% to $2 billion, according to preliminary figures."Cruise operations will continue to be suspended in the US beyond the current July 24 no-cruise order issued by the Centers for Disease Control and Prevention (CDC) and available capacity will be modest for the remainder of 2020 and possibly into early 2021 as the risk of fully restarting operations before proper safety protocols are in place far exceed the potential reward," stated Pete Trombetta, Moody's lodging and cruise analyst. “When cruise operations do resume deployed cruise ships will have limits on the occupancy for each ship while social distancing rules remain in place which will lead to lower ship-level profitability during this period.”The credit ratings agency’s negative outlook reflects the cruise operator’s high leverage and the uncertainty around the pace and level of the recovery in demand that will enable the company to de-lever, Moody’s added.Deutsche Bank analyst Chris Woronka, who has a Hold rating on the stock estimates that sailings won’t resume before August.  Woronka’s $38 price target reflects 10% upside potential to current levels.“RCL had $2.3bn of cash as of April 30 and has drawn another $150m on its revolver in May, which translates into nine to ten months of liquidity, excluding cash refund liabilities,” Woronka wrote in a note to investors last week. “We remain wary about reading too much into forward looking commentary, since change/cancellation policies have been relaxed and we don't know what the initial consumer reaction will be to the "new normal" once onboard.”The rest of Wall Street analysts is slightly more optimistic than Deutsche Bank. The stock’s 12 analyst ratings consist of 5 Buys, 6 Holds and 1 Sell adding up to a Moderate Buy consensus. The $68.33 average price target implies a 98% upside potential in the shares in the coming 12 months. (See Royal Caribbean stock analysis on TipRanks).Related News: Walt Disney Raises $11 Billion From Bond Sale to Bolster Finances Intelsat Sinks 18% On Bankruptcy Filing Twitter Won’t Reopen Offices Before Sept., Allows Permanent Work From Home More recent articles from Smarter Analyst: * GM Plans To Reopen Lucrative Mexican Pickup Plant Next Week- Report * Cisco Shares Up Pre-Market After Topping Quarterly Profit Bets  * Allogene Explodes 28% After-Hours On Initial ALLO-501 Data * Mastercard Sees Steady Improvements As Spending Begins To Recover

from Yahoo Finance https://ift.tt/2LqvflZ

"It's an unprecedented opportunity."

from Yahoo Finance https://ift.tt/2LxyHet