Thanks to a bidding war between two real estate giants, Forestar Group, a residential and mixed-use real estate developer, and its shareholders find themselves squarely in the catbird’s seat.
As recently as one day ago, Forestar said that it still planned to sell itself to Starwood Capital Group for $15.50 per share (or approximately $658 million), despite D.R. Horton attempting to swoop in and buy 75% of the company for a higher price, $16.25 per share (or approximately $520 million).
That came after Starwood increased its initial offer for Forestar from $14.25 per share to $15.50 per share as it tried to fend off D.R. Horton’s unsolicited bid for control of the company.
But things can change quite a bit in 24 hours.
On Thursday, Forestar announced publicly that its board was considering both companies’ offers, and may determine that D.R. Horton’s bid is superior.
Now, it appears that Forestar’s public negotiation proved successful, as the company announced Friday morning that both companies increased their offers for the company, with D.R. Horton increasing its bid enough
A mortgage originator from Chicago stands accused of running a reverse mortgage scam and defrauding elderly homeowners and lenders out of $7 million.
According to the U.S. Attorney’s Office for the Northern District of Illinois, Mark Steven Diamond is a mortgage loan originator with offices in Chicago and Calumet City, Illinois.
Diamond is currently facing seven counts of wire fraud after being accused of fraudulently causing lenders to make reverse mortgage loans to homeowners who either did not sign up for the loans or did so after Diamond allegedly misrepresented the terms of the loans.
The indictment alleges that Diamond fraudulently kept the loan funds for himself after convincing title companies to give the checks to him instead of the homeowners.
According to the indictment, Diamond targeted his victims, who ranged from ages 62 to 97, based on how much equity they had in their homes and whether they were financially sophisticated or not.
Additionally, the indictment states that if one of the relatives of Diamond’s alleged victims questioned whether a reverse mortgage was a good
The market’s potential for existing home sales increased in May, even as the number of sales continued to underperform, according to the Potential Home Sales model for First American Financial Corp., a provider of title insurance, settlement services and risk solutions for real estate transactions.
Potential existing home sales increased to a seasonally adjusted annualized rate of 5.72 million, an increase of 1.8% from the previous month. This represents a 90.3% increase from the market potential low point in December 2008.
“As more and more Millennials marry and have children, among the strongest determinants for the desire to be a homeowner, demand for housing will remain robust,” First American Chief Economist Mark Fleming said. “However, the housing market faces a dilemma that is restricting the inventory of homes for sale.”
“As rates rise and the cost to finance a mortgage increases, existing homeowners are prisoners in their own homes,” Fleming said. “In addition, the fear of being unable to find a home to purchase hinders homeowners’ decision to sell.”
The market potential for existing-home sales fell
Amidst the partisan rancor in Washington, there is one issue that should unite both political parties: the urgent need to expand access to affordable rental housing.
The situation is dire. According to new research by Harvard’s Joint Center for Housing Studies, more than 11 million households in communities across America now spend in excess of 50% of their income just on rent. That’s an unsustainable proposition for millions of low-income families who are often forced to choose between paying the rent and purchasing groceries or critical medical care. Many are just one missed rent payment away from eviction and homelessness.
What’s the cause of today’s high rent burdens? Over the past decade, we have witnessed an unprecedented increase in demand for rental housing that has sent rents soaring. Unfortunately, household incomes have not kept pace. Exacerbating the situation is the severe shortage of rental homes that are affordable and available to the lowest-income families. This shortfall now stands at 7.4 million units, affecting every state and metropolitan area
Millions of low-income families rely on federal rental assistance, but these programs help just one out of every four eligible households. In many communities, housing vouchers are
In April, home prices dropped, followed by an increase in home prices in May, according to a joint release from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. One expert explained the volatility in certain areas of the U.S. are to blame for the shifting home sales market.
“Much of the movement in new home sales the past two months can be traced to volatility in reported sales in the Midwest and West,” Nationwide senior economist Ben Ayers said. “Whereas sales in the West rebounded sharply in May, Midwest new home sales slipped again to a multi-year low.”
He explained the jump in home sales is led by other areas of strength in the economy.
“When combined with the reported jump in existing home sales on Wednesday, total home sales continue to trend higher this year,” Ayers said. “Sales activity is being led by strong homebuyer demand for single-family homes in response to job market gains, low mortgage rates, and faster household formation.”
But, as another expert pointed out, the market is far from reaching its historic norms.
“Despite May’s good news, new home sales still have a long way to go to reach historic norms,” Trulia Chief Economist
There’s a battle brewing between two real estate titans as Starwood Capital Group and D.R. Horton are both angling to acquire Forestar Group, a residential and mixed-use real estate developer.
Last month, Forestar and Starwood announced that the companies reached a merger agreement, which would see Starwood acquire all of Forestar’s outstanding shares for $14.25 per share in cash.
The total purchase price would be approximately $605 million.
But, D.R. Horton attempted to swoop in with a superior offer. After the details of the Forestar-Starwood merger were announced, the homebuilder announced that it was submitting a proposal to acquire 75% of Forestar’s outstanding shares.
The difference? D.R. Horton was offering $16.25 per share, two dollars more per share than Starwood was offering.
“We believe that D.R. Horton is uniquely positioned to make Forestar the country’s leading residential land development company,” Donald Horton, D.R. Horton’s chairman of the board, said at the time. “Together, we can grow Forestar into a much more significant and valuable company for all of its stockholders.”
D.R. Horton’s offer would total somewhere in the neighborhood of $520 million.
At the time, Forestar acknowledged that it received D.R.
About one-third of adults ages 65 and older fall in their home which results in injury, long-term disability and premature institutionalization, according to the U.S. Department of Housing and Urban Development.
By 2020, the Centers for Disease Control and Prevention estimates that the cost for these kinds of injures will total nearly $60 billion. In order to reduce these costs, HUD released a report recommending a more holistic approach to seniors aging in place and their health needs.
HUD released its report, Overcoming Obstacles to Policies for Preventing Falls by the Elderly, during National Healthy Homes month, which recommends government and philanthropic organizations work together at every level to integrate fall prevention strategies and support efforts to aging-in-place.
“Active programs that coordinate senior care and implement fall prevention strategies can benefit seniors enormously,” said Jon Gant, director of the Office of Lead Hazard Control and Healthy Homes. “This report helps policymakers and program managers to identify the causes of problems they may encounter, as well as the resources and methods they can use to overcome them.”
HUD’s report also highlights these four key areas to improve services and care to seniors:
- Why senior falls prevention and coordinated care is an important issue for the nation
Existing home sales increased in May, a sign some experts say shows the strength of homebuyer demand.
One expert explained that buying conditions in many markets have put sellers in complete control and buyers are forced to contend with rising competition.
“The fact that sales of existing homes rose in May, despite incredibly limited selection, shrinking times on market and rapidly rising prices, is a testament to just how strong the draw to homeownership is right now for millions of Americans,” Zillow Chief Economist Svenja Gudell said. “It’s no exaggeration to say that current buying conditions in many markets are terrible, with sellers in complete control and buyers forced to contend with cutthroat competition and intense pressure to make a deal.”
“Still, despite these notable challenges, buyers are finding ways to make things work and continue to come out in droves,” Gudell said. “As long as the economy continues to chug along as it has, I see no reason for this widespread demand to fall off, nor for the pendulum to meaningfully swing back in favor of buyers, any time soon.”
Other experts agree the rate of housing inventory is holding back home sales. As the demand for housing grows each month, inventory becomes even
Delinquencies and foreclosure rates dropped in May, partially reversing the sudden increase in April, according to Black Knight Financial Services’ First Look report.
After rising 13% in April, the largest monthly increase since November 2008, delinquencies saw a partial reversal in May with a drop of 7%.
The inventory of loans that are either seriously delinquent, 90 days or more past due or in active foreclosure continued to improve, hitting a 10-year low in May. The number of loans in foreclosure hit 421,000 in May, a drop of 12,000 loans from April and 153,000 loans from last year.
However, foreclosure starts increased slightly by 55,800 loans, up 5.7% from April. However, this is the second-lowest number of monthly starts since 2005.
Here are the five states with the lowest percentage of non-current loans, the combined foreclosures and delinquencies as a percentage of active loans in the state:
And here are the states where homeowners struggle the most to keep up with their mortgage payment and hold the highest non-current percentage:
The most recent data on housing starts and new home sales painted a decidedly gloomy picture about the state of the nation’s housing economy.
The latest report from the Department of Housing and Urban Development and the U.S. Census Bureau showed that housing starts sank to an eight-month low in May, and the most recent data from those same agencies showed that new home sales fell by 11.4% in April.
And while some observers are suggesting that the lack of housing supply is nearing “emergency” status, one prominent homebuilder is seeing just the opposite.
Lennar Corporation said Tuesday that it saw double-digit increases in revenue from home sales, deliveries of new homes, and orders for new homes in the second quarter.
In fact, Lennar said that the demand for new homes just hit a 10-year high, as the second quarter saw the homebuilder receive more new home orders in any quarter in the last 10 years.
Lennar shared the stats as part of the release of its second quarter financial results.
“The overall market improvement was supported by our highest quarterly new orders in the last ten years of 8,898 homes, a 12% increase year over year,” Lennar