NAHB, Fannie Mae CEOs discuss foreclosure aid
Further addressing the issue of subprime mortgage fallout, the National Association of Home Builders (NAHB) last week spoke to members of Congress on the issue of enacting comprehensive regulatory reform for government-sponsored enterprises, including Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
Speaking to members of the Senate Banking Committee, NAHB executive vp and CEO Jerry Howard said, “At a time when the housing market needs them more than ever, Fannie Mae and Freddie Mac have failed to adequately respond to the mortgage crisis. Rather than aggressively pursue market solutions, they are hunkering down to shore up financial results and shareholder returns — and are even taking steps that will further burden struggling mortgage borrowers.”
The NAHB has requested Fannie Mae and Freddie Mac be provided with “the flexibility to respond promptly, within their charters, to meet market needs.”
Fannie Mae CEO Dan Mudd addressed the NAHB in February, outlining steps the nation’s largest mortgage broker has taken to help subprime borrowers.
Specifically, Mudd focused on the company’s foreclosure prevention efforts, explaining how Fannie Mae is “reaching out to homeowners in need, helping them refinance into new loans, modifying existing loans, and when all else fails, giving them an exit with dignity; in other words, avoiding foreclosures at all costs.”
He said Fannie Mae has refinanced more than 68,000 subprime borrowers into prime-fixed loans (about $13 billion in loans), and the organization expects to do more as the next wave of short-reset ARMs (adjustable-rate mortgages) that originated in 2006 begin to adjust at higher levels this spring. Fannie Mae also supports the Hope Now “teaser freezer” initiative to give borrowers with short-reset ARMs time to refinance into cheaper loans.
In related news, Fannie Mae has announced that Jacqueline Wagner will join the company as senior vp and chief audit executive. Wagner was formerly with the American Express Company in New York, where since 2002 she served as senior vp, chief operational risk officer and general auditor.
Hovnanian sales fall in the first quarter
K. Hovnanian, a national home builder with operations in 19 states, reported wider losses in the first quarter on an unsteady housing market.
The company reported losses of $130.9 million, wider than the $54.6 million in losses reported in the same period last year.
Sales were $1.09 billion, down 6.4 percent from $1.165 billion in the same period last year.
In the first quarter, the company delivered 3,604 homes, an increase of 10.3 percent from 3,266 home in the first quarter of 2007, not including unconsolidated joint ventures.
“Market conditions remain challenging across many of our markets,” said company president and CEO Ara K. Hovnanian. “We continue to focus on reducing our inventories, maximizing cash flow and shrinking our overhead to ensure that we properly manage the difficult market conditions we currently face.”
The company recorded $94 million in pre-tax, land-related charges, an amount virtually unchanged from similar land-related charges of $93 million recorded in the same period last year.
Hovnanian is headquartered in Red Bank, N.J.
Toro sees stronger earnings in the first quarter
Outdoor products company Toro reported stronger earnings in the first quarter, buoyed by a strong increase in professional segment sales and international demand.
Earnings rose less than 1 percent to $18.63 million from $18.45 million last year. Sales were up 7 percent to $405.8 million, from $379.1 million in the same period last year.
Sales and earnings rose in the company’s professional segment, “including a strong demand from golf and grounds equipment customers,” the company said.
The company’s residential segment also saw increases, primarily from strong sales of snowthrowers and “TimeCutter” zero-turning radius lawnmowers.
The growth was attributed to “strong contributions from our international business,” said Michael Hoffman, chairman and CEO of Toro. “While we’re concerned about the increasing domestic economic uncertainty, we believe our competitive position is strong, and we are well-positioned for the upcoming season,” he said.
Toro is based in Bloomington, Minn. The company manufactures outdoor maintenance and beautification products for home, recreation and commercial landscapes.