Regional/National Homebuilder Bank Loans Turning Sour - Housing Tracker

Homebuilder Trends

Builders Form 50+ Council. “The National Association of Home Builders estimates the 55-and-older population will reach 85 million by 2014 and will represent more than 40% of homeowners. The Builders Association of Metropolitan Pittsburgh… has formed the 50+ Housing Council of Western PA. It will assist builders, developers and suppliers to the industry adapt to the new designs and approaches necessary in the changing industry landscape. That includes getting more acquainted with phrases like "active adults," "aging in place," and "universal design." It covers all aspects of the marketplace, from single-family homes and market-rate apartments to assisted living and senior living facilities, said John Auciello, executive director.” (Pittsburgh Tribune Review, May 18th)

Q1 2008 Walter Industries Earnings Conference Call. “Jay McCanless, FTN Midwest: “Since you don't have the competitive advantage of internal financing anymore, is your intention, or is your thought to continue the business as an on your lot business, or potentially look at, since you talked about going into bigger houses, et cetera, getting back into the subdivision business? Mark O'brien, Chairman, CEO of JW Holdings, Walter Industries (WLT): No, I don't think we want to get into the subdivision business, given the capital requirements… We have… been doing [the ‘on-your-lot’ business] for 60 years… I think we are going to stay there. It is a capital efficient market.” (Insurance News Net, May 18th)

Q1 2008 Guaranty Financial Group, Inc. Earnings Conference Call. “We have $261 million in non-performing loans within our $10 billion loan portfolio, of which $182M… are from our homebuilder construction loan portfolio. The current amount of outstanding loans to homebuilders on our books is down from approximately $1.8B two quarters ago to $1.3B today... While previously all of our non-performing loans have been contained within what we call our Regional homebuilder group, we have now one loan out of what we consider our National homebuilders on non-performing loans status and we may see continued deterioration even in this portfolio... We are not taking on new homebuilder customers at this time. Utilization rates by the National builders is reasonably low.” (Insurance News Net, May 18th)

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