Moody’s Analytics estimates that commercial and industrial lending in the fourth quarter grew 0.2% from the third quarter, to $1.22 trillion, the first quarterly increase in two years. Moody’s predicts such lending will rise 3% in 2011. Until recently, a chronic lack of lending to businesses was seen by economists as one of the obstacles to healthy recovery. Commercial and industrial lending “is the last thing that turns in a business cycle,” said Mark Zandi, chief economist of Moody’s Analytics. Coming off the dramatic lending drop after the financial crisis struck, recent increases in commercial lending reported by banks are modest. The amount of business loans outstanding remains well below historical levels. In addition, new activity varies significantly from bank to bank and industry to industry. Still, the uptick is notable, say banking analysts. (www.wsj.com)
Wall Street Journal (12/30/10); Ruth Simon

Home appraisals, which were blamed for being too generous during the housing boom, are now being criticized by some home owners for being too stingy, preventing them from refinancing or borrowing against their houses. The criticism is being leveled at computerized real-estate appraisals, which depend on models that use prices from home sales and other data to determine the value of a house. Computerized appraisals calculate a home’s value by using an index derived from historical repeat-sales data, or sales records of homes with similar property characteristics, such as square footage and the number of bedrooms and baths. In-person appraisals don’t incorporate as much transactional data as a computer model. Yale economist Robert Shiller, who developed the first systems in the early 1990s, is among those who say that in some situations the models may be providing unrealistically low values, prompting lenders to reject loan applications or lend less money on particular properties. Some models weigh past sales of a particular property over time against a historical home-price index, and they are running into problems with properties that have been bought only once. This is the situation in places such as Nevada and Southern California, where new subdivisions sprouted during the housing boom but many homes never sold or entered foreclosure before ever being sold in a non-distressed transaction. (www.wsj.com)
Wall Street Journal (12/30/10); M.P. McQueen

Home owners looking to lower their monthly mortgage payments and also save some on interest may be able to do so without all the hefty fees and daunting credit requirements of refinancing. A little-known strategy, called “recasting,” or “re-amortization,” is available though some mortgage lenders and servicers. It involves paying off a lump sum of the principal amount and asking to have the monthly payments reset according to the original interest rate and loan terms. The lump sum reduces the principal. So the new monthly payments decrease slightly and the borrower saves on interest paid over the life of the loan. Lenders typically charge an administrative fee of $150 or more for this service, though borrowers are not required to pay closing costs or submit to another credit check, because they are not asking for a new loan. Recasting works well for those unable to qualify for refinancing amid the ever-toughening credit guidelines — perhaps because they are self-employed or have less-than-stellar credit — as well as for those with extra cash, like a year-end bonus. (www.nytimes.com)
New York Times (12/20/10) Lynnley Browning

For most people in the city, getting the laundry done will mean lugging it to a wash-and-fold service or taking it to the machines in the basement with a stack of quarters in hand. But a growing number of New Yorkers can wash their clothing at home in their own washers and dryers. This staple of the suburbs remains uncommon in the city — apartments that have washers and dryers make up only about 20% of the sales and rental listings in Manhattan, according to StreetEasy, the real estate website. But demand is increasing, condominium developers are making appliances part of the standard package, and older buildings — even prewar — are relaxing longtime bans to keep residents happy and to avoid scaring off buyers. Jonathan J. Miller, the president of Miller Samuel, the appraisal company, said that while there is no known empirical data to reliably measure this amenity,” a washing machine can add as much as 5% to an apartment’s price tag. New technology is helping to fuel the trend. The washers sold today, especially the front-loading type, tend to be smaller than the top-load models, making them an easier fit for, say, a kitchen alcove, said Allan Schuster, a manager at Gringer & Sons, an appliance store on First Avenue in Manhattan. The new appliances generally require less water and electricity than older models. In addition, ventless, or “condensing,” dryers don’t need an air pipe. That is a boon for city residents who can’t breach their exterior walls, said Schuster, who has been selling washers and dryers for four decades. (www.nytimes.com)
New York Times (12/31/10); C.J. Hughes

A Fannie Mae survey of 3,600 people around the country concluded that, by a large majority, they’d still really like to own a home, but, in the meantime, renting is looking better every day. “In the near term, there’s significant caution, but it hasn’t changed the basic desire to own,” said Doug Duncan, Fannie Mae’s chief economist. “But no question, people are shifting attitudes toward renting. At the beginning of the year we asked the general public, ‘If you were to move, would you be more likely to rent or own?’ And 30% said they’d rent. Now it’s 33%.” In the same time frame, he said, the percentage of current renters who said they’d continue to rent grew to 59% from 54%. The primary driver of this attitude seems to be financial, Fannie Mae concluded. Americans said they’re not likely to buy because their credit isn’t strong enough, they can’t afford to buy and maintain a house, and they’re just generally queasy about the economy itself. Still, some separate demographic forces are at work that favor the rental world, the survey said. Single people are statistically the least likely to own their homes, and marriage isn’t exactly in fashion these days, Duncan said. Married couples represent a shrinking percentage of the population; 50% of households in 2009 versus 56% in 1990. Historically, having kids has increased the likelihood of buying a home, but the percentage of families in 2009 who had children — 45% — was an all-time low. And, in a flip-flop of circumstances, renters these days are statistically more likely than home owners to have children at home. (www.sun-sentinel.com)
South Florida Sun-Sentinel (12/27/10); Alan J. Heavens, McClatchy/Tribune News

Provisions in the $858 billion federal tax bill signed into law by President Obama on Dec. 17 could be bad news for home owners interested in remodeling projects to conserve energy. The law slashed the popular tax credits for energy-efficient remodeling from the current 30% of an improvement’s cost ($1,500 maximum per taxpayer) to a 10% credit, with a $500 maximum for expenditures on insulation materials, exterior windows and storm doors, skylights and metal and asphalt roofs that resist heat gain. The law also clamped new dollar-specific limits on key improvements that had been eligible for 30% credits. These include a $150 tax credit limit on the costs of energy-efficient natural gas, propane and oil furnaces and hot water boilers, plus a $300 credit limit on the costs of central air-conditioning systems, electric heat pump water heaters, biomass stoves for heating or water heating, electrical heat pumps, and natural gas and propane water heaters. The new law also limits allowable tax credits for energy-efficient windows installed during 2011 to a total of $200, compared with the previous $1,500. On top of that, it prohibits taxpayers who have taken total tax credits in past years exceeding $500 from claiming any additional credits on energy-conservation projects they undertake in the coming year. Donna Shirey, chairman of NAHB Remodelers Council and president of a contracting firm in the Seattle area, said the gutting of energy-efficiency credits “is a big step backward. It’s bad for the environment, bad for consumers and, of course, bad for jobs in our economy. We’re heading the wrong way here, sending absolutely the wrong message.” (www.washingtonpost.com)
Washington Post (12/30/10); Kenneth R. Harney